1990-05-14

Hon. Harvie Andre (for the Minister of Finance) moved: that Bill C-65, an Act to provide borrowing authority, as reported (without amendment) from a legislative committee, be concurred in.


[Stage Direction]
Motion agreed to.
Harvie Andre: that the bill be read the third time and passed.


Mr. Pierre H. Vincent (Parliamentary Secretary to Minister of Finance):: Mr. Speaker, I welcome this opportunity to speak at the third reading stage of an important bill that provides the government with the necessary borrowing authority so that it can proceed with its operations. At this point, I think it would be useful to recall some of the historic and economic highlights of the years since 1984, when the Conservative government was elected.
As you know, one of the government's major initiatives was the economic message tabled by the Minister of Finance in November 1984, in which the government set out its economic policies for the years to come. You will recall, Mr. Speaker, that this message mentioned being competitive, reducing the national debt and of course our annual deficit, and creating jobs. It mentioned opening up our country for trade. Since 1984, the unemployment rate has gone down, and job creation has improved considerably, not only in terms of the number of jobs created but also in terms of their quality. You will recall that before that time, 80 per cent of the jobs
created were for a limited term: programs to build or paint fences, clean windows and do general repairs, while 80 per cent of the jobs created by this government since 1984 are permanent jobs. These are jobs where women have their share of the market. This is another innovation that did not exist before 1984.
The economic message of the Minister of Finance mentioned trade. As you know, Mr. Speaker, this government negotiated and finalized the free trade agreement, and in November 1988, Canadians also finalized the free trade issue by electing a majority Tory government, the only party that supported free trade, a matter of vital importance for the future of this country. Without wishing to expand on the free trade debate, I think it is important to point out that in an economy like Canada's, we must have secure access to markets outside Canada. That is what free trade has done, by removing tariff barriers between Canada and the United States.
Mr. Speaker, the free trade agreement was also important because we had to ensure that Canadian companies would be able to export to the United States, without the tariff barriers we have faced, in certain cases, between 1984 and 1988, and I am thinking of cedar shingles and shakes, for instance. Of course, free trade was also an integral part of the economic policies of the Minister of Finance in November 1984. There was the issue of our national debt which, as we all know, was $200 billion in 1984. And that is too much, far to much. In 1984, the annual deficit was $39 billion, which means that in 1984, this government, spent $39 billion more than it collected in revenues. Imagine if a Canadian family, whatever its income, spent $39,000 more than it earned in a year, and that this was added to the $200,000 it had already overspent. This family would definitely go bankrupt.
Since 1984, we have had to apply draconian measures to existing programs, to planned government investment in various areas and to the federal Public Service. We had to make decisions that were not necessarily popular, in order to reduce government spending and thus reduce the annual deficit which had reached alarming propor-

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tions, continued to increase each year and unfortunately still continues to add to the national debt.
In 1984, the government spent-forget interest costs for a minute; unfortunately we cannot do that as a rule, but for the purposes of my example, let's leave out interest costs-the government spent $15 billion more that it collected in revenues, and this does not include the interest paid on the debt. The government still spent $15 billion more than the revenues it collected. This year, that same government, again excluding interest payments, will spend 9 billion less than the revenues it collects. This means that after nearly six years, government spending in all areas, whether we are talking about the public service, programs, capital spending or investment-this year, we will spend $9 billion less than what we will collect in of taxes. That is what I call good management.
However, Mr. Speaker, we still have the deficit problem. In fact, why do we have a deficit this year? The deficit exists because we have additional expenses in the form of the interest that must be paid on the debt, and the national debt was the legacy we received from the former Liberal Government in 1984. Since that time, the cumulative debt is the interest that we have to pay on the legacy we received. It is just something we have to live with, Mr. Speaker. I think Canadians are also more aware of the increasing problems created by the rising cost of this debt burden, which will mean that this year, for instance, 35 cents out of every tax dollar will go to pay interest. You can imagine what we could do as a government, with the help of the opposition, if we had those 35 cents per dollar to give to Canadians through various programs. Unfortunately, Mr. Speaker, as you know, we do not have it.
But, again, we are off to a good start. Interest rates and costs hurt the government, as I think everyone would admit, but at least we are managing and spending less money than we take in.
Very often, Mr. Speaker, we hear the opposition say that tax increases explain why the deficit has gone down. That, Mr. Speaker, is absolutely false, and I want to emphasize it. Seventy per cent of deficit reduction is due to government cutbacks and 30 per cent is due to tax increases since 1984. I think that is a fair balance.
Remember 1988, when we reduced the income tax on individuals. I do not remember hearing the opposition talk about that often. Obviously that is good news, Mr. Speaker.
This year we are implementing the goods and services tax, and that is good news. It is good news if it is dealt with honestly and frankly. For 66 years now, we have had a federal sales tax at the manufacturer's level. That means, Mr. Speaker, that no one, no Canadian, sees the rate of this tax and is even aware that he or she is paying this federal tax on most goods and services in the country. For 66 years, this hidden tax has meant that every year, the government collects money without Canadians being aware of it.
We are the only country in the world now that still has a federal sales tax at the manufacturer's level. However, 48 countries have already adopted a consumption tax, whether it is called a VAT or a GST. Mr. Speaker, now more than ever it is time for Canada to take its place as well and implement a progressive, fair and equitable tax system. It is hard to have a tax that is fair and equitable.
The GST meets these criteria. It will replace the present federal sales tax which is bad for Canadian taxpayers and also bad for Canadian businesses. As you know, Mr. Speaker, the federal manufacturer's sales tax favours foreign companies that send goods to Canada because they do not have to pay 13.5 per cent on the goods they produce.
Thus foreign goods have an advantage over goods produced in Canada. You know, Mr. Speaker, that makes no sense. Moreover, when a Canadian producer wants to sell abroad, his costs include a 13.5 per cent manufacturer's tax that no other country in the world has. So when he comes to sell this chair, he has a 13.5 per cent tax in his costs which his competitor in country X, Y or Z does not have. What does this Canadian producer do? He is stuck with his goods; he is unable to sell them because they cost too much.
The goods and services tax will eliminate that situation. It is a 7 per cent consumption tax that will appear on the bill the consumer pays. This means that all Canadians will know what the goods and services tax costs them whenever they spend money on something.
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But even more than that, Mr. Speaker, all Canadian families whose income is $30,000 or less will receive a tax credit in advance. That is, in December 1990, the Government of Canada will send a cheque to all Canadian families whose annual income is $30,000 or less. A cheque just so the GST is fair and equitable, just so low-income families are not penalized by the implementation of a new tax. I want to point out that it was the new Conservative government which began to follow this new approach in 1986. It was the new Conservative government which in 1986 first gave a tax credit applicable to the federal sales tax. A higher credit is again given with respect to the GST, and again it goes to families that have a higher income than they did before. Again it is given so as to make the tax system fair and equitable. You will hear opposition members criticize the GST. Mr. Speaker, I dare you to recall a single instance where they came up with a fair and valid monetary alternative for Canadians after criticizing the GST. How easy it is to say that one is against higher taxes, against taxes. That is the easy way out. But this government has responsibilities in connection with the deficit, elderly people, and provincial transfers. The federal government has to collect money to meet its responsibilities and redistribute the wealth. Anyone who is against the GST has to tell me where else the $18 billion will come from so we can meet the needs of Canadians. That is the question. In that respect opposition members are not doing their job when they fail to come up with an alternative and keep saying they are against it.
Again, Mr. Speaker, I look at the riding of Trois-Ri-vieres where competition is fierce among people who sell cars, cakes or what have you. But when a dealer claims his product is better, he explains why it is so and why he sells it. When they talk about the future of the country and say that a measure tabled by the government is no good, if they are a genuine opposition party, they ought to come up with a solution. However, when we hear the opposition talk, no solutions seem to be forthcoming.


Mr. Young (Gloucester):: We could invoke the same reasons you gave in 1984.


