1990-02-22

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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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Thursday, February 22, 1990
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Prayers


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A message from His Excellency the Governor General transmitting Estimates for the financial year ending March 31, 1991, was presented by the Hon. Robert de Cotret and read by Mr. Speaker to the House.
Hon. Robert de Cotret (President of the Treasury Board):: Mr. Speaker, I would like to table in support of the Estimates, Part I, the Government Expenditure Plan.
I will table with the Clerk of the House on behalf of my colleagues Part III of the Estimates consisting of 73 departmental expenditure plans, with the remaining 14 to be tabled on or before March 12.
These documents will be distributed to members of the standing committees to assist in their consideration of the spending authority sought in Part II of the Estimates.


Mr. Boudria:: Mr. Speaker, I rise on a point of order. I think you have just heard what we have all heard, that in fact the minister today is tabling the estimates in Part III of 73 out of the 87 respective divisions of the Estimates.
In 1983 the Standing Committee of Public Accounts of this House published a report which was concurred in by this House to the effect that Part Ills were going to be produced for all relevant departments.
Today we are told by the minister that the rules we have established by this House for the tabling of the
Estimates have not been followed. He is informing us that 14 of those departments will not have Part Ills tabled today.
We have just ended a briefing session this morning in a lock-up type format. Until such time as the Estimates were tabled, I was not free to rise on this point of order and to inform the Chair of this shortcoming and this failure on the part of the government to live within the rules.
This morning in this lock-up we asked why the rules of the House have not been followed. The explanation given to hon. members who participated in the lock-up was that the government was aware it intended to make what it considered to be important changes in the area of the Estimates for those 14 departments and it took a conscious decision not to print the Part Ills.
Mr. Speaker, I submit to you that the rules of this House, which we have made for ourselves and for the government to follow, are not suggestions. We do not decide that the government is going to follow the rules if it is convenient for the government. The rules are that the Estimates are tabled, Part I, Part II the expenditure plan, and Part III which are the detailed expenditures of each respective department. Those rules are to be observed by the government.
This is not a mere decision that was made by someone at some point in time. This was a decision of the House. It was a report of the standing committee adopted by the House, and since then the Estimates have been printed that way.
Furthermore, the report in question made to this House by the committee of public accounts was made pursuant to a recommendation of the Auditor General who is responsible to you, Sir, as the custodian of our rights in this House.
Mr. Speaker, I submit to you that the government has failed to live within the rules. Of course we cannot prevent the government from tabling the documents in question for the mere fact that I could not rise in this House and state that the documents were incomplete. I

February 22, 1990
Routine Proceedings
was privy to an in camera decision this morning and I could only do so afterward.
Had I been able without breaking my oath of secrecy, I would have risen on this point of order before the tabling of the documents in question, and I would have prevented them or submitted to the Chair that the documents should not have been tabled. Because that would have been a breach of the secrecy by which I was bound until the documents were tabled, obviously I could not do so.
I make the case to the Speaker now that what has happened over the last few minutes in this House is not proper and is not in accordance with the rules.
Some members across the way do not like the submission I am making to the Chair. It is not a matter of liking or disliking. It is a matter of following the rules that we have set forth for ourselves. If we decide collectively in the future that we want to change those rules, that we want to abandon having Part Ills of the Estimates, I would resist that, but if the House decides that in its collective wisdom I will have to live with the decision that was made. Until such time as this House changes the rules, the government has to obey the rules that were made.
Mr. Speaker, you are the custodian of our rights in this House. I make the submission to you, that the government has failed to observe the rules that we have made. An hon. member across the way asks what I want. It is not a matter of what I want, it is a matter of what is right and what has to be done in accordance with the rules that we have set for ourselves.


Mr. Angus:: Mr. Speaker, I want to speak to the point of order very briefly. My hon. colleague has made a very articulate presentation with regard to the decisions that this House has taken, and the fact that the document tabled just a few moments ago did not conform to that.
I would ask that Your Honour review the particular instances cited by the member, and at some point report back to the House as to whether or not the government, in fact, has violated the rules of the House and issue whatever appropriate instructions you may find to the government to ensure that if indeed it has broken the rules of the House by not tabling all of Part III, there be some process put into place to ensure that next year the government not be allowed to get away with only tabling part of the Estimates.


Mr. Cooper:: Mr. Speaker, I would like to intervene for a couple of moments on this point of order. It is my belief that the government has in fact fulfilled the rules of the House. What the rules of the House require in the tabling of the Estimates is that Part IIs be tabled which we have of course complied with.
I also wish to inform the House that it is not our intention not to proceed with the Part Ills. They will be printed at a later date and will be in the hands of the members on or before March 12.
We believe that we have been consistent with the rules in tabling what we have tabled today and do not think that in any way have we violated the process.


Mr. Speaker:: I am going to consider the point raised by the hon. member for Glengarry-Prescott-Russell and joined in by the member from Thunder Bay-Atikokan. I will also, of course, take into account the comments of the parliamentary secretary. I shall return to the House at an appropriate time and remark on the issue that has been raised.
At the moment, I do not think that I have any authority to stop the government from tabling those parts which they are doing. As a consequence, whatever the rights or wrongs of this point may be, can be settled later. We do have to proceed with the tabling as it is. As I say, I will come back to the House with my comments at an appropriate time.


Mr. McCurdy:: Mr. Speaker, I do not wish to prolong this, although I would be inclined to because I just had the same frustrating experience as my colleague from the Liberal side. I think I heard the parliamentary secretary indicate that the departmental Estimates will be available by March 12. The rules specifically say that they should be available by March 1.


Mr. Speaker:: I hesitate to interrupt an hon. member rising on an important matter but the point of order has been made. I have indicated that I will give it very careful consideration and report back to the House. If the hon. member has another point of order, of course I will hear him. Is it another matter?


Howard Douglas McCurdy: I want to point out that the parliamentary secretary stood in his place and indicated that the departmental Estimates would be available by March 12. I just want to indicate to the Speaker that under Standing Order 81(4), the rules require that those be available by March 1, not March 12. If the parliamentary

secretary is indicating a promise to break the rules then that is a serious breach of the orders of this House.


Mr. Speaker:: I should point out that the Estimates have now been tabled. The information documents are the ones that are still waiting. I will take into account the hon. member's intervention and consider that also.


Don Boudria: On a further point of order, Mr. Speaker.


Mr. Speaker:: I ask the hon. member if this is a different point of order.


Don Boudria: Yes, Mr. Speaker.


Mr. Speaker:: Yes, of course I will hear it.


Don Boudria: Mr. Speaker, a few moments ago the Minister of Justice said that we are going to see what happens to government bills in the Senate. The reference made was that somehow the actions of the government today are related to an action in the other place.


Some hon. members:: Oh, oh!


Mr. Speaker:: The hon. minister.


REFERENCE TO STANDING COMMITTEES
Robert René de Cotret: Mr. Speaker, I would like to move, pursuant to the provisions of Standing Order 81(4) and Standing Order 81(6):
That the Main Estimates for the fiscal year ending March 31,
1991, laid upon the table earlier this day be referred to the several
standing committees of the House as follows:
Since there is a detailed allocation of the Estimates to various committees and the list is lengthy, if it is agreeable to the House, I would ask that the list be printed in Hansard as if it had been read.


Mr. Speaker:: The House has heard the motion of the hon. minister. Is it agreed?


Some hon. members:: Agreed.


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Motion agreed to.
[Editor's note: List referred to above is as follows:]
Tb the Standing Committee on Aboriginal Affairs
Indian Affairs and Northern Development, Votes 1, 5, 10, 15, L20 and L25.
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To the Standing Committee on Agriculture
Agriculture, Votes 1, 5, 10, 15, 20, 25, 30, 35, 40 and 45.
Tb the Standing Committee on Communications and Culture
Communications, Votes 1, 5,10,15, L20, 25, 30, 35,40,45, 50, 55, 60, 70, 75 and 80.
Secretary of State Votes 1, 5, 30 and 35.
Tb the Standing Committee on Multiculturalism and Citizenship
Secretary of State, Votes 15 and 20.
To the Standing Committee on Consumer and Corporate Affairs and Government Operations
Consumer and Corporate Affairs, Votes 1, 5,10, 15, 20, 25, 30 and 35.
Finance, Vote 30.
Governor General, Vote 1.
Industry, Science and Technology, Votes 90, 95 and 100. Parliament, Vote 1.
Privy Council, Votes 1, 5 and 35.
Publics Works, Votes 1, 5, 10, 15, 20, 25, 30, 35 and 40. Secretary of State, Votes 10 and 25.
Supply and Services, Votes 1, 5 and 10.
Treasury Board, Votes 1, 3, 5, 10, 15, 20 and 25.
Tb the Standing Committee on Privileges and Elections Privy Council, Vote 15.
Tb the Standing Committee on Energy, Mines and Resources
Energy, Mines and Resources, Votes 1,5,10, L15, L20,25,30,35 and 40.
To the Standing Committee on Environment
Environment, Votes 1, 5, 10, 15, 20, 25 and 30.
To the Standing Committee on External Affairs and International Trade
External Affairs, Votes 1, 5,10,15,20, 25, 30, 35, L40, L45,50, 55, 60 and 65.
To the Standing Committee on Finance Finance Votes 1, L5, L9, 10, 20 and 30.
National Revenue, Votes 1, 5, 10 and 15.
Privy Council, Vote 25.
Tb the Standing Committee on Forestry and Fisheries Fisheries and Oceans, Votes 1, 5 and 10.
Forestry, Votes 1, 5 and 10.
To the Standing Committee on Human Rights and the Status of Disabled Persons
Justice, Vote 10.
Tb the Standing Committee on Justice and Solicitor General
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February 22, 1990
Routine Proceedings
Justice, Votes 1, 5, 15, 20, 25, 30, 35, 40 and 45.
Privy Council, Vote 40.
Solicitor General, Votes 1, 5, 10, 15, 20, 25, 30, 35 and 40.
To the Standing Committee on Labour, Employment and Immigration
Employment and Immigration, Votes 1, 5, 10, 15, 20 and 30. Labour, Votes 1, 5, 10 and 15.
To the Standing Committee on Management and Members' Services
Parliament, Votes 5 and 10.
To the Standing Committee on National Defence and Veterans Affairs
National Defence, Votes 1, 5, 10, 15 and 20.
Veterans Affairs, Votes 1, 5, 10, 15 and 20.
To the Standing Committee on Health and Welfare, Social Affairs, Seniors and the Status of Women
Employment and Immigration, Votes 25 and 35.
National Health and Welfare, Votes 1, 5, 10, 15, 20, 25, 30 and 35.
To the Standing Committee on Public Accounts Finance, Vote 15.
To the Standing Committee on Industry, Science and Technology, Regional and Northern Development
Atlantic Canada Opportunities Agency, Votes 1, 5, L10 and 15.
Indian Affairs and Northern Development, Votes 30, 35, 40,45 and 50.
Industry, Science and Technology, Votes 1, 5, L10, L15, 20, 25, 30, 35, 40, 45, 50, 55, 60, 65, 70, 75, 80 and 85.
Western Economic Diversification, Votes 1 and 5.
To the Standing Committee on Transport Privy Council, Votes 10 and 30.
Transport, Votes 1,5,10,15,20,25, 30,35,40,45,50,55,60,65, 70 and 75.
That the Privy Council Vote 20 be deferred to the Standing Joint Committee on Official Languages.
That a message be sent to the Senate to acquaint Their Honours thereof.
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1990-91 MAIN ESTIMATES

Robert René de Cotret: Mr. Speaker, I have just tabled the government's Main Estimates for the 1990-91 fiscal year. It is the fifth time I have had the privilege of doing so as President of
the Treasury Board, and each time, I have been able to point to new ways in which the government has improved the management of its resources on behalf of Canadians. I am proud of the continuing progress we have made, Mr. Speaker. It is no accident that today, our federal administration is leaner and more efficient.
Mr. Speaker, five years ago, the government proposed a plan to Canadians. The Prime Minister promised Canadians better management of the economy and better management of government operations. I will now tell you what this plan has accomplished so far and how we intend to pursue its goals in the future. At the time, our country had just experienced a painful recession from which no region emerged unscathed. The economy was unstable and federal spending was out of control. To manage the economy, we first had to make substantial improvements in the management of government operations. We knew the government should be more receptive and more accountable to Canadians whose taxes are used to finance federal programs.
We had to make some choices that were at times veiy difficult, to be able to control spending. We made those choices while respecting the basic values of Canadians. We followed the strategy outlined in November 1984 by my colleague, the Minister of Finance (Mr. Wilson) in his Agenda for Economic Renewal and in my government programs and spending review program. The spending cuts announced at the time were a first step towards putting the Canadian government's financial house in order.

I said then that we had to take a pragmatic and considered approach to reducing government expenditures and that we had to exercise the discipline necessary to ensure sound financial planning. These were the ingredients needed in the 1980s to manage the economy and to manage the government. They are as essential in the 1990s.
Our plan committed us to a program of economic renewal and management reform and we set out four challenges: First, to put our own fiscal house in order so that we could limit, and ultimately reverse, the massive build-up in public debt and the damaging impact of that debt on public confidence and economic growth. Second, to redefine the role of government so that government could expedite growth and job creation rather than being an obstacle to change and innovation. Third, to adopt policies that foster higher investment, greater innova-
February 22, 1990

tion, increased international competitiveness and a positive climate for growth and new enterprise by Canadians. Fourth, to bring about these changes in a way that is fair, balanced and consistent with the nation's sense of compassion, tolerance and justice.
By making expenditure control and good management the primary focus of fiscal restraint, we are meeting these challenges.
Two days ago, the Minister of Finance presented this Flouse with our expenditure control plan. That plan, coupled with the December 15 package of management initiatives, provides fiscal savings of $19.5 billion. This saves the equivalent of over $2,500 for each and every family in Canada.
This expenditure control plan continues our steady progress towards our goal of restoring long-term stability and good management. It will be the foundation for this government's planning through the next five years.
In his statement, the Minister of Finance described how this government is managing the economy. Today, I want to talk about how we are managing the government.
I would like members to focus on the clear evidence of substantial progress that can be seen in the documents I have tabled in the House today. Part I of the Estimates presents the measures we have taken to control spending and manage the government. Part II provides details of our spending proposals to Parliament.
In 1990-91 spending on federal government programs will rise by only 3 per cent, substantially less than the rate of inflation. This is an improvement even compared to this government's very impressive record of 3.6 per cent annual increases in the five years since the 1984 election.
Let me remind members how significant this management improvement really is when compared to preceding governments.
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In the five years before this government took office in 1984, program spending grew by 14.1 per cent annually. In the five years before that, program spending grew by 10 per cent annually. In the five years before that, program spending grew by 17.9 per cent annually.

I think it bears repeating, Madam Speaker, that during the next fiscal year, program spending will increase only 3 per cent.
One of our major objectives is to provide for sound management. To do so, we must strive towards leaner and more efficient government operations.
Thanks to the Expenditure Control Plan, we will be able to save $19.5 billion during the period in question. However, it meant making some difficult decisions, some of which were announced in December 15 last year when I announced in the House a set of austerity measures that would save a total of $1.4 billion over the next three years.
In 1990-91, program spending will represent only 15.7 per cent of GDP. Compare this to 16 per cent for this year and 19.5 per cent in 1984-85! Madam Speaker, it will be the lowest it has been in 20 years.
A key indicator of how well this government is doing is the change that we have achieved in the operating balance.
The operating balance compares the cost of government programs with government revenues. When program costs exceed revenues the result is an operating deficit. Borrowing is needed to make up the shortfall. More borrowing is then needed to pay the interest leading to an upward borrowing spiral.
This is like a family borrowing to pay for necessities, and borrowing more and more to make interest payments on a growing debt.
The situation in 1984 was severe. So much so, that we inherited a $15.9 billion operating deficit. Put another way, the federal government at that time was borrowing more than $2,000 per Canadian family each year just to pay for its programs.

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Routine Proceedings
The government of the day was digging a hole which was ever deeper and ever more difficult for future governments to repair, one that was saddling future generations of Canadians with crippling debt.
There is no more telling evidence of the progress this government has made than the way in which we have turned that operating balance. We have gone from an operating deficit of $15.9 billion to a surplus this year of $9 billion. In 1991, we expect that operating surplus to grow to $12.6 billion, a turnaround since 1984 of $28.5 billion.

Madam Speaker, we are keeping our promise to improve the way the machinery of government is managed. These improvements do not make headlines but they result in large savings for Canadians. You will find the highlights in Part I of the Estimates and I trust that all hon. members will take the time to read the document because it gives evidence of evidence of better, more efficient management.
We have implemented better cash flow management methods. These alone have saved Canadian taxpayers more than $900 million since 1985.


Some hon. members:: Hear, hear.


Robert René de Cotret: We have adopted a better way to manage the government's real estate holdings.
Since 1985, sales of surplus properties have yielded $400 million, generating revenues of $200 million and resulting in more productive use of real estate worth an additional $200 million. This is due to joint projects with the private sector and other governments.
The cost recovery program that we instituted contributes to greater revenue equity. We wanted users and other direct beneficiaries of government services to pay their share of the costs involved in these services.
Revenues from cost recovery should amount to $3 billion in 1990-91, almost twice the $1.6 billion they were in 1984-85.
We also sold all or part of 18 Crown corporations which more appropriately belong in the private sector. Since 1984, the personnel of Crown corporations has
decreased by 75,000 as a result of privatization, productivity gains and rationalization of operations.
The government will sell its share in Telesat, will privatize Nordion and Theratronics and has also decided to offer the general public direct ownership in Petro-Canada. Furthermore, profitable Crown corporations such as the Canada Ports Corporation, Canada Post, Canadian National Railways and the Royal Canadian Mint will contribute to deficit reduction by paying dividends.
Our new method of management has enabled us to reduce departmental overhead expenses, cut down on paperwork and benefit from technological progress. We have also considerably reduced the number of regulations approved by the government in recent years.

I would be remiss if I did not take this occasion to comment in greater detail on managing the federal Public Service.
This federal government is no different than many other organizations in the world. We have challenged our Public Service managers to do more with less, with less money, with fewer people but with more responsibilities. I can assure this House that the management challenge is in fact being met. Let me put on record this government's performance.
We have worked to keep Public Service salaries from setting inflationary trends in the nation.
Since 1984, we have negotiated collective agreements that are fair to employees and responsible to taxpayers. Those agreements have been below private sector settlements, below, and in some case well below, provincial settlements, and below the rate of inflation.
Also, we have reduced the size of the Public Service. Since 1985, we have removed 23,542 person-years from departmental authority levels. To meet new priorities and to make sure that health, safety and security were not compromised, we have provided for some 11,000 person-years. The net result is that the Public Service is now 12,377 person-years smaller than it was in 1985-86. In fact, it is now the smallest it has been since 1973.


Some hon. members:: Hear, hear!
February 22, 1990


Robert René de Cotret: Our approach to managing the size of the Public Service was based on this government's over-all plan to manage better. We are now doing things more effectively.
Over the next five years we will continue to carefully control the size of the Public Service. We will do this because we are committed to ensuring that over the medium term we maintain the balance between federal employment and total employment in the economy.
Let me say that this progress would not have been possible without a dedicated and highly professional Public Service.
Last December, the Prime Minister announced an initiative called Public Service 2000. This initiative will ensure a Public Service that can provide Canadians with the best value for their tax dollars.
In 1984, we committed ourselves to managing the economy and managing the government. Good management is not easy. It requires hard work, tough decisions and leadership. It requires a plan and the will to carry out that plan. This is what this government is doing. Our Expenditure Control Plan, in achieving this reduction, this saving of $19.5 billion, is evidence of our commitment.
We promised fiscal responsibility. This government is delivering. We promised to get the deficit under control, and we are delivering. We promised to cut expenditure growth, and we are delivering. We promised to manage government better, and we are delivering.
I am proud of this government's record. We have acted decisively in bringing about the kind of changes needed to ensure Canada's economic stability, and to ensure that Canadians are able to meet the challenges and opportunities that lie ahead.


Some hon. members:: Hear, hear!


Don Boudria: Madam Speaker, this morning, members of this House had an information session where we were told that the minister responsible, the President of the Treasury Board, would provide us some information today and some later; that the rules of this House were there and
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that we could follow them when it suited the minister, but when it did not suit him, we could forget about them.


Mr. Robichaud:: Disrespect for the House!


Don Boudria: Here is the list in the Estimates with respect to which departments we have little or no details as to what is going on within those departments: CIDA, Communications, Consumer and Corporate Affairs, Energy Mines and Resources, Finance, Fisheries and Oceans, Health and Welfare, Indian Affairs and Northern Development, Multiculturalism, National Defence, Industry, Science and Technology, Secretary of State, Transport and Veterans Affairs.
Do you know what we know about those departments, Madam Speaker? We know that there are cuts, period. That is all we know. We do not know what programs are being cut, other than the information we received in the one or two minutes of briefing that we got at 10.55 this morning.
We do not know anything that is in the Part Ills of the Estimates because they were not tabled this morning pursuant not only to the rules of this House, because they form part of the Estimates, but pursuant to directives that this House gave to the government when it unanimously adopted a report of the Standing Committee on Public Accounts in 1983.
Why is the government behaving this way? It says that the Estimates would have probably been wrong anyway so it was better to disobey the rules of the House. That is Tory logic for you.
If this government did not know that you needed time to print the Estimates between the date of the budget and the date of the Estimates, well then why in blazes could it not have brought in the budget a few days earlier to give it time? You would think that it is someone from outer space who came here to present the budget, totally divorced from the government. The ministers are only one seat away from each other. There is approximately one or two inches between the chair of the minister responsible for the Treasury Board and the Minister of Finance. Maybe they could speak to each other, or correspond if they are not on speaking terms.
Either way they could ensure between the two of them that they live within the rules we have adopted in this House and the rules which governments successively have followed, including this government in the past.

February 22, 1990
Routine Proceedings
Now that this government is in its second term, arrogance is setting in.


Ms. Black:: Setting in?


Don Boudria: My colleague says: "Setting in?". Maybe it was there all along, but it certainly has reached new depths as this second term is well under way.
The degree of arrogance is inversely proportionate to the popularity of the government. As of this morning, the government has a popularity of something like 19 per cent. Only the member from Madawaska could find that funny.


Louis J. Robichaud: It is even lower where he comes from!


Don Boudria: Madam Speaker, we know that the government's reserves in the past were about $3.4 billion. This year, the government has chosen to play with the figures a little. So they decided arbitrarily that the reserves would be reduced to $2.3 billion.
This morning, my colleagues and I asked Treasury Board officials how they could live with that amount. They said that they would be very thrifty. But those are the reserves, Madam Speaker. They are used when there is a drought in the country, when there is a fisheries crisis, when, for example, there is economic hardship in Saskatchewan, when the people on the west coast have difficulties, especially those who work in the fishing industry. These scenarios are quite possible this year. What will the government do? It will not even have any more reserves.
By reducing the reserves, the government claims to be cutting expenses. Either some people will suffer a lot this year because there will be no funds in the reserves to deal with such unforeseen situations or the budget estimates presented to us today mean absolutely nothing because they will not be adhered to in any case.

Let us look at some of the cuts in the Estimates in detail. We have a budgetary comparison between the Estimates of last year and this year.
You will remember during the election campaign the Conservative party said that it was going to establish a separate department of forestry. Most Canadians would have thought that that meant more money was going to go into forestry. Not so. You see, you have to think like a Tory a little bit here. You create a department and take away the funds. That way you can pretend that you live with the promise while doing the exact opposite.
So what did the Tories cut from that? They have cut $47 million.


Louis J. Robichaud: It was just a lot of window dressing!


Don Boudria: The hon. member for Beausejour (Mr. Robichaud) says it was window dressing, and he is right.

The Canadian Centre for Occupational Health and Safety is a subject that has been raised in this House very eloquently by our colleague for Hamilton West. We see a cut here of $2.9 million.
Let us look at the National Capital Commission, an agency whose mandate is to make this city a better place. I remind the minister that in a previous incarnation he used to be the member for Ottawa Centre. It was a very short career that he had as the member for Ottawa Centre at that time. But he will recall in his days when he was the member for Ottawa Centre that it was his job to ensure that this city was a capital for all Canadians. Now, of course, he has changed constituencies, and the budget for the National Capital Commission is proportionately reduced.
The Secretary of State's area is one in which we see those major cuts of $5.45 million. That is one of the areas in which Parliament does not know what is going to be cut, save and except one or two lines in the budget of the Minister of Finance, the seat-mate of the President of the Treasury Board.
With respect to the Minister of State for Multicultur-alism and Citizenship's department, our colleague for the Western Arctic indicated to us yesterday in this House just how wrong those kinds of cuts are. Nevertheless, the government is proceeding with those cuts in the area of $121 million.
February 22, 1990

The Western Diversification Program is being cut by $1.39 million. I say to the minister he, like I, must have seen and heard over recent weeks media reports of the terrible tragedy going on right now in the province of Saskatchewan with the loss of population and the tremendous economic losses. There is suffering going on in the province of Saskatchewan right now, and they desperately need help.
Let us turn to the cuts in the Department of Indian Affairs and Northern Development. If there is any group in this society which needs to be cut, then this group should be the last to suffer any kind of cutback.
I have the honour and privilege of representing a native community in the House, the Akwesasne Indian reserve, which is located partially on Cornwall Island in my riding and partially in the constituency of my colleague, the hon. member for Beauharnois

Salaberry. We see a cutback in that area of $1 million.
In the area of Energy, Mines and Resources we have been made aware of the cuts in energy conservation and other very vital programs to which the government itself says that it is committed. The hon. member for Lac-Saint-Jean often speaks eloquently of how he and his government are pretending to defend and protect our environment. Yet we are seeing these cutbacks in areas such as energy conservation, and others.
My colleague from Notre-Dame-de-Grace has often raised questions in this House on the very important topic of Employment and Immigration.

The Canadian Jobs Strategy will suffer cuts totalling $15 million. The cuts in summer programs for young people are totally unacceptable. This year, my riding will get 10 per cent of what it received the year before, 10 per cent! A 90 per cent cut! And the same applies to Ottawa-Vanier, Carleton-Gloucester and several other ridings in the National Capital region, including Ottawa-West; a 90 per cent cut! Are young residents of the National Capital region supposed to do without summer jobs? How are they going to pay their tuition fees next fall? This is the same government that only two or three weeks ago was bragging about its strategy for
Routine Proceedings
keeping youth in school. I find that hard to understand, Madam Speaker.

In terms of National Health and Welfare, it was described to us this morning in a very summary fashion, because of the limited time, that there were going to be cuts in the alcohol and drug rehabilitation programs. That is what we were told at the Estimate briefing.


Dawn Black: At one minute to eleven!


Don Boudria: My hon. colleague says that that was at approximately one minute to eleven o'clock. That is the time that we were finally given the information.
We know, and it was said yesterday in this House, about how the transfers to the provinces will result in potential cuts in hospital beds. That has been made very clear. We all know how strapped the provinces are in trying to offer quality health care. With a cap on funding now from the federal government how will they do it?
In the area of Employment and Immigration that I mentioned a few moments ago, I just want to get back to one further point. I want to refer to the area covered by Bill C-21, that famous bill introduced by the government which will cut back on benefits to my constituents and others. The government cuts back on benefits involving unemployment insurance. That, in turn, will increase the welfare rolls. Do you know what the government says to the province of Ontario, Madam Speaker? "Don't you dare increase welfare payments because we are capping your payments".
Who causes the welfare payments to go up? The federal government, by decreasing unemployment insurance benefits. So the government is pulling back from unemployment insurance. It causes welfare to increase and then refuses to pay its part of the bill under a contractual arrangement that it has with the provinces. It has put a cap on. It says: "If your benefits increase more than 5 per cent, tough luck, provinces."
What are the provinces going to do? They have to increase taxes of their own, or they are going to ask municipalities, which in Ontario for instance pay 20 per cent of the bill, to increase their share.
When this government claims that it is living within its means, that it is doing a proper job and that it is not increasing taxes, all of those things are false.

February 22, 1990
Routine Proceedings
First, in the area of increasing taxes, we all know that the GST, which is referred to in the budget that was introduced only a couple of days ago, will result in an extra $1 billion a year in revenue. That is one tax.
Then we know from the minister's statement this morning about the so-called dividends of Crown corporations. So what do you do? Canada Post, for instance, increases the price of postage stamps. You take the revenue generated by the increase in postage stamps, call it a dividend and return it to the Consolidated Revenue Fund. That is a tax on postage. Call it what you like, that is what it is. That is another tax.
Then you cause the provinces to increase their taxes as well by cutting back on your contractual obligations with them. So the provinces have to increase the tax for the federal government.
I have just given three instances in which taxes are increased. And there are a lot more, of course.
There are countless ways in this budget, as well as in the effects of previous budgets which are just coming into force now, in which there are tax increases. So it is not accurate to state that there are no tax increases.

Madam Speaker, in concluding, I would like to mention briefly some major cuts in the acid rain sector, where about $20 million in funding will be slashed. As you know, this is a very important issue in my riding and the riding represented by the minister, and I am thinking of our mapletrees which require positive measures by all governments if they are to be saved, and when we see these cuts-

Let me say in conclusion, as one of my colleagues told me only a few moments ago, this government always wants to compare itself with the private sector. If this government were the management team in any Crown corporation or in any private corporation for that matter, the shareholders would have turfed them out of office a long time ago. Judging by the present popularity of the government at 19 per cent, that is exactly what will happen.


