1990-01-30

Hon. Doug Lewis (Minister of Justice and Attorney General of Canada):: Mr. Speaker, I am pleased to table, in both official languages, a number of Order in Council appointments which were made by the government.
Pursuant to the provisions of Standing Order 110(1), these are deemed referred to the appropriate standing committees, a list of which is attached.
While I am on my feet I move:
That the House do now proceed to Orders of the Day.


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


Some hon. members:: Agreed.


Some hon. members:: No.


Mr. Speaker:: All those in favour of the motion will please say yea.


Some hon. members:: Yea.


Mr. Speaker:: All those opposed will please say nay.


Some hon. members:: Nay.


Mr. Speaker:: In my opinion the yeas have it.
And more than five members having risen.


Mr. Speaker:: Call in the members.


The Acting Speaker (Mr. Paproski):: I declare the motion carried.
The privileges of Parliament are rights which are "absolutely necessary for the due execution of its powers". They are enjoyed by individual Members, because the House cannot perform its functions without unimpeded use of the services of its Members.
Having said that, for many days now my colleagues and I have had petitions that we have been asked by our constituents to present in the House of Commons. Petitioners make it very clear both in their presentations to myself as a member-and I am sure I am speaking on behalf of most members of the House, including members of the government-that they want us to present their views in the House of Commons.
This is a right that goes back many hundreds of years, the right of a citizen to petition the Parliament of Canada. The government, as a result of this motion and previous motions, is making this responsibility that a member takes on impossible.
That is why I really believe that our rights as members are being breached and our privileges as members are being breached. We are not able to serve our constituents as we ought. One of the most fundamental rights has been denied, not only us as members but the constituents we represent.
That is only one aspect. There are also-


Mr. McDermid:: You stop the work of the House all the time. What are you talking about? You are being silly. You stop the work of the House all the time.


PRIVILEGE
Mr. Nelson A. Riis (Kamloops):: Mr. Speaker, I rise on a question of privilege arising from the vote we have just taken. I want very quickly to refer to Beauchesne's Fifth Edition and simply remind the House what parliamentary privilege includes.
Section 16 reads:
Parliamentary privilege is the sum of the peculiar rights enjoyed by each House collectively as a constituent part of the High Court of Parliament, and by Members of each House individually, without which they could not discharge their functions and which exceed those possessed by other bodies or individuals.
It goes on:


Nelson Andrew Riis: Mr. Speaker, I hear an interjection. Somebody is simply saying that we are stopping the work on the GST from time to time. That has nothing to do with the rights of the members of the House of Commons.
We have a right to present petitions on behalf of our constituents. That is simply part of the argument.
The other part of the argument is that there are many members who have been asked by constituent groups to present private members' bills and private members' motions on their behalf.
We have gone to the legal departments and asked the legal clerks to assist us in creating and developing private members' bills that reflect the views of our constituents. Most recent, on behalf of a group of cattlemen from western Canada who are concerned about the cattle rustling that was going on in all parts of Canada, and because the government had failed to act in ways that various cattle organizations had requested, I was asked
January 30, 1990

as a private member if I could introduce the issue via a private member's bill.
Cattle rustling is a very serious issue in all parts of Canada, particularly western Canada. Hundreds of head of cattle disappear each year as a result of rustlers. We were asked and we acted accordingly.
As you know, Mr. Speaker, from looking at the Order Paper today, I have a whole list of private members' bills which I ought to be introducing. However, as a result of the government's very undemocratic motion that denies every member his or her rights, I am now unable to introduce my private member's bills on behalf of constituent groups across Canada.
For that reason I really believe that my rights as a member have been breached. Mr. Speaker, I would ask you to rule on the appropriateness of the government to take steps day after day after day which make it impossible for members of Parliament to do the jobs that we were sent here to do and whether it is appropriate that the government has the right simply to ignore the Routine Proceedings of the day, within which we are able to carry on the duties and responsibilities we were elected to do.


Mr. Jean-Robert Gauthier (Ottawa-Vanier):: Mr. Speaker, I would like to join this debate. Indeed what we have just heard sounds to me like a crying over spilled type of approach.
Last week and this week, the House has seen the New Democratic Party do certain things to procedures that frustrated the Orders of the Day, that is, the Routine Proceedings and the calling of business for debate by the members of this House. We did not complain about that being an attack on our privilege at the time, and I do not think it is today, although I did, as all of us on this side in the Official Opposition did, vote against the motion put by the government that we proceed to Orders of the Day.
We feel as strongly as anybody about our right to table petitions, and indeed we have proven that over the months. Since last August Liberal members of Parliament have tabled over 60,000 names and over 1,500 GST petitions here in the House.These are in addition to the 250,000 petitions delivered to the Minister of Finance in September of last year which were gathered by the Sun newspaper chain.
We still have hundreds of thousands of petitions to table in this House. We will table them some day and Canadians will have a chance to have recorded in the proceedings of that day that they objected to this drastic tax, this unjust and unfair sales tax which the government is proposing.
I object to anybody saying that my privileges in this House have been impeded today because the government went to Orders of the Day. I think that is within the rules.


Douglas Grinslade Lewis: Mr. Speaker, I associate myself with the remarks of the previous speaker, and rather than participate in this filibuster any longer, I would ask that you rule immediately.


The Acting Speaker (Mr. Paproski):: I would like to thank the hon. member for Kamloops, the hon. member for Ottawa-Vanier and the House leader for their interventions.
I would like to say that the motion to proceed to Orders of the Day is an age old motion. As far as petitions are concerned the member can file them with the clerk at the table. On private members' bills, there will be future opportunities. Therefore I have to rule out the question of privilege.
I believe there has been consent to have the hon. member for York Centre present his motion.


MOTION TO ADJOURN UNDER S. O. 52 REPORT ON CONVICTION OF DONALD MARSHALL
Hon. Bob Kaplan (York Centre):: Mr. Speaker, notwithstanding the decision of the House taken by this vote to proceed to Orders of the Day, I believe you will find unanimous consent to permit me to press the matter of the emergency debate of which I have given the Chair notice as required under Standing Order 52.
I move and request that the report just released of the Royal commission established by the Government of Nova Scotia to investigate the conviction of Donald Marshall, Junior, a Micmac Indian, and the implications of the findings for the national government in areas relating to justice, racism, native justice and self-government, police conduct and the Correctional Service of Canada, be considered by the House on an emergency basis.

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The Acting Speaker (Mr. Paproski):: I will look at the matter, and I am sure the Speaker will rule on it later this day.



GOVERNMENT ORDERS

[Stage Direction]


[Stage Direction]
The Elouse resumed from Monday, January 29, 1990, consideration of the motion of Mr. Wilson (Etobicoke Centre) that Bill C-62, an Act to amend the Excise Tax Act, the Criminal Code, the Customs Act, the Customs Tariff, the Excise Act, the Income Tax Act, the Statistics Act and the lax Court of Canada Act, be now read a second time and referred to the Standing Committee on Finance; and the amendment of Mr. Turner (Vancouver Quadra) (p. 7569)
Douglas Grinslade Lewis: Mr. Speaker, there have been discussions among the parties and I want to take a minute to indicate that the procedure yesterday wherein there was an opportunity to question the Minister of Finance for an hour at the end of the interventions of the Minister of Finance, the Leader of the Official Opposition and the Leader of the New Democratic Party found some favour in that it gave members, who might not normally get a chance to participate in Question Period but were interested in the debate of the day, an opportunity to question the Minister of Finance.
I would point out to the House that we have looked at this and the Minister is prepared, should the House so wish, to do the same thing today for half an hour. This would give all members who participated in the debate and others an opportunity to question the minister. Our proposal has been made to the Official Opposition and to the New Democratic Party. It would be based on the same understanding as yesterday, that is, that there would be no dilatory motions during the day and also that there would be no effort on either side to extend the hours.
We have put this proposition to the opposition parties with the interest of furthering debate. It does impact on
the minister's time but he wants to make himself available for this type of questioning. If my hon. friends have had an opportunity to review our proposition and it finds favour with them, we are prepared to put the motion immediately.


Jean-Robert Gauthier: Mr. Speaker, indeed the proposal was put to us and we on this side, at least, the Official Opposition, the Liberals, would take this proposal very seriously. There are some questions and clarifications which we would like to pursue before we give our consent to the motion. Such questions could be resolved this afternoon when the House Leaders of all parties meet for our regular Tuesday afternoon House Leaders meeting.
I would just like to give notice that we, for example, would like to question whether that half hour should be within the eight-hour debate allocated at second reading. We could possibly come to a conclusion on that one. We would prefer that it would not be within the eight hours of debate but, rather, excluded from that.
We would like to know who will answer questions. I just heard the minister say it would be the Minister of Finance. Well, the Minister of Finance would be here, I take it, in the last half hour of the day, or the Minister or State for Finance as his replacement. That satisfied that concern.
We would like to be assured that this proposal in the motion not yet put, but if adopted, would follow a certain procedure of advising the opposition that indeed the government would call Bill C-62 on a specific day. We would like to be sure, even though the notice paper says "subject to change" that that bill and not something else would be called on that day.
We have other small concerns which we would like to raise at that meeting. If the government is willing to consider further discussions and clarifications, that is fine with us.


Nelson Andrew Riis: Mr. Speaker, I have to hand it to the government House Leader. This was a very interesting and creative proposal. I think it grew out of a reflection that was shared by all members of the House yesterday that the exchange which occurred late in the day with the Minister of Finance was a useful discussion. I think that we saw the Minister of Finance unable to respond to the questions on a number of points, which I think is useful to identify those areas where the government has no idea what the implications of the GST will be and so on. I
January 30, 1990

think that clarification is useful and I think we felt it was a useful time.
However, I want to make it perfectly clear, in case there is any element of doubt in anyone's mind, that we in the New Democratic Party oppose this GST completely and totally.


Some hon. members:: Hear, hear!


Nelson Andrew Riis: We have no inclination to assist, encourage, work with or co-operate with this government, as presumably the Liberals have, under any condition. There is no willingness to co-operate.
My good friend, the member for Ottawa-Vanier, did not say whether they were supporting this. He said they had some questions, to be fair. We have seen the co-operation. As a matter of fact, we just saw it earlier today. I tried to argue that what the government was doing was inappropriate but my friends, the Liberals, were saying that was a spurious sort of argument and that they would like to support the government once again. This is getting to be a boring repetition, the Liberals supporting the government from time to time.
However, just in conclusion, because I think it is appropriate that I give a clear signal to the Government House Leader, I am prepared to discuss anything. If we can find a way in this motion that would not be, in any way, co-operating with the government on its GST initiative, but would in fact permit a more open and useful debate to identify the pros and cons as different groups see them, that is something that I want to consider seriously.
I understand the House Leaders will be meeting later today to discuss a variety of issues. I suspect that hon. colleagues would say this ought to be one of them in terms of procedure. I am certainly willing to entertain that discussion at that point.


The Acting Speaker (Mr. Paproski):: Well, I surmise that there is no consent right now but you will have discussions.
Before I recognize the hon. member from Trois-Riviere for debate, there is a point of order from the hon. member for Surrey North and also from the hon. member for Ottawa South. On a point of order, the hon. member from Surrey North was rising first.
Government Orders


Mr. Jim Karpoff (Surrey North):: Mr. Speaker, I am rising to speak to Bill C-62.


The Acting Speaker (Mr. Paproski):: I am sorry. The hon. member for Ottawa South on a point of Order.


Mr. John Manley (Ottawa South):: Mr. Speaker, while I obviously will support the position of my whip on the matter raised, I would like to observe that yesterday I was one of those members the government House Leader referred to who had an opportunity to put questions to the minister. I was very grateful for the opportunity to put questions, but I put the same question two times and the minister made no reference to the substance of the question in either of his answers. I would like to suggest that if the minister is kind enough to come that he answer the questions.


The Acting Speaker (Mr. Paproski):: That is debate. [Translation]


Mr. Pierre H. Vincent (Parliamentary Secretary to Minister of Finance):: Mr. Speaker, I welcome this opportunity-


The Acting Speaker (Mr. Paproski):: The hon. member has the floor and he has spoken. The hon. member for Trois-Riviere.


Pierre H. Vincent: Mr. Speaker, I welcome the opportunity to take part in this debate on the goods and services tax bill. Thanks to this legislation, we will be able to strengthen our economy-


Nelson Andrew Riis: On a point of order, Mr. Speaker.


Mr. Rodriguez:: Order.


The Acting Speaker (Mr. Paproski):: On a point of order, the hon. member from Kamloops.


Nelson Andrew Riis: Mr. Speaker, I am not aware that you can selectively decide if you hear a point of order or not. I clearly rose on a point of order at the beginning of debate and I would like to make a motion. The motion is: That the member for Surrey North now be heard.


The Acting Speaker (Mr. Paproski):: I am afraid the hon. member is just a little late. The hon. member from Trois-Riviere has the floor.

January 30, 1990
Government Orders


Nelson Andrew Riis: Point of order, Mr. Speaker.


John R. Rodriguez: You're pulling that stunt again.


Mr. Angus:: Point of order.


The Acting Speaker (Mr. Paproski):: I recognized the hon. member for Trois-Riviere on debate and he has started his debate. Therefore, I cannot recognize the hon. member's point of order, unless it has something to do with anything in particular.


Nelson Andrew Riis: You don't know what it has to do with.


The Acting Speaker (Mr. Paproski):: Well, all right. I will recognize the hon. member on his point of order. The hon. member for Kamloops on a point of order.


Nelson Andrew Riis: My point of order was simply this, Mr. Speaker. At the beginning of the debate I sought to be recognized on a point of order. It was that the hon. member for Surrey North be now heard. That was my point of order. I am quite able to present that motion. Now, whether you accept the motion, Mr. Speaker, is for you to decide, I acknowledge that, but not to simply rule my point of order out of order.


Mr. Albert Cooper (Parliamentary Secretary to Government House Leader):: Mr. Speaker, we are now gaining a certain amount of experience when it comes to these issues, after the games the NDP have played last week and again this week.
The bottom line of our understanding of this procedure is that once an hon. member rises and begins to speak, if the Speaker hears him begin to speak, then that particular motion is out of order. It was very clear from where I sit, Mr. Speaker, that the hon. member who you recognized had begun speaking and therefore the motion by the hon. member for Kamloops is out of order.


Iain Francis Angus: Mr. Speaker, when you called Government Orders the member for Surrey North was clearly standing in his place. No other member of this House was standing. I watched carefully, Mr. Speaker. You did look to the member for Surrey North. You did see him-or at least you gave the impression of seeing him. I would ask that you consider the motion by the House Leader of the New Democratic Party as one that is quite in order.


Jean-Robert Gauthier: Mr. Speaker, I was also present during those deliberations. The way I recall it, which may differ from other people, is that indeed you did recognize the
member for Surrey North. At that time you had not called debate and he said, "I want to speak on debate".
The member for Ottawa South was on a point of order and you did say you were going to recognize points of order. The point of order made by the member for Ottawa South was recognized, then you called for debate. I heard the member being called take the floor at the time. Whether the point of order was heard by you before he took the floor or not, Mr. Speaker, is for you to decide, not for me.
The only motion that we can make on a point of order, I think, is that so and so be heard instead of another member. I would leave it to you, Mr. Speaker, to decide whether the member had the floor. And if you gave him the floor I think it is very clear in the rules who has the floor at this time.


Mr. Barrett:: Mr. Speaker, on a point of order, it might be useful for the House to take a five-minute recess to allow the Chair to go through the record rather than us having this debate.


The Acting Speaker (Mr. Paproski):: I really do not need a five-minute recess for this purpose. I recognized the hon. member for Trois-Rivieres on debate. He started to speak before the hon. member rose on a point of order. Therefore, on debate, the hon. member for Trois-Rivieres has the floor.


Pierre H. Vincent: Mr. Speaker, at the risk of repeating myself, I welcome the opportunity to take part in the debate today on the goods and services tax bill.
Thanks to this bill, we will be able to strengthen our economy, reduce the deficit and make our tax system more equitable.
I would like to congratulate the Minister of Finance (Mr. Wilson) on this excellent initiative. Actually, Mr. Speaker, when you think about it, the job of Minister of Finance has never been an easy one. The situation has not improved today, now that we are facing problems that are both extremely urgent and complex. The world is economy is changing quickly in a host of different ways.
Since he was appointed, the Minister of Finance has shown that he is intelligent, responsible, effective and a man of great courage.
January 30, 1990

It would be so much easier to reduce taxes, to offer new services and to develop all kinds of programs. In fact, Mr. Speaker, that is exactly how governments proceeded from the end of the sixties up to the early of the eighties. They were the big spenders. Public servants were hired in the tens of thousands. New programs were being introduced daily. Crown corporations were created in every possible sector, for every possible reason. In a word, Mr. Speaker, they were living in a fool's paradise.
The balance sheet was not a priority. If they ran out of money, no problem-they just borrowed a few billion more.
Mr. Speaker, the government we had in the seventies and the early eighties promised Canadians the moon. We know what we got: a national debt of nearly $320 billion.
Mr. Speaker, today we have to pay the bill. It hurts when we have to cut spending. It hurts when we increase taxes. However, we have to do this in 1990 if we want to correct the excesses of the past and offer the programs and services Canadians will need in the future.
When introduced, a measure like the GST is never very popular. However, when Canadians see the positive results on our balance sheet and in our country's economy, I am sure the majority of Canadians will understand that the tax reform proposed in this bill is both necessary and salutary.
The GST bill is part of a series of measures aimed at strengthening the Canadian economy and reducing the deficit. I think it would be useful to review the main characteristics of the GST.
It will apply to the majority of goods and services, with the exception of the following: basic groceries; medical devices; prescription drugs; residential rents and existing housing; loans, mortgages and life insurance premiums; health and dental services, including hospital and nursing care; most education services; day care services; legal aid services; municipal transit services and passenger ferries.
This means we did not accept the recommendation that favoured applying the tax to all goods and services. I must admit, Mr Speaker, that I am very pleased with this decision because it would have been brutal to apply the tax to such necessities as basic groceries, prescription drugs, existing housing or day care, just to reduce the tax by one or two percentage points. In fact, we managed to
Government Orders
reduce the rate to 7 per cent without resorting to this radical application.
For businesses, the amount of GST they pay will be the difference between the tax they collect on their sales and the tax they pay on their purchases. If the tax they collect is less than the tax they pay, the government will refund the difference. To claim a refund or pay the tax due, most businesses will have to complete a one-page form, I repeat, one page. There are prophets of doom and gloom in the House and outside who would have Canadian businesses believe they will have to complete endless forms. No, Mr. Speaker, just one page!
Thanks to the input tax credit, businesses will receive a full refund of sales tax on their inputs, which will reduce operating costs in Canada and make all sectors of our economy more competitive. This measure will have the effect of reducing the price of capital goods by an average of 4 per cent. Lower costs will increase incentives to invest, resulting in an increase in productive capital stock and a significant increase in production in most sectors throughout the country.
One of the major concerns about the GST, mainly among small businesses, was the administrative burden that the GST would impose. We intend to introduce a number of simplified accounting procedures. The government will provide a measure of sales tax and income tax relief for small businesses that purchase cash registers to help them apply the GST. The government, together with small business, will also look at other ways to simplify administering the tax.
Mr. Speaker, we are also co-operating closely with the provinces in the area of sales tax administration. Recent statements by the Minister of Finance of Ontario give us hope that we will have a period of co-operation between the two levels of government in this field, which would be positive and much appreciated by business people, Mr. Speaker.
Most sales by charitable organizations and many sales by non-profit bodies will be exempt. Furthermore, charities and agencies largely funded by the state will be eligible for a 50 per cent refund of the GST paid on their purchases for exempt activities.
To protect low-income Canadians, a refundable GST credit will be paid four times a year to nearly 8.7 million families and individuals. The credit will be $190 for adults and $100 for children. Single parents will be able to claim an adult credit if they have a dependent child. Unmarried adults, including single parents, will be able

January 30, 1990
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to claim an additional credit of up to $100. The first GST credit payment should be made in December 1990.
Again, Mr. Speaker, you know that it was this government that established a refundable credit, payable in advance. This is excellent for low-income families and I think that the Minister of Finance should be congratulated for this initiative.
With this refundable credit, families whose income is less than $30,000 will pay less income and sales tax than at present; I repeat, Mr. Speaker: families whose income is less than $30,000. Just this morning, I saw an article in the local Trois-Rivieres newspaper saying that seniors would be adversely affected by the GST. Mr. Speaker, this is absolutely untrue for all seniors whose income is $30,000 or less.
I think it is important to say it and to put an end to the scare campaign currently being waged. Three quarters of households headed by a senior citizen or a single parent will see their after tax income go up, Mr. Speaker. The GST proposal calls not only for certain initial benefits for farmers and fishermen but also includes a list of important tax-free items.
As far as housing is concerned, the GST will only apply to new construction and major renovations. The modified housing rebate will represent 2.5 per cent of the purchase price up to $350,000. This rebate will be gradually reduced for homes worth $350,000 to $450,000, and I must tell you, Mr. Speaker, that I will not have any problems with that in my riding.
On December 19, the Minister of Finance announced major changes to the GST which are included in this bill. The most important change was the reduction of the GST rate to 7 per cent. This lower rate, in conjunction with other changes, meets certain objectives: to benefit quickly and smoothly from the economic spin-offs of the GST, to protect low-income Canadians, to minimize-


John R. Rodriguez: A point of order, Mr. Speaker.


The Acting Speaker (Mr. Paproski):: The hon. member for Nickel Belt on a point of order.


John R. Rodriguez: Mr. Speaker, the hon. member for Trois Rivieres has been here since 1984. There is a longstanding tradition and practice in this House that members do not read their speeches. We are not interested in what the Ministry of Finance thinks about the GST. We are interested in what the member thinks about the GST. In fact, he is reading a speech. If you want to do that, you go to the other place. But in here you are supposed to be able, after five and a half years, to make a speech without having to read it verbatim from some prepared speech from the finance department.


The Acting Speaker (Mr. Paproski):: I think the hon. member was referring to his notes. This is a very important debate and I just think that this is what the hon. member is doing. I am sure he as is capable, as any other hon. member in this House, to debate without notes. But I guess when you are debating finance even the hon. member for Nickel Belt might have to refer to some calculations or some figures or something. The hon. member has made his point of order and I am sure the hon. parliamentary secretary will take heed.