Pierre H. Vincent: Mr. Speaker, I am sure the hon. member will be very pleased to comment on my speech later on. I am looking forward to that.
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The GST, in addition to being a fair and equitable tax, will favour exports of Canadian businesses and will benefit Canadian businesses that must compete with foreign companies that export goods to Canada. If our Canadian companies produce more, that means they need more workers. If they need more workers, that means more jobs will be created. That is how this government has been running the country since 1984. It all goes back to the economic message the Minister of Finance tabled in November 1984.
About the unemployment rate on the weekend in the riding of Trois-Rivieres, it was announced that the unemployment rate had gone down. Why did the unemployment rate go down since 1984? It went down because Canadian companies looked at the government and said: They are working very hard to run the country the way we in the private sector run a business. And when that is the case, people invest. They have confidence in the government, they invest, and that is how jobs are created. You know, Mr. Speaker, we often brag about the fact that the government creates jobs, but basically, it was the good financial climate created by the government that led Canadian businesses to invest and increase the number of jobs in this country. And I am talking about permanent jobs, not part-time, patchwork jobs. I am talking about permanent jobs in lucrative areas, in areas where women also have their share of the labour market.
Mr. Speaker, that was a summary of the highlights of what has happened since 1984, while also situating the importance of this bill in the Canadian economic context.
With your permission, I would also like to mention the deregulation of the energy and transportation industries. I could speak at length about the National Energy Program, which was a disaster for all Canadians, for Western Canadians as well as Quebecers. It was a real disaster, and we had to do a hatchet job on this program, which, I must confess, we did with considerable pleasure.
The same could be said of Investment Canada. In the transportation sector, government decisions were made which helped this sector and helped our Canadian businesses to operate well, to be more competitive, to progress, to make money and to pay their taxes.

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We often hear the opposition say there are 50,000 or 60,000-1 am not sure how many-companies that don't pay income tax. That is false, Mr. Speaker. That is totally false. All Canadian companies pay income tax. When they do not, the reason is they don't have any tax to pay, Mr. Speaker, and that happens when a company incurs a loss. So of course it will not have to pay income tax. Any Canadian taxpayer who in 1989, for instance, earned $45,000 and in 1990 incurs a loss of $35,000, may apply the loss incurred to a previous year's or the next year's income. This is allowed under the Income Tax Act. And the same applies to companies.
Most of the many companies, if the opposition is to be believed, that do not pay income tax are, in fact, small businesses like the ones in your riding, in Trois-Rivieres, or in their ridings, which make a profit one year and lose money the next. We know, Mr. Speaker, that life isn't easy for small businesses. There are some good years, and there are years when business is slow, but the opposition wants us to tax a company that has already lost money!
The companies that make money, Mr. Speaker, pay their taxes, and they have done so since 1986, when we introduced a minimum personal tax. Every single Canadian is paying his fair share of income tax, despite all the tax shelters people can dream up or try to use. Even if they have 18,000 tax shelters, they will still have to pay their fair share of tax because we now have a minimum income tax that this government established, Mr. Speaker, at the same time it abolished the scandalous scientific research tax credits of the former government. It was a scandal. Millions of dollars were wasted, the way this scheme was organized. We put an end to it, Mr. Speaker.
Now if you want to do scientific research, there is no problem. But you still must account for these expenditures in the normal way and not according to the system brought in by former finance minister Lalonde in 1984.
So, getting back to our bill, we must consider the emphasis we have put on things like the Jobs Strategy since 1984. You will recall that before 1984, there were summer programs for students that involved painting fences and sweeping. Mr. Speaker, tell me what post-secondary or university students learned by painting fences in the summer. They learned nothing! Those programs were boondoggles.
Mr. Speaker, we established the Challenge Program which helps students do work that is partly subsidized by the federal government in their future field of activity. Last Friday in my riding, I had the opportunity to take part in the opening for the summer of the student employment centre for the ridings of Trois-Rivieres and Champlain and the person in charge of the Challenge Program pointed out the importance of this program whereby students can earn money and learn during the summer about the field in which they will eventually work. The honorary chairman, Mr. Gaulin, a dynamic young man, is in charge of personnel for a company in my riding. He pointed out how good it is for a company during the summer to have one, two, three or five young people with their new expertise and new techniques that they learned during the year. As they earn money, the young people help the company, which also helps them financially, and learn something practical. We all know that universities are wonderful places but are sometimes weak on the practical side. Thanks to the summer program, young people at the end of their university studies will graduate with a diploma and practical experience. Mr. Speaker, that is what the Challenge Program, established in 1985, does and it works very well.
With respect to employment programs, Mr. Speaker, consider job development programs for which applicants are necessarily people who want to learn something new. The organization or the employer that has such a program trains the applicant in a new sector and pays him or her. Of course the federal government is there to help pay part of the costs. This is a productive program prepared and launched under the Conservative government. Before, as I recall, there was the Canada Works program under which people were hired to shovel snow in yards. Mr. Speaker, shoveling snow in yards is hardly the way to acquire a new skill.


An hon. member:: It is not a profit-making proposition.


Pierre H. Vincent: Not a profit-making proposition, as my colleague puts it. Not unlike the Challenge program, the job development program helps our constituents find work and learn something new. In most cases the company or organization which has hired three employees under a job development program and keeps them on the payroll for a while will end up giving a permanent job to one or two of them. That, Mr. Speaker, is an economic strategy which keeps the nation moving
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forward. It is the kind of initiative we need in employment, in public financing, in international trade and, above all, here in the House.
In conclusion, Mr. Speaker, I see you are giving me a signal- I see that my colleague is anxious to have the floor.


Mr. Milliken:: Your time is unlimited.


Pierre H. Vincent: Thank you. Mr. Speaker, in 1990, some major changes are taking place, and I think we should be well aware of this. For 66 years, we have had a federal sales tax no one has ever seen, whose existence people were not aware of. I remember when I was studying at the University of Sherbrooke in 1978, where I took a master's degree in tax law, and my professor told the class: We are begging the government on our knees to change this tax, which is a disaster. That was said in 1978 by a well-known professor who belonged to a Quebec accounting firm which now has offices across Canada. This professor said 12 years ago: The federal sales tax is bad for the country. That was 12 years ago, Mr. Speaker. This government got the message. Yes, we are going to change the tax system. Yes, we are going to introduce a new tax called the GST, the goods and services tax, a tax that will be paid by the consumer. That is a major change, and Canadians are worried. They are asking questions. I repeat, Mr. Speaker, when they put their questions to government members, they get good answers. When they put their questions to the opposition, the answers are less than accurate.
I think the opposition has a duty to explain the GST properly, because it should be explained. It is a major change-


Peter Andrew Stewart Milliken: It's a disaster!


Pierre H. Vincent: It is a tax change that will replace a hidden tax of 13.5 per cent with a 7 per cent consumer tax.


Mr. Peterson:: It's a disgrace!


Pierre H. Vincent: All Canadians will see the tax.


Peter Andrew Stewart Milliken: All Canadians are opposed to the tax!
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Pierre H. Vincent: Mr. Speaker, I am glad to see the opposition is finally starting to react. I waited thirty-five minutes for them to react, and finally, it worked!
I repeat, the GST has the advantage that Canadians will be able to see this tax. A number of people in the beautiful riding of Trois-Rivieres told me: We trust the Conservative Government, and we know you will keep the tax at 7 per cent. But if the Liberals ever come to power, 10 or 15 years from now, they are going to raise the tax to 8, or 9 or 10 per cent. That is what the people of my riding are saying. I tell them no. The great advantage of the GST compared to the federal sales tax is that it is visible. The party in power, whether Conservative or Liberal, will be ashamed to raise it because it will appear on people's bills the next day. That is the guarantee Canadians have that this tax will stay at 7 per cent. It is a visible tax, compared to the other one at 13.5 per cent that no one sees. How much federal sales tax at
13.5	per cent did I pay on that? No idea. No one knows. The same goes for my glass and furniture. Starting January 1, 1991, we will have a visible tax, which will let everyone know what they are paying. Again, there will also be a tax credit.
The opposition cannot challenge the figures published in an article in La Presse maybe two or three weeks ago. In it, a journalist explained, for example, that a senior whose annual income is $12,000 will be in a better position with the tax credit for the federal sales tax in 1991 than that person is in 1990 with the present tax. The La Presse article has figures to back it up.
The same calculation was done for a single person earning $25,000 a year who has two children. Once again, the figures show that a single-parent family with two children would be in a better position in 1991 than in 1990. They would have more money in their pockets in 1991 with a 7 per cent GST than in 1990 with a 13.5 per cent FST. Mr. Speaker, we must talk about it; we must emphasize it. I think that the opposition members who will speak must also point out that the GST is advantageous for families earning less than $30,000. They will have more money to spend. We must say that. Some sectors of the economy will feel the benefits.