Howard Douglas McCurdy: Madam Speaker, it is reported today that the standing of the government party is at the lowest level of any government party in the history of Canada. I would think this reflects the good sense of the Canadian people. Ordinarily, polls are passing things that reflect reaction to one or two events. This morning we are seeing a poll that represents the reaction of Canadians to the sustained ripping at the fabric of Canada by this government. That shows wisdom.
This is a government that prides itself on efficiency, good management and God knows what all. In so many ways it offends its claimed status in that respect.
As I understand it, and I am not as experienced with this as my colleague, the member for Glengarry-Prescott-Russell, it seems to me that it is self-evident that the Estimates are tabled in order to give us some insight into the details of the changes in expenditure patterns that are contained in the budget.
I could not have imagined a greater farce than was experienced by those of us who were attending the lock-up this morning. Quite frankly, the lock-up was a total waste of time. All of the information we got in the lock-up we could have gone out in the hall and screamed to high heaven and nobody would have found a bloody thing new in anything we said because no new information was provided to us.


Dawn Black: Which was deliberate.


Howard Douglas McCurdy: Whether it was deliberate or not, I do not know. We were crowded into a small room in which it was not even possible for all of us to sit at the table to gain the information necessary to exercise our critical judgment in respect to the information provided to us, had there been information provided to us.
But, Madam Speaker, if you consider where the greatest changes occurred in this budget, I would just like to reiterate what my colleague indicated earlier. We were denied 13 Part III Estimates, the detailed departmental estimates, for CIDA, Communications, Consumer and Corporate Affairs, Energy, Mines and Resources, Finance, Fisheries and Oceans, Health and Welfare, Indian and Northern Affairs, Multiculturalism and Citizenship, National Defence, Industry, Science and Technology, the Secretary of State, Transport and Veterans Affairs.
This is inexcusable. This is an outrage, not just to the opposition, but to the people of Canada that they are denied the kind of critical judgment that should be imposed on what this government tables as the Esti-
February 22, 1990

mates which is supposed to reflect the detailed patterns of expenditures represented in the budget.
Subsequently, at three minutes to eleven, at our request, because no effort was made to make it possible on the initiative of Treasury Board to provide us with the information or to provide us with the resources to get the information, we began to get a notion of why it was necessary to obscure from us the detailed information.
When we asked Health and Welfare representatives about the detailed cuts, we discovered, for example, that there was a $2.7 million cut in expenditures for alcohol and drug programs, cuts to the funded drug strategy, cuts in the response of this government to what the Prime Minister described as a drug crisis in this country.
You probably listened to the radio this morning and yesterday, Madam Speaker, and learned that we are sending Canadians to California to be treated for drug addiction. At the same time, we have the spectacle of a $2.7 million cut here.
Remember the promises with respect to child care? We learned $1.7 million is cut from child care initiatives, $3.5 million cut from the seniors independence program and $3.9 million cut from health research.
We queried the Secretary of State about the $23 million cuts in the budget. There was no information provided to us to find out what these cuts constitute. We did not get all of the information but, the member waved around a couple of pieces of paper and told us that the women's program is being cut by $1.6 million and the youth program is being cut by $6.4 million. I guess in the absence of a true Minister of State for Youth-Madam Speaker, I know this is very pertinent for you-the government just chopped off $6.4 million. The Canadian university program was eliminated and aboriginal programs cut by $9.8 million in ways we do not even quite understand. We do know that native newspapers are going to be eliminated.
We were rushed into a tightly crowded room and denied specific information because this government, quite evidently, would be embarrassed by an announcement, at this stage of the game, of the details of the expenditures. The government would rather wait until
Routine Proceedings
some weeks have passed, particularly next week when no one will be around here, before leaking out bit by bit the information on the 13 departmental documents of which we have been deprived.
Some have called this the "Pass the Buck Budget". It is a budget that was, as my colleague indicated, announced in the context of no tax increases. Never mind the $7.6 billion increase in collected income taxes resulting from last year's actions. Never mind the GST that begins next year. Never mind the cuts in unemployment insurance benefits that will mean increased costs at the municipal level for welfare expenditures and the increased premiums the cities will have to pay. Never mind the hundreds of costs that are going to be devolved upon the municipalities ultimately and be paid for by the hugely regressive tax on property.
The government washes its hands, like Pontius Pilate, as the costs devolve on those least able to pay. But, $2,500 is going to be saved by everybody as a result of this budget. It is very easy to hide averages among 25 million people but, I have a sneaking hunch that the greatest benefit is going to go to the usual people on behalf of whom this government works. The government describes the result of this budget as follows, and I quote: "The rising standard of living and the quality of life second to none in the world will be achieved as a result of the Budget tabled yesterday".
This budget is hugely dependent upon certain presumptions about interest rates over the coming year. Even as I stand here, the markets around the world are anticipating yet higher interest rates. We will have a chance to get this right for the next budget, the corrected budget, that the Minister of Finance will undoubtedly have to take. I hope that the President of the Treasury Board will arrange a room with sufficient seats, that he will provide us with the detailed estimates, the Part III estimates for all the departments so at that stage of the game, we can judge what is going on.
The interest rates are a very important aspect of this. If he is off by 1 per cent, that is $1.5 billion cut from the $225 that people are supposed to be saving all around the country as a result of this budget. It borders on the ridiculous.

February 22, 1990
Routine Proceedings
I would like to go back to the issue about the rising standard of living and look at the some of the presumptions in this budget, some of the goodies, the real good things in this budget, that give the Minister of Finance so much confidence in our future. There will be a mounting level of unemployment. When you fight inflation from the point of view of these people, that is good news. Increase unemployment. That relieves the pressure on inflation. That is good news. Even better news is that the average wage increases will be below the level of inflation. That is good news. When people are poor they will not buy as much and that will bring down inflation. That is all good news. This government has so much good news.
When you read the budget and consider the scenarios described in terms of making Canada more competitive, remember the mounting rate of unemployment and the decrease in the rate of increase in real wages. These are good things. It is also a good thing that there will be a decrease in the final domestic demand so we will not import as much. The good news is that we are importing machinery so that we can get our oil, coal and wood and ship it off to somebody else.
Of course, Madam Speaker, you understand that what is at issue here is that this government has absolutely refused to recognize that this country cannot compete as a low wage economy as the government would have us do. You question whether that is really what this government is thinking about. The government brags because it is only cutting back $39 million in research and development. This is a cut-back in an already inadequate rate of expenditure. If you really want to see the commitment of this government to a shift to a manufacturing and knowledge-based economy in lieu of a resource-based economy, look at what is being done to Established Programs Financing. The EPF transfer cut-backs have already reached a level of nearly $8 billion as a result of this budget. This has severely hurt our capacity to produce educated, creative graduates of institutions of higher learning which are necessary if this country is to shift its directions to create a high wage economy.
The Prime Minister gets up on any number of occasions and says, "Oh, my God, there has to be something done about education. We are going to take some new initiatives, we are going to have a task force. We are
going to make everything all right". It is not all right when students face higher tuitions and the universities are in scandalous shape. I point out in parenthesis here that in addition to these sharp cut-backs in university operational support, they are being hit in a variety of other ways. They are being hit with huge licensing costs for the use of radioisotopes to the extent that universities, as well as the high schools, are going to be driven to abandon an area of teaching in science that is necessary if we are going to produce educated graduates.
Nothing this government does seems to be consistent with any other pattern than the commitment in the free trade agreement to make us the resource pool for the United States and a target for acquisition by all the other countries in the world so long as we remain a low wage economy. It is absolutely outrageous.
Then we have what is going to happen to medicare. In Vancouver, and in Windsor particularly we have a citizens' movement that makes it possible for people who are denied critical health care and heart treatment in Canada to go to Detroit. Sixty per cent of the people cannot get into or near a hospital to have their operations, because so badly has our health system deteriorated already yet more cuts have been imposed. Again, it is an outrage.
One does not have to look at the Estimates to see that this budget is a travesty. It breaks every reasonable promise to Canadians, such as we will continue to have a high quality of life in this country.
I could go on repeating descriptions of cuts but these have been reported widely. They have been criticized widely. They have been condemned by most Canadians except those who are going to benefit and it continues to be those who are wealthy.
This government wanted to make cuts in expenditures. But it should not make them in EPF, not in welfare payments, such as the cuts in the Canada Assistance Plan at a time when the actions of the government are going to impose greater and greater burdens upon the cities and towns of this country to make up for the shortfall. It had money to waste. Just weeks ago it had government money to waste; $161 million for Boeing, $14 million spent to sell the GST that no one wants. It will cost the

government $1.2 billion to cover the increase in the deficit resulting from last week's interest rate rise, $350 million for RRSP top-ups for the very wealthy, those making over $86,000 a year. There were ways to cut the budget without hitting ordinary people and without threatening the very future of this country.
My leader has identified what is really wrong with this budget. We must emphasize the budget because the Estimates do not tell us a heck of a lot that is not in the budget. My leader has pointed out the real serious problem and it is the threat to the future of this country, not only in economic terms but in social terms. The civilized fabric of this country is being attacked by this government. Yet we ask why is there so much evidence of dissatisfaction and conflict in this country? It is because of this government's budget as reflected in the Estimates. I promise you, Madam Speaker, that if you are to preside over a future House it will be with a much diminished number of Progressive Conservatives.


The Acting Speaker (Mrs. Champagne):: The Hon. Member of Westminster-Burnaby on a point of order.


Dawn Black: Madam Speaker, my colleague from Windsor-St. Clair spoke very eloquently about what happened in the lock-up this morning.
I rise on a point of privilege about what happened in the lock-up this morning. I was in there for an hour and one-half. We got no information on the program cuts. I was in there for an hour and one-half. I asked specific questions about the cuts to women's programming. I asked specific questions about the cuts to-


The Acting Speaker (Mrs. Champagne):: I am sorry, I will have to interrupt the hon. member. The hon. member is describing something that did not happen in the House. It did not arise from debate this morning. Henceforth, the hon. member would have to give notice to the Chair of her point of privilege stating what it is about. I cannot entertain at this point in time the hon. member's point of privilege. It did not happen in this House and did not arise from debate this morning.


Iain Francis Angus: Madam Speaker, it is my understanding that the hon. member gave you notice of her intention to rise on a question of privilege. It is not my understanding that it is normal practice to provide the details.
Routine Proceedings
I have been privy to the information that the member wishes to raise and I can say categorically it is impacted by the tabling of the Estimates in this House today, the Estimates which are incomplete in the sense of Part III, and which the Speaker will be reviewing. The member's point is separate with regard to her ability as a member of Parliament to properly advise her constituents. That is the matter which she wishes to raise.


The Acting Speaker (Mrs. Champagne):: It is the
opinion of the Chair that to raise this question of privilege would require at least an hour's notice, and the letter or note sent to the Chair, should contain at least some indication of the manner in which the hon. member considers her privileges have been breached.
I don't think the note I received a few minutes ago is sufficient reason to interrupt the proceedings for a question of privilege on something that happened outside the House.
If the hon. member would care to send the Chair a more detailed note, she could raise this question of privilege after Oral Question Period.


COMMITTEES OF THE HOUSE
Mr. Guy Ricard (Laval):: Madam Speaker, I have the honour to present the report of the Legislative Committee on Bill C-48, an Act to amend the Crop Insurance Act, with amendments.
[Editor's Note: For above report see today's Votes and Proceedings. ]


FISCAL ARRANGEMENTS ACT, 1989 MEASURE TO ENACT
Mr. Brian L. Gardiner (Prince George-Bulkley Valley) moved: for leave to introduce Bill C-290, an act respecting fiscal arrangements between the federal government and the provinces.


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

February 22, 1990
Routine Proceedings


Some hon. members:: Agreed.


Brian L. Gardiner: Madam Speaker, I have the pleasure to introduce this bill today, which I think is important given the debate in this country on budgets and transfer payments. It is an act respecting fiscal arrangements between the federal government and the provinces.
The purpose of the bill is to impose on the federal government an obligation to ensure that any amounts paid by it pursuant to any new shared cost programs are used in accordance with that particular program.
It is important because of the allegations that have been made, particularly in my province where the Social Credit government uses health and education money to pave highways, and the concern Canadians have over what allowed this to happen, the Liberal's six and five program. This bill ensures some responsibility in this Parliament to Canadian taxpayers that education and health money is spent on education and health.


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


Some hon. members:: Agreed.


An hon. member:: No.


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


Some hon. members:: Yea.


The Acting Speaker (Mrs. Champagne):: All those opposed will please say nay.


Some hon. members:: Nay.


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


The Acting Speaker (Mrs. Champagne):: Call in the members.


The Acting Speaker (Mrs. Champagne):: I declare the motion carried.
Bill read the first time and ordered to be printed.


PETITIONS
Mr. Reginald Belair (Cochrane -Superior):: Madam Speaker, pursuant to Standing Order 36, I have the honour and the responsibility to present a petition from people residing in Valrita, Harty and Longlac. They are very concerned about a recommendation to do away with the system of tax benefits for northern and isolated areas.
Because of the hardships suffered by northern residents, including a harsh climate, the high cost of living and transportation and a lack of services, they ask with good reason for this recommendation to be thrown out and that the $2.5 million likely to disappear remain in the riding of Cochrane-Superior.


Mr. Guy Saint-Julien (Abitibi):: Madam Speaker, following in the footsteps of my articulate friend and colleague, I am tabling today, pursuant to Standing Order 36, two petitions from residents of Lebel-sur-Quevillon concerning recommendations of the Task Force on Tax Benefits for Northern and Isolated Areas.
The petitioners, who represent an isolated community, are very concerned and reject the recommendations in this report which would result in many lay-offs among other things. They believe that the Canadian government has failed to recognize the harsh reality of their daily life in the North.
February 22, 1990

Routine Proceedings GOODS AND SERVICES TAX


Mr. Robert E. Skelly (Comox-Alberni):: Madam Speaker, I have a number of petitions on the issue of protecting VIA Rail. Members of the House may wonder why these petitions are being presented now that the government has already taken steps to gut VIA Rail across Canada.
My constituents on Vancouver Island managed to defend their little section of VIA Rail by taking the Government of Canada to court and ordering the government to continue the operation of our VIA service as one of the conditions by which British Columbia entered Confederation.
Madam Speaker, I have a number of petitions from Courtenay on Vancouver Island, Parksville, Qualicum Beach and from other centres on Vancouver Island. The petitioners are concerned that the government is now attempting to sabotage the service that it has been forced to operate by raising fares, undermining the quality of service and generally driving passengers away. This gives some idea of how competently the Conservative government has been able to manage VIA in the past. I would appreciate the opportunity to table these petitions which are all duly certified under Standing Order 36.


Mr. Ray Funk (Prince Albert-Churchill River):: Madam Speaker, like two previous members I have a large number of petitions here from residents of my constituency, the towns of La Ronge, He a la Crosse, Cumberland House, Pinehouse and other points in northern Saskatchewan that implore the government to not implement the recommendations of the task force report on northern tax benefits but rather to extend those benefits into the future for those communities, recognizing the very high cost of living in those communities and recognizing the fact that many people will be forced to seek employment elsewhere, robbing those communities of a lot of the professional business talent and so on that they need to develop and keeping in mind that the proposed goods and services tax will inflict a much greater burden on those communities than on other communities. This is one way in which they could be compensated for those additional costs.


Raymond John Funk: I have another petition signed by over 700 people from my constituency of Prince Albert, Shellbrook, Meath Park and other points in northern Saskatchewan.
It calls on the government to immediately withdraw the proposed goods and services tax or as it is referred to there, the grab and steal tax. They recognize the impact that it is going to have on their cost of living and the impact it is going to have on the ability of families to pay their bills. They ask that the government withdraw this tax immediately and bring in a fair taxation system that is going to allow Canadian families to pay their bills in the future and not be devastated by the tax burden.


Raymond John Funk: Finally, I have a petition from Edmonton and communities around Edmonton. These people are protesting the low-level flights which have taken place over Innu lands in Labrador. They call on the government to withdraw from the agreements that make those kinds of flights possible, to stop the plans for low-level flights over British Columbia and Saskatchewan, including my constituency, and to redirect NATO and NORAD funding toward enabling Canada's original people to regain control of their lands and of their livelihood, and promoting sustainable development for all Canadians.


Mr. Steve Butland (Sault Ste. Marie):: Mr. Speaker, it is a great pleasure to present some petitions from our good friends in northern Saskatchewan to show us that there is unity across this countiy against the goods and services tax and to show that they are against this majority uncaring government. They want to assure the government that the fight will go on. It is particularly timely now as the budget presented in the last couple of days suggests there are no tax increases. Canadians know better.
^ ^ $


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


The Acting Speaker (Mrs. Champagne):: Shall all questions stand?


Some hon. members:: Agreed.

February 22, 1990
The Budget


The Acting Speaker (Mrs. Champagne):: I wish to inform the House that because of the ministerial statement, Government Orders will be extended by 51 minutes.



GOVERNMENT ORDERS


[Stage Direction]
The House resumed from Wednesday, February 21, consideration of the motion of Mr. Wilson (Etobicoke Centre) that this House approves in general the budgetary policy of the government; and on the amendment of Mr. Young (Gloucester) (p.8636) and the amendment to the amendment of Ms. McLaughlin (p.8644).
Mr. Jerry Pickard (Essex -Kent):: Madam Speaker, I stand today to speak on the budget and the motion made by the minister. I have to go back a bit and look at the history of this government and think about what has in fact happened over the time that the Conservatives have been the managers of the economy. If I were to give them a rating on management, it would be a pretty low rating. As a matter of fact, if this government was managing a company, it would have been fired a long time ago. However, that is not the case as it is managing the Canadian economy.
I would like to bring a statement forward to the government. I quote:
The growing public debt has become a severe handicap to the economic progress and the most serious obstacle to economic growth.
High deficits and growing debt will increasingly undermine confidence and put pressure on interest rates and reduce the prospects for growth in this country.
That statement was made by the Minister of Finance in 1984. Today, after five years in office, and against the background of an economy that turned out to be stronger than envisaged in 1984, the net public debt has grown dramatically.
The staggering federal debt figures prove that the government, despite protestations to the contrary, has
failed miserably to address the problem. Virtually every measure it considered unacceptable in 1984 has been surpassed today. That statement was made by the Chamber of Commerce a short time ago when they made representation to the finance minister on 1990-91 budget.
People right across the country have voiced then-opinions about the ability of the government to manage. We know a Gallup poll came out today which showed only one in five Canadians will support this government and the way it has managed the economy. The Angus Reid Poll last week suggested 21 per cent. Again, one in five Canadians would support this government. Four out of five Canadians oppose measure after measure that this government brings forward. Why? What is the reason? What has gone wrong with the management of this country?
Every time I turn around in this House I am told that we have a problem that was inherited from a Liberal government six budgets ago, and the government is unable to cope with it.
Day after day, week after week, year after year, that has been the message. Let us investigate what the statistics were in 1984 and what the stats are today and how a government with a majority has dealt with that huge problem it inherited, and how it has handled the economy in six years of total control. Remember, a government with a majority, as it has had, should be able to machine anything through it wished, set any policies it wished, carry the deficit as far it wished, add debt to this country as it would, and get away with it.
In 1984, the total revenues for the federal government were was $70 billion. Today, total revenues for the federal government are $120 billion. That is $50 billion in tax increases in its five-year tenure. The debt in 1984 was $170 billion. Today, $350 billion. It doubled the debt.
The payment on interest on the debt in 1984 was $22 billion. Today, it is $40 billion. The government has doubled that interest payment on the debt.
But it is really interesting to note that for six long years, this government has had total management of the economy. What has it done in that six-year period? It blamed the Liberals day after day for six years, saying it inherited a problem. However, it doubled that problem and severely curtailed its ability to handle the debt in this country. Through 31 tax increases of over $50 billion, it
February 22, 1990

has run the taxpayer of this country right to the brink and maybe beyond in some cases.
The income tax levels spoken by people who have come into the finance committee, spoken by manufacturers across this country, talked to by economists, have reached their upper limits. There is no more room to add income tax to the Canadian taxpayer. They have decided not to raise income tax because the Canadian taxpayer cannot afford more. However, there is an index policy which automatically brings it up quietly and underhandedly.
Excise tax, the sin tax that we talk about on gasoline and alcohol, was increased to the limits. People in my riding and in my area who live in border towns are driving their cars across the border and filling up with Canadian gas in Detroit and in other border towns because the tax on gasoline in our country almost doubles the price. The same Canadian gas bought in Detroit can be purchased at half the price of gas bought in Windsor.
There is a problem with our tax structure. The manufacturers' sales tax, the killer of jobs according to the Minister of Finance, has been raised and raised until it was two and a half times as large as it was when he took office. Therefore the remedy is a new tax and the GST was brought in, a GST which will solve all the problems. It will be the biggest tax grab placed upon the Canadian public and it will be put in place during the time this budget is in force.
The government has come in and said it is introducing a budget with no new taxes. What a shock. It has taken income tax to the highest limits possible, taken our excise tax to the highest limits possible, introduced a goods and services tax to outrageous levels-we will climb and climb and climb-and now it comes in and says, no new taxes. What a change! But Canadians know there are new taxes.
I could just sit back and think about that cabinet meeting when it was decided to develop the "no new taxes" line. Somebody is sitting back there scratching his head. He is thinking, "Well, you know, we have taxed this Canadian public as high as we can tax them. Every interest group in this country is telling us, don't add more taxes to us. What can we do?" Then somebody came up with, "Let the provinces pay our bill. If we stop
The Budget
living up to the commitments through our transfer payments with the provinces, they can take $2 billion, $3 billion, $4 billion, maybe even $7.5 billion off our debt which will make us really look good. We have been trying to get below that $30 billion debt figure for five years. If we have the provinces pick up a portion of that, we can bring it down to $28.5 billion debt and that will look good on us."
However, the Canadian public realizes what this government has done. Everybody that pays taxes in this country pays to municipal governments, to provincial governments and to the federal government. If the federal government shifts taxes to the provincial government, it still costs our taxpayer the same number of dollars. What this budget has done is shift a huge tax from the federal government to the provincial governments.
The Premier of Ontario suggested that $495 million extra will be required by the province to meet its needs. He also stated that the federal budget will take food out of the mouths of kids in Ontario because problems have been moved from his government to the provincial governments. Ontario is not the only one to suffer.
The Minister of Finance, through his strategy, has done one thing. He has united all the premiers, united them to speak against his budget, united them in anger because they know a huge problem that the federal government has built over the last five years has been transferred to the provincial governments who must now deal with it. That is a shame. It is a shame because where a province has been a good manager, where a province has done the very best to be honest with the public and raised taxes in accordance with expenditures, these provinces are being penalized. All provinces across this country are going to suffer that penalty from this budget.
When we look at that shift, we certainly cannot think that is fair in any respect and yet it is a strong shift that this government has done. They have changed focus now to get below the $30 billion deficit and have the provinces and municipalities pay for it.
Just look at a couple of the specifics within this budget, that are going to affect groups in this country. The transfer payments to the provinces are going to add a great deal more burden to our health care systems. I come from the Essex County-Windsor area. There, Madam Speaker, we have had a great deal of pressure on

February 22, 1990
The Budget
our health care system. I know that there have been special arrangements made by the Ontario government for people who are having particularly chronic problems to be transferred from the Windsor area into Detroit for health care services because the Ontario government does not have the services available for them.
I know that there are shortages and long lines for hospital beds in many areas of Ontario and those shortages and long lines for beds go across this country. One action by the Minister of Finance, and we end up making longer lines, making greater shortages or asking the provinces to put in millions upon millions more to make up the difference. A neglect of an agreement that was made by the provinces, therefore, is coming directly down on the heads of those who are ill, those families who need very critical health services.
I kind of smiled as well, but it is a serious matter, when we look at the headline in the The Ottawa Citizen, "Vets At War With Michael". How on earth can a budget come down on the heads of veterans, hospitalized veterans from the First World War, the Second World War and from times in the past, who served this country offering their lives where need be? Now we are going to tax them in their hospital beds. That is a real travesty of taxation but it shows the low levels at which taxation can arrive at times. It shows that we do not meet the needs of all of those. Certainly I for one feel very badly that the veterans have been even thought of as another area of revenue.
I also have a student who is going to the University of Ottawa. I realize the need for post-secondary education in this country. We have talked about post-secondary education and research and development as the means by which we can get away from being drawers of water, as a means by which we can get away from the lower levels of jobs and raise our people into high-tech and high opportunities for the future.
The answer that this government has provided for students in post-secondary education, the answer that they have provided to research and development is to cut severely into the ability of this country' to produce what we so direly need and that is a higher tech society-a society that can compete on a world basis.
When we heard the UI cuts, we heard there was going to be training for people. We are going to put that into place so that people who are displaced will be retrained. I haven't seen any evidence of that happening. We were also told during the free trade debate that we have to change from being drawers of water and hewers of wood to a society much better able to handle high-tech areas of this world. Yet the government cut research and development. It cut post-secondary education, which means it cut our future. It cut the future of those people who are able to develop higher skills. That is a travesty.
Let us look at the welfare program and the cuts or caps there. We have been hearing for months about the slowing down of the economy. The signs are very clear. Auto workers are being laid off in my region. Many, many people are having a lot more difficulty securing jobs than before. We have seen difficulty after difficulty across this country. There is a crisis in the maritime provinces. British Columbia has had a fair amount of suffering in the fishing industry as well. We know that the farmers in the prairie provinces are in a disastrous situation. Unemployment insurance rules have been changed, or are in the process of being changed, so people who become out of work will get less benefits than they would have just a year ago. Those cut-backs in UI are there when we are coming into a very difficult economy. What do we see? We see the federal government's obligation to the provinces being capped. In other words, it is telling the provinces that this huge problem of slow-down, created by high interest rates and mismanagement of monetary and fiscal planning, is going to come down on the heads of the provinces, because they are going to have to carry the extra expenses.
It is a real travesty when we realize that more people are going to be out of work in this country, as clearly stated by the Minister of Finance. The government has cut back its UI support. It is now cutting back its welfare support. Who is going to pay the bill? At least the provinces are caring governments. They are going to have to carry those expenses. It is a shame that this government, through mismanagement, is dropping that responsibility on the provinces.
When I mentioned the crisis across the country, this budget is glaring in the fact that it did nothing to deal with the Atlantic fisheries crisis; the farming issue in the west, or in Ontario; or the auto industry and the
February 22, 1990

manufacturing slow-downs. The agri-food business has been put under tremendous stress through the free trade agreement and the government is neglecting that responsibility. By cancelling the Polar 8 ice-breaker, it again adds to unemployment in British Columbia.
As we go down the list, it creates its own crisis and difficulty, and then pushes it off somewhere else. It certainly is an unacceptable situation when I see all these things coming up. There is also the housing crisis and the CBC cuts causing a communication problem throughout this country.
We, as Canadians, are upset with the management of the government. The people of this country have a very clear, strong message to give to the government. With the polls indicating 20 per cent support, they are telling the government that it is doing a terrible job.


Mr. Lewis:: It is 19 per cent this morning. Get up to date.


Jerry Pickard: I am averaging my 21 with your 19. The two latest polls give you 20 per cent and that is right up to date.
However, the point is a very clear one. This government is a terrible manager of the economy.


Mr. Wappel:: Madam Speaker, may I just begin by congratulating my colleague on another of his excellent and incisive analyses with respect to the Conservative government making our society stray from that which is right and just.
By way of comment and question, I want to ask my colleague a very simple question. I would like him to comment on a particular part of the budget, and that is the very first paragraph in the budget book in which the Minister of Finance indicates and I quote:
Since 1984 this government has been following a consistent and
comprehensive plan to ensure that Canadians can benefit from a
rising standard of living and a quality of life second to none in the
world.
I ask my colleague this question. In Canada today we have high interest rates, a crisis in the Atlantic fishing industry, a 24 per cent illiteracy rate, and the largest debt in the history of our country. As the hon. member pointed out, under this government, increasing poverty is evidenced by the increasing number of food banks springing up across this country, increased taxes on ordinary Canadians and decreased taxes on the corporate elite. Would the hon. member be kind enough to
The Budget
comment on how the Minister of Finance could possibly have the gall to make the statement that he did?


Jerry Pickard: I thank my hon. colleague for the question. I think he keys in on something that is very relevant to the arrogance that we have seen from the Minister of Finance and the President of the Treasury Board when they present that they are on course with an over-all process which is going to enhance our nation and that Canadians are better off. We have gone through six years of very prosperous times and some good economic growth which was not expected to be as strong. What happened within the whole process of growth and prosperity is that the government has set us on a disastrous course of huge debts and huge deficits. Michael Wilson said in his forecast in 1984 that if we followed the Liberal line we would end up at such and such a level of debt and deficit. Instead, we followed this government's line. Here is a statement made clearly by the Chamber of Commerce, normally a strong supporter of this government:
The staggering federal debt figures prove that the Government, despite protestations to the contrary, has failed miserably to address the problem. Virtually every measure it considered unacceptable in 1984 has been surpassed.
This says that maybe it did set a course in 1984 to destroy the country. That is the only answer I can give when it says it is still on course and doing well with the economy. It has increased taxes. It has increased the debt. The interest payments on the debt have doubled. I really do not understand what course it set and what course it is on. It seems to be a course of disaster by a master.