John R. Rodriguez: Mr. Speaker, you are probably right. In 1972, for the first three months, I may have read a speech, but I cannot remember ever taking a speech and just reading it verbatim. People are watching on TV and they know that he is not just referring to notes. He is reading verbatim. I have never read verbatim from any speech in this House since 1972.


The Acting Speaker (Mr. Paproski):: Yes, I realize the hon. member is never short of words. I do appreciate what he is saying. The hon. member for Port Moody- Coquitlam on a point of order.


Mr. Waddell:: In spite of what you said, Mr. Speaker, you have to lay down the rules clearly. The rules of the House are that you cannot read your speech. I think you have to tell the hon. member that those are the rules of the House and you have not done that, with respect.


The Acting Speaker (Mr. Paproski):: The hon. member for Trois Rivieres on debate.
January 30, 1990


Pierre H. Vincent: Thank you, Mr. Speaker. You know, when one is in the House representing the government and the Minister of Finance one tries to give Canadians the best information available, but as usual Members opposite are having difficulties understanding such a significant issue as the GST. Sure enough, Mr. Speaker, I did refer to my notes and I will continue to do so if only to make it that much easier for NDP Members to grasp the reality of life, at last!
You know, Mr. Speaker, they do not understand Meech Lake, they do not understand that Quebec is a distinct society, except that they are for it when they are in Quebec but against it anywhere else in the rest of the country. They do not understand the GST except perhaps when they are somewhere else in Canada, and even then so far they seem to be against the GST wherever they are. Some NDP Members are in favour of Meech Lake, others are against-


Mr. Nystrom:: That is better.


An hon. member:: Keep it up.


Pierre H. Vincent: See, Mr. Speaker, they get upset when we tell them the truth. But I want to go on with my remarks.


John R. Rodriguez: Mr. Speaker, on a point of order. I think that is much better from the member for Trois Rivieres.


Some hon. members:: Hear, hear!


John R. Rodriguez: We are not angered by that.


An hon. member:: We are proud.


John R. Rodriguez: We are actually very pleased that he is finally being himself.


The Acting Speaker (Mr. Paproski):: Debate. The hon. member for Trois Rivieres.


Pierre H. Vincent: Talk about a problem, Mr. Speaker, if the NDP sides with me I am in deep trouble.


Some hon. members:: Ah, ah!


Pierre H. Vincent: I will have to be careful, Mr. Speaker, I do not like it when they are on my side.
Government Orders
Mr. Speaker, allow me to check my notes and point out that one of the advantages of the GST will be to reduce-


Lorne Edmund Nystrom: Watch it, you are reading!


Pierre H. Vincent: -reduce the deficit and, as you would know, Mr. Speaker, Canadians have made recommendations concerning the GST and there was a national debate on the issue when all Members and all interest groups had an opportunity to air their views. When the GST is implemented on January 1, 1991, when 8.7 million Canadians will have received their first tax credit instalment, and when Canadian companies and particularly small- and medium-sized businesses realize that all they need do is fill in a single 8 1/2 by 11 sheet of paper, sales less purchases, Canadians and perhaps NDP Members, I repeat, perhaps-


Mr. Pronovost:: Impossible!


Pierre H. Vincent: My colleague from Saint-Maurice (Mr. Pronovost) says it is impossible. I am inclined to think he has a point, but perhaps the NDP Members will indeed understand the GST.
I know that some Liberal Members of the Official Opposition understand the GST and they are supportive. There are some, not many but a few.


Lorne Edmund Nystrom: Like who?


Pierre H. Vincent: The Liberal Finance critic was in favour of the GST. Maybe that is why he is no longer the Finance critic. He was turfed out. He was in favour of the tax, but that's nothing to be ashamed of!
Comments from associations and from the opposition were sometimes valid but sometimes, unfortunately, based on premises that did not reflect the real situation. After listening to Canadians, after listening to associations and the Opposition, we tried to come up with several amendments, tabled by the Minister of Finance, that would reflect the Canadian reality and would better serve the interests of Canada. Mr. Speaker, you know we could have done what other governments have done: change nothing.
When I was studying for a master's degree in tax law at the University of Sherbrooke in 1978, the professor who explained the federal sales tax said: "The present federal sales tax does not make sense". The federal government at the time had appointed a committee. My professor said: "I hope the committee will act on the recommendations and do something about this tax". That, Mr. Speaker, was in 1978. The Conservative Government has made its position clear. It wasn't easy. We know Cana-

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dians do not like to pay taxes. Nobody likes paying taxes. However, we made it clear we intended to change a system that was not good for Canadian business, for our economy or for anything in general. We are going to tax goods and services, which is not exactly pleasant, but it is necessary. We are not in the business of passing out goodies, we are governing a country. We were elected to govern, and that is what we are doing.
The opposition was also elected to govern. I think we should remember that it was elected to govern with the party in power, and I think it should sit down and give the subject some serious thought and make concrete proposals instead of just being negative. Not just proposals, but concrete proposals.
In concluding, Mr. Speaker, I would like to stress, and this is important, that most Canadians on low incomes will not be affected by the GST.
I include the elderly, and I do so because scare tactics are being used against them, similar to the scare tactics used during the last election campaign on the free trade issue. Unfortunately, the opposition seems very fond of using these tactics. Instead of being realistic and getting their facts and figures straight, they use scare tactics.


An hon. member:: Oh, oh! Not so!


Pierre H. Vincent: And that, Mr. Speaker, is wrong. I don't see why a member of Parliament should try to scare the elderly when he knows perfectly well that the GST will not have an impact on elderly Canadians on low incomes.
Mr. Speaker, it is with great pleasure that I support this bill, and I hope it will be passed as soon as possible.


John Paul Manley: Mr. Speaker, in the course of his speech, the parliamentary secretary said, and I quote:
-the main objective of the GST is to reduce the federal deficit.
However, during the election campaign, the Minister of Finance (Mr. Wilson) said: The tax reform will be revenue neutral.
Is the parliamentary secretary telling us, does he admit, that the minister did not tell the truth during the election campaign and that his objective always was to reduce the deficit?


Pierre H. Vincent: Mr. Speaker, I must admit I like the opposition member's question, but I also realize that notes come in very handy. This is what I said: The GST bill is part of a series of measures aimed at strengthening the Canadian economy and reducing the deficit.
That is what I said, Mr. Speaker. To answer the hon. member's question, the GST will not necessarily raise more revenue, if we consider the current situation. However, the GST will benefit Canadian businesses, because at the present time, importers are in a better position than our own Canadian businesses which are at a disadvantage because of a hidden, 13.5 per cent federal manufacturers' sales tax. Importers do not have this tax. A Canadian business that exports to other countries has the same 13.5 per cent cost, which does not exist in any other country. We are the only country in the world that still has a manufacturers' sales tax. It is important for us to change our tax system, to make our businesses competitive, and yes, they will make more money, and yes, they will pay more income tax, and yes, the economy will be better off, and if the economy is better off, yes, Mr. Speaker, we will continue to reduce the deficit as intended and as we should!


Lorne Edmund Nystrom: Mr. Speaker, I have a question for the hon. member for Trois-Rivieres (Mr. Vincent).
According to a Gallup poll published two or three days ago, 75 per cent of Canadians are now opposed to the GST. I also saw the poll showed that opposition in Quebec is almost the strongest, with 77 per cent against the GST. Mr. Speaker, I have a question for the hon. member for Trois-Rivieres: We are in a democratic country here and it is now clear that most Quebecers are very opposed to the GST; why is he, as a member from Quebec, in favour of it? Why does he not represent his constituents at all? Most people where he comes from are against this federal government measure, because the Finance Minister's (Mr. Wilson) bill will take a lot of money from ordinary people-it is regressive.
January 30,1990

And as I said, more than 70 per cent of Quebecers are against it. So why does he pay no heed to those who elected him fifteen months ago?


Pierre H. Vincent: Mr. Speaker, I must point out to my colleague that in a poll, when people are asked if they are for or against the GST, it is normal for them to be against taxation, be it the GST, an income tax increase or any other change. If I ask the hon. member himself whether he is in favour of any tax, he will tell me no. No one likes to pay tax!
I would also point out to him that a poll was taken in my riding and 77 per cent of the people were not necessarily against the GST. Organizations like the Chamber of Commerce were in favour of the GST at 7 per cent.


John Paul Manley: No, that's not true!


Pierre H. Vincent: The Trois-Rivieres Chamber of Commerce is active, Mr. Speaker.


John Paul Manley: No, that's not true!


Pierre H. Vincent: It is active. The Chamber of Commerce-


An hon. member:: That's false!


Pierre H. Vincent: If the Opposition would let me finish! They are for the GST at 7 per cent-


John Paul Manley: Six per cent with provincial participation!


Pierre H. Vincent: -as a first step and they would rather have the provinces with us. I told them to convey their message to the provincial governments. We should like to have the provinces with us too. We have no problem with that.
Again, Mr. Speaker, I should like to reply to my hon. friend that we have been elected as a Government to administer this country. To administer a country means that you may have to make decisions which are not necessarily easy or popular.
You must have faced this problem, I am sure. When an organization in your riding applies for a subsidy, although your constitients are all for it, you may have to refuse for one reason or another, including the fact that there is no money, or that there exists no single program to fully meet the needs. It is not because you are not providing your riding with the money your constituents are anxious to get that you are not a good representative doing your
Government Orders
job properly and protecting the interests of your riding, your province or your country.


Mr. Gagliano:: In his speech, Mr. Speaker, the Hon. Parliamentary Secretary to the Minister of Finance indicated that the GST legislation would be introducing a new simplified accounting system. Having listened to him carefully, I wonder if his departmental officials have explained to him what this new simplified accounting system is all about.
As members of the finance committee, Mr. Speaker, we have travelled everywhere in this country, and among the hundreds and hundreds of witnesses which we heard, not a single one of them was in favour of this simplified accounting system. They felt that the whole system was ridiculous and would only complicate things. President Bullock of the Canadian Federation of Independant Business, for one, has totally rejected the system. As a matter of fact, he has also rejected the GST outright.
So, when the Hon. Parliamentary Secretary insists that there are business people out there who understand and support this legislation, I just do not know who he has in mind, because to date, a number of organizations, especially small and medium-sized businesses, have even used paid announcements in newspapers to denounce this tax.
I should like him, therefore, to mention the names of these people we do not know yet who support this legislation.


Pierre H. Vincent: Mr. Speaker, I am pleased to respond to my friend from Saint-Leonard because in fact, before the Christmas recess, I spoke to the Laval Chamber of Commerce, the second largest Chamber of Commerce in Quebec, I think, and the hon. member for Saint-Leonard will correct me if I am wrong. After my speech, the chairman of the Laval Chamber of Commerce said: "The Laval Chamber of Commerce supports the GST if at 7 per cent". That was the second largest Chamber of Commerce in Quebec, Mr. Speaker.
In the circumstances, Mr. Speaker, I suggest that the hon. member for Saint-Leonard, which is in the area of Laval, so to speak, should do his homework and perhaps get out and look at the real world around him.
Mr. Speaker, to answer the specific question put by the hon. member, I would like to ask him if he thinks that an act with 22,000 exemptions, because as we know the federal sales tax currently has 22,000 exemptions, is something that can be called simple? Is this something

January 30,1990
Government Orders
the Canadian people, Canadian business people can like, an act with 22,000 exemptions, with some 150 pending cases and 150 new cases coming up each year?
I remember, Mr. Speaker, last year the hon. member for Saint-Leonard put questions to the Minister of Finance, asking him when he would get rid of his sales tax because it was destroying jobs in Montreal. We told him we would change it as soon as possible. And now, because we are changing it, he wants us to keep the old system and go on destroying jobs: That, Mr. Speaker, is the Liberal Opposition.


The Acting Speaker (Mr. Paproski):: I regret but the period allowed for questions and comments has expired. Debate. The hon. member for Ottawa South (Mr. Manley).


John Paul Manley: Mr. Speaker-


Mr. Taylor:: Point of order.


The Acting Speaker (Mr. Paproski):: A point of order, the hon. member for The Battlefords-Meadow Lake.


Leonard William (Len) Taylor: Mr. Speaker, I could not help but notice when you called for debate and looked around the chamber, as previously you did not recognize a member from the back benches of our party. This time a member from the front benches of our party stood. Therefore I wish to move:
That the member for Yorkton-Melville be now heard.


John Paul Manley: Mr. Speaker, on the same point of order.


The Acting Speaker (Mr. Paproski):: I have a point of order from the hon. member for Ottawa South.


John Paul Manley: Mr. Speaker, we have fought this tax tooth and nail across the country. We are here to fight it now in the House of Commons.
I would like to point out that, conscious of the fact that more dilatory tactics were about to take place by the NDP the moment you recognized that we were to resume debate, I started talking as I got to my feet. I would like to say this. Rather than wasting half an hour
or eight hours of debate we should be here to debate this and not to waste time.


The Acting Speaker (Mr. Paproski):: The floor having been given to the hon. member by the Chair I have to put the question.
Is it the pleasure of the House to adopt the motion?


Some hon. members:: Agreed.


Some hon. members:: No.


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


Some hon. members:: Yea.


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


Some hon. members:: Nay.


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


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


Mr. Speaker:: I declare the motion lost. The hon. member for Ottawa South.
January 30, 1990


John Paul Manley: I would like to begin by expressing my disbelief at the fact that the NDP would try to silence me in making the deeply felt objections that I have to the goods and services tax.
I would like to say that I travelled across Canada with the member for Yorkton-Melville.


John R. Rodriguez: Point of order.


Mr. Speaker:: The hon. member for Nickel Belt on a point of order.


John R. Rodriguez: Mr. Speaker, my point of order is that it is a well known practice and rule that no member can reflect on a vote. I think that what the hon. member is doing is reflecting on a vote which has been decisive and has been taken.


Ian Gardiner Waddell: Mr. Speaker, on the same point of order. My colleague is right.
Also, the NDP was not trying to silence the member. We are trying to hear another member, a member who is opposed to and not for the GST. That is what we are trying to do. We are not like the Liberals.


The Acting Speaker (Mr. Paproski):: The hon. member for Ottawa South has the floor on debate.


John Paul Manley: Mr. Speaker, their intellectual bankruptcy is only exceeded by their arrogance.


Some hon. members:: Hear, hear!


John Paul Manley: I am here not to talk about that left wing rump, what is left of them down there as they recede into irrelevance. I am here to talk about the government and what it is doing to the people of Canada with this regressive tax.
I have a question that I would like to ask of government members who are here. Who is in charge over there? Yesterday we saw in the polls that not only are most Canadians opposed to the GST, not only do we see that Canadians from all regions of the country are opposed to the GST, but 56 per cent of people who identify themselves as Conservative supporters are opposed to the GST. Who over there is in charge? Who is listening?
Maybe I have an idea about that. We know how much the government likes the corporate model. We know how it thinks that the private sector is really the model for everything. I think that the Prime Minister considers the Government of Canada to be just kind of like the
Government Orders
Iron Ore Company. I think that he figures he is the chairman of the board of a great big corporation.
We all know in the corporate structure there are different groups, especially in big corporations. There is this group, that group, the finance group. There is the production group. There is the human relations group. There are all the different sections of a corporation. I think what has happened in the Prime Minister's board of directors is that the finance group has gotten control. I think those who are in charge of human relations in the corporation of the Government of Canada have been shut out.
Those people are listening to the bean counters and they are not concerned about the people. That is what has gone wrong. They do not care about the people. They have the bean counters lined up. They have the economists lined up and they are saying: "Well, we have devised a method to reform the old manufacturers' sales tax, that old tax that we have wanted to reform for so long. And here it is, the streamlined system. Look how neat it is on paper. You can draw a flow chart for it and you can put it on an overhead projector. You can run pictures of it in the boardroom. You can use multicolour, overlapping slides to explain how to do it. It looks terrific". But nobody is asking the people how it is going to affect them. All the government is doing is looking at these numbers.
So who is in charge? Who is listening to the people of Canada? Who is listening to the Conservatives of Canada? Their members of Parliament are not.
I think the question that the government has to ask itself before it proceeds any further with this tax is whether it has any remaining credibility, whether the Minister of Finance has sufficient remaining credibility to put this tax into effect.
There is a big problem lurking here for the people of Canada and for the Government of Canada. What happens if there is a massive tax revolt? What is the government going to do when the people of Canada finally say: "Enough is enough. We are withholding our taxes"? What is it going to do? Unless the government has the credibility, and unless its Minister of Finance has the credibility to put this tax into effect, then they enact it and implement it at their peril, and at the peril of order in Canada.

January 30, 1990
What about fiscal responsibility? We heard one of the Conservative members speak just a moment ago on how this tax was really being brought in to solve the deficit. I think in fact he said the main objective is deficit reduction. Of course, that flies in the face of promises made before and during the election campaign that this was going to be a revenue neutral reform.
I have been digging around in the library and I came up with a document called: "Economic and Fiscal Statement". It was delivered in the House of Commons by the Minister of Finance on November 8, 1984. That was just two months after the election.
The Minister of Finance had some pretty grim news for Canadians. He told them that if they had not had the good fortune to elect him, that Canada was going to be in pretty desperate straits by the end of 1989 or 1990. He said that if his new policies were not put into effect then, under the old government's policies, federal revenues in 1990-91 were going to reach $100 billion.
He said that federal spending by 1990-91 under the old government's policies was going to reach $137 billion. He said with respect to the deficit that when he enacted his policies by 1990-91 he was going to bring it down to $18 billion a year.
What is the reality? After this great change of course and of direction what has this fiscally responsible Minister of Finance done? Instead of the projected $100 billion in government revenues by next year we now expect it is going to be $120 billion-more than he had said in his worst case scenario. Instead of spending of $137 billion, which he thought was going to be such a gloom and doom situation, we are now projecting $149 billion-$12 billion more. Instead of having an $18 billion deficit, we all know he is going to come in in excess of $30 billion.
These are the facts that the Minister of Finance has to bring to the people of Canada in asking this essential question. Does he have the credibility to bring in the most significant change in taxation in Canada since the introduction of the income tax in 1917?


The Acting Speaker (Mr. Paproski):: The hon. member will have 13 minutes left in his debate plus 10 minutes questions and comments when we return to Government Orders.
It being one o'clock I do now leave the chair until two o'clock this day.
At 1 p.m. the House took recess.


[Stage Direction]
AFTER RECESS

The House resumed at 2 p.m.

Mr. John A. MacDougall (Timiskaming):: Mr. Speaker, I rise today to pay tribute to the fine young athletes representing Canada-in particular those from northern Ontario-in Auckland at the Commonwealth Games.
Whether it be France Gareau from Verner or the fine young boxer Domenic Filane from Schreiber, our athletes from northern Ontario are proving that they have the commitment and ability to compete with the best in the world.
In fact, northern Ontarians are very proud of the efforts of Kenora's Michael Smith who captured the gold medal in the most difficult test in the sporting world, the decathlon.
In performing his personal best in four events and in setting a new Canadian decathlon record, Michael Smith scored an impressive 8,525 points to win the Commonwealth gold.
I am sure that all members would want to join with me in congratulating Michael Smith on his Commonwealth achievement and wishing him the best in his future pursuits in the world arena. Congratulations, Michael.


EL SALVADOR
Mr. Dan Heap (Trinity-Spadina):: Mr. Speaker, last Thursday, after I left El Salvador, three men leading a Bible study class in a Baptist church were arrested by the
January 30, 1990

Treasury Police who notoriously mistreat political prisoners. They seem to suspect church people of being allies of the rebels, simply because they help the poor.
One of the prisoners, Innocente Garay, had been chased by a death squad last June. He escaped, was designated a refugee by the UNHCR and sponsored that same month by Emmanuel United Church in Ottawa. He is still in prison, even though his companions, Mr. Fuentes, a government-sponsored refugee, was released yesterday, along with the third man, Carlos Avalos.
When Jesus was born in Bethlehem, the death squads hunted for him, but his parents took him for safety to Egypt. If he came today to El Salvador, the death squads would hunt him again.
I call on our government to intervene with the Salvadoran government for Mr. Garay's release, and to move quickly with visas and minister's permits to bring these men and their families to Canada.


Ms. Catherine Callbeck (Malpeque):: Mr. Speaker, with the next federal budget only weeks away, I want to remind the government of promises it made to the alternative energy and conservation industry in this country.
In October 1987 the then minister for energy told an audience in Prince Edward Island: "I will continue to provide my enthusiastic support of these Island projects for a long time to come".
The same energy minister told an Energy Options conference in Montreal last December: "I am committed to seeing the momentum toward greater energy efficiency continue".
Yet, less than 18 months later, the government announced that it was closing its regional conservation and renewable energy offices across Canada and committing less money to federal-provincial agreements for alternative energy.
Canadians must learn to use their energy more wisely, and the federal government has a leadership role to play here. The government must start promoting alternative energy and conservation with actions, not just words.
5. O. 31 JUSTICE


Mr. Peter L. McCreath (South Shore):: Mr. Speaker, after two and one-half years of exhaustive study, the Nova Scotia Royal Commission investigating the wrongful conviction of Donald Marshall has come down with a thorough, multi-volume report. Not surprisingly, the bottom line of the report is the conclusion that institutional racism was the root cause of Marshall having been mistakenly sent to prison for 11 years for a crime he did not commit.
Most Canadians openly disavow racism and discrimination as acceptable practices in our society. Most adhere to the desire and intention not to be discriminatory in their own actions and behaviour.
Relatively few understand the concept of institutional discrimination or adequately recognize the degree to which it exists in many if not most of the institutions of Canadian society, be they federal or provincial, public or private.
Some have already reacted with cynicism to the Marshall report and its findings. None among us should; nor is there room for smugness on the part of persons of other institutions or other jurisdictions.
All Canadians and their governments should recognize the report as an iceberg symbolizing conditions below the surface in our society. Much work remains to be done before ours is truly a society in which equity and fairness are fully recognized and accepted as the cornerstones and foundation of Canadian society.


ATLANTIC ECONOMY
Mr. Bill Casey (Cumberland-Colchester):: Mr. Speaker, all of Atlantic Canada welcomes the announcement of Cavendish Foods expansion near Summerside, P.E.I. This project is the beginning of the turnaround for Summerside after the negative effects caused by the winding down of CFB Summerside.
The next project that must be addressed is the construction of a fixed link to P.E.I. from the mainland. As I have said before, this engineering marvel will create hundreds of jobs during construction and add almost $1 billion to the economy of Atlantic Canada.