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The owner of the Jean Coutu pharmacies whom I met in my riding last weekend, Mr. Speaker, was telling me: "Prices will go down next year with the GST." In the car industry also, big companies like GM and Ford with big money involved and certainly a few accountants looking into that kind of thing full time admit that cars will cost less in 1991 thanks to the GST. The Sears stores said the same thing. The goods they sell will cost less. The same for Canadian Tire. Mr. Speaker, there are nonetheless national chain stores saying: "Yes indeed, consumers will pay less once the new tax is implemented." Some will ask, and rightly so: What guaranty is there that the 13.5 per cent will be taken off? There is always competition, Mr. Speaker.
Domestic economic realities must also be considered. As we remember, when cameras first came onto the market, they cost a fortune. If we wanted a better zoom or some other feature, we needed another part. It cost an arm and a leg. Now, we can walk into any fine store and buy a camera that does everything by itself. At the push of a button, the flash, zoom and everything else work automatically, and the price is a fraction of what it used to be. For example, when color television sets were first sold in Canada 25 years ago, they cost more than today even with inflation factored in because technology is improving every year and competition is everywhere. Today we pay the same price, or even less, for a small color TV as we would have paid 25 years ago for a big one.
The competition is there. It has its place and will make the GST a viable proposition for all Canadian consumers.
\English]


Hon. Roger C. Simmons (Burin -St. George's):: Mr. Speaker, I listened with great interest to my friend from Trois-Rivieres as he introduced debate on third reading of Bill C-65, an act to provide borrowing authority.
If the government gets the agreement of the House on this bill, it will give the government authority to borrow up to $25.5 billion during this fiscal year, 1990-91.
I would like to respond to two or three points raised by my friend from Trois-Rivieres. He started by saying that he was going to give us some of the historical background. He ought to have said, I submit, that he was
going to give some historical background-I believe he has a new speech coming on. Did the member want to intervene?


Pierre H. Vincent: I was wondering if you were going until 2 p.m.


Roger Simmons: Mr. Speaker, the member from Trois-Rivieres was saying he would give us some historical background. I thought he should have qualified that by indicating that it was very much his version of history or, more to the point, the version written for him by whoever writes those marvellous pieces that those parliamentary secretaries get up and read. It is well read, I say to him, very well read although I am not sure I would stake my reputation on it, if I were him. He reminded us that when the government took office in September 1984 one of its undertakings was to reduce the national debt. The government did a marvellous job of that, an absolutely marvellous job of reducing the national debt. Indeed, if we go back and look at the national debt as it was in September 1984, or during the fiscal year when the government took over, we will find that it was in the order of $150 billion or $160 billion. I have the figure here somewhere. It was $170 billion when the government took over in September 1984.
We understand, according to the Minister of Finance then and now and according to the gentleman from Trois-Rivieres, that the undertaking was to reduce the national debt. The government reduced it all right, I say to him. He should have a talk to his speech writer. The government reduced it all the way from $170 billion down to $360 billion. How is that for reducing? That is a new definition of reduction. The government has more than doubled that national debt in six years.


Peter Andrew Stewart Milliken: They pretend to deny it.


Mrs. Browes:: Look who started it.


Roger Simmons: That is another issue altogether, I say to my friend, the hon. member for Scarborough Centre who says: "Look who started it." It does not take a lot of brains to figure out that if I stand here and acknowledge that the debt was $170 billion when this government took over, then obviously it must have been started and contributed to by some previous governments. I congratulate her on an absolutely brilliant insight. I remind her that, yes, other governments did have a part in that, including the government led by her good friend and colleague, the Secretaiy of State for External Affairs, the right hon. member for Yellowhead. He had a part in
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contributing to that deficit. She should do her homework on that point.
The problem with yelling across the corridor is that she sometimes puts her foot in it. That is the danger, but I am sure she did not realize that. She has been taught by the gentleman from Baie Comeau that those big bad Liberals had done everything and she forgot that there was an interregnum between May 1979 and February 1980 when we actually had a government led by the gentleman from Yellowhead.


James Scott (Jim) Peterson: A sad day for Canada.


Roger Simmons: My friend, the hon. for Willowdale, says that was a sad day for Canada. I say to him, with respect, that everything is relative. It was not nearly as sad a day for Canada as the current administration represents a sad nightmare for Canada over many, many days, unfortunately.
The hon. member for Trois-Rivieres on the first point has struck out completely. In so doing he has misled the House, not deliberately, but he has inadvertently misled the House. He talks about how this government has reduced the national debt, while the public accounts of this country will clearly demonstrate that during the stewardship of this government alone, from September 1984 until now, May 1990, or the end of the fiscal year, March 31, 1990, the public debt has gone from $170 billion up to $360 billion.


Mrs. Anderson:: The compound interest is high.


Roger Simmons: Oh, here we are. Sometimes I am too uncharitable toward my friends on the other side, particularly the hon. member for Simcoe Centre. She has put her finger on another key issue in this whole debate. She talks about compound interest and, by inference, she talks about interest rates. She is absolutely right. If she would talk to her friend and colleague, the Minister of Finance, and persuade him to do now what he said we ought to do when he was in the opposition, that is persuade him to get interest rates down, I would be the first to agree with her that the interest on the debt would be less, the compound interest on the debt would be far less. If she wants to make a contribution to this debate, she can do it, not only in debate but behind the curtains.
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She can talk to the Minister of Finance and tell him to beat some sense into that fellow, John Crow, who is keeping rates not only sky high but a full 5.5 points higher than the American rates. There is no justification for it whatsoever.


Edna Anderson: Inflation.
Mr Simmons: Oh, she mutters "inflation". Tell me about unemployment: Does she know that John Crow and, by inference, the Minister of Finance have a hidden agenda that says we have to drive the unemployment rate in this country higher, up to 8 per cent, because "that will get our inflation down to zero", they say.
Inflation is important but employment is also important. I do not buy the line-and I do not believe that the member for Simcoe Centre buys the line either-


An hon. member:: No, she doesn't.


Roger Simmons: -that we must have interest rates as high as they are. I do not believe she believes that. Her constituents are watching and on her behalf, since I have the floor, I can tell them whether or not she agrees with that. I gather the jury is still out on that point and she is still making up her mind as to whether or not she supports the high interest rate policy of this government.


An hon. member:: No, she doesn't.


Edna Anderson: My constituents are doing very well, extremely well.


Roger Simmons: Anything else now? Don't be shy, don't be shy.
The member says that the people in her riding are doing very well. That wasn't quite the question I put to her. I wanted to know whether her interjection here in this debate, a welcome interjection I may say, meant that she was supportive of the high interest rate policy of this government or opposed to it.


Edna Anderson: Nobody likes high interest rates, but we're doing the best we can.


Roger Simmons: I will say to her constituents who can't see her but should be allowed to hear her-I will speak for her-that basically she is doing one absolutely