Mr. Fontana:: Madam Speaker, let me also take this opportunity to congratulate my colleague from Essex, near London, for his fine presentation on this very important and serious matter, the discussion on the budget. I want to ask him one question.
He has been very insightful in his analysis of the budget and the government's management performance over the past six years. We all know the budget is very much predicated on some assumptions, such as assumptions of growth rate, unemployment rate, interest rates, and so on. The minister obviously has to take into account what the performance of our economy is going to be in 1990. It is clear that not even his most favoured buddies and most favoured clientele in the Canadian constituency agree in fact with his assumptions, especially as they relate to interest rates. Would my colleague

February 22, 1990
The Budget
from Essex-Kent give us more information with respect to those assumptions and how inaccurate or how wrong they may very well be.


Jerry Pickard: Madam Speaker, again I thank my colleague for the question.
Our interest rate situation is a very difficult one. The reason is that we are in an economy that basically has borrowed, borrowed and borrowed. The Government of Canada is the largest borrower in the country. It is in a situation where it has borrowed tremendously not only from this country but from many others.
I quote an article in The Ottawa Citizen of today. It relates to James Gillies' warnings that Canada's worst nightmare is not the net debt, but that it will be growing at alarming rates from $350 billion to $406 billion by 1991-92. The article continues:
The real killer, he says, is the foreign debt of $250 billion-which on a per capita basis is the worst in the world.
The worst foreign debt in the world has been built by this government. It continues:
Our foreign debt is the most of any country in the world on a per capita basis-And of course, we are running a $20 billion deficit in our current account. When you get a big deficit, you have to import capital.
To get capital you have to maintain high interest rates. Our high interest rates are therefore there to bring in foreign capital to prop up our foreign debt. It is very clear that we have to be cautious about who is buying Canada. From the policies that are going on, this is a disastrous course.


Rob Nicholson: Madam Speaker, I just heard the hon. member mention a debt of $250 billion built up by the government. I am sure he would want to correct the record by first acknowledging that when the government came into power in 1984 the debt in the country was $200 billion.


Joseph Frank (Joe) Fontana: No. Stop inflating that.


Rob Nicholson: The interest on that is another $120 billion just on what the Liberal Party left us in 1984. That is $320 billion.


Some hon. members:: Oh, oh!


Rob Nicholson: Does the hon. member ever talk with his colleagues about this? Some of them are pretty quiet such as the member for Winnipeg South Centre or Mr. Chretien who is running for the Liberal leadership. I know the hon. member will agree with me that they are not too worried about this deficit but it is interesting the hon. member said that he is so worried.
Has he ever had this discussion in his caucus, asking why did they let this happen? I know the hon. member will agree with me when I say that we would be in a lot better shape today if we had not inherited a $200 billion debt in 1984 and if we did not have that $120 billion that we have had to pay in interest since then.
The hon. member's concern is very interesting and nice to hear, but has he ever talked with any of his colleagues in the Liberal Party? They have been as bad as the socialists in encouraging government spending.


An hon. member:: No.


Rob Nicholson: Yes, it is true. They have been as bad as the socialists in encouraging the Government of Canada to spend money it does not have. I put that to the hon. member.


Jerry Pickard: Madam Speaker, I appreciate the comment from my hon. colleague on the other side. I would like to correct him on a couple of points that he made.
I was quoting a $250 billion foreign debt.


Mr. Oberle:: Where did you get that? It is absolute nonsense.


Jerry Pickard: That came from an article, as I pointed out clearly, in The Ottawa Citizen. It was Professor James Gillies who was commenting on what is happening to the moneys going out of this country and the foreign groups buying in. That was where that figure came from.
I will go back to the 1984 budget figures.


The Acting Speaker (Mrs. Champagne):: I am sorry to interrupt the hon. member, but the period for questions or comments has now expired.
February 22, 1990

The Budget


Mr. Jean-Marc Robitaille (Terrebonne):: Madam Speaker, I welcome the opportunity today to take part in this debate and to express my views on the measures contained in the federal Budget.
If we are to have a constructive debate on this Budget and some appreciation of all the nuances and subtleties it contains as well as the actual measures it proposes, I think we should consider the Budget in the context of the economic situation and the budgetary realities facing us today.
One aspect I would like to mention right away is the fact that the Budget contains no tax increases. It is the first time in living memory that a federal Budget has not proposed tax increases, and whatever certain opposition members, whose judgment is often clouded by political partisanship, may say, this Budget contains no tax increases. Canadians sent us a clear message. They asked us not to raise taxes and to cut spending, being equally aware of the major problem the deficit and our national debt represent for the economic future of our country.
Despite the fact that we have cut the annual growth of the debt from 24 per cent to less than 10 per cent since 1984, the debt is still growing faster than the economy. Our public debt has grown from $200 billion in 1984 to $350 billion this year. Eighty per cent of this increase consists of the compounding interest on the $200 billion which our Liberal friends left us as their legacy in 1984. We must not forget that the current budget deficit, contrary to what some people would have us believe, is not the result of uncontrolled government spending but was caused by the monstrous debt we were left by the previous Liberal government, combined with the incredible imbalance between that government's revenues and expenditures. That was the situation we inherited in 1984, and we have been working very hard ever since, with today's remarkable results.
In 1984-85, the government had an operating deficit. Program spending exceeded revenues by about $16 billion. This means that when we came to power in 1984, the government spent $16 billion more than it received in terms of tax revenue, and it was necessary to borrow those $16 billion.
Today, in 1990, this balance is now positive, with revenue $9 billion more than program expenditures. This means that now we do not spend more than we take in. On the contrary, we spend less.
This turnaround of $25 billion in the operating balance brought it from a deficit of 3.6 per cent of gross domestic product in 1984-85 to a surplus of 1.4 per cent in 1989-90.
Madam Speaker, I believe that it is also important to add for the benefit of Canadians and members of this House that 70 per cent of this improvement is due to cuts in spending.
Canadians sent us a clear message: they are ready to tighten their belts, the people are prepared to make an effort so that together we can repair the irreparable, but they demand that their governments and their representatives make a concrete effort to reduce expenses and that governments live within their means.
And the Minister of Finance and this government got the message. That is why this Budget contains no tax increases but rather a significant expenditure reduction of about $7 billion by 1992.
It is important to remember that this spending cut contained in the Budget is in addition to the one announced last December by the President of the Treasury Board which provided for major reductions of about $1.4 billion over the next three fiscal years.
The purpose of these measures is to eliminate waste, to make operations more efficient and to save money. For example, Madam Speaker, federal construction projects have been frozen, travel by parliamentarians and officials has been restricted, some parliamentary restaurants will be closed, two government jets are being sold and several government agencies are being merged or eliminated altogether.
Madam Speaker, those are courageous, concrete and responsible acts to give back to Canadians what our predecessors unfortunately endangered.
Madam Speaker, the deficit is a national problem. It requires a national solution.
If we want to restore the public finances, provincial governments must do their part, in the same way that they will benefit from lower inflation, declining interest rates and sustained economic growth.

February 22, 1990
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The deficit cannot be reduced significantly without affecting transfers to the provinces. These transfers are too large a share of federal spending to be left out.
Let us look at the situation of transfers. In the fiscal year that will end soon, transfers of cash and tax points to the provincial governments will exceed $35 billion and these transfers have been growing faster than federal programs in general.
Transfers to the provinces have grown at an average rate of 6.5 per cent since 1984-85. Throughout that period, increases in total federal program spending were kept at an annual average of 3.6 per cent, which means below the inflation rate.
This year, 35 cents of every revenue dollar will go towards paying the interest on the debt. The provinces, on average, spend only 12 cents on servicing the debt.
If the federal government does its duty by keeping spending increases down to around 3 per cent, it would be hard to imagine allowing provincial transfer payments, for established programs financing in particular, to maintain a growth rate of 6.5 per cent.
The February Budget reflects the fact that transfer payments to the provinces cannot keep increasing at the same rate, if we are to achieve our objectives for reducing the deficit.
As part of the Expenditure Control Program set forth in the Budget, provincial transfers are expected to grow by an average of 3 per cent over the next two fiscal years, about the same rate as total program spending.
The Budget also reflects the specific needs of lower-income provinces. Federal transfer payments are expected to increase by an average of 2.3 per cent in higher income provinces and by about 4 per cent, during the next two fiscal years, in lower-income provinces.
The decline in the growth rate of provincial transfer payments represents about 1 per cent of total provincial revenues. Federal support to the provinces remains very substantial, nevertheless, and total transfers will continue to increase, reaching over $36 billion in 1990-91. The poorest provinces will receive a proportionately larger share of these transfers.
Madam Speaker, the spending restrictions we must impose if we are to deal effectively with the deficit and
our national debt, require some difficult and very serious decisions. However, they reflect a concern for fairness and justice that ensures the provinces will not be unfairly penalized.
Madam Speaker, the Budget proposes a wide-ranging program aimed at controlling federal spending for two years. I shall, if I may, mention some of its components.
Although the Expenditure Control Plan will affect certain areas of program spending, major transfers to persons will be exempted.
In other words, the budget cut-backs do not apply to benefits for the elderly, family allowances, veterans' pensions and allowances, unemployment insurance benefits, and Canada Assistance Plan equalization transfers to poorer provinces.
Ever conscious of the views expressed by most Canadians, we want to maintain our social benefits and show that even if the fight against the deficit calls for stringent measures we can and we must do that without compromising our major social programs.
The growth of a number of programs has been limited to 5 per cent for the next two years. This applies to Canada Assistance Plan payments to the fiscally stronger provinces-Ontario, British Columbia and Alberta-and to expenditures for science and technology, Indian and Inuit programs, as well as foreign aid and defence.
Other programs will be held at the 1989-90 levels for the next two years. With respect to Established Programs Financing, total per capita cash and tax transfers to the provinces will remain constant. These transfers will continue to grow with provincial populations.
Some programs have been reduced or eliminated. The government will not proceed with the offer of assistance to the OSLO oil sands project. The Canadian Exploration Incentives Program has been cancelled, and the government will not proceed with the Polar 8 icebreaker project.
Business assistance has proved to be very useful, but the government will take a more business like approach. With limited exceptions, grants will be eliminatd beginning in 1990-1991 and federal assistance will be repayable on more rigorous terms. The emphasis will be on economic development rather than private sector subsidy.
February 22, 1990

The Budget also listed, Madam Speaker, a broad range of measures to make government operations more efficient and less costly. We will continue to privatize Crown corporations and to sell shares in those which are no longer necessary to achieve public objectives. Also, to increase the return on public investments and to reduce the deficit, profitable Crown corporations will have to pay the government more dividends. The 2 per cent ceiling on annual increases in government operations and maintenance budgets will also be extended until 1994-95.
Together with the initiatives announced in December, these measures will yield savings of about $3 billion in 1990-91 and nearly $4 billion the following year. Total savings of over $19 billion will be realized in the next five years.
The Budget thus brings the deficit back to a declining curve, without tax increases. We are acting now so that the government's financial situation in the 1990s will make it possible to support the programs to which Canadians are most attached.
The measures presented in the Budget will lower the deficit to $28.5 billion in 1990-91 and cut it in half, to $14 billion, by 1993-94. The following year, the deficit will go down again, to $10 billion. The excess of operating revenue over program expenditures will reach $31 billion. Program spending will fall to 14.2 per cent of national income, the lowest level since the late 1960s. The national debt will start decreasing relative to the national income. The government will begin to pay down its bonds and Treasury bills.
Both collectively and individually, Madam Speaker, Canadians must commit themselves to building a sound and productive future on strong foundations. To that end, we need a government with the necessary financial freedom to monoeuvre and maintain the important services and meet the new challenges head on. We also need a dynamic economy to ensure an increase in the standard of living and a widening of opportunities for a full and satisfying life. We need a country which is mature, economically sovereign, perfectly competitive and the master of its own destiny.
Canada has the natural resources, the capital, the human resources and skills needed to prosper in a competitive world. However, our ability to determine
The Budget
our economic future is seriously compromised by inflation and our increasing indebtedness.
Our economic strategy and the positive steps we have taken in this Budget, in accordance with this strategy, clearly put within our reach a decrease in inflation and a progressive reduction of the deficit. Perseverance in our efforts will make it possible for us to determine our future better and use a larger share of our income to improve the standard of living and quality of life of all Canadians.
Finally, Madam Speaker, I just cannot overlook the words of praise which the Minister of Finance (Mr. Wilson) has received from Mr. Bernard Landry, a highly respected and credible Quebecer, who stated, as reported yesterday in La Presse, and I quote:
"Under the circumstances, this excellent budget is an amazing feat. Mr. Wilson is certainly the best Minister of Finance Canada has ever had."


Some hon. members:: Hear, hear.


Jean-Marc Robitaille: The Minister of Finance has received words of praise from everywhere. The Minister of State (Finance) who is here can bear witness to that. I suggest that with respect to this budget, the Opposition cannot be right against everybody else.


Mr. Pagtakhan:: Madam Speaker, I would like to ask a few questions of my hon. colleague. Since the budget in a real sense reflects the mind, heart and muscle of government, I did not see any heart for the poor, the sick, the youth, the seniors and the veterans. I see, in fact, no mind or vision for the future.
Would my hon. colleague not admit that were we as a country to be competitive, we truly have to have educated Canadians, literate Canadians, healthy Canadians? How can he expect ill and illiterate Canadians to compete in the coming century? How would he reconcile the increasing health care problems in all the provinces, and the need of the injured and the ill to have access to hospital beds, nurses, doctors and therapists, yes, how would he reconcile the needs of today with the budgetary cuts that this government has undertaken in the wrong departments?
There is a second point I would like to comment on before he stands to answer those specific questions. I would like to submit to him that when the government says there are no new taxes, this is only a way of being sneaky and less candid with the Canadian public. The transfer of payment cuts to the provinces are equivalent,

February 22, 1990
The Budget
and this is not original as the 1989 edition of the book, Canada, the State of the Federation did say that the transfer of payment cuts to the provinces are equivalent to increasing taxes-a sneaky way of increasing taxes without telling the Canadian public quite candidly.
Second, would he tell the House why taxation by surcharge is allowed to continue? This is also equivalent to increased taxes because by definition surcharges ought to be only temporary. We would also like the member to comment that since the GST, if enforced by this government by January 1991, will take effect within the current budgetary fiscal year, why then those GST not be new taxes to the Canadian public. I would like the hon. member to be candid to the Canadian public, to be candid to the ill, the sick, the youth and the poor. Thank you, Madam Speaker.


Jean-Marc Robitaille: Madam Speaker, I want to thank the hon. member for his comments. I almost needed a tape recorder to catch everything he said. In any case, I will try to respond to all his questions and comments. When he told us here in the House that he found it hard to find any heart in what we are proposing, I think the hon. member failed to understand our message.
Obviously, there are a number of challenges facing this government. When he- talks about the need to fight illiteracy and to deal with health care costs, the hon. member is perfectly right. But I would say that the biggest handicap and the greatest threat to all these programs remains the extent of our national debt and our deficit. The Liberal Party left us to deal with the public finances of this country in 1984-85. I may remind the hon. member that it was his party, when it was in power, that left us this mortgage on all our social programs. When we take measures to control spending, to reduce the deficit and, within the foreseeable future, to reduce the national debt, this is still the best guarantee anyone could wish for maintaining the effectiveness of our health programs.
The hon. member seemed rather upset or suspicious about my statement that there were no new taxes. I repeat: the federal Budget has no tax increases. There are none. When the hon. member says that the Budget will lead to tax increases at the provincial level, I may
remind him that the provinces do not necessarily have to increase taxes. They have the alternative of engaging in the same exercise as we have initiated at the federal level, and I am referring to better spending control. I repeat that if we manage to keep our spending increases down to 3 per cent at the federal level, we can hardly let transfer payments increase by 6.5 per cent. I think that would be inconsistent.
As for the GST, Madam Speaker, I am sure we will have a chance to discuss this subject in greater detail.
However, I simply want to say that the GST gives the Government of Canada a certain revenue stability and it provides for a fair distribution of the tax burden among all Canadians, and that this series of measures, the Budget, previous budgets and all other measures that have been taken will make it possible to achieve a better fiscal balance, reduce the deficit, control the national debt and thus guarantee the continued existence of our programs in the future. We must realize this.


Steve Butland: Madam Speaker, I commend the member for the delivery of his speech. I cannot say too much for the content.
I know he took great interest in the by-election in Chambly and I know he would like to take the opportunity when he gets on his feet to congratulate the new member for Chambly and congratulate the New Democratic Party in the Province of Quebec and also Canada. I know he is very eager to do that.
In this deficit discussion I notice that the Liberals suggest it is the Tories fault and they throw it back. However, I suggest that both parties share in the blame and there is no sense going back and forth. I think both parties should equally share in the credit for the deficit. Only the New Democrats have not shared in this deficit production.
Let me speak about the financial commitments of 1988. We have not reflected too much on the election lately, but it was crystal balled at that time that there were no problems whatsoever with the financial commitments of the government, and there was no mention of deficit. However, for the last several months all we have heard from this government, is "deficit, deficit". Why all
February 22, 1990

of a sudden? What happened immediately after the election that we became pre-occupied with deficit?
The member mentioned concrete cuts and we are also interested in concrete cuts, but I understand in the lock-up this morning that it was very general, very vague. I would be interested in the member's comments about how concrete the cuts are and how specific they are.
As far as the "no tax increase", surely the member would agree that there is only one taxpayer and whether he or she pays taxes at the municipal, provincial, or federal level it is a tax increase regardless, and there are not going to be cuts across the board or else we will do without hospital beds and education.
To end my comments, I will just ask one question. Should not each sector be responsible for his or her own governments, own area, or own department? Should not the federal government have become responsible for its own area and not shift the blame to the other levels of government?


The Acting Speaker (Mrs. Champagne):: A very short comment from the hon. member for Terrebonne.


Jean-Marc Robitaille: Madam Speaker, as for the election in Chambly, I think that the hon. member cannot doubt that- Yes, I welcome the new member for Chambly, but I am eager to hear him explain his position on Meech Lake. We are waiting for it here.
In his little talk, the hon. member said-for which I thank him-that the Conservatives and Liberals seem to be accusing each other back and forth and that the New Democratic Party is the only party not involved in creating the debt. I think that the hon. member will recall very well what the New Democrats did when we had a minority Liberal government, what orientation it gave to the Liberal Party, which might not have been strong enough to stand on its own two feet then. Furthermore, luckily we never had a New Democratic government in power because, hearing them talk in committees, calling for new programs, new services, wanting to run people's lives and decide what is good for
The Budget
them, I assure you that the bill would be quite a bit higher than it is now.


The Acting Speaker (Mrs. Champagne):: I must interrupt the hon. member; the time for comments and questions has now expired. Resuming debate, the hon. member for Winnipeg South Centre (Mr. Axworthy).


Hon. Lloyd Axworthy (Winnipeg South Centre):: Madam Speaker, in a budget debate an opposition has a couple of key responsibilities. One is to clearly criticize and point out the flaws in the document presented by the government. Yesterday, we saw our own critic for finance do a superb job of analysing the lack of credibility and the lack of forthrightness in the minister's statement that there are new taxes, there is going to be a continuing deficit, perhaps a worse one, and that the premises of the entire budget are suspect.
As the days proceed, we will find other members continuing the very important task of holding the budget up to light and letting Canadians take a hard look at just how weak the document really is.
This afternoon, I want to present what I think is another responsibility of opposition, and that is to present Canadians with a choice, to present them with alternatives, to have them look at a different kind of economic blueprint, a different kind of economic statement that could have been made, that should have been made, and might have been made with a different government, a government that would have a different set of values, a different outlook, different premises, different assumptions about what is happening in the country, what the priorities are, and what is important.
As much as a critique is important, so is choice. Canadians must be given the opportunity to understand that there are different ways of managing the economy of this country, and certainly of presenting a blueprint and design for Canada that will stand us well in the future.
Every member of Parliament, as we turn this particular decade, was visited with all kinds of material about the 1990s and the vistas beyond. We should all be aware that what is going on in the country does require some direction and some sense of purpose. In our case, a

February 22, 1990
*
The Budget
budget is simply more than an accounting sheet of expenditures and revenues, it is more than simply totalling up taxes and outlays.
It does represent a direction, a purpose, a blueprint and that is, in large part, where our debate should focus. It is important to me because perhaps this budget more than any demonstrates the clear distinction in philosophy and political belief that is polarizing this country in part but certainly setting out major distinctions.
I also think it demonstrates the lack of reality and the lack of sincerity in coming to grips with the very substantial underlying strategic problems taking place in this country.
Let me just present a couple of examples. We are a country that is increasingly finding itself built on two levels, a split level society. The Economic Council said it best. I cite the Economic Council because certainly no one could ever accuse it of being a Liberal think-tank. In its latest report "Good Jobs and Bad Jobs, it states that the regional disparities in Canada are growing wider, that as we go into a service economy, close to 78 per cent of all new jobs will take place in four or five major urban centres.
That leaves a lot of Canadians dispossessed. It leaves a lot of regions of Canada on the outside. It leaves a large part of this country totally outside the job market. How did the Minister of Finance deal with that in his budget? He basically shut down regional development programs. He took the regional development agencies like Western Diversification, ACOA, and others and turned them into lending agencies. They are no longer development agencies. They are now banks. If you are big enough and have enough assets, sure you can get a loan. But if you are a small entrepreneur in a small community in the Atlantic or in the interlake of Manitoba you do not have the same capacity. You need a start-up and that will be denied.
Rather than offering at least some small semblance of gesture toward regional disparities as outlined in this document of the Economic Council, the Minister of Finance goes in the opposite direction. He does not seem to be looking at that reality that is staring him in the face that we are a country where most of the growth and activity is concentrated in one, two or three major urban centres.
That has enormous portents for the future of this country. It means the idea of building a country from sea to sea where there is a sense of belonging in every single part of Canada gets erased. The message is that you have to be in a big city, or one or two big cities in order to prosper.
While I am at it, let me point to another reality as presented by the Economic Council. It points out that the job market in the last five or six years has substantially altered, and that about half of all the new jobs, which this government is always standing up and being so proud about, are temporary, part-time jobs.


Rob Nicholson: No way.


Lloyd Axworthy: It says it in the document. I would suggest that Conservative members learn to read, because there it is. I cite it: "Good Jobs and Bad Jobs, published by the Economic Council of Canada. Forty per cent of all the new jobs are part-time placements or temporary jobs. Not only that, but the disparity in income is growing wider. Look at this figure in terms of the so-called income base of the middle class of Canada. It has gone down from 34 per cent to 29 per cent in a matter of about eight years.
The middle class is shrinking and we are getting one job market for highly skilled, high techs or service stock broker-type people who get high incomes, the BMWs, the fancy condos, and the expense accounts in Florida, but people in the other parts of Canada are suffering and their incomes are dropping.
What do we see in the budget document? What we see actually written in the document is that the Minister of Finance is predicting an income decline for Canadians. That is something we should take confidence in? In the document itself the government is predicting that there will be a personal decline in income.
Along with that reality of the growing disparity in incomes, which the minister does not address at all, is the growing burden of the taxation which falls upon the middle class, which is seeing its income drop. Those are not my figures. They are from the Economic Council of Canada.
So the middle class is losing income and paying more taxes. In the meantime, as the budget document itself points out and I cite specifically documents of the government itself-the Economic Council and the Department of Finance-which also point out that in the last five years, since 1984-85, the corporate burden of taxation in relation to the revenues of Canada have

February 22, 1990

fallen from 13.5 per cent to 10 per cent, and the personal income of Canadians have gone up about 10 per cent or 15 per cent, which now represents close to 50 per cent of all the revenue.
That is a serious reality about this country. Again, I put to this House, what has the Minister of Finance done about it? What we have seen is that he is cutting back on those programs that would provide some assistance and adding taxes, for example, a consumption tax, which will fall heaviest on those middle income people, and relieving the corporations of another $9 billion worth of taxes.
Surely, looking at that reality in black and white, one would have thought there would have been a different budget presented, that the Minister of Finance had a responsibility to recognize that this was a new reality in Canada, a Canada in which there is a growing disparity, a growing gap, a growing separation, and a growing feeling that a lot of Canadians no longer count and are being pushed to the sidelines.
We have had a debate in this House and there is a lot of consternation in the country about the outgrowth of certain regions or communities that are becoming antiFrench in some ways, or anti-Canada. Part of it is based upon an economic reality that they no longer feel they have a stake in the country. It is related to this economic reality. If you are losing your job, income and industry, you will lash out at people. You get angry and mad.
So much of the responsibility of this budget is to repair the fabric of Canada as much as it is to deal with dollars and cents. Yet I saw nothing in the budget that was prepared to deal with this kind of reality.


Mr. Parent:: They don't care.


Lloyd Axworthy: Maybe they do care. But maybe the Minister of Finance has become so fixed and obsessed with just one reality, the thing called the deficit, that he is ignoring the other realities of a country that is slowly tearing itself apart economically, and therefore socially and politically as well.
The Budget
Let us look at another reality that is not addressed in this budget. We hear countless times about the talk of globalization, how we are now players in the international marketplace, how we have to make ourselves competitive and productive and show that we are able to meet the demands of the new international marketplace. I agree that is an incredible challenge that we face. I do not think it is a matter of partisanship to say that we are all in the boat together and everyone wants to see this country succeed.
However, let me return to the budget document for a moment and refer to a little known figure that was not drawn out or emphasized. Certainly, the Minister of Finance did not reference it in his speech. In this coming year alone, we are facing a current account deficit of $20 billion. We are becoming indebted to foreign countries. We are increasingly allowing our economic rights to be taken over outside the borders of this country so we will no longer be mattre chez nous. Every single hour that we sit here over $3 million leaves this country. If you want to look at some striking figures, back in 1965 foreign indebtedness in relation to our Gross National Product was 17.9 per cent. In 1988, that had jumped to 21 per cent. About 38 per cent of our GDP is now in foreign debt.
Why that is important is it comes down to one final truth. The reason for our high interest rates. Because of the escape of capital and money from this country, the outflow of dividends, the outflow of paybacks, the outflow of that kind of money we have to have high interest rates to artificially entice further capital in. We are now paying the price for decades upon decades of foreign ownership and the resulting capital haemorrhaging that is taking place in Canada.
We used to be able to pay for it by a surplus trade balance. Back in 1984, the last year of a Liberal government, we had a $20 billion trade surplus. Do you know what the trade surplus was last year in 1989? It was down to about $4.6 billion. What we used to be able to pay through our merchandise trade, the sale of our grain and our resources and our manufacturing, we are now desperately losing.
I only have to remind you, Madam Speaker, that this is in the era of free trade. This is one year after we were promised by the Prime Minister, the Minister of Trade

February 22, 1990
The Budget
and the Minister of Finance that free trade was going to open up new trade opportunities, bigger markets and larger growth. Instead it has shrunk, it has fallen, and we are now in a serious crunch in terms of our trade surplus and even more desperately in terms of our foreign exchange position.
That is a problem that no government can ignore but this government does. It does so with effrontery and arrogance to the extent that yesterday the Minister of Finance in Question Period said that we are going to persist with a high interest policy. The position of the Government of Canada is high interest rates. A high interest rate will keep the dollar high, the dollar will stay high and therefore our exports will fall, therefore we will have less money to pay for the $3 million an hour pouring out of this country. We are in a vicious circle. We are chasing our tail and the Minister of Finance does not deal with it in one sentence in his budget.
He does not care about the fact that this country, day by day, hour by hour, is becoming more indebted to foreign markets, to foreign banks, to foreign investors and therefore weakening our ability to be a significant independent player in international trading markets.
Is that a sense of responsibility? I go back to my first remarks that it is time Canadians knew that we needed a different kind of budget.
Let us take it one step further on the grounds that we are so deeply concerned about that international marketplace. What is the primary criteria for competition in that marketplace? Every single examination conducted by the Economic Council, the Conference Board, Bank of Canada says we must become innovative and creative. It is going to be information skills and knowledge that will allow us to compete.
What do we have in this budget? How is the Minister of Finance responding to that challenge? I will tell you how he is responding. He is responding by cutting back on higher education. He is responding by cutting back on research and development. He is cutting back on the very elements of investment that would make us strong and competitive. How can this government stand up with any nerve at all and say: "Hey, folks, we gotta become competitive, productive, smart and creative" when we are cutting back on our universities, cutting back on our research and development and totally ignoring the necessity for this country to get into the mainstream, to say nothing of totally contradicting the commitments made by the Prime Minister at the big meetings on education and the commitments made on research and development? That is what gets cut.
There is one exception and I would like to point it out. One part of the budget which still retains a large amount of funding, over $250 million, is the defence industrial productivity program to give grants to industry to make weapons, to make armaments, to fuel the arms race.
What are The Economist, the Washington Post, French magazines, German magazines or Russian magazines all talking about? They are saying that we are now living in an era where the arms race is coming to an end and that every country should start thinking about a peace dividend. How do we start re-orienting our budgets in this new age, to re-allocate it to training, to education, to research? How do we make the country stronger? Not by stimulating further arms investments, but given the chance for the first time in 45 years to re-orient our society, does this government understand that reality? Is there anything in this budget that acknowledges that to be the case? A defence budget of close to $12 billion; DIPP funding of $250 million.
I am not saying that we go and slash and hack away at the defence establishment. We need a policy. We should be talking about conversion. There are other things that we could be doing. We have argued now for a year, since the last budget, that there are all kinds of creative possibilities in which we can use those defence moneys. We can do it in terms of our own sovereignty, developing Summerside as a peacekeeping centre, these sorts of ideas. But the government has nothing in it, there is not a thing. So it is business as usual at a time when every other country realizes that there is a dividend to be achieved and we are failing totally in meeting that possibility.
It seems to me that there is another way, another option, another choice that Canadians could have seen in this budget that would have given us a lot more sense. We should have a creative Minister of Finance, rather than one who simply thinks that the deficit is the only thing that counts.