January 30,1990
Every area of the region will feel the economic benefits from this giant project and many new industries and services will be generated.
On completion, the fixed link will be one of Canada's major tourist attractions. The fixed link will also remove trade barriers between the provinces and create a whole new era of interprovincial co-operation.
This privately funded project will be the focus of the Atlantic and its potential. It will give all Atlantic Canadians a sense of pride and provide a very tangible turnaround for the region after a serious of setbacks.
I call on the Minister of the Environment to ensure that the current study is expedited and completed as soon as possible. Finally, I call on the Minister of Public Works to warm up his bulldozer and let us get this show on the road.


GOODS AND SERVICES TAX
Mrs. Beryl Gaffney (Nepean):: Mr. Speaker, during one of the two Nepean town hall meetings held on the goods and services tax, a resident presented a brief outlining the effects the goods and services tax had on the country of New Zealand.
He told the meeting that in 1985 the New Zealand Government began the move to free trade and free market policies.
The New Zealand dollar was devalued, controls on interest rates were abandoned, tariffs were reduced, restrictions on foreign investments were lifted, banking and finance were deregulated. Almost all supports for agriculture were removed and even marketing boards were under attack. Transport was deregulated. User fees were placed on all government services. Universality was ended for all social programs. Regional development stopped. The national energy plan was scrapped. No government services were to be guaranteed even for public utilities. A total of 432 rural post offices were closed. State enterprises privatized included Air New Zealand, Petrocorp and the Development Finance Corporation. The result of all this led to a depressed and stagnated economy.
Isn't it frightening that we see the same thing happening here in Canada today?


THE ECONOMY
Mr. Lee Richardson (Calgary Southeast):: Mr. Speaker, the people of Calgary southeast know our country must eliminate our massive debt. They are even prepared to pay more taxes to cut the debt. But they are only prepared to do so if the government also cuts back on wasteful and inefficient spending.
Before Christmas the President of the Treasury Board announced a series of spending cuts. Those were by no means the first cuts. This government has saved billions of dollars by cutting programs, privatizing Crown corporations, including Air Canada, and reducing the civil service the level it was in 1973.
The Minister of Finance has done a tremendous job in bringing spending under control, As he prepares for a new budget, I encourage him to continue his worthy efforts to cut costs.


REGULATORY REFORM
Mr. Douglas Young (Gloucester):: Mr. Speaker, the government announced its intention to reform financial regulation in this country in November, 1984. Five years and four ministers later, the government still has not ended the regulatory uncertainty and confusion.
Regulatory reform in Canada is lagging behind profound changes in the financial sector. Failures, takeovers and mergers in this sector have continued. Canadian financial institutions are falling behind their competitors in both domestic and international markets. Now the government appears to be ready to allow American Express to set up a bank in this country before appropriate legislation is put in place.
The government must ensure there is a level playing field in Canada before opening up the financial sector to foreigners.
Committee reports and vague promises must turn into concrete action. I urge the government to act soon to establish national policy and a regulatory framework for financial institutions.
January 30, 1990


THE ENVIRONMENT
Mr. Stan Wilbee (Delta):: Mr. Speaker, as community, government and indeed our world continues the vital struggle to protect our environment, I was pleased to note projects approved under the New Environmental Partners Fund. My constituency of Delta is the recipient of a $5,000 grant shared equally with a funding partner, the British Columbia Conservation Foundation, a nonprofit group dedicated to preserving and increasing wildlife populations.
The Boundary Bay Raptorial Bird Habitat in Delta puts into practice what many of us teach in encouraging, preserving for future generations and making available to the public many of the wonders of creation, particularly relating to natural habitat and a variety of bird species which might otherwise face extinction.
The $50 million Environmental Partners Fund announced in June 1989 covers a five-year period and provides funding for up to 50 per cent of a project's total value. Our Environment Minister's goal is to tap the creative talents of Canadians and establish community oriented environmental projects. It is encouraging to see co-operation between government and community resulting in the protection of our increasingly valued natural environment.


GOODS AND SERVICES TAX
Lorne Edmund Nystrom: Mr. Speaker, the GST is now the most important issue in Canada. As you know, the government proposed a 7 per cent tax on goods and services and the Canadian people are against it. The NDP has a very clear alternative, but the Liberal Party has none. This is the situation two months after the Finance Committee tabled its report.
Mr. Speaker, on Sunday in Toronto, there were six candidates for the leadership of the Liberal Party. Everyone was against the GST, but no candidate proposed an alternative to the system put forward by the government. The public has a right to know the policy of
the Liberal Party of Canada. Please, Mr. Speaker, an alternative!


Mr. Charles A. Langlois (Manicouagan):: Mr. Speaker, the Government of Canada has many reasons to change the present federal sales tax. We know very well that the present tax is old, it is hidden in many cases, it hurts many categories of our manufactured products, it gives goods made abroad an advantage on our domestic markets, it is discriminatory and it has too many exemptions.
The goods and services tax now being debated in the House of Commons corrects all of this. It favours our industry; it will benefit the auto trade. It provides assistance to Canadian small and medium-sized businesses in adjusting to the new regime and gives generous refunds to people on middle incomes and to seniors.
It is our responsibility, Mr. Speaker, to put Canada in step with the world economy by passing Bill C-62 quickly.


FISHERIES
Mr. Fernand Robichaud (Beausejour):: Mr. Speaker, the United Fishermen and Allied Workers annual convention in Vancouver gives all Canadians the opportunity to witness the demise of the fish processing industry on the west coast.
Union officials are saying that the herring processing industry is completely exposed by the recent free trade panel ruling. Processing employs about 10,000 people, jobs have already disappeared and there is a possibility that 80 per cent to 90 per cent of these jobs leave Canada for the U.S.
In Atlantic Canada, free trade did not protect our lobster industry; some of our lobsters are now excluded from the American market. On both the west coast and the east coast Canadians have been abandoned by a government more preoccupied by trade theories than by the well-being of its people. Jobs are being exported to the U.S. along with our herring. The Americans are building a processing industry using Canadian fish because this government has failed to protect Canadian processing jobs.

January 30, 1990
Oral Questions MINING


Mr. Cid Samson (Timmins - Chapleau):: Mr. Speaker, I would like to remind the minister responsible for energy, mines and resources of the crisis Canada might face in the mining sector. I know that this government is allergic to the word "crisis" but nevertheless it is time we faced reality.
Over the last two weeks we have heard of the closure of three mines; one in Kimberley, B.C. and two in northern Ontario, my very own region.
We have also heard of the plight of fishermen and workers in the fish processing plants on both coasts. Canada still relies heavily on its resources to maintain its economy. There are about 4,000 single-industry towns in Canada and the industry is usually resource-based, be it forestry, mining or even fishing. These towns produce $55 billion in annual resource exports. I urge the minister to examine the situation of the mining industry in Canada before it is too late. Long term plans and rational thinking are needed.
As a former health minister, surely my colleague understands that you do not put a band-aid on a wound that requires stitches.


Mr. David Walker (Winnipeg North Centre):: Mr. Speaker, not much has changed in Iran since the departure of Khomeini and the installation of the new president. Human rights abuses continue. In fact, there has been a dramatic increase in the abuse of human rights and in prosecutions for ordinary offences.
Today marks the end of a visit to Iran by the United Nations special rapporteur, Reynaldo Pohl. Mr. Pohl will be presenting a report on human rights abuses in Iran to the United Nations Commission on Human Rights meeting this week in Geneva.
Serious violations have been reported by Canadian friends and families of prisoners in Iran, as well as by over 1,000 Iranian exiles world-wide, who today terminate their hunger strike held in solidarity with the prisoners. Seventy-five of these protesters were Canadian.
We hope that the Canadian government will carefully consider Mr. Pohl's report in Geneva and take leadership for the first time in denouncing these persistent abuses which are intolerable and unacceptable to all Canadians.



ORAL QUESTION PERIOD


Right Hon. John N. Dimer@Leader of the Opposition: Mr. Speaker, in the absence of the Minister of Finance I direct my question to the Deputy Prime Minister.
Canadian consumers will have to dig more than $23 billion out of their pockets just to pay the goods and services tax. For the past two years the Minister of Finance has been trying to convince us that consumers will recoup most of that money as a result of the repeal of the manufacturer's sales tax.
However yesterday in the House he finally admitted that he cannot give any guarantee that companies will pass on to the consumer the savings they make as a result of the elimination of the manufacturer's sales tax.
Can the Deputy Prime Minister tell us why the government failed to get from Canadian business spokesmen the assurance that such savings will be passed on to the consumer? If the Minister of Finance can promise that Canadians will pay the new tax, why can he not promise that in turn they will benefit from the repeal of the old tax?


Hon. Gilles Loiselle (Minister of State (Finance)):: What my colleague the Minister of Finance said, Mr. Speaker, is that he was convinced the tax would be levied but that he could not give absolute guarantees. I would suggest nobody can offer this kind of guarantee in a market economy and I am sure the Leader of the Opposition agrees with that. But the fact is that competition rules do apply in a market economy. Were only one company involved it could fearlessly pocket the 13.5 per cent and add the 7 per cent, but that is impossible because it is already in no position to beat its competitors because of this regressive tax we have, but it is not the only one- We already have good indications. We will do our best to keep consumers well informed and tell them what kind of impact to expect in every sector. In light of what happened wherever this has been done, I am sure
January 30, 1990

Canadians will be well protected and benefit from the withdrawal of the regressive tax we now have.


Right Hon. John N. Turner (Leader of the Opposition):: Mr. Speaker, the Minister of State for Finance is just as naive as his boss the Minister of Finance. Indeed, yesterday the Minister of Finance finally admitted that despite his budget forecasts he was not in a position to guarantee that the Canadian consumer would benefit from the removal of the old tax.

Mr. Speaker, don't you love it? The Minister of Finance and his colleague, the Minister of National Revenue, are going to hire 4,000 new tax police to police this new sales tax, but they will not hire anybody to make sure that the consumers of Canada get the benefit of the old tax.
Let me ask the minister about another aspect of this absurdity that he has brought before the Flouse of Commons. The Minister of Finance, yesterday, claimed that he needed a massive advertising campaign, paid for by the very taxpayers who are going to be hit by the sales tax, to justify his new goods and services tax. He claimed yesterday that he needed this propaganda campaign, "so that Canadians would know the truth" and I am using his words, and "so that they would know all the facts".
Let me ask the Minister of State for one simple fact and one simple piece of truth: exactly how much is this propaganda campaign going to cost? Does the Department of Finance really intend to spend $9 million plus in a propaganda campaign because of the failure of the Minister of Finance, of his colleague the Prime Minister and the rest of the largest cabinet in Canadian history? They can't sell it in Parliament. They can't sell it in the country. Now they are going to spend taxpayers' dollars to try and sell it by an advertising campaign.


John Horton McDermid: Mr. Speaker, it is incumbent upon the government to inform the Canadian people of the new system. This government intends to do that in the most economical way possible.
Oral Questions
I cannot give the right hon. Leader of the Opposition a dollar figure right now, but I can assure him that the information that will be provided will be factual information, the type of information that the Canadian public is demanding and, as a matter of fact, the type of information that the Standing Committee on Finance said should be forwarded to the Canadian people.


John Napier Turner: Let's start focusing on Brampton, Mr. Speaker. The Minister says that it is going to be factual information. Will these truthful ads say that Canada will be the only country in the world with two separate retail sales taxes? Will these ads say that the new GST will break every one of the commitments and rules set forth by the Minister of Finance and the Prime Minister during the election campaign? Will the ads say that the consumers won't benefit from the suppression of the old manufacturers' sales tax? Will the ads say that the government is hiring
4,000	new tax police to administer and monitor and gouge the Canadian people through this tax? Is this what these ads will say?


John Horton McDermid: Most of what the right hon. Leader of the Opposition said is just not true, and he knows that full well. As a matter of fact, during the last campaign this government tried to debate sales tax and the right hon. Leader of the Opposition said we are trying to avoid the free trade debate. You cannot have it both ways. That is exactly what he did during the campaign and he remembers that very well.
The information that will be provided will be factual. It will not be the glory advertising back in the halcyon days of the Liberal Party when we had geese flying across the television set.

*


TRANSPORT
Mr. Maurice A. Dionne (Miramichi):: Mr. Speaker, I have a question for the Minister of Transport. Can the minister tell the House and the Canadian people whether he was aware that last summer the acting chairman of CNR, Mr. Brian Gallery, a personal friend of the Prime Minister and also president of the Tories exclusive fund raising operation, was in a position of conflict of interest?

January 30, 1990
Oral Questions


Mr. Speaker:: That seems to me, with respect, an assertion, an allegation, and a serious one. I would ask the hon. member to keep in mind that if there is a charge to be made, it must be done in a proper way. The hon. member may have facts upon which he wants to ask the question, and that of course would be understandable, but that seems to be an allegation hanging in the air. I would ask the hon. member to rephrase his question.


Maurice Adrian Dionne: Mr. Speaker, I will ask the minister this question. Was the minister aware that the gentleman in question, Mr. Gallery, was, while in the position of acting chairman of CN, at the same time selling advertising to CN or buying advertising from them?


Hon. Benoit Bouchard (Minister of Transport):: Mr. Speaker, I indeed read today the allegations in the Globe and Mail concerning Mr. Gallery and I have personally asked the corporation's chairman to report to me. I will decide what to do in due course depending on the report I will receive from him.


Maurice Adrian Dionne: Mr. Speaker, I would like to address my supplementary to the Deputy Prime Minister.
Will the Deputy Prime Minister take immediate action to bring about a full and complete investigation of what would appear to be a brazen and cynical conflict of interest to the benefit of a personal friend of the Prime Minister?


Hon. Don Mazankowski (Deputy Prime Minister, President of the Privy Council and Minister of Agriculture):: Mr. Speaker, as my colleague, the Minister of Transport pointed out to the hon. member in answer to his earlier question, he has asked for a full report on the issue which was brought to his attention as a result of The Globe and Mail article and he will report back to the House in due course. Of course, it would be premature, Mr. Speaker, and I know the hon. member to be a very fair-minded person, and inappropriate, to make any quick decisions without ascertaining all the facts.


GOODS AND SERVICES TAX
Mr. Ross Harvey (Edmonton East):: Mr. Speaker, I have a question for the Deputy Prime Minister, who will know that Albertans have led the way in this country in the fight against the GST. In fact, he will know that of the entire Conservative benches, the only two who have thus far publicly declared their opposition to the GST are Albertans.
In response to the remarks made by the finance minister in this House last week, several Albertans have asked to debate the Minister of Finance. They include Mr. Jerry Doyle, the MLA for West Yellowhead, Mr. Ace Cetinski and the Sherwood Park Chamber of Commerce, one of the Minister's own back-benchers, and probably thousands of Albertans who would just love the chance to discuss the GST with any minister of the government.
I ask the Deputy Prime Minister, will the government accept any of these offers to debate the GST in Alberta with Albertans?


Donald Frank Mazankowski: Mr. Speaker, several members on this side of the House have debated the issue, have appeared on public platforms and have spoken to the issue. The Minister of State attended a mass rally in Calgary not too long ago. The hon. member for Athabasca has been there. The Minister of Finance indicated in an answer yesterday that he will be going all across the country, including the province of Alberta, to talk about the issue, to debate it, and to appear on phone-in shows.
If the hon. member has not seen a copy of the speech that was delivered by the Secretary of State for External Affairs a couple of weeks ago, I will see that he gets it because it was a very good speech that laid out the facts.


Ross Harvey: Mr. Speaker, I deeply regret that apparently the government has turned down all of the requests handed to it from Albertans to debate the GST-not to read a speech, not to attend a meeting, but to debate the GST.


Mr. Boyer:: How about the floor of the House of Commons? We will debate it here.
January 30, 1990


Ross Harvey: This being the case, Mr. Speaker, might I offer the Deputy Prime Minister or any other government front-bencher right now this challenge: Will any of you debate the GST with me in Alberta?


Mr. Speaker:: The hon. member for Esquimalt-Juan de Fuca.


David Barrett: Mr. Speaker, I will now alter my planned question. I will alter it by simply saying to the Deputy Prime Minister, since you will not respond to my colleague from Alberta, is there anyone over there who will debate the GST in British Columbia?


Donald Frank Mazankowski: Mr. Speaker, first of all the hon. member should honour the Speaker's ruling. If he would be fair and truthful to the House, he would recognize that I was prepared to answer the member for Edmonton East, and I am prepared to answer now.
Yesterday hon. members opposite wanted to debate with the finance minister on the floor of the House of Commons. They debated and they lost.


NATIONAL DEFENCE
Hon. William Rompkey (Labrador):: Mr. Speaker, my question is for the Minister of National Defence, the person who occupies that position for the time being. He stood idly by during the presentation of the last budget and saw Canadian sovereignty eroded severely on both coasts.
For example, the Tracker aircraft which protected Canadian coasts against illegal fishing, illegal drugs and illegal pollution was scrapped and the fisheries portion was given to the private sector at twice the cost.
At a time when the fishery is in crisis, how can the minister stand by and see Canadian sovereignty taken from the Armed Forces and given to mercenaries?
Will he guarantee that this time around he will stand up to the Minister of Finance and say there is no way he
Oral Questions
will take Canadian sovereignty off the east or the west coast from the Armed Forces and that he will protect our coasts against illegal fishing and against illegal pollution? Will he do that?


Hon. Bill McKnight (Minister of National Defence):: Mr. Speaker, I encourage my colleague's new-found interest in his critic's responsibilities. It is nice to see him back.
The decision to remove the Trackers from service was taken because Canada has interest in security. If we are not able to bring about the economic security this country needs to continue to grow and to provide the dollars so we can have military or defensive security, we will be in a much worse position than we are today.
The opportunity to provide a commercial outlet or operation with the surveillance under the Department of Fisheries and Oceans is not new. It is something that we have used to add to the surveillance. There has been additional money provided to fisheries and oceans so that it can provide surveillance on both coasts. It is not as the member would attest.


Bill Rompkey: Mr. Speaker, the argument that the deficit is somehow fought by spending twice as much on the private sector as on the Armed Forces does not hold water with me or with any other Canadian.
In addition, four frigates are now going to be cut from the frigate program at a time when we need increased surveillance. The Atlantic fishery is in crisis. We need ships. We need patrol ships to protect against illegal fishing, against illegal drugs and against illegal pollution. How can the minister justify this kind of cut at a time when we need those ships most?


William Hunter (Bill) McKnight: Mr. Speaker, I am not sure whether the hon. member is aware, but the government is proceeding with the construction of 12 frigates. It has been announced and we are proceeding with them.
We are proceeding with the update of the Tribal class. We are proceeding to put those vessels into retrofit and to create new vessels, some 12 new frigates. I am not sure where the hon. member has been when he talks about cutting four frigates.

January 30, 1990
Oral Questions CLOTHING INDUSTRY


Mr. John Harvard (Winnipeg-St. James):: Mr. Speaker, I have a question for the Deputy Prime Minister and a fellow westerner.
The clothing industry employs 90,000 Canadians. Over
7,000	are employed in my home province of Manitoba. In the four western provinces alone the value of goods produced by this industry is set at over a half billion dollars.
This industry is in jeopardy because of the trade deal and now the government wants to kill the industry with the GST. The clothing industry is exempted from the manufacturers' sales tax, so the GST is a totally new layer of taxation for the industry.
Will the minister tell the workers in this industry how they are to survive both the free trade deal and the GST?


John Horton McDermid: Mr. Speaker, first, my hon. friend from Winnipeg is factually incorrect. The clothing industry is subject to the manufacturers' sales tax in many areas such as communications equipment and so on.
We could go through a whole list of taxes which that particular industry pays that it will not pay after the GST comes in. That will benefit the industry.
As far as the free trade agreement is concerned, we are working very closely with our Canadian manufacturers when it comes to the types of materials they can use and the tariffs that they are paying on them. I have great faith in our clothing industry and our fashion industry.
They are making great inroads into the United States. As a matter of fact the other day the vice-president of Cambridge Clothing was telling me that he is making great inroads into New York and selling Canadian fashions made in Canada there. I think they have a bright future.


John Harvard: Maybe the minister would like to tell those facts to Canadians at axe the tax rallies in the country.


AGRICULTURE
John Harvard: Mr. Speaker, perhaps I will direct a question to the Deputy Prime Minister this time. It is about the GST but it has to do with agriculture.
This year, 1990, could be a year of disaster for farmers. This government has slashed farm support programs at the worst possible time. When many markets around the world are soft and prices are low, the government comes along with the GST, the worst blow of all. This could be the coup de grace.
How can the government proceed with this vicious tax at a time when the Canadian economy is slipping into recession and the Canadian farmer is in such tough shape?


Donald Frank Mazankowski: Mr. Speaker, perhaps the hon. member might do himself and everyone else a bit of a favour and bring himself up to date with the facts with respect to the GST as it applies to agriculture. As he knows or should know, agriculture is exempt.


John Harvard: Farmers are consumers.


Donald Frank Mazankowski: As a matter of fact, it will have a positive effect upon the cost of farm inputs. Farm input costs will come down with the application of the 7 per cent GST because-


John Harvard: What about consumer prices?


Donald Frank Mazankowski: Mr. Speaker, if he would just shut his mouth for a few minutes, I will give him an answer.


An hon. member:: Oh, oh!


Donald Frank Mazankowski: Mr. Speaker, I did not mean that in an offensive way, as the hon. member knows.


Mr. Speaker:: The hon. minister, and I would hope that the remainder of his answer does not strain credibility.


Donald Frank Mazankowski: I did not want to miss the opportunity to enlighten the hon. member about some facts. At the present time, if a farmer buys a half-ton truck, he pays a 13.5 per cent manufacturers' sales tax on it. If he buys a three-ton truck, there is a 13.5 per cent sales tax on it.
January 30, 1990

Under the new provisions a 7 per cent sales tax will be refunded. There is a whole host of items upon which the GST is applied, such as hydraulic jacks, post hole awls, barbed wire, fertilizer and chemicals. All those things will be exempt.


Some hon. members:: Hear, hear!


PRESENCE IN THE GALLERY
Mr. Speaker:: I wish to draw to the attention of members the presence in the gallery of the hon. John Reynolds, Minister of Environment for the province of British Columbia.


Some hon. members:: Hear, hear!


Mr. Speaker:: Also I wish to draw to the attention of members the presence in the gallery of Mr. Rostyslav Bratun, People's Deputy of the Supreme Soviet of the U.S.S.R. and member of the Committee on Foreign Liaison.