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marvellous job of skating at this present moment; she is for and agin it. She wants to have her cake and eat it too.
The gentleman from Trois-Rivieres also gave us of his wisdom on job creation and how this government had got us away from painting cemetery fences and that kind of thing. I will tell you something else it got us away from. It got us away from building wharfs and slip ways in fishing communities along the south coast of Newfoundland. It got us away from providing needed infrastructure in the fishing industry that was most beneficial in helping fishermen pursue their trade-slip ways on which to pull up their boats, wharfs to tie their boats to, stages on which to split and clean their fish.
Those people who want to knock the short-term job creation programs are very selective in how they characterize them. They always pick the painting of the cemetery fence. Yes, that was done under some of those programs, but what was done much more often under those programs-and therefore he ought not to be maligning those programs-is that good infrastructure was put in place such as wharfs and slip ways. I could mention health clinics. I could mention a Girl Guide camp in one part of my riding, a place called Jean de Baie. It is a regional Girl Guide facility used literally by thousands of Girl Guides every summer. It was built under job creation.
We could go to Marystown and see the fire tower which was built to train firemen from all over eastern Newfoundland in emergency procedures. However he chooses, instead, to talk about painting cemetery fences. I say to him that he ought not to knock what was a program that served rural people particularly very well. It served them a lot better than the present charade is serving them, where they are told they can get job creation money provided they will agree to be retrained. That is the magic word now: retrained.
Nobody in his right mind in any community in this country is against retraining, but we have to look at it in the context of some small communities in Atlantic Canada. I will pick one because it has been much in the news lately: the community of Gaultois which is in my riding on the south coast of Newfoundland. It is one community on an island called Long Island. There is no road connection from the island to the mainland of Newfoundland. My good friend, the hon. member for Willowdale, and I visited the community of Gaultois in the last week or so. He saw, as I have seen for many
years, the industry of those people. We watched them in a plant pursuing a skill that they had acquired, refined, and improved over a lifetime.
The government says that they ought to retrain. For what do you retrain people in the community of Gaultois? That is not to be condescending; it is to underline the point that those people already possess any training, any skills that they need to survive in that community. Whether it is the skill to split and clean fish or to catch fish, carpentry skills, welding skills, homemakers' skills or secretarial skills, the skills which are needed in that community are there in abundance.
Retraining in that context, in the context of the government's program, is a code word for forced resettlement. These people will have to pack their suitcases, pick up their bags, leave their homes, leave their loved ones, and go off to urban Canada.
I am looking forward to hearing the remarks of the hon. member for Simcoe Centre. She is just bursting with ideas today and as soon as I am through sometime today, tomorrow, or Wednesday-whenever I get through here-I hope she will get up and tell us her concerns about this particular bill that would have the government borrow $25.5 billion, but I digress.
I was responding to some of the points made by the parliamentary secretary, the hon. member for Trois-Rivieres. He also said that this government, the government of which he is a supporter, had opened up the countiy to trade interests. I would say that is putting it rather charitably. Opening up the country to trade interests is a very charitable way of stating what has happened. I would put it more bluntly and to the point: that it has sold out the countiy to certain interests.
One only has to look at the government's sweetheart deal with American Express, with Amex, to realize that one has to be a foreigner to get a deal with this government, either a foreigner or on a very short list of people who funded the Tory campaign in the last federal election. I say a short list because it did not take a very long list; if they are all throwing in money up in the millions, it does not take many contributors to fund a campaign.
I wanted to say, in response to the gentleman from Trois-Rivieres, that he should be a little more candid when he is talking about what this government has done in terms of trade interest. I say to him that beyond opening up the countiy it has sold out, particularly to
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American interests. That is a theme that I would pursue if I had the time.


Some hon. members:: Oh, oh!


Roger Simmons: I know the hon. member for Edmonton Southwest does not concur with my views, but that does not detract from my right to express them. Actually there are a few over there who do not agree with my views. That is the difference between us; they are on that side and we are on this side.


An hon. member:: Vive la difference.


Roger Simmons: Vive la difference.
The hon. member for Trois-Rivieres also talked about what they had done to improve unemployment insurance. I hope the 170,000 recipients of UI who are going to be cut off at the knees out across this country heard that statement, because they had thought otherwise. They had thought that the UI changes were anything but an improvement. However I sense today either a misrepresentation by the gentleman from Trois-Rivieres or a change of heart when he tells us that the government has improved the unemployment insurance.


The Acting Speaker (Mr. Paproski):: It being two o'clock, the House will now proceed to Statements by Members pursuant to Standing Order 31.


STATEMENTS PURSUANT TO S. O. 31
Mr. Ross Stevenson (Durham):: Mr. Speaker, I am sure the House will wish to join in recognizing the Oshawa Generals as a great team of champions for their thrilling Memorial Cup victory yesterday.
Though the Generals always enjoy an outstanding reputation on the ice, this is the first time they have won the Junior A championship since 1944. Their win was most convincing. The Generals are the first team to be undefeated through the round robin play-offs.
The Generals have brought great pride and pleasure to citizens of Oshawa and the Durham region. Our heartiest congratulations to all members of this supreme hockey team; to their coach, Rick Cornacchia, managers
Frank Jay and Scott Clark; and to the Oshawa Generals president, John Humphreys.


STATUS OF WOMEN
Ms. Albina Guarnieri (Mississauga East):: Mr. Speaker, since 1972 each successive federal government has shown its concern for women's issues by meeting with representatives from the National Action Committee on the Status of Women. These annual meetings provide an opportunity for both NAC members and cabinet to openly discuss issues that affect all Canadian families.
The government may not always have agreed with what NAC had to say and NAC may not always have liked the way government was conducting business, but at least the lines of communication were left open. This policy has now changed. The government has now shown its contempt for women's concerns by refusing to meet publicly with the representatives of the more than 500 organizations with memberships of over three million. It has sent a clear signal to women that their concerns are not high on the Tory agenda.
This government has slashed support programs, threatened to close women's centres, ignored the day care crisis and has now turned its back on the NAC spokespersons. It is time that this government remembered that its mandate also included public accountability.


NATIVE AWARENESS WEEK
Mr. Doug Fee (Red Deer):: Mr. Speaker, yesterday at Rocky Mountain House Historic Park, I was privileged to join with elected provincial and municipal politicians, along with Chief Tom Bigchild and Chief Caroline Beaverbones from the Sunchild and O'Chiese reserves to officially recognize Native Awareness Week in the province of Alberta.
Chief Caroline spoke quietly and eloquently as she, on Mother's Day, told of her pride in her children and grandchildren and her equally strong pride in her heritage.
We all spoke on the need to foster tolerance and understanding, and of the need to be proud of our heritage and our country.

May 14, 1990
The young people from the Sunchild, O'Chiese and Bighorn Reserves provided examples of that pride in art, poems and song.
My compliments go to the organizers from the Rocky Mountain House Native Friendship Centre and the parks staff who provided an opportunity for natives and non-natives to further appreciate the culture and contribution of native Canadians.


NATIONAL TOURISM WEEK
Mr. Bob Wood (Nipissing):: Mr. Speaker, today marks the beginning of National Tourism Awareness Week and I invite all Canadians to participate in events designed to heighten our awareness of this critical industry.
Not many people know how important tourism is to the Canadian economy. It is our third largest industry at $25 billion per year, our second largest earner of foreign exchange at $7 billion, and it contributes $11 billion in tax revenues to government. It provides employment to all regions of Canada and to all segments of the labour force. In fact, 632,000 people, or 10 per cent of the labour force, derive their living from tourism.
In the near north alone, which includes my riding of Nipissing, tourism generates $200 million annually and $1 billion across all of northern Ontario. Yet this government continues to neglect this key industry. At a time when competition for the world travel market is intensifying, we should not be tacking on an additional 7 per cent to the cost of our tourism products. Indeed, when the government sees fit to slash the tourism promotion budget from $35 million to $20 million, we have to question its commitment to this vital industry which will be the world's largest by the next decade.


STATUS OF WOMEN
Ms. Lynn Hunter (Saanich-Gulf Islands):: Mr. Speaker, although the government is always ready to meet with its corporate friends, it has once again refused to meet with the National Action Committee on the Status of Women.
Were the government listening, it would hear a reasoned voice on the subject of peace and disarmament. Women have been at the forefront of the peace movement. Agnes Macphail, the first women MP and a member of my party, worked tirelessly for the cause of peace and international co-operation. New Democrats are proud to continue that tradition.
The NDP has been speaking out about the considerable economic advantages of peace and disarmament. Savings in defence spending will produce what has been called a peace dividend. Canadian women are demanding that these funds be used to promote improvements in the human condition. The peace dividend can and must be part of a fundamental restructuring of global priorities. Much can be achieved in the current political climate. What is required is leadership.
The time is long overdue for a complete and progressive update of our foreign and defence policy. When will this government listen to the voice of women?