February 22, 1990


The Acting Speaker (Mrs. Champagne):: There will be three minutes available to the hon. member after question period, should he wish to conclude.

It being 1.51 p.m., I do now leave the chair until two o'clock this day.
At 1.51 p.m., the House took recess.


[Stage Direction]
AFTER RECESS

The House resumed at 2 p.m.

Guy St-Julien: Mr. Speaker, the Association des prospecteurs du Quebec feels that the decision of the Minister of Finance to abolish the Canadian Exploration Incentive Program is a catastrophy for the financing of mining exploration in Canada.
The APQ points out however that the Minister has chosen to maintain the flow-through share scheme which allows for 100 per cent of the exploration expenditures incurred by the corporations to remain transferable to the investors.
The APQ feels that the administrative decision of the Minister of Finance is bad, in view of the total funds invested during the program implementation and startup period, and that this decision was not based on the cost-effectiveness and efficiency of the program.
Personally, Mr. Speaker, I know that the Minister of Energy, Mines and Resources of Canada and his officials have worked very hard to maintain this program and that this decision is simply the Minister of Finance's decision and his alone.
With all the prospectors and the mining industry of Quebec as a whole and Abitibi in particular, I will continue to strive to eventually obtain justice for them both from the Quebec and federal governments.


SUSTAINABLE DEVELOPMENT
Hon.   Chas. L. Caccia@Davenport: Mr. Speaker, in his single-minded pursuit of the deficit the Minister of Finance makes only passing reference in his budget to the government's commitment to sustainable development.
Three years after publication of the Brundtland Report this government has not rallied enough political will to act. For example, the Minister of Finance fails to see the importance of exempting from the goods and services tax products approved as environmental friendly, of introducing a carbon tax on consumption on fossil fuels, of changing the policy on fossil fuel megaprojects except for cutting the subsidy to OSLO, of shifting research and development funds to advance renewable resources of energy, of making a financial commitment to complete the national park system promised by the Minister of the Environment, of providing support programs to stabilize communities affected by the fisheries crisis, of strengthening Canada's research capability in the environment and so on.
In Ottawa, the gap between rhetoric and action is getting larger. Will the government ever act to implement sustainable development?


VETERANS
Mr. Les Benjamin (Regina - Lumsden):: Mr. Speaker, I rise to condemn the Minister of Finance and the Minister of Veterans Affairs for raising board and lodging charges for veterans in long-term care and cutting services provided to the Veterans' Independence Program. These two measures will enable the Minister of Finance to raise $35 million over the next two years, coming at the expense of veterans who are already living in poverty. He ghoulishly attacks defenceless veterans.
The government says the increased charges for residential care are means tested. Mr. Speaker, the incomes test for single veterans and married veterans is half of the poverty line. Once they are over half of the poverty line they have to pay $420 a month for their food and lodging. Veterans who live below the poverty line should not have to pay more for food and lodging in government long-term care facilities. In fact, veterans should not

February 22, 1990
have to pay anything. The proposed cuts in the Veterans Independence Program is designed to allow veterans not to have to go into long-care homes. They are making their cuts, forcing veterans to go into long-care homes. Shame on this despicable action by the government.


An hon. member:: 
CANADA ASSISTANCE PLAN
Mrs. Coline Campbell (South West Nova):: Mr. Speaker, the budget this week took steps to dismantle another universal program, the Canada Assistance Plan. This cost-shared program provides social and welfare assistance to persons in need and many other essential social services. By bringing in a cap on the Canada Assistance Plan the government has said there is a limit to funds available for social services. The finance minister cites the high growth rate of programs in the have-provinces as evidence that the cap on CAP is needed but seems to ignore the possibility that those programs grow because the need for them grows and the federal government has entered into an agreement to provide assistance for these programs.
Having now capped CAP in three provinces, what will be needed to do so in a have-not province? Just the implementation of the government's national day care system in one province might bring the need for 50 cent dollars above 5 per cent.
In another way, the minister indirectly reduces federal CAP spending by freezing the established programs financing for all provinces. With less money in the provincial coffers the provinces will be harder pressed to generate their own contributions to the cost shared programs under the Canada Assistance Plan. This in turn will eliminate federal spending under CAP and federal responsibility to those people most in need and least able to speak out against such measures.


PRINCE EDWARD ISLAND
Mr. Bill Casey (Cumberland -Colchester):: Mr. Speaker, Prince Edward Island suffers a tremendous economic handicap compared to other Maritime provinces, which I
attribute to the ferry crossing which effectively provides a barrier to trade, economic development and tourism.
Even before the impact of Summerside, P.E.I. had an unemployment rate 30 per cent higher than New Brunswick. It had an unemployment rate 50 per cent higher than Nova Scotia. The P.E.I. average income is the lowest in the Maritimes. Transfer payments per capita, are the highest. Youth unemployment runs at 25 per cent, which explains why so many young people must leave P.E.I. to establish careers.
I believe the only reason for these inequities is the ferry crossing. I predict that the fixed link will correct this situation, but at the same time the P.E.I. government cannot control such growth to comply with the wishes of Prince Edward Islanders.
I urge all those in favour of this project to prepare and present their positions to the environmental review panel hearings beginning on Prince Edward Island on March 19. My Amherst office will be pleased to provide assistance with any of these applications.


SASKATCHEWAN CURLING CHAMPIONS
Mr. Larry Schneider (Regina-Wascana):: Mr. Speaker, I rise today to congratulate the 1990 Saskatchewan Provincial Curling Champions. Tina Ford and the junior girls team will be competing in the National Junior Girls Championship in Sudbury. The Saskatchewan men's champ, Jamie Schneider, won the world junior championship in 1984, and will soon be competing in the Canadian Men's Championship.
The woman's champ is the two-time Canadian finalist, Michelle Schneider, who is representing Saskatchewan for the third time in Ottawa this week.
I take special pride in the accomplishments of these two world-class curlers, not only because they hail from Kronau and Regina, Saskatchewan, but because they are my cousins.
I wish their competitors luck. They will need it.


WESTERN ECONOMIC DIVERSIFICATION
Mr. David Walker (Winnipeg North Centre):: Mr. Speaker, I rise to decry the decline of western economic diversification under this government. When this party

was in charge of western Canada, we managed to put in $1.6 billion of economic development moneys in the early 1980s.
When this government took over we heard said: "We do not like these programs, but don't worry". Right before the last election they said: "We are going to spend $400 million".
Well check your stats today, guys. You spent $75 million. The next year the government said: "We are going to spend $253 million in the west". Well, check the stats. You got only $130 million. The next year they tell us again they are going to spend $250 million. They have walked away from western Canada.
On Tuesday, the Minister of Finance announced a decrease in transfer payments to the west of over $2 billion. So the west is now at a net loss in dealing with this government. Next time around, westerners are going to tell this government what they think of its economic development strategy.


HYDE PARK CHEMICAL DUMP
Mr. Ken Atkinson (St. Catharines):: Mr. Speaker, recent newspaper reports say there is growing apprehension on the part of many people regarding chemical emissions from the Hyde Park chemical dump near Niagara Falls, New York. Located on the bank of the Niagara River this dump is the home of the largest single quantity of TCDD, the most toxic strain of dioxin in North America.
A recent study scheduled to be released soon will apparently show that the levels of dioxin build-up in the fish in Lake Ontario are not as significant as those originally estimated by U.S. government officials.
Many fear Occidental Chemical Corporation, the owner of the dump, will use these findings as a lobbying tool in an attempt to have regulations regarding the emissions of dioxins at the dump relaxed.
I ask the Minister of the Environment, using whatever means he can, to ensure that the U.S. government does not relax dioxin regulations at the Hyde Park dump, and in fact, remove this hazardous chemical wasteland from the Niagara River area.


FISCAL RESTRAINT
Mr. David Bjornson (Selkirk):: Mr. Speaker, if we want our children to have the kind of future we wish for them, we must continue reducing the deficit. Spending restraint is the key to Tory deficit reduction.
Since 1984 we have taken tough measures to cut expenditures. Over that period, however-in fact over the last nine years-we have allowed major provincial transfers to grow at more than the rate of inflation each and every year. The measures in this budget will limit that growth to less than the rate of inflation for the first time in a decade.
In our current fiscal situation it would not be reasonable to let provincial transfers continue to grow so much when everyone else is forced to tighten their belts. Spending cuts are never popular. The new ones we have announced are tough but they are necessary.


NATIVE COMMUNICATIONS
Robert Evans Skelly: Mr. Speaker, by cancelling the native communication program, the Secretary of State has virtually destroyed the native print media in Canada.
The 11 newspapers, funded by the native communication program, played an indispensable role as a media of communication between native organizations and Canadians as a whole. They played an active role in promoting literacy in communities where functional illiteracy often runs as high as 40 per cent. Furthermore, they gave positive media access to aboriginal groups which are either shut out of the national media controlled by the Thompsons, the Southams and Conrad Blacks of this country or else are portrayed negatively or in a confrontational situation.
By eliminating or cutting back on grants to native media and undermining the communications ability between natives and other Canadians the Secretary of State is threatening to create three solitudes in this country rather than simply two. I call on the government to restore full funding of native communications programs and transfer funding of native programs to a

February 22, 1990
minister who does not appear to be biased against native Canadians.
* *


PROVINCE OF ONTARIO
Mr. Ross Stevenson (Durham):: Mr. Speaker, it is almost laughable listening to the criticism directed at this week's federal budget by the Ontario treasurer and province's premier.
At the beginning of the week these same two people were announcing an unanticipated $952 million windfall from extra income tax revenues this year. Furthermore, during the current fiscal year Ontario's new payroll health tax and commercial concentration levy, which cut in on January 1, will bring the province another $560 million. Added together these new revenues will bring in more than three times the amount Ontario loses from cuts to the federal transfer payments for established program financing.
Before complaining further, Ontario's premier and treasurer might consider that since 1984 the federal government spending has been held to an average of 3.6 per cent while Ontario's spending has been racing ahead at an annual rate of almost 10 per cent. If the Ontario government is able to show meaningful restraint in its own spending there should be no need for any tax increase in the province because of this week's federal budget.


TELESAT CANADA
Mrs. Sheila Finestone (Mount Royal):: Mr. Speaker, renewed talks by this government of privatizing Telesat Canada shows it is trapped in a market force ideological view. The government has failed to learn that our communication system works because it has been carefully crafted over many decades. It all fits together. You cannot remove one element, one wall from the house, without considering the whole system. Conservatives obviously have no vision for Canada except how to dismantle it. We have not seen the promised national telecommunication policy from this government in five years. Yet in this vacuum they want to turn Telesat, a cornerstone of our communication system, over to purely profit motives from its public policy mandate.
What about Telesat objectives? Are they just forgotten or traded for bottom-line profits? How could private managers justify serving small native communities? How could they resist the economic attraction of serving a U.S. market of 200 million instead? Will the government ever understand Telesat's real public policy role in research and development, like satellites and HDTV? And with risky investment under way privatizing Telesat now would be a fire sale throwaway of millions of Canadian dollars that are already invested.
There is absolutely no evidence the government has considered any of these questions. For a change it would help Canadians if government were to do a little bit more thinking and planning instead of just selling and cutting.


THE HON. HENRY HICKS
Mr. Howard Crosby (Halifax West):: Mr. Speaker, on March 5, 1990, the Hon. Henry Hicks will reach his seventy-fifth birthday and retire from the Senate of Canada. I am sure Members of Parliament from Nova Scotia and all members of the House will join me in wishing him and his new bride God speed.
Henry Hicks was an educator and a lawyer in a small town in Nova Scotia who, by his own words, "degenerated into a politician". But as a politician he made his mark as Minister of Education and Premier of Nova Scotia and then went on to be a president of one of our great institutes of learning, Dalhousie University.
He continued to contribute to the public welfare with a great career in the Senate, and I know he will continue to do that in the years to come.
Let us all wish Henry Wicks Godspeed.


Some hon. members:: Hear, hear!


THE BUDGET
Mr. Chris Axworthy (Saskatoon -Clark's Crossing):: Mr. Speaker, the federal budget contained nothing for Atlantic Canadians. There was no mention of any assistance package for those thousands of people hit by plant closures. There was nothing for the communities which are faced with extinction. There was nothing for the
February 22, 1990

future of those whose livelihoods have long depended upon the fishing resources.
It is clear that the Prime Minister's word is worth nothing. On December 13 and again on January 22 the Prime Minister made a commitment to Atlantic Canadians. He made that commitment to this House and to the people of Canada to provide programs as generous as those made available to prairie farmers.
The budget was his opportunity to demonstrate that he was prepared to assist these people. He has refused to go to meet them, and he is not prepared even to fulfil the commitment that he intends to support them.
Indeed the deep cuts to health care, post-secondary education and the myriad program cuts in the budget will have tragic consequences on Atlantic Canadians already suffering under a crisis.
When is this government going to listen? When is it going to keep its promises? When is it going to care for Atlantic Canadians?



Mr. Bob Wood (Nipissing):: Mr. Speaker, my riding of Nipissing along with other northern Ontario ridings took full advantage of regional development grants. To cut incentive grants to business makes it even more difficult for northern communities to compete with our southern neighbours. We have already endured cuts to our transportation infrastructure by losing Air Canada and VIA. This is just another blow by a callous and indifferent government.
At a time when the Minister of Finance himself projects a higher rate of unemployment, incentive grants are essential for the economic development of the north.
Also of concern in my riding is the elimination of postal service review committee. At a time when many of my constituents are faced with the impact of franchising postal service and closing of rural post offices, a service review mechanism is essential. This just demonstrates that the government's only commitment to postal service is to deliver a profit and not deliver the mail to satisfied customers.
Oral Questions
Our veterans, contrary to what the Minister of Finance said, will be affected by the cuts in the budget. They will pay $3,000 more a year for care in veterans homes.
Our veterans paid their dues when they walked into battle. When the government starts using these people to save money it has gone too far.
Now is not the time to dissolve our principles but rather to resolve our difficulties.



Mr. Uee Richardson (Calgary Southeast):: Mr. Speaker, this government continues to provide the leadership we were elected to give. The government will reduce the deficit to $28.5 billion in 1990-91 and to $10 billion by 1994-95.
To continue to build a secure future for all Canadians, we must continue to reduce the deficit. That is exactly what we did.
In our latest budget there are "no new taxes". Spending restraint is the key to deficit reduction.
The measures in this budget together with those announced in December will produce cumulative savings of more than $19 billion over the next five years.
Program spending was restrained to $3.6 per cent over the last five years. That is well below the rate of inflation, and it beat the performance of all 10 provincial governments.
There is no painless way to restrain spending, but we in Alberta are willing to do our share. The expenditure reductions outlined in our budget are tough, but they are necessary.



ORAL QUESTION PERIOD


Hon. Herb Gray (Leader of the Opposition):: Mr. Speaker, I have questions for the President of the Treasury Board on the Main Estimates, quite apart from the procedural matter I understand the Chair is considering.

February 22, 1990
Oral Questions
Today, in tabling its Main Estimates, the government failed to provide detailed spending plans in the form of Part Ills for 14 key departments and agencies covering some 60 per cent of its expenditures.
I ask the President of the Treasury Board just why has it failed to do this. Just what is the government trying to hide?


Robert René de Cotret: Mr. Speaker, in answer to my hon. colleague, I would like to say we are not going to hide anything at all. It was done for security purposes.


Some hon. members:: Oh, oh!


Robert René de Cotret: Part III of the Main Estimates that were directly referred to in the budget began to be printed when the Minister of Finance stood in this House to make his budget speech.
Given the number of volumes we have to print, I was able to make the undertaking this morning that those would be before all members of this House on or before March 12. It is only for security purposes.


Herbert Eser (Herb) Gray: Mr. Speaker, the detailed spending plans in the form of Part Ills have always been presented as part of the Main Estimates.
The government has presented six budgets. It knows the form and detail of the Estimates. It knows how important this information is to Canadians.
I ask the President of the Treasury Board: Is the government, in effect, now admitting its incompetence, or is it simply trying to cook the books?


Robert René de Cotret: Mr. Speaker, the government is saying that it is maintaining the security of the whole budget process, a long-held tradition in this place and in the Government of Canada.


Herbert Eser (Herb) Gray: Mr. Speaker, in the past, Budget security was tight, but nevertheless it was possible to table all sections of the Estimates at once. Mr. Speaker, 65 per cent of government expenditures go to these 14 departments. The government seems to know how to increase taxes 31 times, but it doesn't know how
to account for two-thirds of the finances of this country! My question is quite simple: Why do we have a Minister of Finance and a President of the Treasury Board, considering that they clearly have not done their job, which was to inform the public of the details of the Budget and the Main Estimates?


Robert René de Cotret: Mr. Speaker, this morning I tabled Part II of the Main Estimates, which is about two inches thick and provides details on all government programs, departments and agencies. Perhaps the hon. member could consult that document, and in a matter of days, he will get the rest of the details in Part III.


Mr. Douglas Young (Gloucester):: Mr. Speaker, my question is directed to the Minister of Finance. Could the Minister of Finance confirm to the House and to Canadians that in order to meet the objectives set forth in his Budget, it will be necessary to create a recession in this country? In the Budget papers he said that the first quarter of 1990 would see a drop in economic growth, which would be a negative point. Is it part of the minister's plan to ensure there is a recession, in order to meet the objectives he listed in his Budget?


Hon. Michael Wilson (Minister of Finance):: Mr. Speaker, I think it is typical of the hon. member to walk around with a little black cloud over his head looking for recessions.
We do not believe that there will be a recession. As I made quite clear in the budget statement there will be a period of slow growth, a period that is necessary to get the inflationary pressures out of the system.
As that happens we see a recovery very quickly toward the end of this year and into next year, at which time I am confident we will be back on a non-inflationary growth path that will be healthy for all parts of the country.


M. Douglas Young: Mr. Speaker, I have a supplementary question for the Minister of Finance.
The minister states that he has to create the necessary economic environment for sustained reductions in Canadian interest rates. I want to ask the minister again referring to his budget documents about the unemployment rate that will rise, and I am quoting, "throughout 1990".
%


February 22, 1990

Is it essential to his budget objectives that unemployment rise in Canada during 1990? Does he have to ensure there is unemployment in order for his budget to have any chance of success in reaching its objectives?


Michael Holcombe Wilson: Mr. Speaker, let's put this into perspective. When we came into office in 1984 the unemployment rate was 11.7 per cent.


Some hon. members:: Oh, oh!


Michael Holcombe Wilson: I hear groans on the other side of the House. I know they don't like to be reminded of the bad old days, but that is a fact.


Mr. Mulroney:: Liberal days.


Michael Holcombe Wilson: Over the course of this year and into next year we do expect that there will be some increase in the unemployment rate, but the underlying employment will be growing. It is just because the growth in the labour force will be faster than the growth of employment. That leads to some increase in the unemployment rate, but this is going to be just this year and into next year.
Through this whole period there will be an increase in employment, unlike the substantial drop in employment, the huge drop in employment we saw in 1981 and 1982.
*k *k


FISHERIES
Mr. David D. Stupich (Nanaimo -Cowichan):: Mr. Speaker, just moments ago the Minister for International Trade announced that an agreement has been reached allowing 20 per cent of B.C. herring and salmon to be exported to the U.S. prior to landing in B.C., for this year; for the next three years, 25 per cent; and then further review.


Some hon. members:: Shame, shame!


David Stupich: The minister and his colleagues have repeatedly said that no jobs "historically established" would be lost as a result of any decision reached under GATT or under the free trade agreement. Would the minister mind explaining exactly how Canada can allow up to 25 per cent of our total catch of fish to be exported
Oral Questions
before processing without losing processing jobs in Canada?


Hon. Thomas Siddon (Minister of Fisheries and Oceans):: Mr. Speaker, the hon. member has not advised the House that while this agreement may pose some difficulties it is a necessary agreement in order that Canada can live up to her international trading obligations and maintain access to our markets.
All Canadian fish, salmon or herring, are caught by Canadian fishermen. We have the most competitive processing industry in the world if we were to hear the workers and processing companies talk. Therefore they are just going to have to sharpen their pencils and keep being competitive.


David Stupich: Mr. Speaker, I have a supplementary question for the same minister.
This agreement totally breaks all the promises made by this minister, previous ministers, the Minister for International Trade and the Prime Minister.
How does the minister intend to monitor the repercussions of this ludicrous agreement? How is the minister going to count up to 25 per cent of an unknown quantity when he knows that currently fish are being landed secretly? He knows this cannot be policed.
We have given in more than the free trade panel recommended. It said up to 10 per cent or maybe 20 per cent. Now we are going up to 25 per cent for four years, and after that who knows how high? How much more are we going to give to the U.S. just to get it to accept our largess?


Thomas Edward Siddon: Mr. Speaker, the hon. member is not telling the House that under the recommendation of the panel 10 per cent to 20 per cent of the product could be exported uninspected.
Under this arrangement 100 per cent of all salmon and herring caught in Canadian waters will be subjected to examination, counting, and weighing by Canadian fisheries officers on Canadian vessels.


David Stupich: Mr. Speaker, I have a question for the Prime Minister.
The Minister for International Trade sold out Canada on the softwood issue. With respect to the fisheries we

February 22, 1990
Oral Questions
have given up control of the resource: 20 per cent for the first year, 25 per cent for the next three years, subject to review after that, and who knows how high it will go.
Will the Prime Minister give up this Minister for International Trade before he gives up total control of all resources in Canada?


Right Hon. Joe Clark (Secretary of State for External Affairs):: Mr. Speaker, I am sure the falsehood is inadvertent, but it is simply false for the member of the New Democratic Party to say that we have given up control of our fishery.
What we have done with this agreement is asserted control of our fishery by ensuring that conservation practices and standards of this country will apply to at sea as well as other catches.
In reply to the other question, this problem began for Canada with a GATT ruling. I assume that the New Democratic Party, which claims to believe in the importance of international agreements, believes that Canada should accept the rulings and the jurisdiction of GATT. That is where the problem began. We lost a decision before GATT. That was settled some years ago.
As my colleague the Minister of Fisheries and Oceans just said, there was a panel recommendation that would have been less favourable to Canada than the agreement which was concluded today and announced by the Minister for International Trade.


Lloyd Axworthy: Mr. Speaker, my question is for the same minister. He has just made an attempt to correct the members of the NDP Perhaps he should correct his own explanation of the facts.
This problem did not begin with the decision of the GATT, this problem began when this government gave up the right to impose an export tax under the free trade agreement. That is when we gave up the right to protect Canadian interests. That is when the problem began, when the right of Canadians to protect themselves with an export tax which is legitimized by GATT was given up. That is the truth, that is the fact and that is why this government is sacrificing thousands of fish processing workers on the west coast.


Charles Joseph Clark: Mr. Speaker, I have heard the hon. member's indignation. His facts are wrong. Does he have question?


Lloyd Axworthy: Mr. Speaker, what is wrong is the stand this government took to capitulate to the United States and giving away our west coast fishing.
I want to ask the minister this question. How can we stay credible when we just gave away to the Americans on the west coast what we are objecting to the Europeans taking on the east coast? How do we argue with the Europeans that they are taking one-quarter of our catch of cod on the east coast when we just gave it away to the Americans on the west coast? You have lost your credibility, you have lost your legitimacy and you are losing jobs for Canadians.


Some hon. members:: Hear, hear!
Right Hon. Joe Clark (Secretary of State for External
Affairs): Mr. Speaker, you and I came to this House at the same time and we have noticed that one of the things that has happened is that increasingly Question Period is used for people to make dramatic accusations rather than put questions. That is what the hon. member has just done. He is wrong in his facts about the agreement. He is wrong in his suggestion with regard to the situation.


Lloyd Axworthy: State what the facts are. You surrendered this country. That is what we find.


THE BUDGET
Mr. Mark Assad (Gatineau -La Lievre):: Mr. Speaker, my question is directed to the Minister of Finance. The Budget has provoked some strong reactions, and I would like to quote the Quebec Minister of Education, Claude Ryan: "I think it is absolutely deplorable that the federal government has further reduced its commitment to postsecondary education". "There is a deplorable contradiction between what it says and what it does".
How does the minister intend to respond to these words, coming from a politician who is an expert on education?
February 22, 1990


An Hon. Member:: Good question!


Michael Holcombe Wilson: Mr. Speaker, federal-provincial transfer payments have not changed. These transfer payments may be spent at the provinces' discretion. The transfers are limited to a growth rate of 3 per cent. The growth rate of federal spending is also limited to 3 per cent. We have asked the provinces to share these restrictive measures, in the same spirit as the federal government.
We have also made a distinction between higher income provinces, such as Ontario, Alberta and British Columbia, which will receive a lower increase, and provinces like Quebec, which benefit from equalization payments. I think our policy in this respect is very fair, and I think the issue is important enough to ask the provinces to share a national solution in dealing with a national problem.


Mark Joseph Assad: Mr. Speaker, does the Minister of Finance not realize that he is committing a sin of omission in cutting government funding, which is also vital and fundamental for the future of our youth, who are really the future of our country?


Michael Holcombe Wilson: Mr. Speaker, I understand that if we do not reduce the deficit, it will be a big problem for our youth. It is very important for the future of our country and for the future of our youth to lower the level of the national debt. This government has a policy to reduce the national debt and a big part of this problem is reducing the annual deficit and asking the provinces to take part in solving this national problem.


MAIN ESTIMATES
Howard Douglas McCurdy: Mr. Speaker, the President of the Treasury Board said that the despicable contempt with which parliamentarians were treated this morning in a lock-up, in which we had half the amount of room we needed and half the resources required and denied 14 of the key departmental estimates, was as a result of budget secrecy. Some secrets. I do not blame him for wanting to hide the secrets from the glare of publicity.
Oral Questions


Mr. Speaker:: I would ask the hon. member to put his
question.


Howard Douglas McCurdy: My question is: Will the President of the Treasury Board provide us with the secrets and explain the cuts in drug addiction funds when we have a drug strategy and cuts in grants to multicultural and ethnocultural organizations when we have a problem of tolerance steadily growing in this country? Will he provide us with the details of those 14 departmental estimates we have been denied up until now?


Robert René de Cotret: Absolutely, Mr. Speaker. We will provide the 14 documents. I explained very clearly that the reason they were not available this morning was because we wanted to preserve the security and integrity of the budget.
I indicated clearly in this House this morning that those documents have been in the printing process since the Minister of Finance stood in this House and will be available to all members of the House on or before March 12.


Dawn Black: Mr. Speaker, I also participated in the lock-up this morning that was such a farce. When I left that lock-up, I received calls from women's organizations in Newfoundland, the Yukon and Quebec.


Mr. Speaker:: That may all very well be so, but I want to know what the question is.


Dawn Black: My
question is this: The information on the cuts to women's programming is public information. The women's centres in this country know that their program funding has been cut 100 per cent. Will the Secretary of State please tell us what other cuts will be made to women's programming? Violence against women is a crisis in this country. These are the centres that provide information and support to women. They tell me they have been cut 100 per cent. Will the minister confirm that?


Hon. Gerry Weiner (Secretary of State of Canada and Minister of State (Multiculturalism and Citizenship)):: Mr. Speaker, there is a plan in place to provide for our future security and prosperity. The deficit is being addressed. That is what we are concerned with. It hurts when we have to say to any group in the nation-

February 22, 1990
Oral Questions


Some hon. members:: Oh, oh!


Mr. Speaker:: Perhaps the minister would finish his answer.


Gérard (Gerry) Weiner: Mr. Speaker, it pains us to have to say to anyone that we cannot give them as much as they need. Maybe there are some other sources of funding that might be available to groups. We have been very supportive of all of their initiatives and will continue to work within our program to see that they get as much help as we can give them.


Guy St-Julien: Mr. Speaker, my question is for the Minister of Finance.
After abolishing the Canadian Exploration Incentive Program, will the government take special measures to help mining communities in Abitibi, Quebec and Canada affected by the cancellation of this program?


Michael Holcombe Wilson: Mr. Speaker, as the Hon. Member is aware, we talked about this. I am very much aware of his concern and interest in the particular issue.
We are concerned about the impact of this on the communities in the north. We have programs in place through the Department of Employment and Immigration and the Community Futures Program as well as another program that deals with this type of situation. These will be fully available to communities in the north in order to ensure there is the easiest possible transition.
I should also note, Mr. Speaker, that there are grandfathering arrangements which will provide for a gradual reduction in the flow of funds from this program during the course of this year.