Some hon. members:: Hear, hear!


CROWN CORPORATIONS
Iain Francis Angus: Mr. Speaker, my question is for the Minister of Transport. As every reader of Seaports and the Shipping World knows, CN has been one of the regular advertisers in a document which is produced by Gallery Publications owned by Mr. Brian Gallery who is also a member of the board of Canadian National.
The minister commented earlier that he is to investigate, but given the fact that there has been an ongoing financial relationship between CN and Gallery Publications for a number of years since Mr. Gallery became a member of CN, will he take his responsibilities under the Canadian National Railways Act and remove Mr. Gallery from the board?


Benoît Bouchard: Mr. Speaker, I want to reiterate what I said earlier. I did not say I would investigate. I said I read the allegations in the Globe and Mail. I also said that I had asked the corporation's chairman to report to me and that I will take action depending on the report I will get from him. That is what I said and what I am repeating.
Oral Questions


Iain Francis Angus: Mr. Speaker, I am sure that the Minister of Transport is aware that Section 117 of the Financial Administration Act requires directors of Crown corporations to declare their interests in a contract with the corporation or risk it being declared void.
I want to know if Mr. Gallery declared his interest in the contract for advertising to CN and, if not, will the minister remove him from the board of directors?


Benoît Bouchard: Mr. Speaker, once again, CN is a Crown corporation headed by a board of directors and, when a Crown corporation is the subject of allegations, it is customary for the Minister responsible to ask the chairman of the board to report on these allegations. That is what I said and what I will repeat over and over again in answer to questions that are all the same, Mr. Speaker.
>k sje *


CHARITABLE ORGANIZATIONS
Godfrey Stanley (Stan) Wilbee: Mr. Speaker, my question today is for the Minister of National Revenue.
Over the last year or so we have seen some very serious allegations, as well as some outright violations of the rules and regulations governing charitable organizations in Canada. The current climate has seriously damaged the reputation of charities in general but would also suggest to us that perhaps the government may no longer be able to monitor and control the activities effectively.
What is the minister doing to clean up this situation which has such a negative impact on charities and the excellent work that they are doing across Canada?


Hon. Otto Jelinek (Minister of National Revenue):: Mr. Speaker, as the hon. member knows, there are some
60,000	charitable organizations across this country, the great majority of which are very legitimate organizations and benefit society as a whole tremendously.
The hon. member is correct in saying that over the past months and the past couple of years there has been a few who have taken advantage of some loopholes and have abused the system at the expense of the majority of the others. Therefore, as recently as last November, I

January 30, 1990
Oral Questions
advised my officials to begin a comprehensive review of this system.
We are now in the process of consulting with interested individuals and organizations across the country, with a view to eliminating the abuse and coming down with the bottom line objective to make the system fairer, simpler and better for the majority of legitimate charitable organizations in this country.
Changes will take place. They will be very effective and powerful to make the system better and fairer.


CANADIAN BROADCASTING CORPORATION
Mr. Dennis Mills (Broadview-Greenwood):: Mr. Speaker, in the absence of the Minister of Communications, my question is directed to the Deputy Prime Minister.
Since 1984 this government has presided over $280 million in budget cuts to the CBC. Now the minister is presiding over the dismantling of the national headquarters.
Can the minister give the assurance that those regions of Canada other than Montreal and Toronto will have sufficient resources to fulfil their national mandate?


Mr. Jim Edwards (Parliamentary Secretary to Minister of Communications):: Mr. Speaker, I think it is very clear that the government has shown its support for the CBC by granting it numerous increases in the past few years.
In 1987-1988 the government granted an annual increase of $20 million over a 10-year period in order to enable the CBC to replace its outdated equipment.
In 1988-1989 the government gave the CBC some $65.5 million in new appropriations for the carrying out of its broadcasting centre project in Toronto, and in 1988-1989 the government gave the CBC nearly $130 million for the period from 1989 to 1990 and 1992 to 1993. Then of course there was a new appropriation of $81 million to meet unanticipated costs.
The member's question relates to the regions outside Toronto and Montreal.
In answer to that question, that is a matter for determination by the CBC's board of directors that directs an arm's length organization.


Some hon. members:: Oh, oh!


James (Jim) Stewart Edwards: The announcements made today decentralize the decision-making processes of the CBC so that the needs of the regions can be recognized.


Dennis Joseph Mills: Mr. Speaker, my supplementary is directed to the member.


John Horton McDermid: You are a centralist.


Dennis Joseph Mills: Yes, I am somebody who believes in strong national institutions.


Some hon. members:: Hear, hear!


Dennis Joseph Mills: I must say that this member cannot stand up and give us an assurance that there will be no CBC budget cuts in western Canada, in Atlantic Canada and in northern Canada.
Can he stand up and give us assurances that there will be no budget cuts?


James (Jim) Stewart Edwards: Mr. Speaker, lest there be some misapprehension on the part of the House and the nation, the budget cuts that were dealt with today by the CBC president were the result of the April 1989 budget announcements.
They impact largely upon the administrative overburden of the CBC. President Veilleux went to some length to stress that he is trying to preserve the core programming, and especially the regional strengths of the CBC.


Some hon. members:: Hear, hear!


Ian Gardiner Waddell: Mr. Speaker, the parliamentary secretary is right. I am afraid my colleague over there is wrong.
The parliamentary secretary was chairman of the communications committee. The fact is that the government's goal of 95 per cent Canadian content in broadcasting is fundamentally at odds with the $20 million cut-backs today, to be followed by another $15 million in programming. The government cannot have it both ways, can it?


James (Jim) Stewart Edwards: Mr. Speaker, I should stress to the hon. member that there were no new cuts today. The
January 30, 1990

CBC simply announced its plan for dealing with budget cuts that were part of the April 1989 budget.
Those plans include an acceleration of the four-year plan proposed by the government to deal with those cuts over a three-year period.


Mr. Maurice Foster (Algoma):: Mr. Speaker, my question is directed to the Minister of Energy, Mines and Resources. Last week, Rio Algom mines in Elliot Lake announced they were going to be laying off some 1,600 employees. Today, press reports suggest that Denison mines will likewise be laying off 700 employees this year.
Is the minister prepared to put in place a plan of action by the federal government, in co-operation with the municipality, the unions and companies involved, to minimize the adverse impact of the loss of these jobs in the uranium mine industry?


Hon. Jake Epp (Minister of Energy, Mines and Resources):: Mr. Speaker, it is disappointing when mines are closing. In fairness to what has been happening in Elliot Lake, the community, the workers and the company, as well as the hon. member, have been trying to work with the provincial and federal governments in reducing the impact. I think we all recognize that in terms of nuclear generation those mines have suffered, both from new contracts not being available and also the price of uranium having dropped below the $10 mark.
Having said that, my colleagues, the Minister of Employment and Immigration and the Minister of State for Small Businesses and Tourism, responsible for FED-NOR, have given their good offices in whatever way they can to help in the adjustments. There are Community Futures programs available.
All of us recognize that this will not replace the 1,600 jobs, but we are going to be as helpful as we can to the people locally, as well as to the provincial government, to try and ease that reality and see what adjustments can be made so that Elliot Lake can not only survive but can also have a future.


Maurice Brydon Foster: Mr. Speaker, I appreciate the hon. minister's words. The minister knows that with the magnitude of this loss of jobs we are not only talking about the miners who are laid off themselves but
Oral Questions
we are talking about the very viability of the whole community, including small business, schools, churches, and hospitals.
Is the minister willing, at an early date, to visit the community of Elliot Lake to meet with the community action committee there to ensure, in co-operation with the unions, companies and the municipality, that every possible resource of the federal government is brought to bear to try to reduce the adverse impacts of the announcements which have been made in the last couple of days?


Hon. Barbara McDougall (Minister of Employment and Immigration):: Mr. Speaker, as I mentioned yesterday in the House, the Industrial Adjustment Service and the Community Futures, because this area is designated as a Community Futures area, is designed to deal with just that kind of problem in terms of the over-all impact on the community and other opportunities.
I may say, on behalf of my colleague, the minister of energy, that I know several of us including myself have been in the hon. member's region. We sympathize with his concerns.
There are three or four ministers involved in the solutions, including the Minister of State for Small Businesses and Tourism with the responsibility for FED-NOR, which has already brought new activity to many parts of northern Ontario, as the hon. member knows. All of us take a personal interest in what is happening and will continue to do so.
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JUSTICE
Mr. Robert E. Skelly (Comox-Albemi):: Mr. Speaker, the Marshall report was strongly critical of the behaviour of two federal judges. One judge was found to have persuaded then Liberal Justice Minister Chretien to limit the scope of Marshall's appeal reference. Another judge should never have been appointed to the appeal panel in the first place because as Nova Scotia's Attorney General he was responsible for Marshall's original defective prosecution.
Since the minister has had this report in his hands for four days now and the jurisdiction over the federal judiciary is entirely within the responsibility of his ministry, will he immediately use his powers under Section

January 30, 1990
Oral Questions
63(1) of the Judges Act to refer this matter to the judicial council for investigation and possible disciplinary action.


Douglas Grinslade Lewis: Mr. Speaker, I indicated in the House yesterday and I reiterate today that my officials and I intend to review the Marshall inquiry report thoroughly and only at that time, after the review is completed, am I prepared to comment on what action will or will not be taken.


Robert Evans Skelly: Mr. Speaker, Donald Marshall spent part of an 11-year sentence in jail. That is a long, long time to be in jail for a crime of which he was not guilty.
The essence of this matter is the speed of the government's action. The report has now been in the minister's hands for four days. This matter is entirely within the minister's jurisdiction. Donald Marshall has been failed at every level of the justice system: the police, the courts, the justices. Is this minister going to add to that failure by failing Donald Marshall himself?


Douglas Grinslade Lewis: Mr. Speaker, I think I am safe in saying that no member of this House and no member of the public can condone any injustice that was done to Donald Marshall.
There is no question about that from the government side. I do not think there would be any question about that from the opposition side. We intend to do justice in this matter to all those involved. That means taking a very reasoned look at the report, coming to conclusions and making those conclusions public. I undertake to do all those things, and I undertake to do it in the interest of justice.


PULP AND PAPER
Mr. J. W. Bud Bird (Fredericton-York-Sunbury):: Mr. Speaker, I have a question for the Minister of State for Forestry.
This question impacts both on the environment and on forestry. One of the major policy directions being taken on behalf of the environment throughout the world and one which also relieves the pressure on our forests is the
increased production of pulp and paper from recycled raw materials.
What proportion of Canada's total pulp and paper production is presently obtained from recycled waste? What is Canada's targeted proportion, and what is the Government of Canada doing to influence increased pulp and paper production from recycled waste in this country?


Hon. Frank Oberle (Minister of State (Forestry)):: Mr. Speaker, that is a very pertinent and excellent question. It may well be that in this critical area the industry may be leading because in excess of 25 per cent of all paper consumed by the Canadian public is already recycled in Canada.
The problem is that some of this paper comes from foreign suppliers. This would indicate that there is a need to inform the public and to bring about a greater public consciousness so that we will all collect our paper and make it available to the industry which is anxious to use it in the process.
In that particular case, again industry is leading public opinion and is leading government in this area.


INDIAN AFFAIRS
Mr. Jack Iyerak Anawak (Nunatsiaq):: Mr. Speaker, I will direct my question to the Minister of Indian and Northern Affairs in the absence of the minister responsible for Canada Post.
Starting tomorrow, because of Canada Post's food mail rate increases and the decrease in subsidy by the Department of Indian and Northern Affairs, Baffin Island residents will have to pay $4.20 for a dozen eggs. In this capital city, people pay $1.09. Starting tomorrow one litre of milk will cost people in my constituency $4.50, compared to $1.29 for people in Ottawa.
How can the minister justify imposing these food price increases on northern residents, many of whom are on fixed incomes and make less than $10,000 a year? How can he justify making food more expensive, when the recent report of the Canadian Institute of Child Health has reminded the government, once again, of the tragic health conditions of Canada's aboriginal children?
January 30, 1990


Hon. Pierre H. Cadieux (Minister of Indian Affairs and Northern Development):: Mr. Speaker, I would like to make one correction before answering the question. It is not a decrease by DIAND of the subsidy that is involved because DIAND was not subsidizing that particular operation.
As my hon. colleague knows, there has been consultation in the past two or three months with respect to this particular issue. It has been undertaken that the proposed increase will be reduced by 5 per cent. There will be a freeze on any other increase until next year, while all departments under the direction of the Department of Indian Affairs and Northern Development undergo a study in order to assess the situation and bring forth corrections for the next year.


Jack Iyerak Anawak: Mr. Speaker, my supplementary question is for the same minister. A 5 per cent decrease is a small comfort when the average price increase will be 32 per cent.
This morning, after hearing northern Inuit and Indian people explain how devastating the impact of these rate increases will be, the consumer and corporate affairs committee of this House passed an all-party resolution requesting a nine-month moratorium on the proposed increases.
Since the increases are schedule to take effect tomorrow, will the minister relieve the anxiety of northerners now and tell us whether he will ask or order Canada Post to institute a nine-month moratorium immediately, as requested by the committee?


Pierre H. Cadieux: Mr. Speaker, I have been made aware of the committee's recommendation this morning. As my hon. colleague knows it is addressed to Canada Post, and I will transmit it to the appropriate minister.


Mr. Speaker:: The hon. member for Ottawa South on a single question.


SCIENCE AND TECHNOLOGY
John Paul Manley: Mr. Speaker, my question is for the Minister of State for Science and
Oral Questions
Technology. It concerns the Statistics Canada report issued yesterday on federal scientific activities.
That report indicates that science and technology expenditures in Canada have fallen significantly from 3.9 per cent in 1980 and 1981 to 3.5 per cent in 1989 and 1990.
I would like to ask the minister if he believes his own rhetoric about science and technology. Is he willing to take the kind of stand that the Secretary of State for External Affairs has taken and offer his resignation if the government continues its cut-backs in science and technology spending?


Hon. William C. Winegard (Minister of State (Science and Technology)):: Mr. Speaker, I think the figures that have been cited may be a little misleading. I think it makes a little more sense to look at S and T expenditures on program spending. Let us take the debt payments out and look at program spending.
I think the House would be interested to know that in 1980-81 those figures were 4.65 per cent. They went down in 1984-85 under that government to 4.46 per cent. Under this government, taking out the debt, they have increased to 4.89 per cent. That is how we treat S and T, not like the Liberals did.


SOCIAL SERVICES
Ms. Joy Langan (Mission -Coquitlam):: Mr. Speaker, I would like to put my question to the Deputy Prime Minister. The Minister of Finance has stated that Canadians surviving on incomes below the poverty line will benefit from the goods and services tax. In fact, Canadians and their families on social service will not be better off. The province of Saskatchewan deducts 100 per cent of family allowance from welfare cheques.
Will the Deputy Prime Minister promise this House that he will work with the Minister of Finance to ensure that Canadians on welfare will not have their rebates deducted from their welfare cheques?


John Horton McDermid: Mr. Speaker, it goes without saying that the federal government is always concerned when we increase benefits to recipients that the provinces step in and take those benefits away in one form or another.

January 30, 1990
Point of Order
The answer is yes, we will work very closely with the provinces to try to ensure that this does not happen.


POINTS OF ORDER
Mr. Jim Fulton (Skeena):: Mr. Speaker, I think my point of order may be a bit of a hybrid between privilege and order but I will leave that up to you to advise the House.
At 12.43 p.m. today, the bells in the chamber and throughout all the buildings on Parliament Hill began to ring. As members would know, in the upper left-hand corner of the television sets both here and in the lobby, in members offices and in other areas of the precincts of the Hill, there is a digital clock which gives members and the public some idea of how long the bells are going to ring before a vote is taken.
I was, in fact, when the bells began to ring, in the middle of a conversation with representatives of the Canadian Human Rights Commission. I turned on the television, saw that there were 29 minutes and something available and carried on with the conversation only to find that the bells stopped. I subsequently saw a voting procedure begin.
The reason I think that there is clearly either a point of order or a question of privilege and that we have some options is that if we are going to continue having that digital display advising members how long it is until we vote, there will have to be a clear procedure as to whether or not it is a 15-minute bell, a 30-minute bell or something else.
Why I say it is possibly a hybrid between a question of privilege and a point of order is that perhaps there was what might be described as a hybrid political relationship between the Liberal Whip and the Government Whip in this situation in their joint desire to quickly pass the GST legislation.
If you could give me some idea as to whether or not that digital clock is going to continue to be there, perhaps we could add a little red or green light so we will know what has been agreed to by Whips. If there is agreement, then a green light would come on. If it just sort of a loosey-goosey situation, perhaps a red light or a
blinking light or an orange light could come on so the members have a better idea of what is happening.
Today, Mr. Speaker, I am not convinced that a legitimate vote was taken just prior to one o'clock because members who were in committee or elsewhere on the Hill were, to the best of our knowledge and ability, determining when to come to the House based on that digital clock. I think my privileges and the privileges of other members were damaged and perhaps usurped, and I look forward to your ruling.


Jean-Robert Gauthier: Mr. Speaker, I have never heard such nonsense in my life. To re-establish the facts, the facts are that when the House is in debate, we get eight hours of debate at second reading before we revert back to 10 minute speeches.
What the NDP was doing this morning was trying to cut honest debate, good debate, opposing debate on GST by having the bells ring for one-half hour when, indeed, the floor had been given to the Liberals and should have been given to the Liberals because it was our turn. We want to debate this bill. We do not want to waste time as the NDP are doing.
Second, I take strong exception to the New Democrats not getting their act together and not operating within the rules of this House. We will continue to want to debate this bill to the utmost and to defeat this bill, if possible, but we will not play without rules, we will play within the rules.


Mr. Jim Hawkes (Calgary West):: Mr. Speaker, I think the issue is really quite simple. If the NDP and the member who spoke and brought this to our attention would read the rule book, they will find that the rules are expressed in terms of the maximum amount of time until a vote. The clock on the television reflects the maximum amount of time available until the vote. The rules do not deal with minimums. We have had several votes in this session of Parliament already where we moved rather quickly, within a minute or two from the commencement of bells, for the kinds of reasons which the Whip for the Official Opposition lays on the table.
This is supposed to be a place where great debates take place on the great issues of the time and the dilatory $5-million waste last week of taxpayers' money in this Chamber by the NDP is just something that responsible members of Parliament will not tolerate any more than they have to.
January 30, 1990

I suggest to the member that he read the rules and look at the screen. The screen is in accord with the rules. This is another example of wasting the time of the House with a nonsensical point of order.


Nelson Andrew Riis: Mr. Speaker, I would like to make a short intervention. Methinks the opposition Whip protest too much.
The point of the hon. member for Skeena was that we have all come to accept the fact that the little digital clocks on the television screens indicate the time intervening until the vote. Otherwise, there would be no point in having it on the screen. I guess what we are saying is that from this point on, that clock and the time down to the vote is meaningless, irrelevant and should be struck from the television screens because it has, obviously, misled a number of members. That is the point the member for Skeena was trying to make. This is a legitimate point of order. The member wanted to vote against the GST and because of the Liberal-Conservative co-operation on this matter, he was unable to do so.


Hon. Herb Gray (Windsor West):: Mr. Speaker, I want to say a few words about this so-called point of order. The hon. member who raised it said it is a hybrid. I can think of another word to apply to it, but I do not think you will accept it as parliamentary.
I think that in so far as the hon. member wants some clarification of the significance of the digital clock on the screen, that is a question that should be clarified and he has received clarification. But I do not think that the government House Leader should, I am sure inadvertently, create the wrong impression about what the vote was all about.
It was not a vote against the GST or for the GST. The motion, as I understand it, was that the Liberal member for Ottawa South not be allowed to speak. The NDP moved that another member, other than the member for Ottawa South, be heard. The hon. member for Ottawa South had the floor and was on his feet to oppose the GST and was ready to speak for 20 minutes and then have a 10-minute question and answer period. The New Democrats got up and tried to muzzle him, tried to prevent him from speaking against the GST, and that is all that happened.
I conclude by saying that the point of order, or whatever you want to call it, deserves to be raised in terms of clarifying the use of the clock, but I do not think
Point of Order
it is correct for the New Democrats in their desperation over being left out of the debate on the GST, to try to misstate what the vote was about. It was about trying to prevent the member for Ottawa South from having his say against the GST
I do not think NDP members will ever be able to explain why they tried to prevent a member of this House from opposing the GST if they are really against it.


Mr. Speaker:: I will hear the hon. member for Port Moody-Coquitlam in a moment.
I think perhaps it might be helpful to members and to the public to understand exactly what has taken place here.
The hon. member for Skeena has risen and explained to the Chair that watching the television set, which is available in the offices of all hon members, he noticed a vote was about to take place. There is for the convenience of members a digital clock that appears on the face of the television set. It is there for convenience only. I am prepared to certainly consider what might be done in order to make sure that no hon. member is misled by what the television screen shows.
However, I want to explain to hon. members and to the public, that when the bells ring, in most cases unless there has been some arrangement otherwise, they are either what is called a 15-minute bell or a 30-minute bell. There is also a long convention in this place that if the two Whips walk back in the Chamber and take their seats earlier than either 15 minutes or 30 minutes, then we are bound to proceed with the vote. Now that is a rule of the House and it is an old and long-time tradition.
The only thing that I am concerned about at the moment has nothing to do with why the bells rang. If hon. members are interested in why the bells rang or if members of political science classes or the public want to know why the bells rang, they can look at Hansard and see that a motion was moved. Upon that motion being moved, and it has been moved many times by all parties in this place upon occasion, there is a vote called.
It is not for me in listening to this point of order to comment whatsoever on the tactics used, the whys or the wherefores of it. What I am applying my mind to is solely

January 30, 1990
Point of Order
the question of television coverage, and once the vote is called, that is end of the coverage of the Chamber. All we have is the ticking clock. Perhaps the solution might be to have television coverage of the Chamber. Hon. Members could see Whips come in. However, that is not for me to say.
I will look at the question of the clock. I have some indication that members other than those of the party of the hon. member for Skeena may have also found themselves in some difficulty today. But that is the sole issue and I want it clearly understood. I will see if something can be done to convenience members, but I point out the reason the clock is there is a matter of convenience only.


Ian Gardiner Waddell: Mr. Speaker, I rise just so that the House is not inadvertently misled by some of the gratuitous remarks made by the opposition House Leader. I was here. I do not believe he was here for the vote. I voted and it was not to stop an hon. member from speaking. I would not vote that way. It was to hear our finance critic, the member for Yorkton-Melville.