MEECH LAKE ACCORD
Mr. Ross Belsher (Parliamentary Secretary to Minister of Transport):: Mr. Speaker, ten years ago today then Prime Minister Pierre Trudeau, at the height of the referendum debate, told a gathering in Montreal's Paul Sauve Arena that a "no" vote would lead to a renewal of federalism. The majority of Quebecers who voted no, and in fact the rest of Canada, believed that this renewed federalism would involve all provinces, including Quebec.
As we all know, in 1982 Canada patriated her Constitution. Mr. Trudeau affected a renewal of federalism. The problem was and still is that Quebec was left out.
In 1987, the Prime Minister joined all ten Premiers in drafting the Meech Lake Constitutional Accord. This accord fulfilled the promise of renewed federalism, unkept for seven years.
Ten years have passed since Quebec voted yes to Canada. Ten years have passed with Quebec out in the constitutional cold. Ten weeks have passed since I encouraged Canada's 11 First Ministers to reconsider their positions and find a way around the constitutional impasse that we now face.
May 14, 1990

There are now five weeks left to Meech. All Canadians are counting down to Meech. All Canadians are counting on Canada's First Ministers.


JUSTICE
Mr. John Harvard (Winnipeg St. James):: Mr. Speaker, I want to use the next minute to implore the Minister of Justice to get a move on in the David Milgaard case.
David Milgaard has been in jail for 21 years for a murder he says he never committed and there is now serious doubt as to his guilt. Even the RCMP are interviewing a suspect in the case.
Despite the fact that the Department of Justice was asked more than a year ago to reopen the case, the file has yet to reach the desk of the minister. Why? What is behind this procrastination? Is it sloth? Is it indifference? Is it hubris? Is it the desire to protect the reputations of certain individuals?
Whatever the reason, it is now time for the Minister of Justice to act on the David Milgaard case, for justice delayed is justice denied.


STANDING COMMITTEE ON CONSUMER AND CORPORATE AFFAIRS
Mr. Garth Turner (Halton-Peel):: Mr. Speaker, I rise today to inform the House of a significant development with respect to the Standing Committee on Consumer and Corporate Affairs. That committee, last Thursday, sent a summons to the Canadian Union of Public Employees indicating the union is an important witness in our study of the economic effects of the GST. CUPE President Jeff Rose has now responded saying he will appear before the committee next Tuesday evening.
This is an example of responsible leadership. Mr. Rose and I may disagree fundamentally on a number of issues but I would like to hold Mr. Rose up as a model of a responsible labour leader in this country and I urge every other labour leader in the country to be as responsible. I hope Shirley Carr is listening.


OFFICIAL LANGUAGES
Mr. Guy H. Arseneault (Restigouche-Chaleur):: Mr. Speaker, last February 15 I made some comments in this House concerning the finance ministry's provision of brochures, in one official language only, to residents of my riding concerning the goods and services tax. On May 1, I again received a letter from a constituent complaining that he had received government information concerning the GST in one language only.

The same problem also occurred throughout the Acadian peninsula where a number of people received a GST English-only publication from the Government of Canada.
I have to remind the Minister of Finance that the residents of the riding of Restigouche-Chaleur are bilingual and that New Brunswick is the only officially bilingual province in Canada.
My constituents expect bilingual services and the government must see to it that they do.
How much longer must New Brunswickers wait until the federal government offers them services in both official languages?


ANTI-SEMITISM
Ms. Margaret Mitchell (Vancouver East):: Mr. Speaker, Canadians are sickened at the barbarous desecration of Jewish graves and the mutilation of a corpse that occurred last week in France which stimulated similar incidents over the weekend.
Parliamentarians and all persons who respect human rights and abhor racism join with Jews to lament and protest such anti-Semitic acts which create fear of another holocaust and bring shame on us all.
As Canadians we must not be complacent. In 1987, B'Nai Brith recorded a 57 per cent rise in acts of bigotry against the Jewish communities. In Toronto alone there were 39 reports of harassment of Jews. Six desecrations

May 14, 1990
Oral Questions
of Canadian synagogues occurred. In the Ottawa area, swastikas were painted at the scene of a golf course.
I am ashamed that the Premier of British Columbia condones a "Christian only" policy in his party and even made anti-Jewish jokes.
Many of these acts are blamed on neo-Nazi skinheads who are recruiting young Canadians.


MEECH LAKE ACCORD
Mr. Yvon Cote (Richmond-Wolfe):: Mr. Speaker, it has been over ten years since the majority of Quebecers voted no in the referendum after what was described as a major and memorable intervention by former Prime Minister of Canada Pierre Trudeau. He did assure them that no meant yes to renewed federalism, and I quote: If the answer to the referendum question is no, we all said that the no will be interpreted as a mandate to change the Constitution and renew federalism.
But after patriating the Constitution in 1982 without the agreement of Quebec, Mr. Speaker, the former Prime Minister reneged on his promise.
This is why I consider that the current Meech Lake Accord is the obvious sign of the fairness and efficiency of the constitutional program and objectives of the Prime Minister of Canada. I for one hope that he will be able to win the faith and good will of all Canadians.


MOTHER'S DAY
Mr. Rey Pagtakhan (Winnipeg North):: Mr. Speaker, yesterday was Mother's Day 1990. Canadians celebrate this day to show reverence to all mothers and to appreciate the sacrifices they endure for their children throughout their living years.
Lest we forget, let me quote a few lines from Susan Kastner's reflections in "Mother has Reason to Weep" which appeared in yesterday's Toronto Star.
There are mothers weeping over children who have
disappeared - ; who weep while they hold their starving children in
their laps; -who weep for daughters and sons-sold into
prostitution to get the family a little to eat; -who weep because their young are being murdered by drugs; -who weep because their children will grow up paying forever for the colour of their skin; -who weep for children sent to war; there are mothers who weep because there are no jobs for their men or for themselves, and the future holds no prospect of jobs for their children.
Yes, mothers continue to think of their children and men. We in Parliament should think always of all mothers and of those for whom they weep.


STATUS OF WOMEN
Ms. Joy Langan (Mission -Coquitlam):: Mr. Speaker, it has become obvious to even the most casual observer that the priorities of this government are misplaced.
The Minister responsible for the Status of Women and her colleague, the Secretary of State, are making much of the reinstated funding for women's centres, but this action betrays the shallowness of this government's commitment to women in Canada.
Bill C-69 will limit funding transfers for child care, for shelter for battered women, for income support. That is the Tory commitment to women and children in this country.
Women and their children are the victims of this government's misplaced priorities. It has cut the Canada Assistance Plan, it has cut UI coverage, it has clawed back old age pensions and it has clawed back family allowance. This government has no commitment to women's equity. It has no commitment to children. Its priorities are misplaced and wrongheaded and Canadian women will neither forgive nor forget this government for its insistent attack upon them.


Hon. Herb Gray (Leader of the Opposition):: Mr. Speaker, I have a question for the Acting Prime Minister. This morning I and other members of the Official Opposition met in an open and constructive public dialogue with members of the National Action Committee on the Status of Women, a widely based group



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[Stage Direction]
May 14, 1990
[Stage Direction]
representing more than 500 organizations representing hundreds and thousands of Canadian women.
The government, in a failed attempt to control the agenda of women, refused to take part in a similar session, preferring instead to try to allow only a handful of NAC members to meet with only three ministers in closed-door sessions.
Why did the government refuse to take part in this important public dialogue with NAC delegates today? What has it got to hide? Why is it so ashamed of its record when it comes to fighting for the rights of women?
Hon. Mary Collins (Associate Minister of National Defence and Minister responsible for Status of Women):: Mr. Speaker, the government's record with respect to women in this country is second to none and you are very familiar with our advances. We meet with representatives of women's organizations on an ongoing basis. We had hoped to have the opportunity to meet with representatives of NAC this morning. In fact, the executive had agreed to do so, but I understand the general membership decided not to proceed.
I will continue to look for opportunities to have constructive dialogue with representatives of NAC and with other women's organizations, where both sides can tell their story and both sides can listen.
We have entered into those kinds of discussions with groups such as the National Council of Women of Canada, the Canadian Federation of Business and Professional Women, the Canadian Federation of University Women, and the Canadian Catholic Women's League. I look forward to opportunities of meeting with representatives of NAC during the coming year hopefully to build a constructive, positive relationship.


Herbert Eser (Herb) Gray: Mr. Speaker, the minister's answer was certainly not clear and convincing. Why did the government refuse to hold a public meeting? Why was there only a closed-door session, in which only the three women in cabinet met the representatives of this important group?
I repeat, why didn't the government organize public meetings including the Minister of National Health and Welfare and the Secretary of State, two ministers who play a key role in developing policies concerning women?
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Why didn't the government organize a public meeting with all delegates of the National Action Committee, like the opposition did?