Ms. Mary Clancy (Halifax):: Mr. Speaker, this budget has driven a knife to the heart of the Secretary of State women's programs. We have seen a 20 per cent cut to the Canadian Research Institute for the Advancement of Women, a 100 per cent cut to Le Centre des femmes du Quebec and a 100 per cent cut to the Centre for Canadian Women's Studies. My question is to the Minister of Finance. Maybe he can tell me if the Secretary of State can't. When will the minister end this institutionalized discrimination and stop this male chauvinist cut of a budget?


Michael Holcombe Wilson: Mr. Speaker, my colleague has stated quite clearly that we are sensitive to the needs of women's organizations and other organizations that are affected by this budget. We are quite aware that we are asking organizations to share with us in dealing with a major national problem.
It is very important for us as a country to get the level of interest rates down. To do that we have to get the level of inflation and the level of the deficit down. That does not happen just by wishing it to happen. Everybody has to share in some reduction in the level of funding for various programs.
Yes, these programs are affected as are a number of other programs. I think that Canadians as a whole understand the importance of this. I hope that they will be able to accept the reasoning why we have had to take these decisions.


Mary Catherine Clancy: All I can say, Mr. Speaker, is I hope that the battered women across Canada understand why these groups have to take a 100 per cent cut in funding. I hope that the families and friends of the students in Montreal who died because violence against women is accepted in this country can accept this.


Some hon. members:: Oh, oh!


Mary Catherine Clancy: When is the minister going to realize that women cannot wait, that they cannot accept his budgetary cuts on their backs?


Some hon. members:: Hear, hear!


Michael Holcombe Wilson: Mr. Speaker, the statement which the hon. member has just made is absolutely outrageous. It should not be made in a place like this, and she knows it.


Some hon. members:: Hear, hear!


Michael Holcombe Wilson: If she can show any program that is being cut by 100 per cent-


Some hon. members:: Oh, oh!


Michael Holcombe Wilson: Well, now I see the
hon. member who just made the outrageous statement laughing her head off.


Some hon. members:: Oh, oh!


Michael Holcombe Wilson: Now this is something that demonstrates the duplicitousness of people on the other side of this House. We have made it quite clear
February 22, 1990

what our policy is. This government has been very sensitive.


Mr. Rex Crawford (Kent):: Mr. Speaker, my question is for the Minister of Veterans Affairs. This government is now attacking veterans by cutting back. In 1985 the government doubled the board and lodging rate for vets. By 1991 it will be almost doubled again for over 1,500 veterans.
The Leader of the Opposition and I met with Legion members this morning. I quote a Korean War veteran: "These guys put their lives on the line, and I think it is a damn shame and a sin that the country doesn't take care of them now". Does the minister believe his cuts meet the test of fairness? How can he justify using our veterans as targets for the deficit cutting shooting gallery?


Hon. Gerald S. Merrithew (Minister of Veterans Affairs):: Mr. Speaker, the changes that were made by the government with regard to veterans programs were done in consultation and after consultation with veterans organizations in Canada. I want to read one of the lines from one of the veterans' groups since the hon. member read one. It says:
It is obvious that some changes had to be made-because the DVA rate was too low-
They go on to say:
Having studied a large number of case histories of this nature, I had to come to the conclusion that the only statesman-like approach for veterans would be to accept an increase in the rate charged by DVA -


An hon. member:: Who wrote the letter?


Gerald Stairs Merrithew: This is by Cliff Chadderton, who happens to be chair of the War Veterans Council and is executive director of the War Amps of Canada, the Legion.


Some hon. members:: Hear, hear!


Gerald Stairs Merrithew: Mr. Speaker, the Royal Canadian Legion as well has made public statements recommending the changes. They understand the need for changes because they correct inequities in the program.
Let me tell hon. members: We have the best programs for veterans in the world, and we are going to do more this year.


Some hon. members:: Hear, hear!
Oral Questions


Rex Crawford: Mr. Speaker, it must be a small world. The minister has said vets will only have to pay if they can afford it. However, if all 1,500 vets affected paid the full amount for 1990 and 1991, it would be $5.4 million less than the government says it will save over that two-year period. Why has this government decided that veterans who through this century have fought for Canada in three wars have not given enough? Lest we forget. Is this not a betrayal?


Gerald Stairs Merrithew: Mr. Speaker, as we mentioned yesterday, and we mentioned it publicly, all of these charges for board and lodging are subject to income testing. In other words, the people in hospital for their disability will pay nothing. They will pay nothing in the future. With regard to those people who are on War Veterans Allowance or any of the other incomes which we pay these veterans, I can tell you that we will guarantee that there will be $1,185 a month reserved for them in a case of a married veteran and spouse, and there will be allowances as well for their personal needs.
Let me state that our veterans will pay the lowest rates in Canada now and will pay the lowest rates in the future.


Some hon. members:: Hear, hear!


Chris Axworthy: Mr. Speaker, in 1988 social programs were a sacred trust, according to the Prime Minister. In 1989 the finance minister promised that money for health and post-secondary education would continue to rise higher than the rate of inflation. Now the Minister of Finance and this government has shattered both those promises, both those commitments to Canadian.
My question is directed to the Minister of Finance. What happened to the national dream, that no matter where you live in Canada, no matter what your financial resources, you are entitled to the same quality of health care as everyone else? Why should the finance minister and his pampered Bay Street buddies have the best health care money can buy, while the less well off Canadians have to settle for less?


Michael Holcombe Wilson: Mr. Speaker, this government is, has been, and will be committed to the best health care program that we can

February 22, 1990
Oral Questions
have in this country. That has not been changed by this budget.
We have asked the provinces to share in the solution of a national problem. The transfers that we make to the provinces are not for health care, or post-secondary education. They are unconditional transfers. It is up to the provinces to decide how they want to spend that money.
However, in making the changes we have been sensitive to the financial strength of the provinces. Provinces such as Ontario, Alberta and B.C., who are fiscally stronger, have been limited to a growth rate of about 2.25 per cent next year. The less strong provinces, such as the Atlantic provinces, will have a growth rate of about 4 per cent. But the average for all the provinces is 3 per cent and the average for the total program spending of the Government of Canada is 3 per cent.
We are not asking the provinces to do anything more than we are prepared to do ourselves. In fact, the other spending reductions that we have made represent a far greater adjustment in our spending than we are asking of the provinces themselves.


Chris Axworthy: Mr. Speaker, the Minister of Finance should listen to his own words about compounding interest. What is going to happen in this country in the next five years is $7 billion is going to be cut out of health care. That is after 88 per cent of Canadians told this minister not to cut funding to health care and post-secondary education.
In this budget 70 per cent of the-


Mr. Speaker:: The hon. member will put his question.


Chris Axworthy: Mr. Speaker, in light of the 70 per cent of this budget being cuts to the sick, students and the poorest in Canada, why does the Minister of Finance not pick on somebody his own size? Why does he not pick on somebody who can fight back?


Michael Holcombe Wilson: Mr. Speaker, the provinces who we have asked to make this adjustment in their spending are quite capable of speaking for themselves. Some of the provinces have acknowledged that we do have a deficit problem, that we do have a debt problem and that we must deal with it. They understand the way that we have to deal with it, even though my hon. friend might not be able to deal with it.
Let me ask him to consider this one point. We cannot ignore this debt problem and what could happen if we do not deal with it. Consider the debt that this government took on in 1984 from the previous government. It was $185 billion. Eighty per cent of the deficits that we have incurred since 1984 have been simply interest on that debt. Surely that is a clear enough message to him that if we do not deal with this problem, we are going to get overwhelmed by debt and that is something-


Mr. Speaker:: The hon. member for Beaver River.


Miss Deborah Grey (Beaver River):: Mr. Speaker, after last year's budget I requested an analysis of the government's revenue and expenditure patterns by province, and was told that that simply was not available. This kind of analysis is essential. The government says its spending cuts will allow the Bank of Canada to reduce interest rates. But this is true only if the greatest cuts are in the regions of highest inflationary pressure.
My question is for the Minister of Finance. Will he agree to table a regional analysis of the government's revenue and expenditure patterns for this year's budget?


Michael Holcombe Wilson: Mr. Speaker, I think what my hon. friend is really voicing is a sense that people have that this budget is going to be hard on this part of the country or that part of the country.
Let me quote from Jeffrey Simpson this morning. He gave some sample headlines from across the country. He wrote:
B.C. battered by Wilson's budget-The Province in Vancouver.
Alberta pays Wilson's tab -Budget hits Saskatchewan hard -
In Central Canada -$ 3-billion cuts hit hardest at Ontario.
The same in Quebec and so on throughout the whole country.
I think the important message here is that most parts of the country feel that they have been asked to carry a share of the burden. That says to me that we have allocated that burden in a fair way.
February 22, 1990


Deborah C. Grey: Mr. Speaker, if such were the case, then I should think it would be very simple to table an analysis of regional spending.
This analysis is essential so that Canadians can see whether these cuts are fair. For example, utility tax transfers to Alberta have been simply frozen in this budget. Will the Minister of Finance confirm that just days before this budget he increased tax transfers to the Ontario treasury with a voluntary payment of $90 million in payroll taxes?


Michael Holcombe Wilson: Mr. Speaker, I am aware that the position of the Reform Party of Canada has been to cut spending.
We have cut spending in this budget. I cannot understand why my hon. friend is not standing up and saying this is a good budget, if she is supportive of the fact that we have taken the bull by the horns, that we are getting spending down, and that we are going to continue to get the deficit under control.


THE ENVIRONMENT
William D. (Bill) Casey: Mr. Speaker, in the absence of the Minister of the Environment I have an exciting question for his parliamentary secretary.
Although the fixed link to P.E.I. will have a major economic and environmental impact on my riding, there are no hearings scheduled for this part of Nova Scotia at all; only Westmorland County and Pictou County on the other side of us.
Will the Department of the Environment support an application to correct this oversight and hold hearings in Cumberland County to assess the impact of this tremendous project in our region?


Mr. Lee Clark (Parliamentary Secretary to Minister of the Environment):: Mr. Speaker, as most members of this House understand, the very essence of the EARP process is the independence of the panels which are constructed to hold public hearings throughout the area affected.
Consequently, it would be very inappropriate for the minister to direct the panel to hold hearing in any specific community.
Oral Questions
However I will certainly convey to the panel the interest of the member and ensure that it gives very serious consideration to his request.
He * sit


PETRO-CANADA
Hon. Roger C. Simmons (Burin -St. George's):: Mr. Speaker, I had intended to put a question to the minister of energy. In his absence, maybe the Prime Minister would consider responding to it. It has to do with the PetroCan privatization, but it is larger than the privatization question.
Now that PetroCan is on the auction block, how will we maintain an adequate Canadian presence in the oil patch and ensure adequate Canadian participation? Even more to the point, who will develop frontier oil and gas reserves now that the Prime Minister's and the minister's own advisers say that we desperately need them if we are not to become too heavily dependent on foreign supplies again?


Hon. John McDermid (Minister of State (Privatization and Regulatory Affairs)):: Mr. Speaker, in the absence of the minister of energy, I would be happy to answer this question.
Petro-Canada is just one of the players in the frontiers as the hon. member knows. There are many oil companies in the frontier doing exploration work and have in fact found now known reserves of over a billion barrels of oil.
These various companies are in partnership with PetroCan. As the hon. member knows, it is extremely expensive to be exploring and to be developing these resources. Consortiums are formed. This will carry on through the policies of the ministry of energy. Nothing has changed in that way whatsoever.
Petro-Canada will play a role in that and will maintain its strong Canadian ownership and Canadian presence in the frontier.


Roger Simmons: Mr. Speaker, I thank the minister. He demonstrates that he knows lots about privatization and nothing about energy, which is why I would hope the Prime Minister would tell us the answer to another very specific question.

February 22, 1990
Point of Order
We know that in this one that the big winners are his buddies on Bay Street. They will make a couple of hundred million. The losers are Canadians-


Mr. Speaker:: May I ask the hon. member to put his question, keeping in mind the time.


Roger Simmons: Mr. Speaker, I want to ask the Prime Minister this. Can he tell us whether there are other casualties? In particular, can he assure us that the privatization of PetroCan in no way delays or jeopardizes the Hibernia development off Newfoundland?


John Horton McDermid: Mr. Speaker-


Roger Simmons: Wilson's not interested. That's what they're saying back home.


Mr. Speaker:: If the minister wishes, he has the floor.


John Horton McDermid: Mr. Speaker, the hon. member is yelling. He is not interested in the answer so he is not going to get one.


Roger Simmons: You scum! You give scum a bad name.


John Horton McDermid: Don't be so god-damn stupid, Roger.


Some hon. members:: Oh, oh!


Mr. Speaker:: The hon. member for London East may ask a single question.


HOUSING
Joseph Frank (Joe) Fontana: Mr. Speaker, my question is for the Minister of Finance.
The waiting lists for social housing are scandalous. In Toronto there are 20,000 people on a waiting list. In Vancouver there are 5,000. In New Brunswick there are 20,000. In Montreal there are 20,000 people.
How long do these waiting lists have to get before this government wakes up and realizes that we need more housing for the homeless, seniors, single parents and the working poor, not less? Why has this government cut the social housing budget by 15 per cent this year?


Hon. Alan Redway (Minister of State (Housing)):: Mr. Speaker, obviously the situation with respect to and the
need for social housing is one that is of great concern to this government, the Minister of Finance and myself.
It is also something that is of concern to knowledgeable Canadians in the field of social services. They are particularly aware of the problems that we are having with the budget.
A few months ago I received a letter from the Executive Director of the Family Services Association of Metropolitan Toronto in which he said: "It should be evident to most Canadians that 31 cents interest on each tax dollar is an unacceptably high price to pay for current government operations and programs. Furthermore, allowing the deficit to grow-"


Mr. Speaker:: That is a very thoughtful letter. I am sure it could be given to the hon. member.
The hon. member for Edmonton East may ask a single question.


PETRO-CANADA
Mr. Ross Harvey (Edmonton East):: Mr. Speaker, under Article 1602 of the free trade agreement, the 25 per cent ceiling on foreign shareholdings the minister responsible for privatization proposes to set on Petro-Canada can never be lowered ever. It can only be raised.
Will the minister agree that there is absolutely nothing in his proposals to prevent Exxon, for example, from securing anywhere up to 30 per cent of Petro-Canada's shares through itself, its subsidiaries and associates and thereby effectively controlling Petro-Canada?


John Horton McDermid: Mr. Speaker, the hon. member is entirely wrong. When he sees the legislation before the House he then will understand that that would be entirely impossible.


POINT OF ORDER
Mr. Don Blenkam (Mississauga South):: Mr. Speaker, I rise on a point of order.



February 22, 1990

A week ago a question of privilege was raised by the hon. member for Nickel Belt in connection with a meeting of the Standing Committee on Finance on Thursday, February 15.
I have read over the transcript of that meeting. Apparently I suggested that the hon. member for Nickel Belt might be expelled from the hearings. Apparently that is not possible or proper. It did, in a way, reflect upon the hon. member for Nickel Belt.
I want to apologize to the House and to him for that insinuation.


Mr. John R. Rodriguez (Nickel Belt):: Mr. Speaker, I want to say to the member for Mississauga South that I certainly accept his apology.
I also want to say that I have read over the transcripts. I have said a lot of things about the hon. member. I would like to withdraw anything I said that in any way reflected on the calm, cool personality of the chairman of the Standing Committee on Finance.


Some hon. members:: Hear, hear!


Mr. Speaker:: Hon. members will know that this will make it unnecessary for me to say anything about either of the two hon. members.


PRIVILEGE
Dawn Black: Mr. Speaker, I raised with you by letter earlier today a question of privilege. Since that time, as a result of something that was said during Question Period, I must raise another question of privilege.
While I was questioning the Secretary of State, the member for Burlington called me a fishwife. I think that that is unparliamentary. My question was a serious one. It should be taken very seriously by the government.
I do not feel at all comfortable being called a fishwife. I think it is wrong.
I would ask you, Mr. Speaker, to act on this matter. I would like the hon. member to withdraw the comment. It was heard on the television sets across this country as well.
Privilege


Some hon. members:: Shame!


Dawn Black: Mr. Speaker, my second question of privilege-


Mr. Speaker:: If the hon. member will let me deal with the first question, I will do so. Then I will immediately recognize her again on the second question.
Does the hon. member for Burlington wish to respond?


Mr. Bill Kempling (Burlington):: Mr. Speaker, I do not recall directing a comment of that kind at the hon. member. I do not even know the question she was asking. I was not paying any attention.
However, if she thinks the comment I made was meant for her, I will withdraw it.


Dawn Black: That is a gracious response.


MAIN ESTIMATES
Dawn Black: Mr. Speaker, I will continue to my second question of privilege.
This morning I was in the lock-up sponsored by Treasury Board to inform members of Parliament in a secure environment about the Estimates and how they would impact on various departments.
When I asked specific questions on the impact of the cuts to women's programming, I was told that that information was not available and would not be available for approximately a week and a half. I asked specific questions about that program, about multiculturalism, native affairs and programs for visible and minority women.
I was told the information was not available. I left the lock-up after spending an hour and a half in there. I returned to my office one minute later and received phone calls from women's organizations from the Yukon, British Columbia, Quebec-from almost every province. The people calling were telling me they had been informed that their funding had been cut 100 per cent. I received calls from CRIAW and other women's organizations telling me their funding had been cut 20 per cent.
It is obvious to me that this information was available. It had been made public. Yet it was withheld from members of Parliament.

February 22, 1990
Speaker's Ruling
That is a breach of my privilege as a member of this House, as well as a breach of the privileges of other members.
I would ask you to review this matter, Mr. Speaker, and to rule on it.


Mr. David Barrett (Esquimalt-Juan de Fuca):: Mr. Speaker, Subsequent to the comments by the hon. member, I would ask that my request concerning a question of privilege be withdrawn. It was one which I issued last week.


Mr. Speaker:: I thank the hon. member for that intervention.
The hon. member for New Westminster-Burnaby has raised a question of privilege. I understand no one else is rising on it. I will take the matter under advisement and report back to the House.


POINT OF ORDER
Iain Francis Angus: Mr. Speaker, during Question Period today the Minister of Veterans Affairs quoted from a document in his hand, a document which I believe was a communication from the president of War Amputations of Canada.
I would ask that following the normal processes of this House the minister be asked to table that document so that it will become a matter of public record.


Mr. Speaker:: The hon. member for Thunder Bay- Atikokan has raised a point with respect to a letter which the hon. minister was reading. Perhaps I was too hasty, but I interrupted the hon. minister with the suggestion, I think, that rather than read it, it could be sent across to the hon. member who had asked the question.
In any event, I understand that the minister is more than prepared to table the letter. I will accept that, of course.


Iain Francis Angus: Mr. Speaker, I have just been advised that also during Question Period the minister responsible for housing quoted from a document, a letter from the United Way, and I ask that that be tabled as well.


Mr. Speaker:: Perhaps colleagues on the government side could take that request. If necessary, the hon. member can raise it again with the Chair.
The hon. member for Halifax is rising, I think, on a question of privilege.


PRIVILEGE
Mary Catherine Clancy: Mr. Speaker, I rise on a question of privilege relating to an exchange and a response from the Minister of Finance during Question Period.
In responding to my supplementary question, the minister suggested and insinuated that I was laughing at the extremely serious situation relating to violence against women in this country.
This is not the first time that the hon. minister has so characterized members on this side of the House, myself among others, particularly when we have not had the opportunity of responding when it is indeed a supplementary question.
I think this is an extremely serious matter, particularly given the exigencies of television coverage in this House and the fact that our responses cannot be seen. I feel my privileges have been breached. I would ask that you, Mr. Speaker, review this matter.


Douglas Grinslade Lewis: Mr. Speaker, I take the point my hon. friend raises. I would ask that if you, Sir, are prepared to do that, that you also examine the record. You will find that the member who makes the complaint suggested immediately thereafter that the Prime Minister was laughing.


Mary Catherine Clancy: He was.


SPEAKER'S RULING
Mr. Speaker:: I think that the point raised by the hon. member for Halifax illustrates a problem in this Chamber that we have sometimes, not all the time.
I may be able to review both Hansard and/or the tapes. If the minister was on his feet, with the television coverage which we have in this place there is no way for me to be able to use that to assist in seeing whatever the hon. member was doing. I will not be able to do that.
February 22, 1990

I think the proper approach to this is to say simply this. It applies to both sides of the House and it applies at all times. This is a place of free speech. It is a very vigorous place; it is not a tea party, and I have said that before. It is an adversarial forum. That is what preserves our freedoms.
However, in the process we must be conscious of not only the feelings of each other but the implications that go with remarks we make outside this Chamber as well. I know that all hon. members would want most of the time, except when they sometimes become forgetful, to maintain that.
I think that is the only response that I can give the hon. member for Halifax. I regret the matter. But there is no way I can review it from an evidentiary point of view.
I do ask all hon. members to conduct themselves in such a way that complaints like this do not have to be brought to the Speaker.
I thank the hon. member for raising the matter.


BUSINESS OF THE HOUSE
Don Boudria: Mr. Speaker, I wish to rise on a point of order and ask the usual business question.
In particular, I would ask the government to indicate to us what business it intends to call for tomorrow.
Second, is the government prepared now to give its answer to the question asked by my colleague from Ottawa-Vanier as to whether or not Parliament will be sitting next week pursuant to the suggestion of the hon. member for Ottawa-Vanier. If so, will we be considering the budget next week in the manner in which the member for Ottawa-Vanier suggested?
In the unlikely event that we are not sitting next week, perhaps the minister could indicate what business he intends to bring forward when Parliament does resume after the one week recess.


Douglas Grinslade Lewis: Mr. Speaker, first, I would like to
Speaker's Ruling
advise the House tomorrow at 10 a.m. we will commence debate on Bill C-56, the Small Business Loans Act. That is the only piece of government business we have for tomorrow.
After Routine Proceedings I have suggested to the opposition parties that we will be raising a point of order on the Message from the Senate with respect to Bill C-21.
On Monday, March 5, Tuesday, March 6, Wednesday, March 7 and Thursday, March 8, the week of March when we return, we will be debating the budget motion.
I did attempt to reach my colleague, the House leader for the opposition, who suggested that the Liberal party would be prepared to work next week rather than to adjourn, but he was on his way to the airport and/or in Paris and then on to Greece.


Don Boudria: He's not going to Greece.


Douglas Grinslade Lewis: I did not get into long distance calls to try to reach him to see if he wanted to come back to work. In case my hon. friend is talking to him by long distance telephone, or perhaps communicating with him by telegraph or fax to a foreign country, he might tell him that we will take next week off as agreed because we want to go back to meet our constituents.
Members of the government party will be in our ridings meeting with our constituents. We will also try to cover Ottawa-Vanier in the hon. member's absence.


Don Boudria: Mr. Speaker, just so that the House and indeed all Canadians are aware, the hon. member for Ottawa-Vanier is out of the country until Monday night. He is out of the country on government business replacing the Deputy Speaker of this House. He will be back on Monday night.
Of course, Mr. Speaker, the House will know that the hon. member for Ottawa-Vanier probably has an attendance record here which is unmatched by anyone, including the minister who just made those unnecessary remarks.


Mr. Speaker:: My attendance record is pretty good.


Some hon. members:: Oh, oh!

February 22, 1990
Speaker's Ruling POINT OF ORDER


REQUEST FOR TABLING OF DOCUMENT
Coline M. Campbell: Mr. Speaker, I rise to ask a point of clarification. It is because somebody on the other side said that I was wrong. When the member asked for the tabling of the document that had been read, it seems to me, Mr. Speaker, you said that it should be exchanged with the member. I do not know why it would not be tabled and then be here for everybody to see.
My second point is that there should be some explanation as to why a document was brought into the House so that the minister could depose it in the House. I was here. I watched that. I understand the rule is that if anybody is reading from a document, then it is fair game and should be placed before the House. That is something that goes back for many, many years. Maybe that is something that has changed.
In this case what we had was the Minister of Veterans Affairs read a letter. We had another member who asked that the document be tabled. At the same time we had to wait for someone to bring him in some paper which he then tabled.


Douglas Grinslade Lewis: He was out.


Coline M. Campbell: I am saying that he was sitting there when someone brought in the paper to him, whatever it was. That implies, for whatever reason, that he was not ready to table the document in the House.
I am just saying that there are two points here. It is very important we not forget that when you are reading from a piece of paper, that is the paper the person should be tabling in the House.
Maybe I misunderstood, Mr. Speaker. It seems to me you said to exchange it with the other member. I think it should be tabled.


Douglas Grinslade Lewis: Mr. Speaker, the hon. minister was out of the House. Often ministers will quote either from an excerpt from an official document, which has been placed in their briefing notes, or from the entire document. I happen to think that in this case the minister actually had the entire letter.
I know that ministers leave the House and discuss matters with their aids. He came back in an effort to clear up the situation.
There is no question that the government has on record support from the War Amputations of Canada and from the Legion support for the government's programs. We would be glad to put that on the record. Having heard this exchange, I am sure that the minister will be able to put on the record and table in the House exactly the documents he used that are official.


SPEAKER'S RULING
Mr. Speaker:: The hon. member for South West Nova has raised a point with respect to documents that are referred to by a minister in answering questions or members. The rule is as she quotes it. In such a case the minister ought to table the document and certainly will have to if called upon to do so.
I may inadvertently have said something that led to some confusion. Without in any way denigrating the content of the minister's reply or the seriousness of the question and the answer, I felt that the minister had gone on too long. I interrupted him and said: "Perhaps that is enough. If you want the hon. member who asked the question to see the letter, then perhaps you can send it across the aisle," or words to that effect.
That may be where the difficulty arose. I have to say that I interrupted the hon. minister because I thought the hon. minister was going on too long.
Immediately afterward I think the hon. member for Thunder Bay-Atikokan rose, and I think I am correct, and asked if the minister would table the letter. I said that was appropriate and the minister did.
The point the hon. member makes is correct. The practice has always been that if letters or documents are read then those should be tabled.
I think I may have contributed to the confusion. I was only attempting to move things on so that more members would be heard.
I thank the hon. member.


MAIN ESTIMATES
Mr. Vic Althouse (Mackenzie):: Mr. Speaker, I rise on a point of order with regard to the Estimates that were tabled this morning.
February 22, 1990

I note that in Part III of the 1990-91 Estimates for Agriculture Canada in Figure 2, page 1-7, we have a very strange and I think somewhat misleading set of data which are very hard to credit. I think it leaves an extremely wrong impression concerning the appropriations by the government to the portfolio of agriculture.
I would like to refer you, Sir, to that table. I know you do not have one in front of you at the moment, but if you would look at the radical change that has occurred in the accounting procedures I think you will find that it leaves a very wrong impression with the House and with members who are attempting to deal with government Estimates.
Specifically, what the government has done is in the non-budgetaiy appropriations concerning the Farm Credit Corporation it has increased its share of the principal contributed to the Farm Credit Corporation. Our understanding is that the Farm Credit Corporation may then lend 25 times that amount.
For years the government's appropriation to that corporation has been shown as being the amount of funds that the government has contributed. But for this year and for last year they have suddenly decided to come up with some wildly inflated figure which they say is the revised maximum allowable borrowing levels of Farm Credit Corporation. That is very easy to do in the print, I am sure. But when you look at the table you are left with the misguided perception that the government is appropriating something like $27 billion to the Department of Agriculture and Farm Credit Corporation-


Mr. Speaker:: The hon. member for Mackenzie may well have a complaint. I find it very difficult to find that it is a point of order that I can address.
Having heard the matter that has been raised, which is of course a serious matter, perhaps the hon. member could have a discussion with someone on the government side and the matter could be resolved. I do not think it is something that as Speaker I can resolve.


Victor Fredrich (Vic) Althouse: I realize you cannot resolve it, Mr. Speaker, but it almost fringes on privilege if members of Parliament whose duty and main job it is to look at the government's expenditure plans have a very' great deal of difficulty in doing that, especially if the expenditures are
The Budget
presented in a way that is not of sound accounting practice and is quite misleading.


SPEAKER'S RULING
Mr. Speaker:: I understand the hon. member's concern. Again, I do not think it is a point of order.
The hon. member can of course pursue the matter in the appropriate committee, and perhaps he will do so.
A great many documents are produced in this place. Over many years I have heard abundant complaints about a good deal of them. I suppose that applies to both sides of the House sometimes.
However, the hon. member has aired his complaint. Other members have heard it. Perhaps it will be resolved.



GOVERNMENT ORDERS


[Stage Direction]
The House resumed consideration of the motion of Mr. Wilson (Etobicoke Centre) that this House approves in general the budgetary policy of the government; and on the amendment of Mr. Young (Gloucester) (p. 8636), and on the amendment to the amendment of Ms. McLaughlin (p. 8644).
The Acting Speaker (Mrs. Champagne):: When the House rose the hon. member for Winnipeg South Centre still had three minutes remaining.