Some hon. members:: Oh, oh!


Mr. Speaker:: I would invite hon. members to consider what has been said in what started off as a point of order, and if they are still convinced after having looked at Hansard that the matter has to be brought to me further, I will of course hear them. But I am not at this point entertaining argument on why the vote was called or what the purpose of it was.
I will, of course, hear the hon. member for Ottawa- Vanier. I know he will take into account what I have just said.


Jean-Robert Gauthier: Mr. Speaker, you have convinced me. I rest my case and I will refer to Hansard.
However, since you alluded to the fact that the Whips may be the ones to whom we should be looking to decide when a vote will take place, short of doing a dance with my colleague from the government side, I am ready to look at that whole problem, especially in this regard.
It has been a tradition of this House that when the Whips walk into the House, members give way and clear the aisles. That has not been our experience in this
Parliament and I would like to ask members of this House, in an effort to be co-operative and to show some respect for the Whips coming in for the vote, that maybe they clear the aisles so that the Whip and I do not have to wind down the aisle through all kinds of opposition.


Mr. Speaker:: The hon. member for Esquimalt-Juan de Fuca may want to assist the Speaker.


David Barrett: Mr. Speaker, not on the merits of the particular case, but the mechanics of the case, there is another question I would ask the Chair to consider, namely to notify members of committees who also must look to that clock for guidance. Members in committee are also placed in the invidious situation of not knowing that that time frame will not be met. There may be an occasion where there are far more serious events and members of committee will miss that opportunity to vote.


John Napier Turner: Mr. Speaker, I am prompted by my good friend from Esquimalt-Juan de Fuca to suggest to him and his colleagues that since the New Democratic Party has indeed entered the age of technology and discovered the benefits of hidden microphones, perhaps the NDP Whip could get himself a walkie-talkie to keep the boys and girls of the NDP informed so that they can get here to the House on time for votes.


Some hon. members:: Oh, oh!


Mr. Speaker:: I suppose gallantry imposes upon me the obligation to let our hon. friend from Nickel Belt at least have his say.


John R. Rodriguez: Mr. Speaker, I was here when the motion was put. I heard the Whip from the government side say that 30 minutes and 15 minutes on the television screen monitor is really a guide and there is no minimum time.
In fact, I was here. That bell rang for about two minutes, so even if members had to come from the Confederation Building by bus-I am corrected, the bell rang for three minutes-it is possible they could have missed the vote.
That was a recorded vote, and members do have a responsibility to be here. We cannot be held responsible if the Whip from the Liberals and the Whip from the Conservatives cooked up this deal to get this thing put
J anu ary 30,1990

through. And we know why they wanted it pushed through. We know why! After all they have-


Mr. Speaker:: I want to assure hon. members I have heard the point and I will consider it and see if there is something that can be done to convenience members. I do not think there is any need to extend this discussion.
Is the hon. member rising on a different point? I recognize the hon. member for Kingston and the Islands on another point.



PRIVATE MEMBERS' BUSINESS

Mr. Peter Milliken (Kingston and the Islands):: Mr. Speaker, this morning I, and I am sure all hon. members, received a notice from the Clerk advising of a draw to be held pursuant to Standing Order 87(2) for Private Members' Business on Thursday, February 1.
Members will know that the Standing Committee on Elections, Privileges, Procedures and Private Members' Business had the honour to submit its seventh report to the House a few weeks ago-in fact some months ago now-in which it recommended some changes to the Standing Orders relating to Private Members' Business that will expedite the disposal of this kind of business in the House. It provided for additional hours, it provided for a revised system of draw and so on.
I am wondering if I might request of Your Honour that the draw to be held on February 1 be deferred to a later date so that the motion standing in the name of the chairman of our committee could be debated and approved by the House before the draw occurs.


Nelson Andrew Riis: Mr. Speaker, on the same thoughtful point of order, I want to reply on behalf of the New Democratic Party. We spent a lot of time as members examining the whole process of Private Members' Hour. At the beginning of that process I suggested that we look at it in a more comprehensive way and not simply that the New Democrats had been particularly ambitious in presenting various motions and various private bills when the Liberals had presented a handful and I think the Conservatives had presented virtually none. But that is beside the point. That is not the issue.
Point of Order
On the other hand, we recognize that perhaps by backing off and introducing some changes, it would be to the benefit of all members. That is certainly our main motivation in considering this.
I want to say that we are in the process right now as a caucus of examining the very important report. It was a good report. The members on it obviously worked hard on behalf of all of the members of the House. But I think, rather than take this what I believe is a premature step, I would rather hold off for a day or two. The caucuses will meet tomorrow, I understand, at which time I think all the caucuses, if they have not already, will have a chance to deliberate on this important issue.
So while my inclination is to give consent, I think in the spirit of the value of the private members' work in this House, it deserves another day or two of reflection, consideration and thought.


Albert Glen Cooper: Mr. Speaker, in light of the hon. member's comments, which I think are very valuable, perhaps what we could do is just ask that the draw be delayed until the parties have had an opportunity to have discussions on this particular subject which I think is very important for private members of this House, and we could ask for the consent of the House to do that perhaps.


Nelson Andrew Riis: Mr. Speaker, I realize that my hon. colleague is going to soon ask for unanimous consent from my hon. friend in the Liberal Party. Our rule as a party, that is the New Democratic Party, has been to completely and totally not co-operate with the government because of the GST fight that we are waging.


Arthur Jacob (Jake) Epp: This is Private Members' Business.


Nelson Andrew Riis: Let me get to it, Jake. I know you are anxious about that GST, but let me finish this conversation.
Because we are dealing with Private Members' Business-this has nothing to do with the government's initiative, it has to do with Private Members' initiatives- I would be quite prepared to agree to put off the draw until we have had a chance with each of the caucuses to examine the situation, deliberate further among the House Leaders and come forward hopefully with a standing order which we would all agree with, as opposed to the report. The report includes many items with which I have difficulty but I am sure that for 90 per cent of it we

January 30, 1990
Government Orders
can agree upon and perhaps we can proceed in that fashion.


Mr. Speaker:: I thank hon. members for their contributions. I should explain that under the rules, the Chair has no power to unilaterally postpone the draw. I am sure hon. members know that.
There seems to be a general disposition to postpone it pending discussions between all three parties. Is that agreed?


Some hon. members:: Agreed.



GOVERNMENT ORDERS


[Stage Direction]
The House resumed consideration of the motion of Mr. Wilson (Etobicoke Centre) that Bill C-62, an Act to amend the Excise Tax Act, the Criminal Code, the Customs Act, the Customs Tariff, the Excise Act, the Income Tax Act, the Statistics Act and the Tax Court of Canada Act, be now read a second time and referred to the Standing Committee on Finance; and the amendment of Mr. Turner (Vancouver Quadra) (p.7569).
The Acting Speaker (Mr. Paproski):: When the House recessed for the lunch hour, the hon. member for Ottawa South had 13 minutes left plus 10 minutes for questions and comments.


John Paul Manley: Mr. Speaker, again we have had lengthy argument over the NDP wishing to interfere with the delivery of this speech. I can well understand when they elect a new leader and immediately drop five points in the polls why they would not like to have anyone else get up and give a reasoned and detailed explanation of objections to the GST. I can certainly see why they do not want 20-minute speeches. They do not have too many members that are capable of giving a 20-minute speech on the GST.
I would like to refer you, Mr. Speaker, to a white paper that the government put out back on June 18, 1987, in which it set out the objectives of tax reform. It states:
The tax reform proposals have been designed to meet five broad objectives:	fairness, competitiveness, simplicity, consistency,
reliability.
This is the objective of tax reform. The question I have for the government is how can it come before the House and suggest that the goods and services tax proposal that is before us for consideration meets those five objectives. I suggest that there is absolutely no question that it does not.
What about fairness? I do not know what fairness means to you, Mr. Speaker, but we have an idea based on what the minister said yesterday of what fairness means to him. Reading from page 7559 of Hansard yesterday, the Minister of Finance described the vision of Canada that he is putting forward. I quote:
It is a vision of conservatism at its best, which is to preserve what is good and to leave a better quality of life to those who follow us in terms of both a higher standard of living and a healthier environment-it is a vision deeply rooted in reality and expressed through decisive action, not empty rhetoric.
What I agree with in that is that his vision of Canada as evidenced by the goods and services tax is a vision of conservatism at its best. It is conservative. It is a conservative view that says that we do not need to care about the poor. We do not need to care about the illiterate. We do not need to care about students. We do not need to care about the people who live in the disparate regions of this country. We do not need to care about the north.
The seniors of this country, those who are living on fixed incomes, who are surviving and making do, are the ones who begin to be hurt first by this measure. Government members have told us, and we have raised this point many times, that there is a refundable sales tax credit for the poor and they pontificate as the minister did yesterday saying, "We have raised it in the past. Of course, we'll raise it in the future."
Let me tell you what the government really thinks about the elderly. At least one of its members speaks openly and says what he thinks. This is the Chairman of the Finance Committee, the member for Mississauga South, commenting on the elderly which was printed in the Toronto Star of September 27, 1989, and I quote:
They live at a slower pace and they don't spend money in the same sense that you and I do. Older people don't wear out their clothing. They don't wear out their furniture. They don't run around and all of that costs dough.
January 30, 1990

There is compassion for you, Mr. Speaker. That is why the elderly do not need to worry about the goods and services tax. They do not run around.
What about the students? We raised the issue of education yesterday and the minister denied that education was affected by this tax. Does he not realize that, for the first time in Canada, we are going to be taxing books? We are going to be taxing reading.
The member for Calgary down at the far end of our side, yesterday, said, "Well, can't they borrow them from the library?" It is hopeless!
The regions of this country, those that are away from the central manufacturing districts of Ontario and Quebec, are desperately concerned about the effects of this tax. They are concerned because, once again, they are going to be excluded from those good manufacturing jobs that have always been central in Canada.
What happens with this tax is that for the first time there is going to be a tax imposed at the federal level on the costs of transportation. It is going to mean that to live in the regions will be even more expensive than before.
To try to put factories in the regions and export things to central Canada to be sold is going to be ever more difficult than it was before because not only will transportation costs be a factor but the tax is going to be imposed on top of transportation costs at the consumer level. The government members don't care about that. In fact, what they see in this tax is the fact that the regions in western Canada will be ever better able to send their goods south of the border. They are looking to the north-south connection. They are not worried about tying this country together as they should be.
There are lots of sectors that are affected badly by this tax. I know my colleagues will be raising many of them in the hours of debate that still remain.
Tourism is important. Tourism has never been taxed at the federal level, other than indirectly to a very minimum extent. Now all tourism services are going to be taxed. There is going to be a disincentive for tourists from other countries coming to Canada where they will be subject to that tax. I know the government is going to
Government Orders
say, "Oh, but they can get a refund. All they have they to do is keep all their receipts and send us a nice letter when they get home and we'll send them the money back". That is wishful thinking. I think we would be better to get the tourists here and let them spend their money and keep their 7 per cent, and encourage them to do that.
As for Canadians, is there an incentive to travel within Canada as a result of the GST? No. Why not go south of the border where they are going anyway to do their shopping, because of the government's monetary policy, and not face a 7 per cent tourist tax. Three million dollars a week is being spent in the United States by Canadians who cannot afford our high dollar.
Other sectors include the independent insurance adjusters, just as an odd example. They will be wiped out by this tax. The incentive for insurance companies to do all of their adjusting in-house will be irresistible. A whole entrepreneurial, small business sector of our economy will be wiped out in one move with the imposition of this tax.
Then there is the objective of simplicity. Mr. Speaker, my leader yesterday did some reading from the act which illustrated the lack of simplicity. I have my own favourite section though. He read the part on housing. The one that I like is Section 148, "Small Suppliers". The reason I like that one, Mr. Speaker, is because the GST is not supposed to be too onerous for the little people, you know, the ones that have gross revenues from their businesses of less than $300,000. They are really at the low end so they are exempt from this.
They are the music teachers, the people who do hairdressing in their homes and that sort of thing. One of them might want to know for sure that they are exempt so that they do not have to collect the tax. My advice to them, if they are listening, is get your copy of Bill C-62 and turn to page 1990, Section 148. Read this section and figure out if you are one of the small suppliers that is exempt from the tax. Here is what it says:
148. (1) For the purposes of this Part, a person is a small
supplier-
So far, so good.
- throughout a particular calendar quarter and the first month immediately following the particular calendar quarter if

January 30, 1990
Government Orders
(a)	the total of all amounts each of which is the value of consideration that became due in the four calendar quarters immediately preceding the particular calendar quarter, or that was paid in those four calendar quarters without having become due, to the person or an associate of the person at the beginning of the particular calendar quarter for taxable supplies, other than supplies by way of sale of capital property of the person or of the associate, made by the person or the associate in the course of commercial activities does not exceed the total of
(b)	$30,000, and
I will not read paragraph (c). It is just as long as paragraph (a). Then in (2), there is an exception to that definition which is equally as long as the first part, including the part I did not read.
Now that is the lowest end of the scale on this tax. These are the people to whom it does not apply. How would you like to explain it to the people to whom it does apply? Good luck music teachers.
In the short time remaining to me I would like to raise a matter that I think is of very fundamental importance because I think there is some smoke and mirrors going on across the way on this issue. I raised this question yesterday. The Minister of Finance was good enough to come here for an hour yesterday, as the Minister of Justice said earlier, but not in order for us to debate with him. There was no opportunity for debate. He was here for us to ask questions. He was not here to give answers.
In fact, the House leader of the NDP got up at the conclusion of the exercise, if you can believe it, and said in a very pontifical way, "We appreciate the Minister of Finance making himself available for this hour to enter into this exchange. I think it has been helpful and useful". I do not think that the House leader of the NDP was even listening to what was going on, either that or he did not understand it.
I asked the Minister of Finance whether this was not the greatest single corporate tax decrease in the history of Canada. Did he answer it? No. No.


Nelson Andrew Riis: Mr. Speaker, I rise on a point of order. I would not normally interrupt my hon. friend's speech. He had an odd good point in it. He referred to the House leader of the NDP and the fact that I drew attention to the fact that the Minister of Finance had stayed in the House an extra hour to respond to questions. That was one of the first opportunities we had, in a sustained way,
to not only question the Minister of Finance but to get him on record saying certain things. He said, for example, that he assumes that all of the savings that manufacturers will have when the manufacturer's tax is reduced from 13.5 per cent to 7 per cent will be automatically passed on. Of course, that is an assumption that he makes. I do not think there is a single other Canadian who makes that assumption. It was important to get the Minister of Finance clearly on record.
If I may while I am on my feet, it is clearly on record on a number of occasions that we have seen this co-operation, that the Liberals have actually supported the government's efforts to introduce the GST.


The Acting Speaker (Mr. Paproski):: The hon. member for Ottawa South on debate. There will be an opportunity for questions and comments within the next three minutes.


John Paul Manley: Mr. Speaker, the suggestion that we support the GST is so ridiculous as to fall of its own weight.
In the smoke and mirrors yesterday I would like to point out what I think to be a contradiction in what was said. The House leader of the NDP brought out the point that the minister tried to say to us that all of the manufacturers' sales tax is going to be passed on. That is what he said. He said that in answer to questions. But in his speech yesterday, as reported at page 7560 of Hansard, he stated:
In fact, about one-half of the $18 billion in federal sales tax
revenues currently comes from the taxation of business inputs,
materials and supplies used in the production process.
He said that in the context that the savings of this business input tax was going to be available to broaden the capital investments in the country. He cannot have it both ways. Either it is available for business to invest or it goes through to consumers. The reality of this tax is that in a massive degree tax is being shifted from corporations to individuals, and that in the face of the minister's promises that corporations were going to bear a larger share of the tax burden in this country.
I do not know why the minister is not willing to be forthright on this. Twice the question; no answers. I challenge the government to come forward and say "Yes, we admit it. Because we believe in the corporate model, we think it is best that individuals pay tax and not corporations". Therefore we have, by the minister's own
January 30, 1990

admission, moved at least half of $18 billion from the corporate level to the individual level.
I know that my time is up and I appreciate your indulgence, Mr. Speaker.


Mr. Charles DeBlois (Montmorency-Orleans):: Mr. Speaker, I have a brief comment and a question for the hon. member for Ottawa South (Mr. Manley). Earlier, he was poking fun at the text of the bill as he quoted a few passages. I may remind the hon. member that any text about taxation will inevitably contain indications that, on the face of it, may seem overly technical and sophisticated. However, I may remind the hon. member that this tax bill is supposed to replace the present legislation which contains 22,000 exemptions that could fill a dozen volumes. I am sure that if he played fair ball and quoted the exemptions that have accumulated over the years, it would be a very entertaining experience.
I have only one question for the hon. member. I think the GST has both interesting and difficult aspects. It is a revised form of an existing tax. Part of the good news, as I told my constituents, is that I am going to wait until the GST is introduced to buy a new car, because as of January 1991, we can expect to pay between $500 and $600 less for a car that costs between $15,000 and $16,000. That is what I tell people. This is very good news.
Am I to understand the hon. member for Ottawa South is against reducing the federal tax on cars? How will he explain to his constituents, who will be glad at the news, that he is against the tax? How can he argue against this price reduction?


John Paul Manley: Mr. Speaker, I have two things to say, first, on the subject of simplicity. The hon. member will have to admit that the minister, not I, said that one of the objectives of tax reform should be simplicity. So my question was: Does this bill reflect the government's desire for simplicity? I haven't read all the difficult parts, the technical parts that apply to the oil sector, for instance. I looked up the parts that apply to music teachers, but if they don't understand the parts
Government Orders
that concern them, we have a problem, if simplicity is what the government wants.
Now about cars, obviously the Conservative Member and his friends always buy new cars. I am just your average Ottawa lawyer, and I usually buy used cars. The hon. member will have to admit there will be a sales tax of 7 per cent on used cars, although at the present time there is no 13.5 per cent sales tax on used cars.

I want to make the point for my constituents in Ottawa South as well, who I know do not always get the translation on this. Yesterday the Minister of Finance tried to make the point that there is going to be great savings on cars. Well, it may be, because we are dealing with an oligopoly and because we know that the big business community is supportive of this tax, whereas the small business community is grossly opposed to it, entirely opposed to it, that there will be a small reduction in the price of automobiles. That happens to be one of those sectors where it is a very short trip from the manufacturer's level to the retail level.
But as the member should know, the manufacturers' sales tax does not apply to the resale of used cars. The goods and services tax will apply to the sale of used cars. So any benefit in the car market to be gained by the goods and services tax is going to be gained by those fortunate Canadians who are still able to go out and buy a new car. We would all love it. And the bigger car they buy, the more they are going to save. But when those little Canadians, like myself and my friend from Gloucester, go and buy a used Chevy, we are going to have to pay the 7 per cent which we did not have to pay before.


Ian Gardiner Waddell: I am tempted to tell the hon. member for Ottawa South that he might consider a bicycle or something like that as he becomes a smaller and smaller little guy or whatever.
He did well to use the example of the music teacher and the details of the tax to show that in fact it is a very complicated tax. That is part of the reason for the great opposition in the country. Certainly amongst the small business community that is one of the main reasons for the opposition.
But I thought he was rather gratuitous in his snide remarks about the NDP. We have been trying to lead opposition to the GST. Rather than being snide about it I

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Government Orders
think he should join it, as he has in his speech, and remember who the enemy is.
As I understand the government's line, the Conservative's line is basically that we have had Liberal governments in this country for almost as long as we can remember except for the last five years, and those Liberal governments ran up a horrendous deficit by mismanaging the Canadian economy, by staying in power, by giving lots of grants, by printing money, spending money, and pretty well spending their way into continued power and eventually it caught up with them.
So there is an allegation of mismanagement by the Conservatives, who have done some mismanagement of their own to the economy. They have basically just continued the program. They are saying to the hon. member that the party which he represents has some responsibility for this GST because the government has to raise money to deal with that past deficit. I would ask him to deal with that.
Second, I would ask him to suggest some alternatives. The Liberals are a funny group. They are like mugwumps. A mugwump is someone who sits in the middle of a fence with their mug on one side and their wump on the other and you never know which way they are going to fall. You do not really know what the Liberals stand for. They can articulate an opposition to something like the GST but they do not know what they stand for. My question is, what are your alternatives to the GST?
Let me ask you more specifically: Would you favour getting rid of the $100,000 capital gains exemption, not on houses and on farms but on stock markets and so on? This would save the government $1.5 billion. Would you be prepared to decrease interest rates by 2 per cent which would save the government $3 billion? Would you consider bringing in a corporate minimum tax like the Americans? This would save another $2 billion. Would you consider a wealth tax in which you could really redistribute some income? You could save $1 billion to $2 billion there.
In other words, you could pick up the money that the government is getting through the GST, which is basically a tax on middle-income families. In my riding of Port Moody-Coquitlam taxes on middle-income people earning from $25,000 to $40,000 have been increased by 60 per cent by this government. People earning over
$125,000 a year have actually decreased their payment of taxes.
We are clear in the NDP what we stand for. We have proposed all these alternatives. What are the alternatives of the Liberal Party to the GST, or are they going to continue to be mugwumps?


John Paul Manley: Mr. Speaker, I think when the hon. member began he asked me to remember who the enemy was, suggesting that it was not he.
After that long oration I would like to go back to the question of tax reform in general. In fact, I spoke on this on an NDP motion day back in the fall. At that time we debated the issue of tax reform on the basis of their motion. I think I was very clear in stating that I believe that general tax reform was necessary and that the goods and services tax reform was not one that represented a meaningful improvement.
I think that is the message that we tried to deliver in preparing the Liberal minority report from the finance committee on the goods and services tax. What we have before us is a proposal by the government to bring in an alternative to the existing manufacturer's sales tax.
Unfortunately, we are not in an election campaign. I wish we were. If we were I would say that our party, as well my friend's party, should be bringing forward specific alternatives to say what we will do if the people elect us. Unfortunately we are not in an election campaign and therefore what we need to do, as opposition, is to focus the debate in the country on this prime question: Is the government's proposal a measurable improvement over the status quo? That is the debate.
I believe that it is not. I believe the people of Canada agree that it is not. But as soon as we start to debate some other scheme of tax without having a good hearing of what the people of Canada think and what they believe that tax reform should look like, we let the government off the hook. We let them try to beat a straw man over the head, some alternative that my hon. friend and his research department have cooked up or what we have tried to put together with the minimal resources that are available to us.
I believe Canadians need to be heard on the issue of tax reform. I do not believe that this government is interested in listening to them. I think if we form the
January 30, 1990

government the next time we will listen to them and tax reform will follow the wishes of the people of Canada.