Mary Collins: Mr. Speaker, as I have already indicated, it is our feeling that a public meeting is not productive unless there is a full opportunity for both sides to tell their story and for both sides to listen.
The Minister of National Health and Welfare recently met with representatives of NAC and is away from Ottawa today. The Secretary of State is also away from Ottawa. He has indicated he would be prepared to meet with representatives of NAC at a mutually acceptable date later this month.


PUBLIC SERVICE
Herbert Eser (Herb) Gray: Mr. Speaker, the opposition parties found it possible to be present today. Furthermore, they found it possible to have a dialogue with the representatives of NAC.
I want to turn to a specific case of lack of concern by the government for the rights of women. I am talking about the case of Mary Pitawanakwat. She was fired by the government two years after she complained of facing sexual and racial harassment in her job as a social development officer with the federal Department of Secretary of State.
Why has the government been attempting to obtain a Federal Court order to block her efforts to have the Canadian Human Rights Tribunal deal with her complaints on their merits? Will the government drop these efforts and allow the commission to get on with the job of ruling on these complaints on their merits?
Does the government not realize that, if it continues with these efforts to block this case being heard, it is in direct contradiction with its own national campaign against racial discrimination and for the promotion of affirmative action for the rights of women and natives?


Mary Collins: Mr. Speaker, I know that case is before my colleagues for consideration. I met Mary a few weeks ago. I am sure

May 14, 1990
Oral Questions
that they will be taking that issue under consideration. I have nothing further to report on it today.


ROYAL COMMISSION ON REPRODUCTIVE TECHNOLOGIES
Ms. Mary Clancy (Halifax):: Mr. Speaker, in the absence of the Prime Minister, I will direct my question to the Acting Prime Minister. It is with regard to the Royal Commission on Reproductive Technologies.
This Royal commission is due to report in October of 1991 and hundreds of groups, women and men, nationwide, want to contribute to this process.
Can the Acting Prime Minister tell Canadians that the process will start immediately, or is this just another example of the government stifling debate, particularly when it relates to women's issues?


Harvie Andre: We set it up.


Mary Catherine Clancy: You set it up, Harvey, but let's get it moving.


Mary Collins: Mr. Speaker, we discussed this in committee last week. I am pleased to inform the hon. member that that commission is proceeding. It is hiring its staff. It is preparing for hearings which, I understand, will be held this fall throughout the country.
As I am sure the hon. member is aware, once a Royal commission is established, it is the author of its own destiny. I am sure that its work will proceed and it will be able to bring forward recommendations which will stand in the interest of both men and women in this vital area for the future.


Mary Catherine Clancy: Mr. Speaker, Canadian women are, to say the least, disillusioned by the government's failure to restore funding to eight major research groups in the country. The Royal commission, in spite of the good words that we hear, is still not on the road.
Will the Acting Prime Minister show that the government is committed to research and development, and
restore funding to these research groups? Will someone announce the royal commission's timetable?


Mary Collins: Mr. Speaker, I have been advised that the royal commission is planning its hearings. I am meeting with some of their people in the near future.
I cannot assure the member that there will be any changes with respect to funding. The Secretary of State has had to have funding cuts, as have all government departments, in order that we can proceed with deficit reduction and ensure that our economy is moving ahead. That will absolutely be the most important issue for women in the future.
I have met with representatives of these organizations. The Secretary of State has met with their representatives to work with them to find alternative sources of funding in order that they continue with the good work that they undertake.


STATUS OF WOMEN
Ms. Audrey McLaughlin (Yukon):: Mr. Speaker, my question is for the Minister responsible for the Status of Women. The largest women's group in Canada, representing five million women, had asked to meet with all three political parties today. The government and the minister responsible for the Status of Women refused to do so.
The government meets with business groups and that is reported on publicly. It meets with the corporate sector and that is reported on. The government travels around the world and meets with other governments, and that is reported publicly.
Even if her colleagues will not, why will the Minister responsible for the Status of Women not meet with the National Action Committee representing five million women? Why does she not have the courage to say: "I will meet with you in public. I will be accountable for my government's policies"?


Mary Collins: Mr. Speaker, as I am sure the hon. member is aware, I did offer to meet with its representatives to enter into a
May 14, 1990

dialogue on what I believe would be a constructive way of approaching these issues.
I am also, of course, prepared to meet with women's organizations across the country and speak to their annual meetings upon invitation. I will continue to do so, including, of course, with NAC upon an invitation that might be extended to me.


Audrey Marlene McLaughlin: Mr. Speaker, the minister knows full well that the question is, why she will not meet in public.
I want to raise again with the Minister responsible for the Status of Women an all-party report from 1987 called Fairness in Funding. It is a report endorsed by her party.
The report states that funding for women's programs should "at least be maintained and indexed to a cost of living allowance". This report also endorsed increased funding for women's programs. It also endorsed considering increased funding for northern and rural women's programs.
How can the Minister responsible for the Status of Women meet her mandate? How can she stand there and say she will not meet publicly with women's groups? Will she again confirm her endorsement of these principles, as her party did in 1987?


Mary Collins: Mr. Speaker, as I have already indicated, I am willing and prepared. I think I have met with representatives of some 40 women's groups across the country over two months, in nine of the ten provinces and in one of the territories. I will continue to do that. I will listen to their concerns and encourage my colleagues to enter into constructive dialogue and effective lobbying in order that we can further women's equality in the country.
The Women's Program of the Secretary of State, of course, undertakes valuable work but that program, like all programs of government, must recognize that we are in a period of financial restraint and we all must share in that restraint.
However, on the other hand, I think it is important to recognize that the work that has been undertaken by my colleagues in Health and Welfare and in Employment and Immigration. They are funding a wide variety of
Oral Questions
activities to further women's equality through the Canadian Jobs Strategy program and the family violence prevention program.
The holistic approach of the government to support women in their various activities is a growing and expanding role and the results, we are going to ensure, will be the furtherance of social, legal and economic equality for women in the country.


Audrey Marlene McLaughlin: Mr. Speaker, I would like to assure the Minister responsible for the Status of Women that, unlike sometimes in Question Period, it is possible to have a dialogue with the women of Canada. We had a dialogue with the National Action Committee today. This minister can have one too.

Mr. Speaker, my last question is directed to the same minister. In December, all women, in Quebec and across Canada, were horrified when fourteen young women lost their lives, murdered by a man who had a grudge against feminists. The minister must give a clear response to all Canadians who are trying to understand.
Will she order a public inquiry on this tragedy and on violence against women in society?


Mary Collins: Mr. Speaker, the incident in Montreal was a tragedy of proportions beyond, perhaps, the ability of any of us to truly understand.
The issue of violence against women is probably my top priority. The government must look further into the causes and prevention, and try to deal with this problem in an effective way.
I will be working with my colleagues and other colleagues in women's organizations across the country to help us find answers to this really dreadful problem in our society.
A royal commission on that particular incident would not be within the prerogative of the federal government. I think our approach should be to start to address the root problems of violence against women and also, of course, to support women who find themselves in situations of abuse, to provide protection for them and to deal with this problem from a holistic approach as well.

May 14, 1990
Oral Questions
[Translation)


VISIBLE MINORITIES
Mrs. Shirley Maheu (Saint-Laurent-Cartierville):: Mr. Speaker, my question is directed to the Minister responsible for Multiculturalism and Citizenship, and in his absence, I would ask the Acting Prime Minister to respond.
At the meeting of the standing committee last week, the minister was unable to justify his failure to hire representatives of visible minorities, especially women. Today, could the minister give us his reasons and tell us when he intends to remedy a situation that has become unacceptable and intolerable?


Hon. Robert de Cotret (President of the Treasury Board):: Mr. Speaker, in response to the hon. member's question, we have been making considerable progress in recent years as far as visible minorities are concerned. Although we would like to do more, the objectives set for 1991 show an increase of 3.8 per cent in minority representation in the Public service, compared with 3 per cent in 1989. I may add that the departments are committed to meeting these objectives.
Regarding women's employment in the Public Service, Mr. Speaker, I think we have worked very hard in this area during the past years. In fact, I can inform the hon. member that in all categories- including management, scientific and professional, and administrative-there has been a major increase in the percentage of women's participation, compared with the situation in 1984 when this government was elected.