Lloyd Axworthy: Madam Speaker, what I was trying to present during the lunch period was the need for an alternate budget, a different way of looking at the economic and social landscape of this country. I tried to present a number of different and alternate ways in which the government could have organized a different direction for this country.
For the last three minutes let me just concentrate on perhaps one area in which we have agreement. I have heard the Minister of Finance say many times, and I agree with him, that the ultimate test is for the children. He talks often of how the financial deficit affects

February 22, 1990
The Budget
children and how we do not want to burden them with debt in the future. I think we all agree with that.
I also want to raise other deficits that our children are facing. How many children in this country are facing a deficit of poor housing, children living in substandard conditions in our inner cities? How many of our Indian children are still on the reserves sniffing glue in northern Manitoba? How many children in this country are facing the prospect of their fathers and mothers being unemployed and not being able to collect unemployment insurance any longer? Perhaps the only job prospect is facing a move to Toronto, Montreal or Vancouver to get a job where they do not have a prospect of growing up in their own regions.
The question of deficit is not just one that you account in fiscal terms. You account it in terms of the enormous gaps and vacuums and the real serious mortgaging of our future in terms of our environment, in terms of our conditions of our cities, in terms of the social conditions that our children face.
When we talk about a million children in poverty, those are a million individual cases of tragedy. More than that, those are the children who should be tomorrow's engineers, scientists, doctors, politicians and journalists who will never be there, who will never even get to the starting gate because we are cutting back on their education, health care and housing.
This country is going to be desperately in need of highly skilled and highly trained young people in the future. However if at the very beginning because of a lack of proper day care, support, treatment and abuse centres, all of which have been attacked in this budget, children are not even given that chance, this country will face the worst deficit of all, and that is a deficit of human talent, human creativity and human ambition. That is the real deficit we face which this budget has in no way addressed. The budget is a great failure in that it does not come to grips with the underlying reality of this country.
This year the United Nations ratified the declaration of the rights of children. We were party to that declaration. It says: "The states party to the present convention recognize the right of every child to a standard of living adequate for the child's physical, moral, mental and social environments".
We are flunking that test. This budget flunks the test. We want to offer Canadians an alternative way, a better choice, another way of deciding how we will give direction to this country in searching out answers and solutions to its economic and social problems.
That is the real task for Canadians. It is a task that this budget does not address. When we in the Liberal Party are given a chance we feel adequate and ready to do the job.


Sheila Finestone: Madam Speaker, I am really pleased to hear my colleague address one of the fundamental values and visions for Canada that seems to be absent from the view of this Conservative government.
There were many holes and gaps in this long winded, poorly conceived and badly designed budget. I would ask my hon. colleague who was addressing the question of children and their future how he felt the children and the future that we leave as a legacy when not one word in this budget addressed the environment in which we live and the potential for leaving a much diminished social, physical, as well as mental environment for our families and our grandchildren.


Lloyd Axworthy: Madam Speaker, I thank the hon. member for Mount Royal for the question. As I said in my opening address, there were other ways of attacking the problems of this country.
What an opportunity we had. The Brundtland commission is now three years old. We had a summit in the city of Toronto just two years ago where all the industrial countries agreed that they would make major efforts to bring down the standard of emissions of fossil fuels and carbon dioxide in the air. We know that if we do not do something substantial and radical in this country and in countries around the world in 10 years or 20 years the earth will be a cesspool. That will be one of the legacies we leave to our children.
One way of doing something, which was discussed in the Brundtland commission and since then, is a green tax. The Minister of Finance says he wants revenue. Then why are we not taxing polluters? Why are we not saying to those companies which are engaging in practices that are environmentally unfriendly that they will no longer get the business grants, subsidies, write-offs and deductions which they are now all afforded? There is an awful lot of money to be saved for the Government of Canada. At the same time a good market pressure could
February 22, 1990

be put on those very same firms that are engaged in those kinds of practices.
But once again, as the member for Mount Royal pointed out, there was nothing there. It did not even mention the problem. It did not address the fact that economic fiscal tools by the Government of Canada could be used to set a framework, to set rules, and to begin to guide without heavy regulation the choices and decisions in a market-place to get a sustainable environment.
That is the real failure of the budget. There was nothing creative about it. Yet, here is a government that was strong in rhetoric two years ago in Toronto, but when the Minister of Finance has a chance to show how that rhetoric can be turned into practice, what do we find in these pages? Nothing but blanks.


Raymond John Funk: Madam Speaker, this budget has distressed a lot of western Canadians. I think it fails completely to come to grips with the very real economic collapse happening in the rural communities right across the prairie provinces, as well as in the northern parts of the western provinces.
I was wondering if the member could attempt to sort out for us what the government is trying to do with the flimflam that we see with respect to regional development funding. It has created a mini-monster called the WDO which was supposed to take over the former regional development programs, the ERDA programs. However we see that virtually no money has been spent. Those agreements in Saskatchewan and Manitoba expired last March 31. As far as I can see scarcely $1 has been spent in the last year. If we look again no dollars are allocated for this year.
Where does the member see the government going? What has happened to regional development funding in western Canada?


Lloyd Axworthy: Madam Speaker, again I appreciate the question from the member for Prince Albert because it is a matter of vital concern in western Canada.
The regional development programs have been eviscerated. The only alternative being offered by this government is the Western Diversification Fund. Under
The Budget
this budget the Western Diversification Fund has been turned into a lending bank. The opportunity for smaller businesses to get direct grants to start off, to improve, to renovate, or to innovate has been extinguished.
It is okay for companies such as the West Edmonton Mall that want to put up another fancy amusement centre. They have the assets and the capital to go ahead and get the loan from Western Diversification. However to a small business in the Interlake or an engineer who wants to start a new kind of business or whatever the Minister of Finance has just said: "You don't count any more."
I think that is happening. Increasingly we are finding that western Canadians do not count when it comes to this government. They are not in the periscope of the Minister of Finance. The Western Diversification Fund is simply being turned into a pale replica of the Federal Business Development Bank and the Farm Credit Corporation which was simply a way of charging going rates of interest on loans and not giving the kind of stimulus or engaging in major investments in western Canada, in the infrastructure of Canada.
If we talk to any mayor of any municipality in western Canada, there is still the need to repair roads, to repair sewage systems, to deal with soil conservation, to deal with the water problem, and to repair the basic underpinnings of the western economy. There is no money. There is no support. There is no federal participation.
As I said in my earlier remarks that is part of the problem with Canada. The federal government is withdrawing from Canada. It no longer feels that it has responsibilities in the region. It no longer wants to establish a presence across Canada. If we have a government that does not believe in governing any more, that simply believes in leaving it up to the market-place where the market-place does not work or does not fit into the kinds of decisions being made on the Bay Streets, in the big business organizations across North America, then we simply become a forgotten territory and a forgotten people. That is the story of western Canada under this government.


Mrs. Dobbie:: Madam Speaker, the hon. member paints a very pretty picture. He lives in a lovely dream world. The world he lives in is a very nice place. It is a world where dollars grow on trees, where there is a

February 22, 1990
The Budget
bottomless, endless pitcher of money flowing, and where everybody can live a Utopian dream.
He speaks about international affairs and how we can use taxpayers' dollars to manipulate things to our advantage and so on. Where does the hon. member think those dollars really come from if they do not come from the very taxpayers he is talking about supporting? Where does he think those dollars come from if they do not come from the business community that he is suggesting somehow we should support through some grant program? Where does he think the dollars come from to support the social programs of which the member is such a proponent?
I would like the member to tell this House how much he thinks he can stretch a single dollar. There is only $1 in this country, Madam Speaker. That is the dollar that comes out of your pocket, my pocket, the hon. member's pocket, and the pockets of all individuals out there. How does the hon. member think that that dollar can be stretched beyond its capacity right now, when 35 cents out of that dollar which they pay to this government go to service a debt that was created over a period of profligate spending where people-and the hon. member was one of those people-lived in this Utopian dream where they thought that there was never, ever going to be a time when we had to pay the piper.
I would like the hon. member to tell us how he thinks a dollar can be more than a dollar, and how he thinks the taxpayers can dig down deeper and afford to pay more than they already are for the debt that was created by the hon. member's government?


Lloyd Axworthy: Madam Speaker, let me make it clear to the hon. member for Winnipeg South that I do not see a Utopian world in Canada. I do not see a Utopian world when I see a million kids living in poverty. I do not see a Utopian world when young native kids are committing suicide. They have the highest rate of suicide of any group in the world. That is not Utopia, I say to the member from Winnipeg South; that is a tragedy. It is a dark scar on the face of this country. There is nothing Utopian about watching the children of this country go down the tube. There is nothing Utopian watching the children of this country going hungry, going without education, and going without proper housing.
I will tell the member where the money comes from. There are 116,000 corporations in this country that did not pay any taxes last year. I will tell her something else. Of the new investments in this country 96 per cent went for corporate takeovers and acquisitions; not new investment, not new business, but to play the paper economy game, to move the chairs around to help Conrad Black get bigger and bigger, and to strip down the corporations of this country. Some $3 million an hour leave this country to pay off our foreign debts. That is where the money is going.
How much money is lost because of our capital gains exemption? How much money is lost because we do not have a proper tax on succession of wealth in this country?
There are lots of places where dollars could be found, but the problem is that this government does not want to look for them because when they start looking for them that is where they will find their friends.


Mr. Rene Soetens (Ontario):: Madam Speaker, I am almost tempted to carry on from the last presentation because the member certainly provided lots of opportunities for me to comment. However I am really here to participate in this budget debate and in the debate on the amendments that the two opposition parties have put forward.
Yesterday morning in my constituency I had the opportunity of having a budget breakfast to which members of the business community, citizens of the community, and students were invited. Some 280 people participated. There was not one person who stood in objection to the budget program. Sure, there were questions. There were some serious questions about some of the programs, but in the end not one constituent stood in opposition at this particular meeting. I did not choose who the constituents were. Those who wanted to come simply came.
We come back to this particular budget and I say maybe my constituents are really quite concerned about it. About 45 minutes ago I made a point of checking with my office staff in the constituency and here in Ottawa to see how many calls have received from constituents concerned that some of the budget programs were impacting on them negatively. We received not one call,
I should point out.
February 22, 1990

I have to presume from this point that the budget provides really strong leadership, the leadership that Canadians have been asking for. I mention that because I had a call from one of the local newspaper reporters in my area who was concerned that there was a poll released showing that we were at 19 per cent. She wondered whether I was concerned that we were at that number. I said to her that leadership was not public opinion polls. If this country wanted leadership by public opinion polls, we would have leadership that was in place prior to 1984. Prior to that time public opinion polls seemed to influence greatly exactly what was in every budget. One thing that did not influence the budget was the deficit; what did not influence the budget was where the money was coming from.
I am happy to report that in spite of what those public opinion polls say, we are providing the leadership in this country that is sorely needed. Fiscal responsibility is a direct cure to a disease that afflicts this country. It is one of inflation and deficits. The two go hand in hand. I do not think one should ever assume that they are out of step.
Since 1984 we have had to address two particular deficits. The first was on the program side. The previous government had been spending money to the tune of $16 billion a year faster than it was making it. Forgetting about the interest on the debt and the debt altogether, it was also spending $16 billion more a year than it was collecting in revenue. Not only did it not pay interest on the debt it was accumulating, it was paying $16 billion more on programs than it could afford. There was another $20 billion that had to be addressed which was the interest on the debt. When we came to office, the two combined amounted to something in excess of $38 billion.
I think we have done tremendous work in trying to address the two issues. We took the first deficit, that one that dealt with the deficit in programs, to zero in three years. Now, a couple of years later, we have taken that to a $12.6 billion surplus. We are now spending less on programs than revenues, and finally we are starting to pay some money toward the interest on our debt. That is what we should be doing.
Unfortunately, that debt has grown to the point where we have to raise $41 billion a year in order to pay the interest, so we still have a deficit of $28.5 billion.
The Budget
I have made a point of listening to some of the members over the last day and one of the arguments listed by them dealt with interest rates. A point was very adequately made by a member that the finance committee of which I am a member did a study on interest rates last spring. We recommended strongly that the government encourage the Governor of the Bank of Canada to reduce interest rates.
I supported that particular recommendation at the time because the evidence which was presented to us suggested that only southern Ontario was suffering from inflationary pressures.
Of course when the Governor of the Bank of Canada appeared he disagreed with our evidence, but we had numerous other people who suggested information to the contrary. Being relatively new at it, I thought that with all this contrary evidence maybe the government was wrong and all these other people were right.
Hindsight is a great thing. The Governor of the Bank of Canada was right. We need only to look at recent statistics from many parts of Canada to see that inflation is occurring all over Canada. I have a chart which I find rather interesting because I think it is representative of some of the inflationary pressures that exist in all parts of Canada.
One factor is public sector wage settlements for the last year. While the federal Public Service has averaged a 4.2 per cent level of wage settlements, other parts of Canada have levels much higher. Only Alberta and Saskatchewan, and I give them full credit for this, managed to bring in wage settlements that were less than that of the federal government.
I was told that in British Columbia there were no inflationary pressures. I should now ask why then would the province of British Columbia give an average wage settlement of 8.2 per cent in that province if there were no inflationary pressures. Why would Manitoba give 5.5 per cent? Why would Nova Scotia give 5.7 per cent? Why would Ontario average 6.6 per cent? Places like Newfoundland, Prince Edward Island and Nova Scotia settled at just under 5 per cent. Obviously there were inflationary pressures. The statistics in the public sector wage settlements show those numbers very clearly.
What does this lead me to conclude? Inflation is certainly a curse of sound economic conditions and the Governor of the Bank was right. Since I am a member of the committee, I guess I have to say publicly at this time

February 22, 1990
The Budget
that hindsight is a great thing. The recommendation we made last spring, almost a year ago, that the Governor should reduce interest rates was absolutely wrong. I have to say that very publicly, and I do fully support that inflation has to be addressed. Yes, I know that high interest rates cause problems throughout this country, but the alternative of high inflation will cause far more serious problems than the problem the governor is creating through interest rates. Very clearly I support the government's fight against inflation.
I have listened to other comments in debate and yet, yesterday for example, a number of members of the Opposition did not talk about the direction the budget was going. They talked about the goods and services tax. That is not a direction of the budget. As a member of the finance committee and one who has listened to all the debate on the goods and services tax and has actively taken part in it, I was shocked. If this budget is so disastrous, how could these members talk about the goods and services tax and not the budget? Obviously they did not have anything they really wanted to emphasize out of the budget that disturbed them, so they had to go to another issue that was politically a little more acceptable for them to talk about.
There was even a member who talked about the free trade agreement and how bad it was. I am not sure what the free trade agreement has to do with this budget. I checked through it all and I do not see any particular program being cut. I do not see any particular revenue earmarked against free trade or losses against free trade. Again, the problem was that they just could not find what they wanted to talk about in this budget. There were just not enough negatives for them and they certainly did not want to talk about all the good things. That leaves it up to members of the governing party to talk about the good things.
Before I get to the good things, there is this feeling of leadership that is required. I mentioned at the outset that leadership was required; it was not necessarily popular, but I do believe it was right. I have listened to members here complain about their part of Canada
being terribly affected by this budget. I do not know, Madam Speaker, if you have seen this particular article, but in The Globe and Mail this morning, columnist Jeffrey Simpson listed some articles from across Canada that comment on the budget. If you wanted to describe it as leadership, I would certainly support that.
Let me read some of the headlines:
B.C. battered by Wilson's budget-Alberta pays Wilson's tab - Budget hits Saskatchewan hard -S 3-billion cuts hit hardest at Ontario- An "unjust" blood-letting of $220-million for Quebec- Budget ignored promised aid for fishermen.
We have gone from one end of this country to another and they are all saying that they have been picked on. What this says is that we have asked all Canadians to recognize that we have a deficit. It takes some leadership to deal with that deficit. No part of Canada is being asked to pay its undue share in the problems this country faces. That is what I call leadership.
Elaving listened to the other members, Mr. Simpson's final comment is probably the most appropriate one I can pass on to some of my colleagues in this House. I quote:
With a debt heading toward $400-billion and a projected deficit, despite the cuts, of $28.5-billion next year, it would be fascinating to hear how the usual suspects and regional tub-thumpers would have acted. Chances are their "solutions" would have varied as much as their criticisms.
Certainly in the case of one party we know what its solutions are because it was in government long enough to prove that it knew how to spend money.


An hon. member:: That was the problem.


René John Soetens: Now I would like to talk about some of those positive features I mentioned were in the budget.
So that I do not mislead anyone at the outset, I have to say that this budget is not perfect. As long as we have a deficit in any budget presentation, I know there is room for improvement. However we are going in the right direction. The deficit is going down. This budget clearly shows that there is some light at the end of the tunnel. We can see when we stop paying or increasing the debt. In fact in the budget there is some direction that indicates we are going to start paying it back. I find that very comforting. Although it is not perfect it is going an awful long way toward being perfect.

As I mentioned, six years ago the deficit was $38-plus billion. Four years ago the deficit was at $30.6 billion, as it was last year.
This budget forecasts the deficit to be $28.5 billion and next year it will be $26.8 billion. Those are positive steps. Those are things members of the Opposition ought to be talking about very proudly in their presentations. No, they did not rate a lot of mention in their presentations.
That is the improvement. This budget sets the stage for continuing growth and strength in the economy, which directly improves Canada's ability to deal with the debt. Until that debt is addressed, our ability to spend money in some of the very appropriate areas members opposite are talking about just cannot be addressed fully.
How did we accomplish these positive steps in the budget? No, contrary to the comments of some in this House, we did not attack social programs.
Exempt from any impact in this budget will be things like elderly benefits, old age security, family allowance, spouses allowance, guaranteed income supplements, veterans pensions, and unemployment benefits. None of those will be affected in any negative fashion by this budget.
Family benefit programs provided through the province will still be protected fully except in three provinces. One of those provinces is one in which I am a resident. In spite of the fact that they are not fully protected, they will still have an extra 5 per cent to spend on those programs if they need it.
It is not like we cut them back. We did not attack those people who need assistance the most. We made sure that the funds continue to be available. Since the government is holding all Government of Canada spending to a 3 per cent increase, it is not unreasonable to ask the provinces to share in that 3 per cent level. In the past, while we have been restricting ourselves to 3 per cent, we have been passing money to them at 6.6 per cent. We are saying to them, as we are saying to all Canadians, it is time for restraint. If you want money from the federal government, we will make it available to you on the same basis as we make it available to all government programs in which we participate at about 3 per cent. I do not think that is an unreasonable situation.
The Budget
A lot has been mentioned about provincial transfers. There are various ways in which we transfer money to the provinces. Established Programs Financing is one. That has been frozen for all provinces, except for any adjustments owing to the variable due to population capacity.
This program traditionally funded health care and post-secondary funding, but since 1977 there is no relationship between the money we provide to the provinces and the services that they provide to their constituents.
Let me talk about Ontario for a minute. I read one headlines a little earlier about how badly Ontario was affected. In Ontario we have lists of people in hospitals waiting for major surgery. Cancer patients have to travel from Toronto to Ottawa and even to U.S. cities for that special care they need. Never mind the problems that rural Ontario faces, even urban Ontario has some real serious problems with health care.
The Treasurer of Ontario just this week made a special point of flying back from Florida to announce that he has balanced his budget because of an unexpected transfer of $950 million through taxation from the federal government. That is $950 million extra that he was not expecting.
Did he use it to hire one more nurse or one more doctor? No, he did not.
Did he use it to send one patient to a distant hospital for that special care? No, he did not.
Did he use it to build one more hospital room or to fulfil his promise to my constituents to double the size of the Ajax and Pickering General Hospital? No, he did not.
Did he use it to fulfil his commitment to my constituents that he would enlarge the Whitby General Hospital for extended care beds? No, he did not. When members in the House argue that health care will be affected, it is clear that in Ontario at least the provincial government will use it as it pleases.
I should comment that the province of Ontario did not use that money to improve the cash problems that universities are experiencing either.
Prior to the budget release I read some views in some articles that defence spending would be hit and hit hard. It was not. It was capped at a 5 per cent increase.

February 22, 1990
The Budget
In this time when there are changing demands on our forces with the circumstances occurring throughout the world, the military needs this money. I certainly support that. It will have to live within its 5 per cent ceiling.
I should talk to some degree about the grants to business because I have heard some comments there. All across this country I have heard people comment about the fact that we ought to stop giving money to business. Throughout the entire hearing process as we travelled across Canada on the goods and services tax, that was the most favoured presentation by most of the chambers of commerce that appeared before us. Whether they represented rural parts of Canada or urbanized cities, they all supported a stop to these grants to business.
Lo and behold, now that they are in place I hear comments from the Opposition that say: "You can't do that. You can't stop these grants. You have to allow us to spend this money''.
Grants are important and assistance is still there, but is it not better that assistance be provided on the basis that if it is such a good idea there will be a return on that particular assistance program to the federal Treasury and to taxpayers and the money will be repaid in reasonable terms and rates? Certainly on that side I think the budget has been very positive.
One of the highlights of the budget is the selling of a portion of PetroCan. I am sure all Canadians will endorse that. When a company is asked to operate in the private sector, it has to be given the tools to operate in full in the private sector. Unfortunately any company owned by the federal government that needs cash has a problem. We cannot give them any. Therefore putting Petro-Canada back into the private sector enables it to operate fully like Canadians would expect it to operate to generate the revenues, to generate investment and to create the jobs that Canada needs. I whole-heartedly endorse the move by the federal government to return Petro-Canada in stages back to the private sector to let it do as it should be doing.
There are numerous other areas of spending that have been addressed. I would like to get into them today but I appreciate that I cannot. I would like to close by saying to
you, Madam Speaker that I appreciate this opportunity to address the House on the budget, particularly knowing that the member for Halifax West allowed me to speak in his place. He was most anxious. We switched places to do this, so I thank the member for the opportunity to speak at this point on the budget.


Mr. Whittaker:: Mr. Speaker, in listening to the member's speech he touched on social programs and the fact that they did not cut back on social programs this time around.
However, one area he did not get into to which I would like to direct his attention was that of seniors. In looking at the Estimates we see that the senior's independence program has been cut $3.5 million and we look at the effect of this budget on seniors in particular.
In looking at the press release the One Voice Seniors Network put out yesterday, I note that it has pointed out that some of the measures of the government which will hurt seniors are the massive cut-backs in social housing. It pointed out that even though it is not in this budget the clawback will be coming into effect and is going to affect them. It also pointed out that through the government's policies and the goods and service tax they will now be paying tax on many things they have not paid tax on before.
I know the member will stand and say that they are going to be in a better position than they were in before because of the rebate system. I would also like the member to point out them that it is only partially indexed to inflation and that in fact they are going to be treading backward in the years to come.
Seniors are now going to be paying tax under the goods and service tax on things like the recreation, golfing, movies, and bowling. They are going to be paying tax on the taxis for those who do not have transportation to go down to the stores in the small communities which do not have public transportation to get their groceries.
We are seeing in the cut-backs to provincial transfer payments problems with social assistance on which many, particularly senior women, depend for top-ups. Those programs now must either be taken over by the province, or more funding has to be put in, or cut back. Similarly the member has talked about the health programs. I would suggest that those will also be hurt.
February 22, 1990

There are a number of factors where seniors are going to be hurt. By cutting these things to seniors we are ignoring seniors in the future. We have an ageing population. We have to face the facts that we must redirect our priorities in looking to the future, not only for the next generation but for our generation who is now ageing. My question to the member is this. Will he try to convince the Minister of Finance, the members of his party, the cabinet minister, his colleagues and the Progressive Conservative government that they cannot continue to ignore the aging population of Canada? They must fortify not destroy the programs that have been set in place up until now.


René John Soetens: Madam Speaker, it was certainly a very well thought out question. I guess the only debate I would have with the question is on the facts contained within it. Let me give some clear examples.
The member talked about the One Voice Seniors Network. They are well known supporters of particular viewpoints that the member is concerned with. I understand that.
In the presentation that the One Voice Seniors Network sent out to many of its membership, they talked about the impact of the goods and services tax. As I suggested during my speech, members of the opposition want to debate the goods and services tax rather than the budget. I will try to answer partially the hon. member's comment about the goods and services tax and partially his comment about the impact.
The goods and services tax in the brochure sent out by the One Voice Seniors Network talked about a new tax on telephone communication, a new tax on fuel, a tax on rents and of course, as Madam Speaker is aware, those are misstatements of the information that is provided.
If we are concerned about whether a senior should pay tax on golf, I can understand that that would be of concern to the member who asked the question. I am not sure I can say that seniors who have contacted me are concerned about having to pay tax on their golf.
With regard to the clawback, it is awfully nice to again hear the member speak about protecting the rights of seniors who make $77,000 a year and have to pay back their entire old age security. He talks about taxing high
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income earners and when we do that, he says we cannot do it.
Ultimately he is concerned about how Canadians are affected by this. Are seniors being affected? Let me put it this way. Seniors would be far more affected in the impact of social programs if we did not bring the deficit under control. Without a controlled deficit, all programs for all Canadians will be under attack. By reining in the deficit, we have a much stronger ability to protect all the social programs that Canadians want and expect.


Larry Schneider: Madam Speaker, I rise today with great pleasure to ask my hon. colleague a question relative to the remarks that he has given today on a subject that no doubt is near and dear to the hearts of a lot of Canadians.
When I say to the hearts, I am talking about those who are capable of looking at the entire problem and not just looking at isolated problems. Our national debt is in fact a national problem of the kind of magnitude that it will take the credibility of people like my hon. colleague to resolve. My hon. colleague and I got to know each other as we spent a week in Saint-Jean, Quebec and learned a little bit about each other. I find that he is a man of integrity and I would entreat him to the residents of the constituency of Ontario.
I found as I followed him around the finance committee hearings throughout the past year that he indeed was a man who did provide a lot work to the committee. I have a couple of questions or points to which I would like him to respond.
First is the matter of Petro-Canada. He did touch on this subject. He did not touch on another component to it that I think if he had the opportunity he would like to and that is how much more effective Petro-Canada will be once the pride of ownership is given as an opportunity for these individuals who own these service stations.
Second is perhaps a little enlightening experience with respect to the fact that we are a government that does not govern by poll. Of course, we are doing some pretty unpopular things. Perhaps he could address to his constituents and to the members of this House how tough it is to be a member of the finance committee and a member of a government which believes in paying its bills.

February 22, 1990
The Budget


René John Soetens: Madam Speaker, it is certainly a very good question and I appreciate the member asking it.
He is right, we did have a chance to get to learn a little more about each other certainly in our week at Saint-Jean, Quebec. I do not know if I failed the course, but I certainly would not profess to be bilingual at this point in time. I appreciate, though, that we did have an opportunity to try to learn together on what I think we both found a very difficult subject.
But on the issue of Petro-Canada, I would like to comment that certainly in my constituency, and I presume the same applies particularly in western Canada, there is an awful lot of people who simply will not shop at Petro-Canada because it is owned by the taxpayers.
There is a group of constituents in this country who believe that Petro-Canada should be owned by the private sector. People want to shop at Canadian businesses. There is no doubt about that. And if Petro-Canada were owned by the private sector, first, it would have the freedom to make some investments, to borrow some money, and make some long term commitments without the constraint of the federal government in its pocket. Right now PetroCan cannot borrow money without our approval because, of course, we are the owners of it.
When we do not have any money ourselves, it is awfully difficult for us to argue that somebody else ought to be allowed to borrow it. So I think that the freedom that Petro-Canada needs to operate as a private corporation in the private sector will enable it to be even more positive and more aggressive in fulfilling the mandate that it has. I have a lot of constituents who would be happy for that to happen.
Yes, being on the finance committee is tough. But I can tell you that constituents throughout my constituency and certainly throughout most of Canada want the government to address the deficit. They want to address the way we spend our money and I think that that is where leadership comes in. You just have to make those tough decisions. We are making them, and, yes, I am sorry we are down in the polls, but I know we are making the right decisions.


The Acting Speaker (Mrs. Champagne):: The period for questions and comments has now expired.
Before recognizing the next member in debate, I would like to tell the House that I have received written notice from the hon. member for Nanaimo-Cowichan that he is unable to move his motion during the hour of Private Members' Business on Friday, February 23, 1990.

Since it was not possible to exchange positions on the order of precedence, pursuant to Standing Order 94, I instruct the clerk to move this item to the bottom of the order of precedence.
The time provided for the consideration of Private Members' Business will therefore be cancelled and, pursuant to Standing Order 94, the House will continue with the business before it at that time.

Resuming debate. The hon. member for Saskatoon- Clark's Crossing.