The Acting Speaker (Mr. Paproski):: The time for comments has expired. Debate. The Hon. Minister of State for Finance.


Gilles Loiselle: Mr. Speaker, I am pleased to take part in this debate on the Goods and Services Tax Bill. This debate is all the more important in that it involves the future of the country, one might say. We are indeed faced with a difficult and complex problem today, because our national debt is about $320 billion. For ordinary people, $320 billion is an almost inconceivable amount, almost unreal and unimaginable. Nevertheless, the effects of the national debt are very real and extremely serious.
To give you an idea of the size of this debt, consider the following: the government must spend 35 cents of every dollar in revenue to repay the debt. The government spends twice as much in interest on the debt as it does on senior citizens. The government spends 15 times as much on interest on the debt as it does on family allowances. Everyone will agree that this situation is not only deplorable it is unacceptable.
Even worse, despite all our efforts in the last five years to reduce expenditures, to improve the management of federal programs and services and to increase tax revenues, the national debt continues to grow. Any increase in the national debt inevitably results in higher interest payments on the debt. Well, Mr. Speaker, to use a famous phrase heard in Quebec in the early 1960s: It's got to change! We must end this vicious circle.
Replacing the present manufacturers' sales tax with the GST is an essential part of the government's program to build a stronger economy in an increasingly competitive world. We want to build a Canada that can meet the demands of the 1990s and the next century, a Canada where the quality of life will improve all the time, a Canada that will be better able to protect the environment and to provide advanced health care, satisfactory social security and quality education. But to reach our objectives, we must have a dynamic, competitive economy. I think that we must pursue two main
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thrusts. First, we must continue to work to eliminate the deficit and growth in the public debt.
Second, we must pursue our efforts to achieve fundamental and consistent economic renewal, so as to give private initiative a free rein and limit government intervention.
During the past years we introduced a policy designed to promote job creation and the kind of investment that brings in new technology.
We have freed key economic sectors like transport and energy from a regulatory nightmare. We have improved patent and copyright legislation so that Canadian investors can obtain fair compensation for their ideas and efforts.
We negotiated a wide-ranging trade agreement with our most important trading partner, to provide our businesses with freer and more secure access to the richest market in the world.
We have played a major role in multilateral trade negotiations under GATT, and we have deployed a strategy for developing trade with the triumvirate formed by the United States, the European Community and the Pacific Rim.
We privatized Crown corporations whose mission no longer responded to the goals of public policy. Most of these corporations have added significantly to the number of jobs in this country and are expanding their operations.
The Canadian Jobs Strategy made it possible to restructure the government's employment programs, with major emphasis on training and preparing Canadians for steady, durable jobs.
We are helping to build the Canada of the twenty-first century. All the measures I have just described will help lay the foundation for durable growth that will generate productive jobs in the future.
The GST is essential to the success of our economic program. It will be a more reliable and more predictable source of revenue and, by stimulating growth, will help reduce the deficit. It will also eliminate the tax on exports, putting Canadian goods on an equal footing with imported goods on our domestic markets.
Implementing our economic program has made it necessary for a number of Canadians to make some adjustments which were not always easy, I agree. It is not

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always easy to cope at a time when the economy undergoes profound changes. Our efforts, since 1984, to reduce the deficit were necer ary to correct the mistakes of the past.
Since 1984, we have reduced the deficit by nearly $8 billion, from $38.3 billion to $30.5 billion this year. In 1984-85, program spending was about $16 billion more than the government's revenue. This year, thanks to improved expenditure management and increased revenues, budgetary revenue exceeds program spending by about $9 billion.
We will continue our efforts to reduce the deficit. According to the plan the Minister of Finance (Mr. Wilson) tabled last April, 1993-94 will be the last fiscal year in which the government has to borrow new money on the financial market.
The bill before us today faithfully reflects the revised GST we revealed in December.
The 7 per cent rate will help bring in a climate of lower inflation, interest rates and deficits and help stimulate economic growth in the coming years.
However, with the GST at 7 per cent instead of 9, it will bring in nearly $6 billion less each year, money which was needed to reduce the deficit and maintain essential services for our fellow citizens' welfare.
The measures announced by the President of the Treasury Board (Mr. de Cotret) will contribute $700 million a year to financing the lower GST rate.
We also made some changes to income tax provisions.
The lower GST rate enables us to reduce the GST credit and still keep our commitment to protect Canadians of modest means. Families earning up to $30,000 a year will pay less in income and sales taxes thanks to the GST. Three quarters of families headed by an elderly person or a single parent will have more after-tax income with the GST.
The refundable GST credit which will be paid four times a year to 8.7 million families and individuals will protect people on low incomes. The credit will be $190 for adults and $100 for children. Single parents will be able to claim an adult credit for one dependent child. Unmarried adults, including single parents, will be able
to claim an additional credit of up to $100 and the first GST credit should be paid in December 1990.
Since the 7 per cent GST is less of a burden on middle-income Canadians, it is no longer necessary, as we had originally thought, to reduce the income tax rate. Even without this income tax reduction, middle-income Canadians will pay less tax.
Mr. Speaker, we also announced that the surtax on high incomes would be increased and that it would be extended to the basic federal tax on $12,500.
We have also asked companies to carry their share of the load. For example, corporate taxes will go up and the annual fees that were to be paid to small businesses to administer the GST have been eliminated. However we want to help small businesses adapt to the new system, so they will be entitled to a one-time credit of up to $1,000.
Sales and excise taxes on alcohol, tobacco and fuel will be readjusted to maintain them at their current level.
With respect to housing, the GST will apply only to new houses. The GST housing rebate has been readjusted to take the lower rate into account and will enable the government to honour its commitment to give Canadians ready access to houses at affordable prices.
Mr. Speaker, I do not know anybody who likes taxes. The introduction of a new tax is never popular even if the new levy replaces so ridiculous and destructive a tax as the current manaufacturer's federal sales tax.
Of course this initiative is not aimed at pollsters.
Its purpose is to make Canadians more prosperous and the tax system more equitable. It will eventually rid Canadians of the ever heavier public debt burden and put Canadian companies on the same footing as their competitors in this country and abroad.
Mr. Speaker, now more than ever before is the time to take action.
A modern country such as ours whose economic growth depends on international trade cannot afford the luxury of maintaining a tax system designed for the conditions and circumstances which prevailed in the 1920s. On the eve of the 21st century, how can we possibly hope to stay competitive with a regressive and harmful 66-year-old sales tax!
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Look around you, you can always find people in favour of the status quo. Either they fail to understand, or they are not unduly concerned over the national deficit and the problems related to the current federal sales tax.
Others will concede that the GST should indeed be adopted, provided some major changes are made to our project. The problem we are faced with stems from the fact that there is no consensus on the changes to be made, each interest group having its own homemade solution to propose.
The Official Opposition was satisfied with playing hide and seek with Canadian taxpayers over this issue. Its representatives have stated that they are unconditionally against the GST project, without suggesting any acceptable alternative. In existential terms, we find ourselves on this issue in what I would call the Liberal void.
The New Democratic Party, on the other hand, has proposed several measures, including the possibility of setting up a Royal Commission of Inquiry. What an original and radical solution, Mr. Speaker!
As you know, people have been looking into the problems associated with the manufacturers' sales tax for the past 50 years, but the NDP would like them to continue for several more years. Also, the NDP proposes to reduce by 33 per cent the manufacturers' sales tax. Yet, it makes no effort to explain how we are going to replace these millions of dollars, except by increasing corporate and individual income tax. The NDP proposes a minimum tax of 20 per cent on corporate profits. According to its estimates, this would bring in $5.4 billion, based on the total benefits of $27 billion reported by the corporations over the reference year. Simple, is it not? But look out! These $27 billion in alleged profits are misleading data. This figure is the total of a double accounting resulting in an inflated base for a minimum tax. This figure includes a substantial amount made up of already imposed inter-corporate dividends.
Moreover, this figure reflects in part the incidence of accelerated depreciation which, to a large extent, is being eliminated as a result of the tax reforms adopted in 1988. Finally, a significant part of this figure is related to various incentives for research and development, as well as regional development, measures which the three
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parties, including the NDP, consider important for the future of Canada.
These figures apply to the tax year 1987 and do not take into account the fact that the tax reform on large corporations has already increased corporate taxes by $2 billion. Moreover, the Minister of Finance (Mr. Wilson) announced in December a new increase in tax on large corporations.
In this respect, Mr. Speaker, it must be kept in mind that only 3,500 large corporations are subject to the large corporation tax. When the NDP referred to tens of thousands of profitable businesses that do not pay tax, the large majority are small businesses. Small businesses would be the hardest hit by the 20 per cent minimum income tax proposed by the NDP. Do the NDP propose that the government add an extra 20 per cent to the 12 per cent income tax already paid by small businesses? That party claim they support small businesses. They are strange bedfellows Mr. Speaker! The NDP claim they are the small businessmen's friends. What is an odd kind of friendship, Mr. Speaker! As they say in English with friends like the NDP, who needs enemies?
That kind of proposal, Mr. Speaker, brings nothing but serious trouble for the Canadian economy, especially for our regions, quite apart from its negative impact on small businesses.
After 50 years of studies and discussions on the federal sales tax, after two and a half years of review and debate on the concept and the details of the GST, after months of hearings and discussions in committee and a detailed committee report, the time has now come to proceed with our sales tax reform proposal.
In conclusion, Mr. Speaker, the bill now before us is the result of a long process of reflection and consultations with every walk of life and every region in the country. This proposal is essential if we are to have a healthy Canadian finance, a strong and growing economy, a fairer tax system.
For those reasons, Mr. Speaker, I am proud to support this legislation because it is one guarantee of a prosperous and dynamic future for every Canadian man and woman.

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Leonard William (Len) Taylor: Mr. Speaker, I note that the motion on the floor right now is for a six-month hoist which has been put forward by the Liberal party. Although the minister spoke strongly in favour of the goods and services tax, he did not really address the matter of postponing the introduction of the tax or the implementation of debate on the goods and services tax for six months.
I am wondering if the minister is aware of this. I know that ministers are often busy and do not have a chance to read the newspapers as regularly as some of those without as much responsibility. He may be aware that a Liberal leadership race is on in the country and that there is a considerable amount of assistance in moving this legislation through the House by the Liberal Party. Yet the Liberal Party continues to express a considerable amount of verbal opposition to the goods and services tax.
With that said, may I ask the minister if he thinks the Liberals may have proposed this motion for a six-month hoist at this time because they are looking forward to the conclusion of the leadership race after which, under a new leader, they can change their minds and support the goods and services tax?


Gilles Loiselle: Like all ministers, of course, I never read the newspapers. I say that as a former newspaper reporter. I know that one edition frequently erases the previous day's edition. I do not take it as seriously as some of my colleagues.
I am also aware that there is a Liberal leadership convention to be held. It is a veiy good democratic exercise. I follow it with care because I think it is important for the opposition to organize itself. So far it has not proven to be very well organized.
In its opposition to the GST in particular, I have heard a lot of-I would not say nonsense because I suppose the word would not be welcome-views put forward even today which are far from the reality of anything we have in mind or anything we are doing.
I refer to the elderly and tourism. I am more convinced than ever that a major effort to provide information is required. We have a responsibility to provide that information. We will, of course, make every effort so that our
friends across the floor will understand what we are doing.
It is a modem tax. What they call a tax grab is something that 48 countries have implemented as a mechanism to address government revenue. So it must not be so out of this world. Yet, on every aspect of it, we hear opposition.
We have had a white paper, technical documents and debate. We will have more debate. We will discuss this at length with our friends in the House and we will go ahead with it. The GST is needed. We must make sure that the present manufacturers' sales tax, the greatest disaster as far as fiscal framework is concerned, is removed so that our industries can develop, so that jobs can be created and so that we can compete in this very difficult world.


M. Douglas Young: Mr. Speaker, I listened with interest to the comments of the minister on the goods and services tax. I am surprised at the Suggestion that maybe the opposition is not well organized in terms of how we are dealing with the GST.
I would suspect that the minister would be impressed by the fact that after dropping the rate from 9 per cent to 7 per cent opposition in the country has increased. I think what the minister fails to understand is that the people of Canada are leading the fight against the GST.
It is all well and good for politicians on all sides of the House to have their views. They perhaps may not share all the same views. But the Canadian people have decided that they are opposed to the goods and services tax.
I would like to ask the minister if he is satisfied that the government is well organized in putting forward its tax reform dealing with the GST and the supposed reform of the income tax side of the equation. We were supposed to see the disappearance of the surtax on income tax. We were going to see a reduction in the rate for middle-income earners.
Is the minister as pleased with the over-all effort that has gone into the GST as he is with his reform of financial institutions?
One has to be very careful about suggesting that the opposition is not getting its act together in terms of proposing alternatives when the minister in his own responsibilities is sitting back while the institutions involved in the financial sector in this country are hanging by their very nails. They are grasping for some legislation, something that has been promised for at least



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a year or a year and a half. I want to hear from the minister about getting acts together.


Gilles Loiselle: Mr. Speaker, the hon. gentleman has covered a lot of ground in a very little time. I quite see his point.
As far as financial institutions are concerned, I will not go into that. I am still committed to introducing such legislation. I must tell him that we have already moved in many areas, areas such as the securities area and so on and so forth. This is where we are way ahead of other countries. I would not say that all of the institutions are waiting and hanging on by their nails. That would be far too strong. I know that they are anxious to get our legislation, and they will get it. I hope to be able to table it shortly.
As far as the Canadian people are concerned, I, like the hon. gentlemen in this House, am frequently in touch with the population. That is why we are in politics. I meet them frequently. Obviously, in my capacity as Minister of State for Finance I deal with the GST all over Canada but particularly in Quebec. I have met dozens and dozens of groups which at the outset, after having listened to the messages that come from the other side of this House, have a veiy negative approach.
In any case, a tax is never popular. Tax reform is never veiy popular. Everybody sees the government putting its hand deeper and deeper into your pocket.
When you speak with them and calmly explain to them why you are doing it, my conclusion is that they understand very well. Of course it would take a long time to go around meeting small groups of 75,100 or 200 people, so you need to use a better means of stating what you are going to do. Very often the opposition is based on false information.
I am confident that gradually, slowly, the over-all situation is changing. I will not say that it is a popular subject. I personally share the view that taxes are not necessarily a pleasant thing to discuss.
As far as getting our act together, we know what we would like to do ideally. I think we have taken very strong measures over the years, and we are taking one now. Nobody will suspect that we are doing this for electoral reasons. We are doing it because we are deeply
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convinced that it is good for the country. Nobody would claim that we would do it if we were convinced that it would, as members of the opposition say, throw our economy into a turmoil. How can we at the same time gouge everybody, make a lot of money and then throw the economy into a turmoil?
We are convinced that this is a very good way of proceeding. It is very good reform. It is good for the economy. It will create jobs. It is a modem way of arranging our affairs so that we can free the forces of our industry which are there waiting to prosper.


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


Nelson Andrew Riis: Point of order.


The Acting Speaker (Mr. Paproski):: I will recognize the hon. member on a point of order after I announce the proceedings on the adjournment motion.

It is my duty, pursuant to Standing Order 38, to inform the House that the questions to be raised tonight at the time of adjournment are as follows: the hon. member for Thunder Bay-Atikokan (Mr. Angus)-VIA Rail; the hon. member for Ottawa South (Mr. Manley)-Social programs; the hon. member for London East (Mr. Fontana)-Proposed goods and services tax.


The Acting Speaker (Mr. Paproski):: On a point of order, the hon. member for Kamloops.


Nelson Andrew Riis: Mr. Speaker, I listened with interest to my hon. friend, the minister, who is I must say a very experienced politician and parliamentarian. He had some very interesting comments to make. I enjoyed his speech.
I know that we cannot refer to the absence of members in the House, but I would think that there would be more members of his own party interested in what he had to say. I was going to call quorum, but I think that since there is now just a bare quorum I will not do that.
On a second point of order, the minister referred on a number of occasions to documents from which he quoted. I wonder if he would be interested and prepared

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to table those documents that he referred to during his intervention.


Gilles Loiselle: Mr. Speaker, I must admit that I do not know which document the hon. member is referring to.


The Acting Speaker (Mr. Paproski):: There does not seem to be any documents.
The hon. member for Sudbury has the floor on debate.


Mrs. Diane Marleau (Sudbury):: Mr. Speaker, I speak today against Bill C-62 which is an act to implement the goods and services tax.
The hon. member who just spoke, the hon. Minister of State for Finance, used the term "reality". Yesterday in his speech the hon. Minister of Finance said that this tax was based on a vision, and I quote: "-a vision deeply rooted in reality". I say to you that the assumptions which the government uses for its projections are not based on the economic realities of day-to-day life in Canada.
The Government of Canada has based its arguments concerning the GST on certain assumptions. The first assumption is that the Governor of the Bank of Canada will not raise interest rates when faced with the inflation that will be caused by the application of this tax. Even the members on the government side agree that there is going to be inflation with the introduction of this tax.
We all know that the Governor of the Bank of Canada hates inflation and is purposely, right now, keeping the interest rates high to battle that inflation. When the GST is imposed there will of course be a dramatic rise in inflation. What do you think the Governor of the Bank of Canada will do? All indications are that he will raise the interest rates. That is reality.
The second premise is that workers in Canada will not ask for wage increases because of the advent of this tax. I do not know where the hon. Minister of Finance and his workers live, but I know one thing. It is an automatic response of people who wish to keep up with the cost of living. Not only is it an automatic response, it is a necessity. Of course every employee in Canada will try to keep up with the cost of living and will ask for a raise. That is reality.
The third premise that is used with the projections is that all manufacturers will remove the 13.5 per cent manufacturers' sales tax from their prices, this same manufacturers' sales tax which is buried in their prices right now.
The government puts great trust in the theory of free market economics and competition, believing that firms will be forced to pass their savings on to consumers in order to keep their prices competitive against the price of competitors who use the opportunity to lower prices. This may occur in those markets which are perfectly competitive, but reality shows us that most markets here in Canada are not perfectly competitive.
Indeed, many representations were made to the finance committee to the effect that that would not be the case. Mr. Mezon of the Automotive Industries Association told the committee in October of 1989:
-it is going to be very difficult for most manufacturers to pass that along. It is an opportunity to pick up some profits and that is exactly what is going to happen-I think most manufacturers will look at it as a windfall, and that will add to the inflationary effect.
The Montreal Board of Trade also told the finance committee in October 1989 that faced with rising costs due to the sudden increase in inflation, firms would choose not to pass along savings to consumers. That was taken from an article printed in The Gazette of Montreal.
Indeed, past experience in Canada indicates that the inflation rate of the price of manufactured goods and all items increased after the manufacturers' sales tax was reduced by 3 per cent in 1978. This would suggest that consumers did not receive all of the savings.
Consumers will be left unprotected,. Canadians have absolutely no assurances that they will not be overcharged when they purchase a good after the application of the GST.
They tell us that they are going to set up a mechanism as sort of a watchdog. However, this watchdog will have absolutely no powers to stop gouging. All they can do is report. What use is it six months down the line to find out that you were overcharged? We want to make sure that we are not.
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Not only will prices remain high and not decrease in the fashion predicted by the Conservative government, but the 7 per cent will cause an increase in the final price to the consumer. That is reality.
The other reality which this government seems to forget is that this country is a vast and very different country. It has many regional areas that are cut off from the major centres. There are great distances that one must travel. One must transport goods. The GST gives absolutely no notice to these distances or these regional differences.
Take the fact that the GST will apply to the cost of heating your home. Cold is a reality in this country. The GST will cause a significant increase in the heating bills of Canadians. It impacts far more severely on those Canadians who live in the north or on Canadians who live in some of the Atlantic provinces where the cost of transporting fuels adds greatly to the cost of heating homes.
I have before me a Statistics Canada report. It is a family expenditure survey of selected cities. This was done in 1984.
This survey states that in 1984 the cost of heating the home of the average Canadian family in St. John's, Newfoundland in one year was $1,522. That was in 1984. Realize that this is 1990 and it is much more expensive today than it was then. These are the figures and the year that I have for them.
It costs the same average household in Ottawa or Toronto approximately $825 to heat their home in 1984.
If you take 7 per cent and add it to that cost of heating the home for one year in 1984, for the people who live in St. John's, Newfoundland it means an additional cost of $107. For the people who live in Toronto and Ottawa it means an additional cost of $58.
You can see the impact of this tax. It is far greater for those areas such as St. John's, Newfoundland-and we have not even touched on areas like Yellowknife, Whitehorse and Iqaliut. Those people spend three and four times what we do to heat their homes. That is reality. No one has taken that into consideration. What is that going to do to families in those areas?
The tax does not take into consideration the kinds of discrepancies which occur normally in this vast land of ours. Is there not a method, some kind of mechanism to equalize the burden across these regions of our land?
Is the government forgetting the outlying regions of our country? Home heating in a country such as ours is a necessity. It is as much a necessity as basic groceries, and yet this government has zero rated groceries. Is there not some way that this government could consider zero rating the heating fuel which is so necessary to each and every one of us?
Another consideration is the imposition of the GST on transportation costs. That will hurt every outlying region, every region that is removed from the major centres. It will hurt progressively; it will hurt more as one moves away from the centres. Those who are the farthest will be hurt the most.
Distance is a reality in this country. Size and geography have always made transportation of goods and people a challenge for Canadians and therefore is a major consideration in the economy of our nation.
Transportation is a lifeline for outlying regions. These outlying regions must ship products and raw materials to markets in the populated areas and receive supplies and manufactured goods from the same populated areas. The cost of living in outlying regions is higher than the cost of living in major population centres because of the need for transportation of food and manufactured goods.
The people in Sudbury understand what the cost of transportation means. The people of Canada understand what the cost of transportation means. According to the Atlantic Provinces Transportation Commission, the imposition of the GST is contrary to one of the sections of the national transportation policy. It appears as if this government has totally overlooked the kinds of policies that are already in place. Perhaps the government should go back and check the national transportation policies and find out whether this particular GST conforms to the policies of this government.
The proportionately higher transportation costs in regions located farther from the major markets and sources of supplies will mean that goods manufactured in these regions will be less attractive because of the higher costs involved in shipping a product from a remote area to the market centre than the cost of purchasing a

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product manufactured within the major market centre. What that means to regional development is a terrible blow. How can we expect industries to locate in these regions if we are now going to add a transportation cost tax which will make their goods less competitive?
Some will say to me that they can bring in their transportation tax and get a refund on the input and so on. What it happens, though, is that additional cost of transportation gets added on to the final price of the good and the good is more expensive because it must be taxed at full retail value. Not only is the good taxed at retail value in this case, but nine out of the ten provinces will turn around and tax it with a sales tax.
I really wonder what is happening. Are people from this government forgetting that there are many regions in this country in desperate need of regional diversification? The Atlantic provinces are having some problems. Northern Ontario has a number of mines closing down. How does the government expect these regions to come through if every time they turn around they are being hit by an additional tax?
The GST, as far as the people of Sudbury are concerned, and I am sure the people of the other regions of the country agree, will become a tax on distance. That is reality.
We have talked a little about simplicity. The government had said that this tax would be simple. I have news for this government. When flying to Ottawa the other day I looked at a magazine on the plane and saw an advertisement. The ads are already starting to appear in which a major accounting firm is saying: "Come on in so we can help you plan for the complexity of the new sales tax that is going to be put into place".
Everyone else understands the complexity and the difficulty that people will have in adhering to this tax. Why can't this government understand it? It is certainly clear to everybody else. How can it be more simple when we are going to have a tax and then another tax.
The government says that it is going to be visible. If there is a little sign somewhere in a store that says "the price includes the goods and services tax", is that visible? You are really going to know a lot about the tax! Ask the
small business people in your communities what that will do.
I walked into a men's clothing store not long ago and the people there were appalled at the amount of extra work that it would cause them. This store is not computerized. It is just a normal store and people do not buy computers for a normal store. The work is done by hand.
These people are going to have to add the goods and services tax to the price, and then they will still have the sales tax to deal with. The owner of the store said to me: "What happens, Diane, when people have less money? The first thing they stop buying is suits and then I stop making money. Then I have problems and I have to start laying off some of my people because I cannot keep them employed", and so the story goes on. That is the reality of what is going to happen with this goods and services tax. The tax will impose further hardship on low income Canadians. There is no getting away from that. When you do not have any money and you have to pay more, it is bad.
Government members are trying to lull Canadians into believing what a bunch of good guys they are: "We are going to give you a tax credit". What they are forgetting to tell Canadians is that they are not fully indexing this tax credit. Therefore, after five years, many of the 500,000 Canadians who did receive the tax credit will no longer qualify, and those who do will have a much reduced amount of benefit.
I will state one thing: when the government brings in this new law in regard to RRSPs, it is planning to index fully the amount of money that rich people can invest in RRSPs. Therefore the government understands the reality of fully and partially indexing. If that reality is understood, perhaps the government would consider changing that portion and fully indexing the credit to low income Canadians.
I ask this government to scrap this bill, go back to the drawing board and come up with a whole new plan. The government's assumptions are flawed. The people of Sudbury and indeed the people of Canada ask the government to get in touch with reality, the realities of this country, and come up with something that will help the people of this country.