Shirley Maheu: Mr. Speaker, I would like to remind the hon. minister that this does not answer the problems, the doublewhammy that visible minority women face.
My supplementary question is for the President of the Treasury Board.
The latest report on the Employment Equity Act clearly shows that the government is slow to act in this area, despite your figures. When will the government amend the Act in order to increase the number of
women in key positions in the Public Service and when can we expect concrete results?


Robert René de Cotret: Mr. Speaker, concerning key positions in the Public Service, I would like to remind my hon. colleague that the proportion of women appointed to positions by Order in Council-ambassadorial positions, and so on- has increased as never before in the history of this country.
I would also like to tell my hon. colleague that the management category, for example, which is the most important one in the Public Service, was only 7 per cent female in 1984. This proportion increased from 7 per cent in 1984 to 13.6 per cent in 1989. We doubled it, Mr. Speaker. We are continuing, we are not stopping there.


AGRICULTURE
Mr. Maurice Foster (Algoma):: Mr. Speaker, my question is for the Acting Prime Minister and concerns the desperate financial situation facing western prairie farmers.
Six weeks has passed since the government promised to take some action with regard to the financial crunch facing prairie farmers. Now that the western premiers have adopted a common front saying they simply cannot afford to cost share any supplementary assistance to farmers because the government has cut off or reduced their transfer payments, how long will the government continue to stonewall western farmers on these payments, payments that were needed weeks ago and are due now?


Mr. Murray Cardiff (Parliamentary Secretary to Deputy Prime Minister, President of the Privy Council and Minister of Agriculture):: Mr. Speaker, this government has never in history stonewalled farmers.
There is a meeting taking place at the present time in Winnipeg dealing with this special problem. The Minister of Agriculture and the Minister of State for Grains and Oilseeds are meeting at the present time with the ministers of agriculture of the three provinces to formalize and, hopefully, to finalize an agreement with those provinces.
May 14, 1990

We are hopeful that we can be successful. If we all work together, I am sure we can be.


Maurice Brydon Foster: Mr. Speaker, meetings like this have been going on for six weeks now. Is the parliamentary secretary aware that credit is simply drying up for farmers on the prairies?
With wheat prices down by $30 a tonne and with interest rates up above 15 per cent, farmers simply cannot get credit. In light of the parliamentary secretary's comments, can he assure western agriculture producers that cheques will be sent out before the end of this month? When will payments be made to these producers?


Murray Cardiff: Mr. Speaker, it would be very premature to make any indication of that when a meeting is taking place today.
The Minister of Agriculture has indicated that he is very flexible in terms of matching funds that the provinces can make available to match the $500 million that the federal government has put up.
As I said before, it would be very premature to make any announcement today while the ministers are meeting.


CANADA ASSISTANCE PLAN
Ms. Dawn Black (New Westminster-Burnaby):: Mr. Speaker, the Minister responsible for the Status of Women answered the leader of the New Democratic Party by saying that violence against women was her "top priority". I certainly wish that this matter would become the top priority of the government.
If this is her top priority, and if it is any kind of a priority for her government, why did the government put a cap on the Canada Assistance Plan? This is the federal-provincial funding mechanism for shelters for battered women. Why is their a cap on CAP?


Hon. Perrin Beatty (Minister of National Health and Welfare):: Mr. Speaker, I am the minister responsible for the Canada Assistance Plan. I can indicate to the hon. member, as most members of the House of Commons recognize, it is important that the federal government have controls on federal spending.
Oral Questions
The one area which has not been controlled up until now has been transfers to the provinces which have been increasing at the rate of 6 per cent per annum. The caps apply only to the wealthy provinces.
In the case of Ontario the cap on transfers on EPF and the Canada Assistance Plan amount to less than 1 per cent of the revenues of the Ontario government for this year. It is absolutely possible for the Ontario government, as it is for other provinces, to find money for family violence or any other area of importance to them.


Dawn Black: Mr. Speaker, the women who are battered in the province of British Columbia and the women who are subject to abuse in Ontario and Alberta are just as battered and just as bruised as any of the women in any other part of this country.
When are we going to see the government take this situation seriously? When are we going to see real dollars and a real plan of effective action to combat violence against women in our society?


Henry Perrin Beatty: Mr. Speaker, first, the hon. member mentions British Columbia. The cap on CAP amounts to 5 per cent growth per annum, which is permitted for every province. British Columbia did not meet that target last year and likely will not this year. Thus the cap probably will not affect that province.
Second, the commitment to doing everything we can to fight family violence remains. We are determined to do that. We have committed money specifically to family violence programs, quite outside of the Canada Assistance Plan. We are going to continue to do that.


FISHERIES
Mr. Fernand Robichaud (Beausejour):: Mr. Speaker, my question is addressed to the minister responsible for fisheries. Last week, the Minister of Fisheries and Oceans announced a fisheries adjustment program that is far from meeting the needs of the regions concerned. Besides overlooking many communities, it makes no mention of fishermen in Quebec, New Brunswick and Prince Edward Island.

May 14, 1990
Oral Questions
Can the minister tell us why the government completely forgot about the fishermen in these provinces? Or maybe the government still believes, as does the Prime Minister, that all these people seem to be happy and doing fine?


Hon. John C. Crosbie (Minister for International Trade):: Mr. Speaker, the hon. gentleman should know that the program announced a week ago today by the Minister of Fisheries and Oceans is the Atlantic Fisheries Adjustment Program. It certainly applies to New Brunswick, Prince Edward Island, Newfoundland and Labrador, and Nova Scotia.
With respect to the province of Quebec, the Minister of Fisheries is prepared to discuss with the province of Quebec whatever program may be particularly needed in that province.
In addition, this program concentrates on the problems of the fishery, particularly with respect to the offshore and in connection with the total allowable catches that were recommended as a result of scientific advice and the interim report of the Harris committee this year.
The inshore fishery with particular reference to Newfoundland and Labrador has not been affected in so far as total allowable catches go because the allowance remains at 115,000 tonnes this year. If the fish strike in and we have a good fishery there, that is one situation. If it is a poor fishery, that will have to be dealt with later.
With respect to the question of whether it is new money or not, this is usually something the hon. member asks. He asks his old canard. This is money in Canadian currency, and it is all new money.
With respect to rebuilding the fish stocks, the $150 million under that heading is all new money that was not provided for before.


Fernand Robichaud: Taken away from other programs.


John Carnell Crosbie: Just wait now. The hon. gentleman wanted to know if it is new, old, in between or tattle-tale gray. I am telling him.
For economic diversification there is $146 million, which is all new money never provided for before in the Estimates.
That is $146 million plus $130 million. I have missed $130 million for adjusting to current realities, which is all new money.
Add up $130 million, plus $150 million, plus $146 million and what do you get? A hell of a lot of new money.


Fernand Robichaud: My supplementary is for the same minister.
The whole lobster industry is in a severe crisis. Fishermen are receiving prices that do not even cover their operating costs.
Will the minister come up with a price support program-new money-for the lobster fishermen? Or will he just offer to promote the sale of lobster at prices that will drive the fishermen out of the lobster industry. Is that what the government is offering?
Hon. John C. Crosbie (Minister for International
Trade): Mr. Speaker, the lobster season has really just begun in its fullest sense at the present time. There is a problem with lobster because there is an over-supply in so far as the markets are concerned.
The way in which one can attempt to overcome that is to try to increase the demand. That is what the minister is attempting to do. He announced a program involving $2.4 million on May 11 with the fisheries ministers of P.E.I. and New Brunswick to promote New Brunswick and P.E.I. lobster during the next three years.
In addition, the Departments of External Affairs and International Trade have launched promotional efforts for lobster in more than 20 foreign posts abroad.
Various fairs, missions and market intelligence activities are planned to enhance the diversification of processed lobster to encourage the development of new products in an attempt to overcome this problem, which is not a simple one because it is a problem of over-supply.
I am surprised that the world does not eat all the lobster that we produce and that the demand does not outrun the supply. But we have to make sure that they understand.
May 14, 1990

I attended a promotional effort in London last fall in connection with lobster. I expect that this problem will eventually be overcome, but it will take some time.