Chris Axworthy: Madam Speaker, it is with mixed feelings that I rise to discuss the budget introduced so recently. It attacks all those things that the members of the New Democratic Party in this House hold dear. It attacks the sick, the students of the future, and it attacks the very poor in our society. Fully 70 per cent of the cuts in this budget attack the sick, the students and the poor, which is an indictment that I do not think any party, any government or any finance minister would want to spread around too freely.
It is not a surprise at all that only 19 per cent of people in this country support this government's position. This government was reminded by 88 per cent of Canadians not to cut post-secondary education and health care, and yet it went ahead and did it anyway.
This budget indicates that the government has run out of ideas and has no idea on how to manage the economy. The Tories have preached restraint now for six years and have yet to target the greatest single contribution to the size of the deficit-our insanely high interest rates.
With peace breaking out all over Europe, this government has not touched defence spending. In fact, defence spending will increase by 5 per cent, at the same time
February 22. 1990

that consideration is being made to move the doomsday clock away from midnight for the first time since the Second World War.
This government continues to move the tax burden from the rich and the powerful, the multinationals and the millionaires onto to the middle and lower income groups. The Minister of Finance's own figures indicate that last year another $1 billion was shifted from corporations onto ordinary income earners. Taxes received from corporations were $1 billion less than projected, while the taxes received from individual Canadians were $1 billion more than was projected, a continuation of the move away from those who can best afford to pay taxes to those who can least afford to pay taxes.
Now the government claims that it has no choices left as to where to cut. Rather than show some leadership on the world stage and contribute to a lessening of international tensions by cutting defence spending, they now attack medicare. Instead of reducing interest rates, the government raises them and then cuts education spending to make up for the increased borrowing charges. Rather than let the Canadian dollar resume a sustainable level which would encourage our export industries, the Minister of Finance announces plans in the budget to borrow $3 billion to intervene on the international money market.
The lack of imagination shown by the government in addressing the needs of the country is so atrocious it brings new meaning to deadly dull. Their dullness now threatens the health of Canadians, their dullness attacks veterans by gouging them for an additional $35 million in user fees, their dullness threatens the future competitiveness of Canada by reducing access to post-secondary education.
Why should the sick, the poor and our youth be sacrificed so that this government can gamble $3 billion on the money market? Why are small businesses, farmers, home owners and consumers gouged with the highest real interest rates, second only to those that the Liberals created? Why are they gouging small businesses, farmers, home owners and consumers?
The Minister of Finance is like a little boy in his obsession with the level of the dollar. Fie wants to go to international meetings and boast about the size of it. The
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government is making up for its mismanagement of the economy by attacking the most defenceless members of our society-the poor, the sick and the youth. As I said, fully 70 per cent of these budget cuts are on the backs of the sick, the students and the poorest in our society.
There is no excuse for this, Mr. Speaker. It is a shameful recognition of the direction this government is following. Eighty-eight per cent of Canadians told the government not to cut health and post-secondary education funding, but it went ahead anyway. This is bullying of the worst kind, when a government refuses to listen to those who elected it, refuses to listen to the people it is representing.
The minister with his fat bank account and his life of privilege understands nothing of the daily struggle faced by millions of Canadians. Now he wants to undermine the national underpinnings of medicare, Canada's most essential and most valued social program.
This is the third time the government has taken the axe to health and post-secondary education spending. In 1986, the Conservatives reduced spending by 2 per cent a year, in 1989 they reduced spending by a further 1 per cent a year and now, less than a year later, they have reduced increases to 0 per cent a year. Given the government's own projections of approximately 5 per cent inflation per year over the next several years, it means that health and post-secondary education spending will decline in real terms for the first time since these programs were established and decline by 5 per cent each year.
Anyone who visits our universities and colleges, anyone who visits our hospitals knows full well that these institutions cannot afford a cut of 5 per cent a year. Already they are struggling to meet the demands that are placed upon them and this 5 per cent cut will make it impossible for them to ensure that we have the high quality health care that Canadians deserve and need, and that we have the high quality education system that Canadians need in order to take on the world economy of the future. It is short-sighted. It is short-sighted and it makes no sense.
The Minister of Finance has spoken about the enormous effects of compound interest in describing the growth of the deficit, but with his customary hypocrisy, he has not mentioned the compounding effect of all of

February 22, 1990
The Budget
the cuts to health and education spending. The total effect of the 1986 cuts was over $2 billion between 1986-87 and 1988-89. Because of the magic of compounding, the initial cuts have now reached $2 billion each year and, of course, the figure is growing. That just represents one of the three cuts this government has made with regard to health and post-secondary education funding.
When we consider the effects of the new freeze on health and post-secondary education funding, we have to include the 1 per cent cut announced last year. Incidentally, Bill C-33, which announced that cut has still not been passed by Parliament and, of course if New Democrats and the people of Canada have anything to do with it, we will make sure that it never gets passed.
The Minister of Finance has said that the government will save $7.3 billion over five years with the proposed freeze in transfer payments. The effect of this, plus the 1 per cent cut last year, if that is included, plus the 2 per cent, means that the actual cut that this government has made to health and post-secondary education is close to $11 billion over a seven-year period. To indicate the magnitude of that cut, the annual budget of the University of Saskatchewan, as you fully well know, Mr. Speaker, is about $160 million. That shows the extent of the cuts of this government, the slashing that it is making of two of our most valuable programs, health and post-secondary education.
If health and education spending had grown at the rate expected before the minister began to amputate the funds, the federal government would be spending $30 billion more between 1986-87 and 1994-95. These cuts are unprecedented in their size, and they are unprecedented in their lack of consultation.
I do not suppose the Minister of Finance would find one hospital, one university, one student, one professor, one doctor or one nurse who agreed with the extent of these cuts. In fact, they are so huge that they are even greater than the gouging and slashing undertaken by the Liberals when they introduced their infamous six and five program which dramatically cut spending on postsecondary education and made two other further cuts to both health and post-secondary education.
Mr. Speaker, what we are seeing is the end of a dream. When New Democrats forced the federal government to bring in medicare and hospital insurance nearly 30 years ago, it was recognized that Canadians from every part of the country should have similar levels of health care. That is why a national program was designed, so that every province, not just the better off ones could provide health care.
The then Prime Minister, Mr. Diefenbaker, who was so much a champion of health care would turn over in his grave when watching what his modern-day colleagues are doing. It was recognized then and it remains just as true today that Canadians should not be penalized by their place of birth or by how poor their parents are. Every Canadian has a right to medical care. It is immoral and unjust to place a higher value on the health and lives of the rich, or those who live in wealthier provinces, than on the health and lives of the poor, or those who live in less well-off regions.
Perhaps the Minister of Health needs to be reminded that he has moved from being the Minister of Defence to the Minister of Health. The defence budget will recognize an increase by some $700 million in this budget, while the health care budgets and education budgets of this country are slashed.
This is a government which prefers guns over health care. It is a government whose priorities are wrong. With post-secondary education in the late sixties, the federal government began a system of transfers of tax points and cash to the provinces. There was a national consensus that young people from every part of the country should have access to higher education.
Young people in Newfoundland and Saskatchewan should not be forced to travel thousands of miles to attend universities in southern Ontario. Young people in Quebec should have access to higher education in then-own language rather than travelling outside the province to study in a foreign tongue far from home.
The national dream of equal treatment for all Canadians is being destroyed by the government's actions in this budget. This government has determined that it does not matter who you are, it matters how thick your wallet is. Post-secondary education will no longer be available to bright young people if their parents are poor. Universities and colleges will become the preserves, even more than they are now, of the upper classes. No longer will health care be a right. Now we copy the horrifying
February 22, 1990

American system where health care is a commodity, the best that money can buy.
It is ironic that while Americans are demanding a health care system like we have in Canada, we are making the choice to have a health care system like they have. We all know the problems that that will create, the numbers of people who are inadequately or not covered by the system and the fact that the rich have private hospitals with luxurious suites while the poor are denied basic health care. That is the direction we are moving in. Americans want our system. Our government is rejecting that system for one which is so flawed.
What is the minister's expertise to determine that people do not get as sick in Nova Scotia as they do in Alberta? Why is he encouraging the privatization of medical care, the creation of two health care systems; one for the rich and one for the poor.
We have already seen from Alberta suggestions that this is the direction in which the health care system should move. We have heard all sorts of pronouncements from the government, both with regard to health care and post-secondary education, about how important they are to the country and about how committed this government is to those two programs.
Actions speak louder than words. When we look at who is going to pay for the government's philosophy, when we look at what the government actually does in pursuing its big business, free enterprise, anti-Canadian policy, we can see who pays the cost.
There are cuts and shifts out the national AIDS program which will make it more difficult for us to fight the war on AIDS which this government has said is such a priority. Twelve million dollars is taken out of that strategy and moved to other places. Support groups in favour of improving health services and looking into research and education in public health lose out by $900,000. Support groups which are advocating health promotion lose out by $150,000. The national health surveillance program which attempts to ensure that Canadians are protected from health hazards and ensures that our health standards are adequate is cut by $12 million. Programs for vocational rehabilitation of disabled persons, one of the most vulnerable groups we have in our society, are cut by $15 million. Support
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services for welfare recipients, again a group which is severely disadvantaged in our society, have cuts of $2 million. Cuts in programs to address child care problems and to encourage the increase in quality of child care cut by $2 million. Cuts to programs to assist seniors in supporting themselves and in leading a dignified and happy life by $3.5 million.
The legitimate role of the federal government has been traditionally to help the most vulnerable in our society, the less well off. If, as the Conservatives believe, that there is no longer a role for government in this respect, if, as they can attack the poor, the disabled, the sick and the old, who is going to play this role? Is the private sector going to do this for us? That is what the government seems to be suggesting. Is it going to conduct research into AIDS, is it going to assist those people living with disabilities, is it going to investigate aspects of seniors' health care, is it going to help seniors live in their own homes with some dignity and with some happiness? Is big business going to support the support groups which want to investigate measures which can assist in our health care program?
Clearly it is not. So what this government is doing is attacking those very programs and those very groups which can assist us in making our society a better place. The government is saying, if you are sick in Newfoundland, you do not deserve the same high quality of health care as better off Canadians do. It is saying that if you are a student in Saskatchewan you are not entitled to the same high quality university education as you are in rich provinces. The government is saying that health promotion, the fight against AIDS, the disabled, battered women, children, seniors, those on welfare are no longer priorities of this government.
I think we have to assess the philosophy of this government and look carefully at what this government is doing. If we look at the budget we see that there was nothing on the environment. Such a short period of time ago the government was professing great commitment to the environment and to an economic program which paid attention to environmental concerns. Yet as soon as the first budget comes along, after these pronouncements, we see nothing in the budget at all for the environment. We see nothing to address the crisis in Atlantic Canada, a crisis which is going to affect tens of thousands of

February 22, 1990
The Budget
people in Newfoundland and the maritime provinces, tens of thousands of people in Newfoundland, Nova Scotia, Prince Edward Island and New Brunswick. We saw nothing in the budget to make the wealthy and corporations pay their fair share of taxes. We saw nothing to help the homeless. Indeed we see cuts to social housing. There is nothing to help feed the 1.2 million children who go to bed hungry in this country.
We see nothing which would have addressed the concerns of the deficit other than those cuts on the least well off in our society. We saw no imagination in terms of adjusting tax rates for the wealthy and for corporations. While corporations can write off to the tune of almost $1 billion their lunches and their entertainment expenses, this government in this country of so much wealth is taxing those people who are earning less than the poverty line.
People that we see in our offices-do not know whether the Tory members see them in their offices-are already suffering and not able to cope with this government's cuts.
In conclusion, this budget fits into the Tory philosophy. It helps the rich and it hurts the poor. The last speaker talked about free trade and the goods and services tax. He wondered why some speakers were referring to these particular measures. Well, it all fits into the same package.
As we have seen from those recent public opinion polls, the government represents only 19 per cent of Canadians, the richest Canadians and not the poorest. Free trade involved us giving up control of our economy and attacking people, the sick, students and the poor. This budget is putting into effect the same philosophy which sat behind the free trade deal into social programs and the way in which this economy will be managed.
We see increased regional disparity. There is no effort in the government's activities to help those less well off regions. The attacks were not quite as hard as those on the richer provinces, but there was nothing to redress the enormous problems of the regions of the country. Members of the government should go out and visit
those regions to see the enormity of the problems. Then maybe they would concentrate on addressing them.
There is the privatization of Petro-Canada which will take away our last vestiges of an attempt to control our own oil and gas reserves. There is privatization in the health care system. It has to come, and we are already seeing it because there simply is not enough money going into the public system. We are going to see increased privatization in the post-secondary education too as tuition fees go up and as we see private universities springing up in the country.
We have a two-tiered system which the government is pushing upon on us, one for the rich and one for the poor. There is an Americanization of our programs and an Americanization of our society. It is one in which the rich do well by the government and the poor get trodden on. It is simply not acceptable. The people of Canada are speaking out all over the place. We see it from the public opinion polls today and whenever we see ordinary Canadians in our office and at meetings. The country is sick of these unfair programs which protect the rich and hurt the poor. The government, of course, and members opposite will feel the brunt of it come the next election.


Some hon. members:: Hear, hear!


Howard Edward Crosby: Mr. Speaker, sometimes I am afraid that we, in the House of Commons, have become so insulated against the empty rhetoric of members of the New Democratic Party that perhaps we should stop to think that perhaps somebody else is actually listening to them and accepting some of the material. Let me make a couple of comments to point out a few things to the public.
The NDP constantly takes credit for being the institu-tors of our health care system. What nonsense! I was a solicitor in the Department of the Attorney General of the Province of Nova Scotia in 1957 and 1958 when the Right Hon. John Diefenbaker, who was then the Prime Minister of Canada, was promoting the hospital plan. That was the precursor or our medical care plan for all Canada.


An hon. member:: It happened in Saskatchewan in 1952. Where were you in 1952?


Howard Edward Crosby: He required the consent of six provinces in order to implement the hospital care plan across Canada. He prevailed upon Nova Scotia and the Hon. Robert Stanfield to join with the five other provinces
February 22, 1990

which had agreed to participate. That was the beginning of public hospital care in Canada. It had nothing to do with the New Democratic Party. What colossal nonsense, perpetrating this fraud over a period of time as though some person in the province of Saskatchewan created the whole medicare plan.


An hon. member:: Have you ever heard of Tommy Douglas?


Howard Edward Crosby: Time and time again we are faced with this nonsense. The onus is on members to stand up from time to time, forget the empty rhetoric, and give the facts to the House of Commons.
I want to go after another area of empty rhetoric that the member mentioned, Petro-Canada, the great white father of the oil industry. The executives fly around in the same jets as every other oil company. It has the same rules and regulations for its dealers. It overcharges its dealers on tires and batteries and other accessories. It has the same plans and programs as any other oil company.
I would like to ask the member what will be the loss? Do you know any dealers? Have you ever talked to a Petro-Canada dealer and asked him or her what the arrangements were as opposed to private enterprise dealers? Put that to the test. Ask any Petro-Canada dealer how sad he will be when privatization takes place. Those are the little people who Petro-Canada is supposed to protect, not the corporate executives.


Chris Axworthy: Mr. Speaker, I am sure that coming from Saskatchewan, we are both amused and surprised at what the member from Nova Scotia just said. Perhaps the member forgot Tommy Douglas, Woodrow Lloyd and Allan Blakeney. Perhaps he forgot, as this government seems to have forgotten, that Saskatchewan even exists. Saskatchewan was the province which brought into operation hospitalization and ran medicare on its own without any federal support for six to seven years. So let us not hear this nonsense about it. If we look at the history books we can see it.
In terms of the national program, without the lead of Saskatchewan and the New Democratic Party, this country would not have a medicare program. We will be
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labouring under the same system as the Americans have in which most of our less well-off citizens would not be covered by adequate health care facilities.


An hon. member:: A Tory system.


Chris Axworthy: Yes, a Tory system. One which favours the rich and hurts the poor. Let us not hear any more nonsense about the origins of medicare. It is quite clear where the origins of medicare were. They were situated in Saskatchewan and in the CCF, the forerunner of the New Democratic Party, which persuaded the rest of the country that this was a good idea.
Mr. Diefenbaker, of course, played a role in making medicare a national program. Everyone in Saskatchewan, and indeed all of us in the New Democratic Party, would admit to that role. He was supportive of the medicare system as we all know, somewhat to the surprise of his colleagues in the Conservative party at the time, and to the establishment in big business and the medical community. He did play a role and we all recognize that role.
Of course, he would be turning over in his grave at what the government is doing to medicare and what they are doing to Saskatchewan and the other poorer regions of the country. The member opposite knows that. Mr. Diefenbaker was not as neo-conservative as the government is. Mr. Diefenbaker was a traditional Tory who cared about ordinary Canadians, unlike the government.


Steve Butland: Mr. Speaker, yesterday we congratulated our colleague on his expertise in a particular area. Now I have to congratulate him on his versatility. He is on his feet every day expounding words that Canadians want to hear. He struck a lot of nerves across this country.
He mentioned one of our favourites: corporations. He said we should be taxing corporations. I had occasion to ask Revenue Canada a couple of months ago what constitutes a large corporation. I was told $10 million and above. I asked, how do you arrive at that figure? The answer was it was very complex but about $7 million constitutes a large corporation. I asked how one got from $7 million to $10 million. The answer was that one had to err on the side of caution. I thought that was a very interesting answer to what designates a large corpora-

February 22, 1990
The Budget
tion. One could only hope that the minimum wage and poverty line would be so flexible for Canadians.
The deficit that the Conservative party has suddenly found to be the major problem in the country popped up in December, 1988. In November, 1988, it was no problem at all. We went through a whole campaign and there was not a mention of it. "It is in our financial commitments and we are fiscally responsible". Two months later, all of a sudden, we broke all those promises and now the deficit is a major problem.
As far as the budget process is concerned, the Prime Minister in his now famous book that you can buy for 99 cents at any Coles bookstore across this country, said consultation is very important. The budget process must be a consultative one. It cannot be dropped out of nowhere one night. That is exactly what happened this time. The Minister of Finance was too busy to meet with anybody prior to this budget, breaking a long traditional process. Instead he sent out 50 letters. I think he read three of them. He read the ones from his friends and said this is what we have to do.
I am sure that the vision of the country that the government has is very different from our vision and this member's. He is a very caring politician. What is his vision of the country and how does he think the New Democratic Party would move toward that vision of our country?


Chris Axworthy: Madam Speaker, I thank the member for his question. One thing about us as New Democrats is that, before anybody else and anything else, in terms of our approach to dealing with the deficit, which we recognize is a serious problem and the other problems of the country, we put people first.
There was an old slogan, of course, of the CCF: "People before profits." What that reflected was a desire to give people a helping hand, rather than a kick in the teeth, which is what the government specializes in.
So, we should put people first. We should look for policies which help people, care about people, enable people to live happy and healthy lives, enable people to be educated even though they may be poor, enable people to have health care even though they may be poor, and encourage them to work and have jobs, rather
than discourage them. We would help the regions, not hurt them. We would look for the resources to do that from people other than those whom the government looks to for those resources.
The government looks to the poor and the least able to provide the resources to deal with the country's problems and concerns. It leaves those who are most well off, the wealthy, the corporations with tax loopholes for the rich, and so on. That is where we would look for those ways in which we could provide the resources to solve the problems for the country.
Clearly, we would also attack interest rates in a meaningful way, which is simply not what this government is doing. In fact, interest rates are getting very close to the level at which the Liberals had them in their heyday. There is now a gap of almost 9 per cent between inflation and interest rates. At the height of the Liberal hypocrisy dealing with interest rates, the gap was about 11 per cent. We are not very far off from a very similar situation which hurts ordinary Canadians the most.
We would look for places where people are able to provide resources, not attack the least well off in our society.


Howard Edward Crosby: Mr. Speaker, let me continue this debate on the budget of 1990 by quoting some of the principles introduced by a Minister of Finance in the House of Commons. These are financial principles adopted by the Minister of Finance.
First, we must continue to practice fiscal responsibility. We must persist in restraining government spending. We must strive to contain the rise of the deficit-we must rigorously review our priorities to ensure that existing programs continue to serve valid objectives-we must continue to rely primarily on the dynamism and creativity of the private sector as the engine of growth in Canada.
I am sure members of Parliament recognize that as consistent with the thoughts expressed by the Minister of Finance in his budget. But they are, in fact, remarks made by the Hon. Marc Lalonde, when he introduced his budget in October, 1982.
Now the difference is that the Hon. Marc Lalonde as Minister of Finance under a Liberal government did not abide by those principles. He enunciated them in the House of Commons, but he did not follow them in his subsequent financial plans. As a result, we are left with
February 22, 1990

the deficit and debt mess that we encountered in 1984 and we have been trying to fight that situation ever since.
Marc Lalonde was not the only Liberal finance minister guilty of those grave deceptions. Back in the 1960s, the Hon. Edgar Benson made similar remarks in the House of Commons. He said that he intended to continue severe restraint. The government's experience in the previous year and the prospects for the following year forced it to recognize the central problem of the control of public expenditures in Canada at the time. But again, Mr. Benson, as Minister of Finance, and subsequent finance ministers, did not abide by the principles they enunciated.
Now the members opposite in the Liberal party and the New Democratic party criticize us for enunciating those principles of financial responsibility and then abiding by them. That is the difference. They simply used those principles as rhetoric. We use them as a plan of action. So that is what the budget is all about. It is about reality. It is about the realities of the financial situation of the Government of Canada.
Our goal has to be that of getting our economic and financial house in order. Let us compare it with the family. Who would lend money to a family who for 20 years overspent its budget? They bought a new car when they could not afford a new car. They bought equipment for their homes, took vacations, and constantly overspent. Now would any banker or lender want to assist that family in future expenditures? They would say to them, no, that is not the way to operate. You have to go back and get control of your budget. You have to account for your revenues and relate your expenditures to those revenues.
That is very basic financial responsibility and it applies equally to any government or institution. Revenues have to relate to your expenditures. How can anybody complain in the House of Commons or anywhere else in Canada? As the Minister of Finance says: "I will tell you what we are going to do for 1990-1991 and all future years. We are going to relate our revenues as the government to our expenditures and we are going to bring them into balance." How can anybody quarrel with that?
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What has happened over the last five years since the Progressive Conservative government took office in 1984. That is exactly what we have done. We have related our revenues to expenditures.


An hon. member:: Oh, oh!


Howard Edward Crosby: The member laughs, the member who is a part of the government that in 1984 allowed the national debt to rise to $200 billion. They then say: "Why did you people not do something about it? Why did you not eliminate the debt and reduce the deficit to zero?" How could you possibly do that?
The members opposite and all other members of the House of Commons knows that it has to be a gradual process unless they are willing to cut off social programs.


Mr. Manley:: What's left?


Howard Edward Crosby: They stand in the House and defend social programs and say: "Don't reduce social programs." Then they take away the financial ability to provide those social programs. Now that is hypocrisy of the worst kind, to pretend to defend social programs and to pretend to support social programs and their expansion and to look after needs as they are created in the Canadian public and then to deprive the government of the financial ability to do that. What sense does that make? Does anybody in Canada really believe that that is possible, to continue spending, not raise revenues and allow the deficiency and the deficit to occur year after year? I do not think any Canadian would fail to realize that that kind of process can lead to disaster.
The greatest threat to social programs is a bankrupt national treasury. I defy any member of the House of Commons to stand up and say that that is not the case. A bankrupt national treasury will not provide or support any social program. Just ask somebody from Argentina, Brazil or Poland about that.
People are always talking about eastern Europe. Look at eastern Europe and what is happening with the rise of democracy. But listen to Gorbachev, Walesa and Havel. They will tell you. The lesson they have learned in eastern Europe is you cannot go on spending and not producing. What they are saying to their workers and people is that they have got to be realistic about their economy. People have to work and contribute if they want any benefits from their society. That is what they found out in eastern Europe and that is why they are marching in Prague and in all those eastern European

February 22, 1990
The Budget
countries. They are marching for democracy, but they are also marching for enterprise because they know that that is the solution to their problem. They know that you cannot take more than you give, as the members in the New Democratic Party are always pretending. You cannot take more out of the system collectively than you put into it. It is as simple as that. If Canadians do not realize that, we are in big trouble.
That is our job, to convince Canadians that that is the situation. How are we going to do that? We have to point out, time and time again, even though the members opposite do not want to hear it, the great disaster that was nearly brought on the country by years of Liberal deficits piling up, detailed, not by members of the Progressive Conservative Party, but by people like Terence Wiells in The Gazette. I read his article dated Sunday, April 23, 1989, where he said: "How did we get into this mess?" and details from Benson on through, year by year, Liberal budget after Liberal budget, leading to deficit. You get sick of saying it, but if people will not listen you have to keep saying it until they do listen because the legacy of years of debt is a financial disaster for Canada. It is an erosion of social programs, the inability to cariy on and reach all your national and international commitments.
What does it mean in dollars? Very simply, when we came into office in 1984 there was a $16 billion deficit in program spending. That meant that the amount spent by the government on programs was $16 billion more than the revenue. In 1989-90 there was a $9 billion surplus on program spending. That is, we lived by the principles announced by the Minister of Finance. We said we are going to relate revenues to expenditures and we produced a surplus of $9 billion.
But here is what people have to realize. If you take those two figures, the deficit of the Liberal government prior to 1984 and the surplus that we established over a five year period, and add them together, that is $25 billion. Add that to the current deficit of $30 billion which we are still incurring and the figure is $55 billion. If we had not taken action we took in 1984 and in subsequent years we would have a deficit in this country of over $50 billion.
Can you imagine what that would do to our dollar? It would not be worth 50 cents. People are complaining that the dollar is going down. It would go down right to the bottom, below 50 cents. What would interest rates be? We would be glad to pay 13 or 14 per cent because they would be 26 per cent. What would inflation be with a $50 billion deficit in Canada? Talk about double digit. There is no such thing as triple digit but I can tell you it would go a heck of a lot higher than 11 or 12 per cent that we saw in the early 1980s.
So those are the kinds of problems that have to be underlined and understood by all Canadians or they are not going to understand the programs that the Minister of Finance has introduced, the initiatives that he has taken to right the wrongs. That is why I say the budget is about reality.
Let us talk about the opposite of that reality. Members opposite like to mention the polls. No problem with the polls. We can get back on top, we can go up to 50 per cent or even 60 per cent. All we have to do is restore VIA Rail and its $600 million a year deficit, let the Post Office carry on as it did before and produce another $600 million deficit instead of the $70 million surplus they experienced in the last fiscal year. We can roll back tax increases. We will not require Canadians to pay any more in taxes. We can increase the OAS, the GIS, we can roll back the unemployment insurance changes. We can just fund the deficit on the unemployment insurance plan.
We can go on with all sorts of programs that will bankrupt the national treasury and everybody would be happy. They would think that was wonderful. They would all support the Progressive Conservative government because they would be getting more money in transfer payments. They would have all kinds of services. But for how long? It might last a year, it might last two years, it might even last three years. But sooner or later you have to pay the piper and when the Canadian people pay that piper they will find they are paying enormous interest rates. They are going to have to face the reality that the whole system is going to collapse.
But the government is not going to let the system collapse. They are not going to be misled by the empty rhetoric of members opposite and members of the New Democratic Party. We are going to grasp the realities of
February 22, 1990

the situation and that is why we say the budget is about reality.
I have already indicated the government's record of expenditures and the important things that have been done over a period of time-the down-sizing of the Public Service, the fact that the Public Service, in 1990, is no larger than it was several years ago. There are 12,300 less persons employed in the Public Service of Canada. I have mentioned Canada Post and the fact that they now produce a surplus, whereas years ago there was a $600 million deficit. That is the same in various other areas of activity.
The other important initiatives that we have taken would take too long to list. But let me just leave you with this thought, Madam Speaker, and members of the House of Commons; this has been at a price paid by the people of Canada. We understand that. The people of Canada have been great contributors to this righting of the national economy in terms of taxes. Yes, the revenues of Canada have gone from $70 billion in 1984 to close to $120 billion in the next fiscal year and that is the contribution of the people of Canada. We respect that and we know it was at some sacrifice and suffering. We know that the people have paid more taxes. But I hope they realize that that contribution is going to pay off. It is going to pay off in a solid economy, an economy that is respected not only domestically but internationally all around the world.
We know public servants have paid a price. They have had downsizing and I hope they understand the need and desirability of that initiative. They have taken lower salary increases, below the inflation rate in many cases. That has been a tremendous contribution to the Canadian economy because it shows to the whole Canadian labour force, all working people including ourselves, that that ought to be the test, that ought to be the guiding light.
I think I want to congratulate public servants across Canada for accepting the kind of salary increases that they did a few months ago through the Public Service Alliance. One hundred and fifty thousand public servants accepted a salary increase in the area of 4 per cent. That kind of acceptance of the realities of the economy is what will make Canada strong. We have contributions from the people of Canada in terms of tax increases. We
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have the special contributions of public servants in terms of downsizing and acceptance of reasonable pay increases.
I think that has led to the present state of the economy. What is the present state of the economy? There have been over 1.5 million jobs created across Canada over the last five years. Those are good, fulltime jobs-over 900,000 jobs for women-not part-time jobs but jobs in science and technology, and in other areas, that will be lasting jobs for the future.
We have always said that at the heart of our policy has to be employment of Canadians. I had somebody say to me when I was first elected: "You can talk about inflation. You can talk about a variety of problems. You can talk about high interest rates, but if I don't have a job I can't deal with any of those problems. Get me a job and then I will worry about interest rates, about inflation, about the high cost of living and all the other problems that beset Canadian families." If you do not have a job you cannot even deal with those problems.
That is why we have made employment of Canadians a priority and there have been 1.5 million jobs created. That is why the unemployment rate went down from double digit numbers to 7.8 per cent in January, 1990. That does not mean there is not unemployment in Canada. Of course there is, in Newfoundland, in parts of Nova Scotia and throughout Atlantic Canada and in northern Ontario and elsewhere. We are fighting that on a day-to-day basis through job training programs and a variety of initiatives.
But the government and the Prime Minister will never lose sight of the fact that the thrust and energies of this government have to be directed towards job creation so that every Canadian will have a job. We recognize and have said many times-it bears repeating-that the best social program for Canada is full employment. That is where we should direct our energies.
I do not think anybody would deny that the thrust of the budget is the balancing of revenues and expenditures and the reduction of the deficit. How we reduce expenditures by almost $3 billion is by dealing with the transfer payments primarily. I do not think anybody should deny that and I do not think the Minister of Finance would ever suggest that it be denied.