Leonard William (Len) Taylor: Mr. Speaker, it gives me a bit of pleasure to be able to stand and ask the member a question. I was quite taken with the speech that she made opposing the goods and services tax. I am certainly very appreciative of
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any words that are spoken in this Chamber, particularly for the government's benefit, when they are spoken against the goods and services tax.
The New Democratic Party has stated quite clearly that we as a party are opposed to this tax. We understand that Canadians are opposed to this tax. The polls are very clear on this point. Canadians are also opposed to the damage that this tax is going to do to our economy in the long term, which is something that this government has failed to address.
We in the New Democratic Party have informed the members of this Elouse and Canadians from coast to coast that we are not going to co-operate with this government in any way to help it, using its majority in this Elouse, to implement this horrible and regressive tax without concern or regard for the well-being of our country.
My question to the hon. member who just spoke is essentially to do with that matter of co-operating with the government to ensure that this goods and services tax somehow gets implemented. Canadians are frustrated. They want members of Parliament to be able to stop this tax. They do not trust this government any longer, and they want this tax stopped at all costs.
Could the hon. member tell me why is it that the Liberal Party objects to what might be the only way to stall the implementation of this tax until the Tories across the way start listening to Canadians? Why is it that the hon. member does not join in this fight to stop this tax instead of helping the government get its way and get this tax implemented sooner than Canadians would want, if at all?


Diane Marleau: It is very obvious that the hon. member to my left has been reading the polls and it does my heart good. They have been reading the polls where they have dropped 5 per cent. We are way up there and they realize that we are the enemy. I really thank him for giving us all of the credit. I love it. Keep up the good work.
As far as we are concerned, we are opposed to this tax, but we are very prepared to have good, constructive debate. We want to tell the people of Canada just how bad this tax is. We do not want to play little games so that
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we do not get a chance to make our speeches and inform Canadians of what we really feel.
All members to my left want to do is delay and delay, and we know what will happen. After a certain number of hours the government will call the vote and bring in closure, and we will not have had a chance to give the Conservatives a run for their money. It is important that the people of Canada have us stand up for them and put forward very reasonable, rational arguments for the government not going forward with this goods and service tax.


Mr. Simmons:: Mr. Speaker, I want to congratulate my colleague and friend from Sudbury, not only for laying out so well and so articulately our position against the goods and services tax, a speech by the way that she should mail to every Canadian who did not have the good fortune to be watching when she was speaking today-


John R. Rodriguez: Save the taxpayers' money.


Roger Simmons: And still NDPers mumble. They are frustrated, Mr. Speaker, and I come to my second point.


Arthur Jacob (Jake) Epp: What was the first one?


Roger Simmons: My first one, and I challenge anybody over on my left to disagree, is that the member for Sudbury has just put very forthrightly the case against the goods and services tax. Her speech was much better than any tantrums, any bell ringing or any stomping out of here can ever achieve.


Arthur Jacob (Jake) Epp: We will keep you to those words.


Roger Simmons: Second, I say to the gentleman from Provencher who was party to that despicable 15-day bell ringing some years ago that he too could take a lesson from what the member for Sudbury said in her response to the gentleman in the NDP.
We in this party intend to oppose vociferously at every turn this goods and services tax. I am with her 100 per cent on the tactic that she advocates and we are following. We are going to do it by standing here in this Chamber, until that crowd over there cuts us off, telling the story of why we are against the goods and services tax.
If his question to her and to us is: "are we going to throw childish tantrums" the answer is no. I rise to compliment my friend for saying that and saying it so

January 30, 1990
Government Orders
well, we will keep up the fight. We will not throw childish tantrums.
Perhaps the member would like to comment on my comment.


The Acting Speaker (Mr. Paproski):: Maybe she would. The hon. member for Sudbury.


Diane Marleau: I certainly would because I feel that the government members have to face reality.
I do not know what kind of lives they have had before, but I can tell them about my past experiences. I was raised by a single mother. I know what she went through to make sure that I had clothing and shoes. I also know what will happen now when a single mother goes to buy a snowsuit or a pair of shoes for her children. She will have to pay more because of this tax. Even more so-and I know because I was born and raised in the town of Kirkland Lake which is far from major centres-we paid more for goods. They still pay more for goods because they are away from a major centre.
I have lived in Sudbury for the last 27 years of my life. We have lived through some ups and downs. When it comes to regional development, we care very deeply about what happens. We care because transportation is key to our regional development. We do not want to see a tax on transportation because we understand that it will make life more difficult for us.
We also know that it costs a lot of money to heat our homes because it is cold in Sudbury. People in Sudbury understand that kind of thing. Perhaps hon. members on the other side of the House should come and visit. Perhaps they should go a little farther north to Kirkland Lake, Moosonee, or Iqualuit and find out what it is really like to be cold, and then return and tell those people that they are going to love this tax, that it is so good for them. Come on, get your head out of the sand. Go on a tour and find out what people really think about your tax.


John R. Rodriguez: Mr. Speaker, I listened to the speech of the hon. member for Sudbury. It was all very negative. It all outlines what the Liberals are against. All I have been hearing from the Liberals is how terrible the GST is.
A party like the Liberal Party owes it to Canadians to tell them exactly what they propose to put in place of the unfair manufacturers' sales tax. We agree that the
manufacturers' sales tax is unfair and discriminates against Canadian exports. We have no problem with that.
In order to fulfil our responsibility and always to give options to Canadians we tabled a minority report. It is not a question of hooking the government. It is a question of laying before the people of Canada an alternative if we are opposed to it: why we are opposed to it and what we propose to put in its place. This is what we have done on this side of the House.
All I hear from the Liberals is the same nonsense I heard from Pierre Trudeau when he argued against Robert Stanfield's wage and price controls, until he got into office and then he put them into place. I say to Canadians: "Beware of members of the Liberal Party. They are wolves in sheep's clothing".


Diane Marleau: Mr. Speaker, the hon. member to my left has obviously stepped into the trap and is prepared to debate his alternatives rather than keep that particular government, the Conservative government, on its toes defending what it proposes. I intend to keep after the government until the next election.


Mr. Rene Soetens (Ontario):: Mr. Speaker, I rise today and am pleased to join in this debate on the goods and services tax.
A headline in The Toronto Star of November 30 probably outlined very well some of the concerns I have heard expressed today and on previous occasions. This is from The Toronto Star, a well-known newspaper that is known for its support of many good Toiy policies. It states: "A lot of nonsense is being spouted against the goods and services tax".
I have listened to the debate, not just here but in the finance committee of which I am a member. I must concur that sometimes The Toronto Star states its view very eloquently on the issue and did so very well on that particular instance.
The reason I start out with that particular point of view is that one of the problems the government is having in trying to convince Canadians of the value of the goods and services tax is the misinformation that is being disseminated. Maybe it is not purposely, but somehow it does get out.
For example, One Voice, the Canadian seniors network, sent an article out to its members which it kindly provided me a copy of. On page 9 it lists some things that might be taxable under the GST legislation. It lists water. It lists the telephone bill but does not talk about the
January 30, 1990

removal of the telephone or communications tax. It lists transportation but does not talk about the input tax credits on fuel costs. It lists insurance and a whole series of other things, many of which are not taxed at all. It is no wonder that Canadians are somewhat confused when they get information of that nature.
A communique released on January 22 by the New Brunswick Senior Citizens Federation states: "Axe the tax Boycott G.S.T." On page 4 its lists some of the things that are taxable. Under utilities, it talks about water.
The legislation is very clear. Water is not taxable. It also talks about music lessons. Very clearly, music lessons are not affected. It talks about insurance. Very clearly, insurance is not taxed. It talks about the price of a $10,000 car but does not mention at all that with the removal of the existing federal sales tax that $10,000 car will cost less. It simply adds the GST to the existing $10,000 price.
With erroneous information like this being disseminated across Canada, I do not wonder that a lot of Canadians are opposed to it. If I received information like that from people I trusted I would be upset too. Now I know that they are wrong and I hope that Canadians who are listening will in fact get the correct information.
Not all Canadians are spouting negatives. There are some who are very positive. I have here a September editorial from Business News which was distributed in the Oshawa area that has been traditionally known as NDP country. It states:
Go for it, Mike.
And if there must an increase, then a sales tax seems as fair a way to implement it as any. All the necessities will not be taxed -food, rent, day care and health services will all escape the tax-so those who are just getting by will not be affected much, if at all. Instead, it would appear, those who consume the most will pay the most. Isn't that the ideal for taxation -
This is from an editorial in a newspaper distributed in Oshawa.
I might add that recently I spoke to the Oshawa Chamber of Commerce. Oshawa is not my particular riding. It is a vacant riding at the moment in that it is not represented by a member of Parliament. At the Oshawa Chamber of Commerce where I spoke there was a poll taken of all the members who were present. I did not choose the members. I know that many of them came to
Government Orders
oppose the very thought of my speaking on the goods and services tax, yet 43 per cent of them were in favour. My caution to the NDP and their colleagues is that pretty soon there is going to be a by-election. We will take 43 per cent in Oshawa any time, thank you very much.
Having said that, I would like to get on to the issue of the federal sales tax. We seem to be ignoring the whole concept of the fact that the federal sales tax is there and that it is being eliminated. Many of the speakers we have heard in the House of Commons, particularly in the Opposition, talked about the impact of the GST and totally forgot about the elimination of the existing federal sales tax.
Let me tell the House what some people who appeared before the finance committee have said. Many of these presentations would not necessarily be talked about in public, at least not by the Opposition.
For example, when the Metropolitan Montreal Chamber of Commerce appeared before us on October 11, it very clearly said, and I quote: "We would first like to reiterate that we support the elimination of the present federal sales tax which is probably one of the worst taxes in the world. It promotes imports and impedes exports."
One has to acknowledge that the National Chamber of Commerce appeared in front of our finance committee hearings and said something somewhat different. As we travelled across Canada, whether in Vancouver, Edmonton or Manitoba, as we travelled west and went down east, it is noteworthy to recognize that individual chambers made the point very clearly. They agreed with the elimination of the federal sales tax. They also agreed with the implementation of a value added type tax like the goods and services tax.
So that you do not think we only had business speak to us in favour of the elimination of the federal sales tax, Mr. Speaker, we also had some friends of the NDP appear before us. In fact, on October 10 the National Director of the United Steelworkers of America appeared before us. Here is one of his comments which I will quote verbatim: "We support the elimination of the manufacturers' sales tax. In a country whose manufacturing economy is under constant pressure, it makes no sense to have a tax system that biases the internal economy in favour of service providers. And, in an economy as heavily dependent on trade as Canada is, it

January 30, 1990
Royal Assent
makes no sense to impose what amounts to a tax on exports or manufactured goods."
That is what we have been saying on the Conservative side. That is what the finance minister has been saying. I find it rather disturbing that here is a major industrial sector across Canada, literally in every province, represented by a very large international union saying: "Get rid of the federal sales tax" but I have not heard a word, not a peep, from the NDP about the fact that one of their supporters is in favour of the elimination of that tax.
There are a whole series of other reasons why we should eliminate the tax. So far I have addressed comments from people who are not predominantly present in my riding. I do not think that the message of the diversity of people across Canada who agree with what we are doing is getting out. For example, we had appear before us Mr. Allen Hills of the Canadian Federation of Farm Equipment Dealers who stated: "A tax system that involves exceptions and exemptions, based on government definitions of who is and who is not, will quickly degenerate to the same situation we have today as we try to administer the current federal sales tax mess. That is part of the reason I say the current system is a mess or a nightmare."
He goes on rather extensively describing the problems of the existing federal sales tax. He also says that the worst thing we could do with the new goods and services tax is implement as many exemptions as presently exist under the federal sales tax.


John R. Rodriguez: Mr. Speaker, I rise on a point of order. I have been listening to the hon. member go through his speech. He mentioned the National Director of the United Steelworkers and read statements from Mr. Docquier with respect to the manufacturers' sales tax.
I thought maybe I had not got it right so I went to check on this matter. Mr. Docquier agrees with us that in fact the manufacturers' sales tax is unfair. He did not read into the record the conclusion of Mr. Docquier which is that he does not agree with this regressive, mish-mash tax that the government has put forward. Why did the member only quote part of the presenter's statement? Why not state the whole story, that he does
not agree with what the government has proposed? That is why we have proposed alternatives.


The Acting Speaker (Mr. Paproski):: The hon. member will have 10 minutes left plus 10 minutes questions and comments the next time the bill comes up.


MESSAGE FROM THE SENATE
Mr. Speaker:: I have the honour to inform the House that a message has been received from the Senate informing this House that the Senate has passed the following bills without amendment: Bill C-4, an Act to amend the Energy Supplies Emergency Act and to amend the Access to Information Act in consequence thereof; Bill C-12, an Act respecting Museums; Bill C-13, an Act to authorize the divestiture of Nordion International and Theratronics International Limited; and Bill C-31, an Act to amend the Governor General's Act.
Also, I have the honour to inform the House that a message has been received from the Senate informing this House that the Senate has passed Bill C-ll, an Act to restructure the Eastern Canadian Synod of the Lutheran Church in America under the name of Eastern Synod of the Evangelical Lutheran Church in Canada to which the concurrence of this House is desired.



THE ROYAL ASSENT

The Acting Speaker (Mr. Paproski):: I have the honour to inform the House that a communication has been received as follows:
Rideau Hall Ottawa
January 30, 1990
Sir,
I have the honour to inform you that the Honourable John Sopinka, Puisne Judge of the Supreme Court of Canada, in his capacity as Deputy Governor General, will proceed to the Senate Chamber today, the 30th day of January, 1990, at 5 p.m., for the purpose of giving Royal Assent to certain Bills.
Yours sincerely,
Jean M. Sevigny Deputy Secretary, Operations
January 30, 1990


The Acting Speaker (Mr. Paproski):: It being five o'clock, the House will now proceed to the consideration of Private Members' Business as listed on today's Order Paper.



PRIVATE MEMBERS' BUSINESS


Mr. John E. Cole (York- Simcoe) moved: that Bill S-9, an Act to amalgamate the two corporations known, respectively, as The Governing Council of The Salvation Army, Canada East and The Governing Council of The Salvation Army, Canada West, and to make necessary provisions regarding the charter of the amalgamated corporation, be read the second time and referred to a legislative committee.
He said: Mr. Speaker, I rise today to sponsor the Private Member's Bill S-9, which will amalgamate the two governing councils of the Salvation Army, Canada East and Canada West, in order to streamline their corporate operation. At the present time there are two separate corporations, each administering the property, business and other affairs of the Salvation Army in Canada.
The original governing council of the Salvation Army in Canada was incorporated in 1909. In 1916, the governing council was separated into an eastern and western corporation. At that time it was appropriate for separate corporations because transportation and communication was not as simple or as convenient as it is today.
They have now reached a point where the sophisticated advances in telecommunications and the improvements in transportation make the administration of two corporations unnecessary. The most efficient and convenient way to administer the affairs of the Army is from one central point. Currently, Winnipeg is the home of the Canada West governing council or the legal head office of the Army, while the affairs of both governing councils are administered from the head offices in Toronto.
Private Members' Business
The proposed legislation would amalgamate the two corporations in the same manner as that provided for in the case of corporations incorporated under general corporate legislation by amalgamating them and continuing them as one corporation. Actually, the legislation will simply give what is a reality now a legal entity.
Currently each corporation has five designated officers of the Army as its members, who are the same people in each case. The only identifiable difference between the corporations is their geographical location. The process of amalgamating the two corporations will be relatively simple, given that no new corporation will be formed. There is no transfer of property and the corporations are identical in nature.
In order to ensure their ongoing governance, Bill S-9, provides that the original act of 1909 and the act of 1916, which applied to the governing council of the Salvation Army, Canada East, as well as the by-laws of the governing council of the Salvation Army Canada East will apply to the corporation once amalgamated. The separate statute which incorporated the governing council of the Salvation Army, Canada West, will be rescinded.
As the law requires, notice of the intention by way of a Private Members' bill in Parliament to seek this one continuing corporation has been published in The Canada Gazette and in the appropriate provincial gazettes. It has also been published in two national newspapers, one in each official language.
This bill, therefore, seeks to give legal substance to something that has been an operational fact for some time. I would like to stress the importance of the support of members in this House for the bill. In doing so I would like to take a few minutes to speak about the Salvation Army and what it means to our Canadian community.
I have always marvelled at the selflessness of these men and women of the Salvation Army whose entire careers are devoted to making life more liveable for others. They seek not glory nor attention. Theirs is a hands-on ministry. They minister directly to those in need and they minister to the needs of the whole person.
What exactly is this movement; a church, a denomination, a charitable enterprise, a social service agency with paramilitary structure? It is all of them and it is none of

January 30, 1990
Private Members' Business
them. It is, as Arthur Meighen once described it, "a vital, spiritual force with an acute social conscience".
In this day and age of super sophistication and cynicism, it is good to find that there are still those whose real reason for being is to help their struggling neighbour.
The Army has changed quite significantly in its 107-year existence in Canada, as it has elsewhere. Yesterday's Army was small, struggling and evangelical. Today's Army is something quite different, but the zeal has diminished not one iota. The desire and determination to make a difference for the better are as alive as ever.
But the Army today is apolitical and conservative in nature. It takes no sides, endorses no candidates and refrains from attacks on the status quo. Nevertheless, governments at every level are pleased to be able to work closely with the Army on social work projects that benefit every segment of society. They realize the efficiency and effectiveness of this operation and they appreciate the devotion, determination and common-sense of the Army.
These are not social scientists with grand schemes to solve all the problems of mankind. These are not social workers with files and programs to minister to people's needs. These are not specialists who will only look to one area of hurt. These are the practitioners of a holistic medicine of the soul. They seek to help the whole man; body, mind and spirit. They are down-to-earth, well trained men and women who lead exemplary lives themselves. They prefer to deal directly with human suffering, treating each case individually and tailoring the help to the problem at hand.
Little do they care if a particular problems fits into a special category for which there is a prescribed program. They are not big on sending those in need to a variety of offices to fill in a multiplicity of forms. They, in fact, live the great commandment, to love God and to love thy neighbour.
I strongly believe, Mr. Speaker, that we as parliamentarians can do a small service to this very worthy group of people by passing this bill, a bill that simply helps streamline their corporate administration so they can continue to devote their time to helping others.