February 22, 1990
The Budget
There are, as has been detailed in the budget papers, very stern measures with respect to transfer payments. Why would the Government of Canada reduce, freeze or limit transfer payments? I think the answer is very obvious, and I think every provincial premier knows what the answer is. The financial situation of the provinces of Canada is much better than the situation of the Government of Canada. I do not know whether I need to detail that, but just so no one will think this is the member for Halifax West, this is a Tory talking.
The Financial Post says the same thing. In an article on February 22, 1990, it says that the provinces will have to do their part. I am quoting: "The provinces are complaining about finance minister Michael Wilson's budget, but he was justified in requiring them to do their part in fighting the deficit. Ottawa has frozen per capita grants for health care and post-secondary education for two years. Until 1977, established programs for financing transfers were strictly tied on a matching basis to the provinces providing health care and post-secondary education. The provinces wanted more freedom and since 1977 they have been able to use the funds in accordance with their own priorities. In some cases, this has been to support their general revenues."
Does anybody think that The Financial Post was mistaken when it published that? If you look at the record you will find ample evidence of what exactly has been going on.
While the federal deficit has been going up and the Government of Canada has been experiencing difficult financial times, the deficits of the provinces, particularly in Atlantic Canada, have been going down. Prince Edward Island has a balanced budget. New Brunswick is heading to a balanced budget. In the 1989-90 fiscal year, Nova Scotia reduced its budget by a windfall of $48 million and has announced that in the next fiscal year it would have a balanced budget. The same can be said about New Brunswick where Premier McKenna said that things were never better in Atlantic Canada in terms of the financial picture and structure. Newfoundland has experienced similar reductions in its deficits over the years.
As a result, in July, 1989 the total provincial deficit of every province of Canada amounted to $3.7 billion. The provinces of Canada all together had a collective deficit
of $3.7 billion. Do you know what, Madam Speaker? Accounting for $2.2 billion of that was the province of Alberta where there is no sales tax and where most goods and services are cheaper than in any other part of Canada. The province of Alberta had a $2.2 billion deficit.
I can tell the province of Alberta how to wipe out that deficit. It can wipe that deficit out overnight. All it has to do is the same as the rest of us have done, impose a sales tax. Although I am sure that my colleagues from Alberta are concerned about the deficit, I do not think that anybody has to cry too much about Alberta.
Graphically demonstrated is the difference between the situation with the provinces. In the province of Nova Scotia, compared to Canada, we spend 35 cents of every revenue dollar on interest charges. The province of Nova Scotia spends 16 cents of every dollar on interest charges. The average across Canada is about 12 cents interest per revenue dollar. I guess that proves, does it not, who has the better financial resource in 1990. The provinces do.
The provinces, as The Financial Post and every other sensible and serious financial writer states, have to do their part. They have reduced their deficits because of transfers from the Government of Canada. It is not the Government of Canada, it is not the right hon. Prime Minister or the hon. Minister of Finance, it is the people of Canada. They are the taxpayers, that is where the money comes from. We are simply taking the money of the taxpayers of Canada and giving it to the provinces. Now the time has come for the provinces to take hold of their finances and take the appropriate action. While our expenditures have gone down to the point where there will only be a 3 per cent increase in 1990-91, the provinces expenditures have continually gone up with 10, 11 and 12 per cent increases.
The measures taken in the budget are serious and difficult for Canadians, but they are serious and difficult times. In the end, all Canadians, including the provinces of Canada, will benefit from a balanced budget. They will benefit from financial responsibility because it is only with financial responsibility that you show any concern for the people of Canada.


John Paul Manley: Madam Speaker, the hon. member referred favourably to things said by the new President of Czechoslovakia, Mr. Havel. When he was in Canada last week, he said that he believed any country that per-
February 22, 1990

mitted more than 49 per cent of its businesses to be owned by foreigners was stupid.
I would like to ask the hon. member if he agrees with Mr. Havel on that point.


Howard Edward Crosby: Madam Speaker, Mr. Havel, as you may or may not know, comes from a part of eastern Europe, Czechoslovakia, that has been closed to the rest of the world for over 30 years. You are not allowed to go into Czechoslovakia. When we went there last fall we had to go through all kinds of rigmarole to get into Czechoslovakia. Mr. Havel may find out as he travels around the world that his people are marching in the streets because they have dosed the doors and gates of Czechoslovakia for 30 years. They have forgotten what was going on in the rest of the world. Now they will have to face up to the realities of the world and the mobility of capital. Where is Mr. Havel going to get his capital, if he does not seek outside help?
That is not the message I got when I was in Czechoslovakia. The message I got was they want the world to come to Czechoslovakia, they want help. That does not have to necessarily be ownership, there are other ways to control capital. We have said time and time again, you do not have to own, you have to legislate. That is the way you get control.


Mr. Langdon:: Madam Speaker, there might even be unanimous consent in the House to permit the member to extend his speech. He is making such fine arguments for those of us on the opposition side of the House. For instance, he suggested that Alberta should simply create a sales tax. So much for the government's argument that there are no new taxes in this budget.
There is a $2.2 billion deficit in Alberta, so the member suggested raising a sales tax. I am certain the people of Alberta will be very pleased to hear that this parliamentary secretary, a relatively senior member of the Conservative party as a parliamentary secretary, is telling the people of Alberta: "You need a sales tax. That is what you need". I hope it will be reported widely in Alberta that the urgings of this parliamentary secretary are that Alberta should have a sales tax, that that is what this budget is about is to see that Alberta gets a sales tax.
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Second, I want to suggest that the parliamentary secretary's long discussion about the importance of jobs is again fascinating to hear. I would like to hear him talk at great length about that. Then I would like to see him explain the fact that this budget takes us up to an 8.5 per cent unemployment rate from the present 7.5 per cent rate that exists in this country. That is not my projection, Madam Speaker. That is the projection of the Minister of Finance himself. Here is a member who gets up and says the key thing about economics, the key thing about a budget is that it should create less unemployment when his own budget that he is trying to defend creates a 1 per cent increase in unemployment which will fall particularly on his products.
The question I want to put especially to this member because he comes from Atlantic Canada is to ask him to give us some more of his sterling arguments in defence of this budget in terms of an interpretation, an explanation why this government, according to the Estimates, which were introduced today to this House, is going to be cutting the amount of money which goes in programs for the Atlantic Canada Opportunities Agency, the agency which provides help for his province. Why is there a cut in program activities from $379 million last year to the total for this year of $339 million?
I would be very interested in hearing his explanation why his part of the country should be hit so hard by this heartless budget.


Howard Edward Crosby: First, let me deal with the matter of ACOA. I direct the member's attention to pages 9 and 10 of Part III of the Estimates dealing with the Atlantic Canada Opportunities Agency. He will see as he reads that section that there is no such reduction. The difference in amount to $339 million is explained by the fact that $39.4 million was transferred prior to the Main Estimates to other departments to implement programs, that there will be a reprofiling of 10 per cent of the previous budget, and in fact, the amount available to ACOA will increase. The member can get that information from the Main Estimates. Of course, the member can also read what is said about the future for the Atlantic Canada Opportunities Agency in the 1990-91 fiscal year. It also explains the amounts that have been

February 22, 1990
The Budget
spent in Atlantic Canada and the programs and the diversity of those programs compared to previous programs for Atlantic Canada.
The point with Alberta, let me try to make this clear so that the member will understand, it is who has the financial resources to meet all the obligations of all the services provided in Canada, including education, hospital care and the whole range of services. The question is who has the financial ability to provide those services?
Is it the Government of Canada taking taxes from the people of Canada, or the governments of the provinces taking taxes from the people of the provinces, or some combination of both? What we are trying to explain to those who do not even want to understand is that right now that financial resource appears to be more with the provinces than with the Government of Canada. In that way the provinces have the possibility to reduce their expenditures, as the Government of Canada has done, to raise taxes, to cut the programs that they may find are not essential at this time. So I hope the member would understand the whole concept of financial responsibility.
We do not want to hurt anybody. We do not want to raise anybody's taxes. We just want people to recognize that financial responsibility is the basis for government services and the continuation of the social programs that I am sure the member advocates.


John Paul Manley: Madam Speaker, this year's federal budget, at least in terms of its size and weight, has a reduction in expenditures. When we found ourselves the other day in the lock-up with four hours to study the document that was roughly a tenth of the size of what we have become accustomed to in budgetary times, we had, if anything, an excess of time.
I found myself as I looked through and considered what was in it actually feeling some sympathy for some of my friends on the other side languishing at the bottom of the polls having the difficult task of trying to persuade the people of Canada to accept the goods and services tax lying ahead of them and also having to take on a budget like this.
Then we came into the House of Commons, sat and listened to the minister read the text that was contained in here. To my amazement, the government members responded with enthusiasm. I suppose I should not have
been amazed. Perhaps I am still too new to this place. But I was amazed to see the response that he got.
It reminded me of the story that we have all heard as children about the emperor's new clothes, and how the emperor was tricked into buying what he was convinced was an invisible set of clothes. He put them on and paraded not only before his court but before his people. They were too cowed by the emperor for anyone, except the smallest of their people, to come forward and say: "But the emperor has no clothes".
So when the Minister of Finance stood here the other day and read his budget speech, and his Cabinet colleagues and his back-benchers around him stood and cheered, I could think of nothing more than the emperor without his clothes. The issue that has to concern all of us, above and beyond the budget, is the issue of credibility. The question is whether, as we go into the very difficult times that we are embarking upon in this country, even by the admission of the budget papers themselves, does this minister, does this government have the credibility and the support of the Canadian people to take them into the difficult times ahead?
What does the budget say about the economy. I do not think that the minister in his speech really highlighted some of the things that his own document says. I suspect that the members opposite would not have been standing to applaud had he read, with conviction, words like this from page 43:
The weakest period is expected to be from the fourth quarter of 1989 to mid-1990 with growth averaging below 1 per cent at an annual rate. The first quarter of 1990 could be particularly weak. No increase in economic activity from the fourth quarter of 1989 is projected and a one-quarter decline in output is possible.
A negative growth in the first quarter of 1990 is what the minister projects in his budget documents. Did he stand in the House and say: "Troops, we are about to have negative economic growth this quarter." Did members stand and applaud?
What does it say about the second quarter? It does not say anything about the second quarter. A recession, in technical terminology, is two-quarters of negative economic growth. We have accepted in the budget document the possibility of one-quarter of economic growth and in the second quarter he does not say what is going to happen.
February 22, 1990

I suggest that in this document we have an admission by the Minister of Finance of Canada that this country is currently in a recession, and the braying hyenas that sat around him stood and cheered.
What else does he admit in this document? He admits that consumption is going to slow. He admits that personal disposable income will fall. He admits that personal savings will decline. He admits that long-term interest rates will rise. He admits that housing starts will decline. He admits that inflation measured by the Consumer Price Index is going to rise. Underlying his assumption of the rise from 4.7 per cent to 5.1 per cent, he states that this assumes: "The one-time increase in the price level following the introduction of the GST is unlikely to be translated into higher wages." Even though he assumes there will not be higher wages because of the GST, he states that the CPI will rise.
Had he read those numbers out, and they are in his documents, I am not making them up, I wonder whether his colleagues and his back-benchers would have stood and cheered. I wonder whether they have even noticed it.
Then we look in here at the labour market and what does he say? What is the projection? The projection is for an increase from 7.6 per cent to 8.5 per cent unemployment.
I submit that the numbers that the minister has given us indicate that we are in a recession. Would he stand in this House and admit it? The Emperor has no clothes.
What did he say back in 1984? The previous speaker from Nova Scotia was very proud of the new course that this government took the country on after 1984. I went back to that November 8, 1984 economic statement. When I read those numbers and those projections, it was surprising. It evidences a strategy which is at best cynical. First, he made the numbers look as bad as possible, then he projected a worst case scenario, and then predicted how he was going to do so much better than this worst case scenario.
In other words, he said: "Look what would have happened to Canada if those Liberals had stayed in power". He depicted it. He gave the numbers in his 1984 statement. He said: "No, we have changed the course.
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We have gone a different direction. Here is what we are going to achieve".
He made such a point of trying to make things look bad that he actually overspent his own short-term projection in the fiscal year 1984-1985. You can read the figures for yourself, Madam Speaker, but the actual 1984-1985 results which showed the $38 billion annual deficit that government members love to cite, is actually $3.5 billion more than the minister projected on November 8, 1984. Could it be that every last nickel he could find to spend on anything, he crammed into those few months. Or, is it that he just cannot predict the numbers? In five months, he found a way to overspend $3.5 billion.
Now let us look at his worst case scenario, compared to his actual performance over the years since 1984. He said: "Oh, my goodness, if those Liberals had stayed in power, by the end of this decade federal spending would reach $137 billion. Wouldn't that have been terrible?" In his budget document this week, they have managed to make $143 billion the expenditure. He said: "If those guys on the other side had stayed in power, federal tax revenues would have reached $100 billion". He has managed to get it up to $120 billion. "The debt would have reached $408 billion". He has managed to squeeze that one down, I admit, to $380 billion. Interest on the debt was going to be $34 billion in that worst case scenario. We read this week that it is going to be $41 billion. Has he performed? My goodness, he has performed.
The emperor has no clothes. That was 1984. Four years of Tory government and we go into an election campaign. What does the Minister of Finance tell the people of Canada? He says: "Look at my new clothes. We have spending commitments. We do not have promises. Our promises cost nothing, because the money is all there. We will not touch social programs".
The Prime Minister of Canada says social programs for the elderly will be improved, not diminished. The Minister for International Trade tells the people that unemployment insurance will not be touched. The Liberals say: "look out people, they are going to cut social programs. They are going to cut regional development". The Minister of Finance stands up and says: "Those fellows are liars. They are just trying to scare the people. Look at my good clothes. I have a wonderful robe called regional development programs. Look at my new gloves.

February 22, 1990
The Budget
That is social programs". We see now, that emperor had no clothes.
They cannot afford even the things that he said were already paid for, the OSLO project, the Polar 8 icebreaker. I am sorry, but I thought that money was already put aside. Maybe I misunderstood. Every nickel has been accounted for, that is what he said. But then days after the election, the interest rates in Canada started their sharp increase. At the end of November 1988 the interest rates started to climb. Then we see budget 1989, the Doug Small budget, and what happens? VIA Rail is slashed, the clawback of social programs is introduced, forces bases in various parts of Canada are closed, taxes are increased. What happened in those five short months between the election campaign when everything was rosy and that budget? We wonder why the people become cynical. We wonder why the people do not believe politicians when they stand up and talk to them.
Then there is the goods and services tax. The goods and services tax was that tax that was going to be fair, simple, revenue neutral. Do you remember when the minister described those clothes? He put on the jacket of revenue neutrality. In this week's budget, he says that the goods and services tax is going to help us reduce the deficit. I guess revenue neutrality means something different from the common meaning of those words. It sounds like if it is going to reduce the deficit that it is going to bring in more money than the old tax did. That of course is what we have been saying. It seems we can see right through his jacket of revenue neutrality.
Then the simplicity, he is going to wear the gloves of simplicity he said and held them up, white gloves of simplicity. We can see right through those too. We can see the simplicity that is going to emerge with having two retail level sales taxes in this country. Join me at my local corner store as we go in and take an item off the shelves and go to the clerk who starts to ring it up. There she is, she is 16, it is her first job.
She has to figure out whether the item is taxable under the GST and exempt under provincial sales tax, or maybe it is exempt under the GST and taxable under the provincial sales tax, or maybe it is taxable under both the GST and the provincial sales tax, or maybe it is exempt under both. It is one of those four. Once she has figured
that out then you get out the discount coupon you clipped out of the magazine. She says: "Oh, no, not a discount coupon. Let us see, how does that work?" On the GST it comes off the price and then you add the tax. Under the retail sales tax, you calculate the price plus the tax and then you take the discount. So we have the price, minus the discount times 7 per cent, and then we have the retail sales tax added on, that is times 8 per cent, at least in Ontario, but that is with the discount added back in. We have got to add that back. Then we do the retail, but then we have got to take the discount off again. I think she might want to get a job somewhere else.
That is the goods and services tax, and again the emperor has no clothes. Fairness, those were the trousers. I will not describe the fairness, except to remind the House that six times I have asked the Minister of Finance to stand up in this chamber and explain whether or not the move from the manufacturers' sales tax to the goods and services tax represents the largest corporate tax reduction in the history of Canada. He will not answer that question and I defy him to stand up and do so.
Now we get to this budget, two themes: one, we are getting the deficit under control and two, there are no new taxes. That is what this budget is all about. Those are the clothes that the emperor put on in this budget. We are getting the deficit under control. This budget is the pass-the-buck budget. This has nothing to do with controlling the deficit. This has to do with transferring the deficit to other levels of government. In our own municipality of Ottawa-Carleton the elimination of the increase in the Canada Assistance Plan funding alone will cost this region $17 million a year, according to local officials.
The minister has put on the cloak of no new taxes. You cannot fault him for that, I am sure. After 31 tax increases since he became Minister of Finance, plus the introduction of the goods and services tax, how could he have possibly found room for new taxes? It would have challenged his creativity.
But there are taxes, and tax increases. There are the provincial tax measures that will follow from this budget. There are the automatic increases that come from deindexation and, of course, the goods and services tax.
February 22, 1990

I urge this House and the people of Canada to wonder with the financial numbers that have been presented in this document, with the reality that we are in-recessionary times-whether this minister or this government has the credibility to take Canada on through the times that follow.
If we are in a recession, as I think the minister has told us that we are, I suggest that this budget is the wrong budget for these times.


Mr. James:: Madam Speaker, I sat here with a great deal of interest listening to the hon. member speak. I know he put a lot of thought into his speech. He certainly made it fairly interesting in talking about the Minister of Finance having no new clothes and so on.
I guess the thing that he seemed to be working on a lot was worst case scenarios. We did not need to have a scenario in the late 1970s and early 1980s. We had the absolute real thing. I would assume he would remember that the government of the day, being of his political persuasion, took this country into a recession. We do know that. We all went through that.
I most especially went through it in business. I received a notice from the bank every week telling me about rising interest rates until they reached 22.5 per cent. That was real. That was under his government's stewardship. Certainly there was inflation along with it.
I think Canadians knew that also in 1984. That is why they turfed that government out. It was wanton spending. The deficit was certainly an issue, and the long term debt was an issue in 1984. That was real. Canadians saw it and decided that that government could not manage this country. It was into wanton spending. It was moving on into $45 billion or $50 billion a year. It was spending $16 billion more on programs than in collecting revenues. Is that an example of stewardship in terms of Canadians' money? Sure it was.
The credibility of finance ministers in the past was noted by the member from Halifax who pointed out that these ministers referred not only to documents but they said that they were concerned about spending. What did they do? They just kept on spending, attempting to buy elections. That is what went on. Canadians decided that
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that was enough, and that they were all through with that sort of thing. That government was defeated.
They will look upon this government as having the political will to say: "We have to hold inflation down. We have to cut spending". That is what we are going to do.
The minister said in his speech that the economy is in a period of slower growth. He said that. He put it in the documents and he is up front in saying that we are going to look at a slow growth situation in this coming year. I certainly do not remember the Liberal government of the day telling me and my company that I was going to be paying 22.5 per cent interest. That almost put my business down, as it did so many businesses at that point in time. Talk about credibility. Talk about being cynical. I will tell you we sure experienced that with the Liberal government of the day. Yet this member stands up and is so critical of this government when he should be reflecting on what his party did to this country.


John Paul Manley: Madam Speaker, the member raises very important issues. In my speech, saying that the emperor has no clothes, I did not mean to trivialize the importance of the problems that face Canada. The argument he has made we have heard many times from across the way, not just in the context of this budget debate but in other debates on monetary policy and so on.
There is something that confuses me about government members making those arguments. What it reminds me of is my children. They are very good children. I love them dearly, as everybody loves their children. But sometimes you have to discipline them. Now and then I have to tell my eight year old son to stop hitting his sister. Very often his response is: "Well, she hit me first". Exactly what I keep hearing from the government across the way is: "Well, you did it first".
These problems we face are very important. I have heard nothing in the comments from across the aisle which suggest that the medicine administered in the early 1980s was the wrong medicine. I am sure the hon. member would admit that there was a global recession at that time. It was a recession faced not only by Canada. It was not of Canadian making. It occurred globally. What I have heard him say is that we are administering the same medicine now. He says that it is okay now, but it was not then. That does not make much sense to me.

February 22, 1990
The Budget
I happen to think what we need to do to approach our economic problems in Canada is to establish for ourselves what the objectives are and what the key issues are. I agree that inflation and deficits are major economic problems. I agree that we need to address those problems. I believe that employment is also very important. I believe that this budget is a prescription for much higher unemployment, with very significant personal costs to individuals who are affected by it.
I believe that the time has come for Canada to lead the world in establishing environmentally sustainable development programs in this country. Yet in this document I see nothing about the environment. There is nothing to say that the government has any commitment to the rhetoric it has given out on the environment.
I see no evidence here that the important need for more investment in science and technology is going to be addressed by this government. There is a $38 million cut in science and technology.
In the cuts to transfer payments I see great costs, not only to our hospitals but to our post-secondary educational institutions. I suggest that these things do not lie in the area of expenditures. Governments are wrong when they look to cut back this kind of item in order to balance budgets. I suggest that these are in the realm of investments. My friend has been in business. Ele knows you treat those differently.
In education, it is as simple as this. If we think education is expensive, wait until we begin to absorb the cost of ignorance.


John R. (Jack) Whittaker: Madam Speaker, first I have to tell the member that I did enjoy his speech. It was a well prepared and a well delivered speech.
I would like to talk a little bit about his trip across Canada with the finance committee. Does he see some of the same things and patterns I have seen in travelling with that committee, things that I see projected and increased in this particular budget.
I refer to the regional disparity question, the major regional disparities that have not been looked at in the goods and service tax. We see the increased regional disparities as a result of cuts in this particular budget not paying attention to the east or the west.
I ask him whether he would he agree with me when I say that the finance minister and his wealthy friends are going to end up with all of the clothes of the nation while he strips the majority of Canadians who will end up left bare and shivering in poverty?


John Paul Manley: Madam Speaker, perhaps, as my friend suggests, there will be more than the emperor with no clothes. What we have in the goods and services tax is a withdrawal of the federal government from the vision of a strong, national Canada. You have it with the GST because transportation costs will be taxed under a federal sales tax, increasing the burden on the regions as they acquire things from the central manufacturing areas and making it more difficult for them to build their own manufacturing base.
You see it in the budget as you see the withdrawal from regional development programs, the fundamental changes to those programs that will make it more difficult for the federal government to play a role in building the regions of Canada. You see it in the cut-backs of transfer payments to the provinces, where the federal government is just going to have to stand back and take a back seat to the provinces in what they do with investments in medicine, health care and postsecondary education.
You see it in things like the cuts to the Canadian Broadcasting Corporation. The minister responsible does not even think that the CBC should be concerning itself with national unity or so he told a House of Commons committee.
This is a budget that is characteristic of a government that is withdrawing from the nation.


The Acting Speaker (Mrs. Champagne):: Resuming debate. The hon. member for Regina-Wascana.


Larry Schneider: Madam Speaker, at the outset of my remarks today I was going to say how pleased I am to be able to address this very important subject, that being the debate on the budget. However, given the minimum amount of time I will have today, I will barely get into the subject so I will confine my remarks to the approximate three minutes that I have left.
The thing that we must consider about our budget is that it has no new taxes. The people of Regina have often written to me and, in turn, I have passed on the message to the federal government, as have all of my
February 22, 1990

colleagues, saying that they do not want any more taxes and, believe me, I do not want any more taxes. Not even the NDP wants any more taxes. To that extent, we think similarly.
Now they are indicating to me that that is not their position. Is it their position that they do want more taxes? I mean, that is the converse. I have to expect that that is what they are saying. However, we will let them have the opportunity of really telling us what they mean if they can bring their consciences to the table and make it clear as to whether or not they want new taxes.
It is our position that Canadians do not want new taxes. I understand from the far end of the room that the NDP wants new taxes. We will find out whether or not the public of Canada can tolerate socialism and the obsession that socialists have for sneaking taxes in the back door in direct contrast to the program that our Minister of Finance has attempted to lay before the citizens of Canada.
Canadians want to rid themselves of the burden of increased taxes. At the same time, they want to maintain the same level of social services that they have been accustomed to and this budget in no way, shape or form affects the provinces' capability of delivering those services to their people.
This budget has no new spending plans either. It has no new ways to spend more borrowed money. In Saskatchewan and across Canada people are telling us to cut spending. Members of Parliament have been telling Michael Wilson to cut spending, and now we have the minister's answer. It is: " Yes, I will cut spending and cut spending again. I will do it across the board on a wide range of programs." The Minister of Finance and the Conservative party are listening to the people of Canada and we have acted on what we have been told to do.
At the same time, we have taken the pill to address the cavernous debt that is strangling our ability to be free Canadians. No other political party has the intestinal fortitude or the plain guts to address this problem. It is a difficult time.


The Acting Speaker (Mrs. Champagne):: I must interrupt the hon. member.
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It being 5.45 p.m., it is my duty, pursuant to Standing Order 84(4), to interrupt the proceedings and to put to a vote forthwith all questions needed to dispose of the subamendment now before the House.

The question is on the amendment to the amendment. Is it the pleasure of the House to adopt the amendment to the amendment?


Some hon. members:: Agreed.


Some hon. members:: No.


The Acting Speaker (Mrs. Champagne):: All those in favour of the amendment to the amendment will please say yea.


Some hon. members:: Yea.


The Acting Speaker (Mrs. Champagne):: All those opposed will please say nay.


Some hon. members:: Nay.


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


The Acting Speaker (Mrs. Champagne):: Call in the members.


Mr. Speaker:: I declare the amendment to the amendment lost. The hon. member for Beaver River is rising on a point of order.


Deborah C. Grey: Mr. Speaker, I would just like it to be on the record that I am in the Chamber at present and am choosing to abstain on this motion.
Some lion, members: Oh, oh!


Albert Glen Cooper: Our rules are very clear, Mr. Speaker. We come into Parliament to vote either yea or nay. We do not come in to abstain.
That is clearly out of order.


Mrs. Catterall:: Mr. Speaker, I appreciate the intervention of the hon. member who just spoke. However, I think that he is either mistaken or he is not living by the same rules he is now quoting.
I recall a vote not six hours ago in which he and all the members of the government party sat and did not vote on a motion that was before the House.
Perhaps the Speaker could clarify what the rules are.


Leslie Gordon Benjamin: Mr. Speaker, I also rise on this point of order. There is no such thing as an abstention in the House of Commons. All it means is that the hon. member who was just up bragging about not voting was not here. There is no such thing as an abstention.


Charles Joseph Clark: Mr. Speaker, I want to rise on a point of order to indicate that I was in the House of Commons. As the people of Alberta expect me to do, I was here voting, not hiding out.


Don Boudria: Mr. Speaker, I rise on the same point of order. I think members from all sides of the House will be aware that members from time to time are in their places and choose to abstain. If that is wrong, perhaps the matter should be referred to the Standing Committee on Elections, Privileges, Procedure and Private Members' Business. Until such time as that happens any member is free to vote or not vote if and whenever he or she wishes to do so.


Mr. Malone:: Mr. Speaker, I rise on a point of order because I think there is an important matter here that the House does need to consider.
First, there is the question as to whether or not there is such a thing as an abstention. Our rules do not provide for that.
More important, we have also over a period of time engaged in the practice of attempting to explain votes, to say how we would vote if we were in the House when we arrive late for votes. I think that these matters ought to be undertaken because Parliament has been the place where we come to stand up to be counted. The parlia-mentaiy system is set up for a vote that is either yes, you are for it or no, you are against it.
February 22, 1990

This is not the United Nations which is the only place that I know of that allows for an abstention. It is not a place where we allow for the explanation of how we vote.
Explanations take place during debate on second reading, in committee stage and at third reading. It is inappropriate that we continue a practice that is in conflict with our parliamentary practices.


Mr. Murphy:: Mr. Speaker, I rise on the same point of order. I do not mind the new found righteousness of the
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government, but I wonder if the member for Portage- Interlake would explain why he abstained last year on the base closing in his own riding.


Mr. Speaker:: Perhaps the hon. member will some day make that explanation, but I can assure hon. members that he is not going to make it at this present moment.
It being 6.18 p.m. this House stands adjourned until tomorrow at 10 a.m., pursuant to Standing Order 24(1).


[Stage Direction]
The House adjourned at 6.18 p.m.
[Stage Direction]
Friday, February 23,1990