THE ROYAL ASSENT

[Stage Direction]
A message was delivered by the Gentleman Usher of the Black Rod as follows:
Mr. Speaker, the Honourable Deputy to the Governor General desires the immediate attendance of this honourable House in the Chamber of the honourable the Senate.
Accordingly, the Speaker with the House went up to the Senate Chamber.
And being returned:
The Acting Speaker (Mr. Paproski):: I have the honour to inform the House that when the House went up to the Senate Chamber the Deputy Governor General was pleased to give, in Her Majesty's name, the Royal Assent to the following bills:
Bill C-3, An Act to establish the Department of Industry, Science and Technology, to repeal the Department of Regional Industrial Expansion Act and to make consequential amendments to other Acts-Chapter No. 1
Bill C-4, An Act to amend the Energy Supplies Emergency Act and to amend the Access to Information Act in consequence thereof-Chapter No. 2
Bill C-12, an Act respecting museums-Chapter No. 3
Bill C-13, An Act to authorize the divestiture of Nordion International Inc. and Theratronics International Limited. -Chapter No. 4
Bill C-31, an Act to Amend the Governor General's Act- Chapter No. 5



PRIVATE MEMBERS' BUSINESS


[Stage Direction]
The House resumed consideration of the motion of Mr. Cole that Bill S-9, an Act to amalgamate the two corporations known, respectively, as "The Governing Council of The Salvation Army, Canada East" and "The Governing Council of The Salvation Army, Canada West", and to make necessary provisions regarding the charter of the amalgamated corporation, be read the second time and referred to a legislative committee.﻿January 30, 1990
Peter Andrew Stewart Milliken: Mr. Speaker, I am rising to support the passage of the bill that the hon. member for York-Simcoe has proposed to the House. I want to say first how thankful Canadians are for the excellent work carried on by the Salvation Army across our country.
Indeed, I am pleased to say that during the break that we had over Christmas when Parliament was not sitting I had the opportunity to tour some of the facilities of the Salvation Army in Kingston, including the Harbour Light facility in particular and the new citadel that had been built at the north end of the city, to see what excellent work is being conducted by the Salvation Army in my community. I know the work that that body does is multiplied across Canada in hundreds of Canadian centres where the excellent social work and work for assistance with people in need is carried out on a daily basis by the Salvation Army.
I am pleased that we in this House have an opportunity to record our appreciation and the appreciation indeed of millions of Canadians for the work that is carried out on an annual basis by this group and to pass a bill that deals with changes they desire in our corporate structure.
I have read the proceedings in the other place concerning this particular bill and have read the proceedings in the committee in the other place. I am satisfied with the opinions expressed there that the bill will accomplish the objective. I believe the objective is a sensible and worthy one and I believe that the bill therefore should enjoy the support of all members of the House. I am happy to rise to support it and make my speech very brief on that point, Sir.


James Capsey (Jim) Karpoff: Mr. Speaker, I also rise to support the passage of this Private Member's Bill so that it can be referred to committee. I think the work of the Salvation Army in Canada as it is in most of the western world is well known. It certainly pioneered in the field of health care, social services, corrections and in child welfare. We wish to facilitate the continuation of the excellent standards and work that the Salvation Army has started.
The Salvation Army, however, is like many other organizations. It has grown dramatically in size. Its complexity has increased. It now has to deal with such
Private Members' Business
complex things as detailed programs, government funding, properties that are immense, mortgages, cash flow, and a whole series of business and organizational problems that it initially did not anticipate in 1909 and in 1916 when these bills were initially passed.
The reasons we would like this matter to go before a committee to examine the bill are several. First, the other place did pass the legislation. It did have a committee. But it made no attempt to find out what were the implications of those bills. In fact, the committee hearing was one page in which the committee basically complimented the Salvation Army on its good works with much justification, but did not look at the technical details of what was happening with this legislation.
Second, there is a letter from Consumer and Corporate Affairs that says one of the things which this bill is intended to do is to remove the $350,000 limit on land value, a limit imposed in 1916.1 read the 1916 legislation. There are two pieces of legislation in fact. But this section was repealed in 1957.
So we have Consumer and Corporate Affairs saying this is the intent of the legislation, and I read the legislation in 1957 that the parts referred to were repealed.
We have a letter from the minister raising an issue that the bill expresses no charitable intent for the Salvation Army. If you look at the 1916 legislation it is very clear that many of the activities that were contained in those pieces of legislation were of a charitable nature.
The legislation proposed that the Salvation Army, East be the continuing corporation and its by-laws be the ones that continue and the Salvation Army, West sort of fade out, which some people in western Canada would say is the intent of most easterners on all things.
When we read the two pieces of legislation and the 1916 piece of legislation, the Salvation Army, West is very detailed and sets out what the Salvation Army is going to be able to do. It can manage and operate hostels, places of rest, homes for women, and homes for children. When we look at the Salvation Army, East legislation, the by-laws make no mention of those things.
It also raises the whole issue of the transfer and handling of Salvation Army properties. I have sent a letter to the Salvation Army and I am going to refer to

January 30, 1990
Adjournment Debate
parts of it because I think it is important that these questions be answered.
Do the proposed changes, particularly the removal of the $350,000 limit on real estate, and the amalgamation allow the Salvation Army to transfer property held by registered charities?
Each of its facilities is a registered charity in its own right. Can that be transferred to the corporation such as Grace Hospital, House of Concord, Mainwood Home, child welfare facilities?
Could profits from the sale of these properties legally then be used by the corporation for other purposes? In other words, for non-child welfare or non-medical purposes?
Could the properties be transferred and sold in spite of provincial government wishes and the fact that the provincial government may have advanced funds on those properties or held liens such as under the Community Facilities Funding Act.
Could the assets or value of properties be transferred from one province to another province in spite of provincial government source of funding?
Has the Salvation Army communicated with provincial governments its request and obtained their concurrence?
As the Salvation Army is not a registered charity, can it hold properties that are used for charitable purposes? Does the Salvation Army now hold real estate in excess of the $350,000? I believe it does because since I wrote the letter, I found out that section was-


Peter Andrew Stewart Milliken: They are a registered charity.


James Capsey (Jim) Karpoff: They are not a registered charity. The Salvation Army Corporation is not a registered charity. They have a number of registered charities held at provincial levels.
As I stated previously, I want to indicate to the Salvation Army that we would like this matter referred to a legislative committee so that these matters can be dealt with. We feel strongly that it would be a disservice to the Salvation Army if this House simply rushed through the legislation in a manner that would at some time in the future lead to the embarrassment of the Salvation Army.
The Salvation Army is known for its good works. It is known for its dedication to humanity and we feel that it deserves that this legislation be examined in detail by a committee, and we support approval at this stage and referral to a committee of this House.


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


Some hon. members:: Agreed.


[Stage Direction]
Motion agreed to, bill read the second time and referred to a legislative committee.
The Acting Speaker (Mr. Paproski):: The time provided for the consideration of Private Members' Business has now expired.



PROCEEDINGS ON ADJOURNMENT MOTION

[Stage Direction]
A motion to adjourn the House under Standing Order 38 deemed to have been moved.

Iain Francis Angus: Mr. Speaker, I rise this afternoon to further continue the debate on VTA Rail. A question was put by me in this House back on December 6, with an unsatisfactory answer, I think it is safe to say.
It has been an interesting experience, working with the transport committee, railway unions, Rural Dignity, Transport 2000, Greenpeace, and the city of Thunder Bay, all in the aid of promoting a modem, efficient rail passenger service.
What we got from this government was not a step into the future, but a leap into the past. The Government of Canada cut the funding to VIA Rail which forced VIA to slash its system by approximately 51 per cent. Whole areas of the country lost their rail service. Northwestern Ontario in particular lost The Canadian. Atlantic Canada saw its service reduced to the point where it is almost impossible to go from Atlantic Canada to central Canada. The international and regional transportation networks were decimated.
This government argues that the fiscal necessities of our time forced it to do that. It also argued that the
January 30, 1990

people were not using VIA Rail. It was saying that 3 per cent of Canadians travelling from one city to another city were travelling by rail.
Well, Mr. Speaker, you know that you can use figures in many different ways. That 3 per cent represented 6.5 million to seven million people, and it was growing. More and more people were using it every day. We are seeing two to three million people directly disenfranchised as a result of this government's decision.
We have argued all along that what the government should be doing is what they promised to do and what the previous government promised to do. In fact, I have said it before. Seven ministers of transport promised to invest in VIA Rail. They started. They bought some new locomotives but, unfortunately, because they did not go the next step to buy the new passenger equipment, they had to attach the old locomotives to the new locomotives just to provide the heat for the trains behind them. That is not exactly the height of efficiency.
The government also said that there would be no impact on the environment, that shifting that many people from the trains to planes, cars and buses would have a negligible effect. It is obvious that if you add a million more car trips per year to the roads-and those are the government's figures concerning cars which will spew out that much exhaust into the air and contribute to that degree to the degradation of the environment-then there is no way that the government's figures are correct.
We have taken this battle to the courts and to the streets. We will continue it because we recognize that once before train services were cut in this land. That was back in 1982-83.1 think, Mr. Speaker, that you were part of a very valiant effort to convince the government of the day to change that decision. Very clearly in 1982 it was wrong to cut VIA by 20 per cent, which is what the Liberals did, just as it was wrong in 1989 to make the decision to cut the system by 50 per cent.
Mr. Speaker, I say to you and to the Government of Canada that a fundamental error has been made. It is an error that will return to haunt government members, particularly in two or three years from now when we will go to the polls and the people of Canada will have an opportunity to pass judgment on the government of the day. As we know, governments tend to be defeated and not elected in this country. The Conservative Party will
Adjournment Debate
join the ranks of the opposition once again to be replaced, I hope, by a party that truly believes in rail passenger services, not one that just says good things about it in opposition but attacks it in government.
I look forward to the response by the hon. parliamentary secretary. He is fighting a losing battle on this one, the political battle, but I wait with interest his comments.


Mr. Ross Belsher (Parliamentary Secretary to Minister of Transport):: Mr. Speaker, I am so glad that the member opposite from Thunder Bay-Atikokan is so concerned about the welfare of the government throughout this situation in which we have found ourselves.
Really, it was a very difficult decision we had to make in terms of trying to bring some fiscal reality back into the system. Back in November when the hon. member opposite raised the issue it was in light of the standing committee's recommendation to the government that it put a moratorium on the changes that had been announced to take place on January 15.
In reflecting on the recommendations which the committee made, it was interesting to note that there was no mention that if the House and the government were to accept the recommendation, how we might continue to pay for the tremendous expenditures that flow out of the federal treasury on behalf of VIA Rail in order to keep VIA Rail afloat. That is what this is all about. Lofty ideas do not require financing-reality does.
In deciding upon this new network, the government had to balance fiscal reality with the actual usage as well as transportation needs. We are trying to build for the future here so that we will have a VIA Rail in the future.
Despite the more than $5 billion spent on VIA since 1977, subsidies to VIA have continued to rise. They are not going down, they are continuing to rise, even after $5 billion of expenditure.
In 1988 they reached an unprecedented level of $644.8 billion. Yet the passenger levels were 20 per cent lower than they were in 1981.
Our decision preserves the historic transcontinental service and service to remote communities solely dependent upon rail for access. It continues to provide a number of daily services in the Quebec-Windsor corridor which generated more than 70 per cent of VIA's 1988 ridership. In other words, we were looking at something that was affordable but we also needed something that

January 30, 1990
Adjournment Debate
was sustainable. That was the challenge that was put to VIA management.
In order to mitigate the effects, the government directed VIA to treat affected employees with concern and compassion in full compliance with all of the collective and special agreements. VIA's five-year plan provided for separation benefits totalling more than $140 million. Given these factors and the need to reduce the deficit, the government stands by its decision to restructure VIA.


SOCIAL PROGRAMS
John Paul Manley: Mr. Speaker, I rise in this adjournment debate with respect to a question that I raised in the House of Commons on December 7, 1989.1 was asking the government about some aspects of its proposed clawback of social benefits and in particular the way in which it had presented this clawback tax to the people of Canada.
An exchange arose with the Minister of Finance in which he referred to some pre-budget consultations with the One Voice seniors network. As a result of his reference to that pre-budget consultation, the One Voice seniors network issued a press release in which it stated that the minister was twisting its words. Their press release stated: "Seniors were appalled yesterday to see their words twisted to support the government's controversial clawback legislation".
I asked a question about this in the House. In the absence of the Minister of Finance the Minister of State for Privatization and Regulatory Affairs took the floor. He made matters worse. He decided to try to quote something that was said by Mrs. Woodsworth of the One Voice seniors network.
The Minister of State for Privatization and Regulatory Affairs said, as reported at page 6615 of Hansard:
Mr. Speaker, I believe it is the hon. member who is twisting the
words of the Minister of Finance. It is very plain exactly what Mrs.
Woodsworth, who was representing that group, said. She said it, and
I will read it to you again. I will do so slowly.
I might say there was some sarcasm in his voice when he said that.
-we agree with the Economic Council that people with over
$50,000 of income should have their OAS taxed back.
That prompted a letter from Mrs. Woodsworth in which she referred to that quotation. She stated the following:
It has been the consistent position of One Voice that the clawback is a serious threat to universality of Canada's social benefit programs, and we have never supported the measure. I know that I personally never made such a comment.
We have contacted the Economic Council of Canada and they have been unable to locate any report which makes a reference to the clawback or the $50,000 threshold.
What concerns us more is that the clawback was not announced until the budget was released in April. We wonder how discussion of the clawback or the $50,000 threshold could have taken place in February before it had been announced in April.
Mr. Speaker, I do not want to belabour this. The Minister of State for Privatization and Regulatory Affairs clearly was anxious to make his point and he did it with perhaps a touch of emphasis which he later regretted. The point very clearly is that the government, in introducing the clawback of old age security payments and family allowance payments, did so in what I describe as an under-handed and sneaky fashion.
These benefits were referred to by the Prime Minister prior to both elections as "sacred trusts". He did not ever suggest to anyone that he was about to cut into these social programs, and yet, when the first budget came out after the last election, there it was.
The process-well, there was no process. The process was that it was announced in the budget and enacted in income tax legislation.
Whether you agree with universality or not, that is not the point here. The point is this; universality has been recognized as the cornerstone of our social programs in Canada, be they family allowance, old age pensions, or medicare. Even education, in a sense, is a social program, and universal access has been regarded as the cornerstone of that.
If you want to end that, if you want to change the basic structure of our social programs, surely the way to do it is to announce the intention to have a full and open public debate on it, in which the case for and against universality is made, not only by those who are concerned with fiscal aspects of it but by those who are concerned about
January 30, 1990

the social aspects of it. Once that debate has occurred across Canada then we proceed with the will of the people in mind.
There was no debate. There were promises made, promises broken. Debate did not occur. It was introduced in a tax bill where it could not be fully debated and forced through by the government using time allocation. The universality of those social programs has ended without full debate. For that I think the government must be held to account.


Pierre H. Vincent: Mr. Speaker, I think we should put the problem into perspective. This means realizing the fact that we have a national debt that has now reached $320 billion and is a threat to Canadians. Mr. Speaker, $320 billion isn't peanuts. It's a major problem.
That being said, if we look at what the situation was in 1969, Mr. Speaker, 12 cents of every tax dollar was spent on paying our debt. This year, it is 35 cents. Out of every tax dollar collected by the Canadian government, 35 cents goes to pay Canada's debts, debts that were accumulated during the previous administration. If we want to go on having social programs in the future, if we want to ensure that Canadians will have the social programs they want and to which they are entitled, I think that at a time when we are talking about budgetary restrictions, we must consider those Canadians who have high incomes and who can help the Canadian government pay off this enormous national debt.
Mr. Speaker, we are saying to the 2 per cent of Canadians with a gross annual income of more than $77,000 that they are going to pay back part of the old age security pension they receive at a rate of 15 per cent. Only this group of Canadians is affected by this measure. Mr. Speaker, I think that if we asked Canadians over 65 with a gross annaual income of $77,000 if they were prepared to give a little more to their country than a person who has a much lower income, they would have to admit, although perhaps not willingly, that they don't need an old age security pension from the Canadian government.
In concluding, Mr. Speaker, I must say I am surprised that I should have to explain all this to my Liberal
Adjournment Debate
colleague. It seems that only two days ago, at a Liberal orientation conference in Toronto, they recommended removing social programs and introducing instead a guaranteed annual income. Implicitly, this means doing what the present government will do by taxing high-income Canadians at a somewhat higher rate.
I see, Mr. Speaker, that you are telling me that my time has expired. Thank you.


PROPOSED GOODS AND SERVICES TAX
Mr. Joe Fontana (London East):: Mr. Speaker, I rise to further inquire of the Minister of State (Housing) about the effects of the GST on housing affordability.
I said on November 28, 1989 that if the goods and services tax is applied to a new home, it is not a tax on consumption. It is a tax on a dream. It is a tax on savings and it is a tax on a basic essential of life, shelter.
This government has reneged on its promise to mitigate the negative repercussions of the GST on the affordability of new home ownership, on housing. The result will be reduced accessibility to home ownership on the part of Canadians, especially those who live in high cost markets such as Toronto and Vancouver.
The government promised to ensure that there was no negative impact on housing affordability from sales tax reform and that the new tax would not be allowed to prejudice the reasonable opportunity for home ownership that Canadians would otherwise have enjoyed. In other words, the new system will not pose a barrier to the affordability of housing.
A rebate of 2.5 per cent of the GST is payable on new homes that are principal residences priced at less than $350,000. The rebate then declines sharply to nil for homes above $450,000.
The average home priced at around $150,000 in this country will be taxed at a rate of 4.5 per cent after the rebate. The Conservative government has assured the people of Canada on numerous occasions that the rebate guarantees that the GST does not pose a barrier to the affordability of new homes in Canada. I disagree and I have the figures and calculations to back me up.

January 30, 1990
Adjournment Debate
This rate of taxation will have an average inflationary effect on the price of new homes of some 2 per cent nationally and this could rise to as much as 3 per cent in metropolitan centres where the cost of land is very high. I am aware that the Department of Finance does not agree with these figures but the average 2 per cent inflationary increase on both new and existing homes is one that is widely accepted by housing organizations such as the Canadian Home Builders' Association.
The figure is calculated to factor in the current effect of the federal sales tax and compare it to the new goods and services tax. The assessment of the effect of the GST on housing affordability cannot be done in a vacuum. Actions by provinces and municipalities which have resulted in added financial obligations on the housing sector through land transfer tax, lot levies, processing fees and other means are also reducing the affordability question. The government promised to bear these factors in mind but it obviously did not.
The rebates that are being offered are not only insufficient to counter the inflationary impact of the goods and services tax, they are also inherently inequitable to Canadians who live in high cost areas who must pay higher prices not because the houses are luxurious but because the land costs are expensive.
The government is not acknowledging these facts. Instead, the government is clinging to its conclusion that the GST will only have a slight increase of .3 per cent on the average, to be exact, in the price of new housing. Why is this government ignoring housing organizations which claim that this government has over-estimated the burden of the existing federal sales tax on a typical new home?
The government insists that the effect of the FST on a new house is about 4.2 per cent. Other figures show that the net effect of the FST is only 3.7 per cent. This lower rate is documented and calculated in great detail.
The Department of Finance has not released any of the calculations behind its estimates. Why will the government not show how it arrived at a 1.6 per cent effect on the GST on new home prices in Toronto? Detailed calculations have been given to the government to show that the effect of the GST on home prices in Toronto is actually 3 per cent.
How democratic is this Tory government when it tells the people of Canada, "We are right and you are wrong." The Conservative government is telling Canadians it does not have to be accountable for its decisions.
The entire existing federal sales tax will not disappear entirely as of January 1, 1991, as they would have us believe. This government insists on clinging to its unrealistic assumption that all the existing FST will disappear on New Year's Day. A more reasonable assumption would be to assume that one-third of the existing FST will remain in the cost structure of new housing over the foreseeable future.
I ask this government to table the figures on the effect of the GST on housing because people want to buy homes. They need the shelter but they cannot afford to buy the homes if, in fact, the GST is having an adverse and negative effect on affordability.


Hon. Alan Redway (Minister of State (Housing)):: Mr. Speaker, time and time again I have told Canadians, and I want to re-emphasize this evening to the hon. member, that my primary goal is to ensure decent affordable housing for every Canadian. That is a goal, not only of me personally, but of the government. For that matter, although it may surprise the hon. member, it is a goal of the Minister of Finance as well.
Housing affordability is something that the Minister of Finance spoke about back in the fall of 1988. He indicated at that time that with the imposition of a goods and services tax efforts would be made to protect affordability for low and modest-income Canadians.
As a result of that undertaking by the Minister of Finance, his officials and my officials at CHMC have had numerous discussions over many months. I have personally had many discussions with the Minister of Finance on this very vital issue.
Those discussions took place against the background of the whole question of introducing a goods and services tax in place of the present federal sales tax, a tax which penalizes our exporters, benefits importers, penalizes jobs in this country and reduces the gross income of Canadians as a whole.
The first goal was to get rid of that tax. The second, of course, was to find a way to protect affordability of housing against a background of discussions wherein people were saying that we should tax everything, not just new housing, and that there should be no exemptions. The proposal at that time was for a 9 per cent goods and services tax, and that there should be a 5 per
January 30, 1990

cent goods and services tax on all housing, existing as well as new housing.
The result, of course, is what we have before us now. The House is debating Bill C-62, which deals with the goods and services tax as presently put forward.
In examining that tax we have to bear in mind first, that at the present time there is a federal sales tax of 13.5 per cent on all building supplies. As well, there is a federal sales tax on many other inputs that go into the building of a new house, whether it is the machinery or the tools that are used in the building of that new house, or whether it is the office supplies or the printing materials that are used with respect to it. Whatever it is, there is at the present time a federal sales tax of 13.5 per cent that goes into the building of that new house.
What we are talking about now is taking that off and putting in its place, first, a 7 per cent goods and services tax with a rebate of 2.5 per cent on homes of up to $350,000. The net impact of the goods and services tax on new housing is a 4.5 per cent tax on all parts of that new house. That compares with the present federal sales tax that impacts on new housing at the rate of 4 per cent. That means what we are talking about with the goods and services tax is really a one half of one per cent increase of the total tax that is imposed on a new house under this system.
What the impact of the goods and services tax with the rebate means is that there will be, in many cases, no increase in the tax, or in some cases a modest increase in the tax. In all cases there will be a rebate on the tax up to the $350,000 cost of housing.
Adjournment Debate
I think it is important that I point out as well that over the last two years housing prices have increased dramatically without any tax changes whatsoever over and above what the impact of the GST will be. For instance, in Canada last year the price of a new house increased by 13.2 per cent; in Toronto, by 19.2 per cent; and in Vancouver, by 30.7 per cent.
It is quite clear that there are other factors going into the cost of housing and new housing other than and separate and apart from any taxes whatsoever. That is why I and the government have been working to put surplus government land on the market to increase the supply of housing. That is why we are looking at the possibility of a 5 per cent down payment. That is why we have instituted co-operative committees, provincial, federal and municipal, to make sure that we can accommodate affordable housing.
With all of these things, I am sure it is clear to you, Mr. Speaker, and to the hon. member that the government is dealing with this question of housing affordability and that we will continue to deal with it until we have ensured that each and every Canadian has a decent house at an affordable price.


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


[Stage Direction]
The House adjourned at 6 p.m.
[Stage Direction]
Wednesday, January 31,1990