Roger Simmons: Mr. Speaker, my question is for the Minister of International Trade in the absence of the Minister of Fisheries and Oceans.
The minister will know that federal scientists announced in St. John's today their latest findings, namely, that previous estimates of northern cod stocks were too high, and that the fishery is in even worse shape than they had projected earlier. Yet his bosom pal, the European fisheries minister, has called for yet one more study before they stop pillaging our fish stocks.
When is the government, and in particular the minister, going to take off the kid gloves and stand up for the fishermen and the plant workers, his fellow contrymen?


John Carnell Crosbie: Mr. Speaker, long before the hon. gentleman came into this Chamber and long after he is gone from this Chamber I will be standing up for the fishermen of Newfoundland and Labrador.


Some hon. members:: Hear, hear!


John Carnell Crosbie: Rather than this approach of alarm that the hon. gentleman is trying to spread, we are dealing with the problem. Today, there was a meeting of the Atlantic Groundfish Advisory Committee in St. John's so that the people who participate, and the press, could be fully briefed on the latest scientific information. It is an open process that our Minister of Fisheries and Oceans is involved in.
The new estimates confirm last year's assessment and the conclusion of the Harris panel. The 1983-84 year classes are now considered to be among the poorest ever seen. The spawning stock will decline in 1991 as these year classes mature.
However, there is a brighter note as well. The 1986-87 year classes appear much stronger in research surveys and could contribute significantly to stock rebuilding in 1992 and later years, if not extensively caught as juveniles.
These estimates now have to be confirmed through meetings with fishermen. Toward the end of the year there will be formal scientific advice for next year, at
Oral Questions
which time the minister will discuss the options with Atlantic fisheries ministers, the industry and the unions.


Roger Simmons: Mr. Speaker, while he is standing up for fishermen, probably he could tell us this in relation to last week's aid package. He will know that in the 1986 FPI privatization agreement, provision was made to keep the plants at Trepassey in his riding, Gaultois and Grand Bank open.
Is the minister prepared to recommend to his colleagues in Cabinet that the community adjustment funding provided for in last week's package be applied to keep Trepassesy, Grand Bank and Gaultois open under Clause 5 of that privatization agreement?


John Carnell Crosbie: Mr. Speaker, I might remind the hon. gentleman that he was a member of a government that gave away 9,500 tonnes a year of prime northern cod within the Canadian 200-mile limit to the European community. This is the same hon. member who now abuses diplomatic representatives who come to the gallery of this House. He got up the other day and insulted those particular people.


Mr. Boudria:: That is not proper.


Some hon. members:: Oh, oh!


John Carnell Crosbie: Mr. Speaker, I am rather timorous. I get frightened and worried by the noise opposite.
With reference to community development funding, those communities can use those funds for any economic development in their communities, including using them to see whether the plants in their community can continue to operate, so long as they do not use them for operating subsidies. They can use them otherwise to try to ensure that the plants continue to operate under new ownership or other arrangements.


THE ENVIRONMENT
Mr. Jim Fulton (Skeena):: Mr. Speaker, my question is for the Acting Prime Minister. I assume there is one across the way.
Since the Brundtland commission, the Federal Court, the National Task Force on the Environment and Economy and the Canadian Environmental Advisory Council have either ruled inclusion or called for legislated environmental review of cabinet policy, and since in the last few days Canadians have been shocked to learn that

May 14, 1990
Oral Questions
this government has decided to exempt its own cabinet policies from environmental review, will whoever is the Acting Prime Minister today take this opportunity to reverse publicly this odious decision?


Hon. Frank Oberle (Minister of Forestry):: Mr. Speaker, as my hon. friend knows, the Minister of the Environment is attending a very important international conference.
However, he did answer a similar question that the hon. member posed last week in the House before he left in which he reiterated the government's commitment to place before the House and the country a very comprehensive plan and the government's new policy which will reflect not only the government's commitment to a new ethic but also the programs that we intend to initiate in terms of the ERP review process.
The details of the legislation are still in cabinet. The hon. member will have to await the outcome of the final determination.


James Ross Fulton: Mr. Speaker, my supplementary is for the Acting Prime Minister. I do not know whether that is my friend Frank or not.
Earlier today an alliance led by Greenpeace, representing more than a million Canadians, called for a royal commission on the national emergency facing Canada's forests. Perhaps unknown to most Canadians, Canadian forests are disappearing to fire and clear cutting at a rate comparable to that in the Amazon-one acre every five seconds.
I wonder if someone on the government side, perhaps the Acting Prime Minister, might announce that there will in fact be a royal commission of inquiry into Canada's most valuable natural resource, our forests.


Frank Oberle: Perhaps if my hon. friend would reflect on what the government has done over the last five years in terms of developing the necessary strategic alliances with industry and the provinces which have, after all, the principal and the first line of responsibility for the custodianship of the resources that lie within their scope of jurisdiction, the hon. member would recognize that much has been done.
This year 1.2 billion trees will be planted. Some of the policies that we have been able to put in place over the last five years are showing very impressive results.
Perhaps the hon. member would wait for the final assessment of the progress that has been made over the last five years before he would call or join the chorus for a royal commission.


INCOME TAX REFUNDS
Edna Anderson: Mr. Speaker, constituents of mine from the riding of Simcoe Centre have made numerous inquiries on the status of badly needed tax refunds they are expecting from Revenue Canada.
I would like to ask the Minister of National Revenue what he is doing to provide accurate information to Canadians regarding the status of their individual tax refunds in order to reassure them that they will receive the money owed in a timely and efficient manner.


Hon. Otto Jelinek (Minister of National Revenue):: Mr. Speaker, as the hon. member could be aware, we have processed a record number of 6.2 million refunds as of April 30 due to the improvements in our productivity efforts in order to assist the taxpayer.
Nevertheless, I would like to point out to the hon. member that starting tomorrow, as a matter of fact, all taxpayers will be able to take advantage of a tele-refund program, which is a national computerized service, which will provide up-to-date information on any refund services to the taxpayer.
This is yet another step to improve productivity and to make the system fairer and simpler for Canadian taxpayers.


NEW HORIZONS
Mr. Robert D. Nault (Kenora-Rainy River):: Mr. Speaker, my question is to the Minister of National Health and Welfare.
May 14, 1990

I have been informed that in northwestern Ontario the New Horizons Program for seniors has been severely cut. In fact, there will only be a total of six applications approved for all of northwestern Ontario this coming year in comparison to nine applications which were approved in my riding last year.
Can the minister tell us exactly what is going on with the New Horizons Program for seniors? I think all seniors in this country would like to know.


Henry Perrin Beatty: Mr. Speaker, you bet I can, and I would be particularly delighted.
I am pleased to inform the hon. member and the House that he was particularly well treated last year relative to virtually all the other members in the House of Commons.
The allocation for the hon. member's constituency was some $36,806. The amount spent was $74,975. The amount approved was some $86,688.
Already this year the amount committed from the previous year carried over some $33,574, and there is a further allocation of some $24,620.
In terms of programs to be submitted for my approval over the next two to three weeks there is some $9,794.
The hon. member should be pretty pleased with that.


Some hon. members:: Hear, hear!


Robert Daniel Nault: Mr. Speaker, it is very interesting that the minister knew exactly what I was going to ask him.
I would like to inform the minister, since he seems to know so much, that the fact is that my riding has been cut by 32 per cent for the upcoming year.


Some hon. members:: Oh, oh!


Robert Daniel Nault: That is not too bad. Last week the minister suggested to this House, through another minister, that there were no cuts at all to the New Horizons Program.
On the one hand the minister says simply that there have been no cuts, while on the other hand I am being told that I have been cut by 32 per cent. Even though we have been treated so well in Kenora-Rainy River, I would like that to continue.
Could the minister simply tell us if there are any cuts or if there are not any cuts? I would like to know one way or another so that the senior citizens of Kenora and in
Oral Questions
the area I represent will be able to make their plans for the upcoming year.


Henry Perrin Beatty: Mr. Speaker, I am a bit puzzled. The hon. member seemed surprised that I knew he might be asking a question. His office called to tell me so. Perhaps his office did not inform him of the possibility.


Some hon. members:: Hear, hear!


Henry Perrin Beatty: I can simply confirm for the hon. gentleman that his riding was disproportionately well treated last year. With the amount of money carried over this year, he will be exceptionally well treated again this year as well.


CITY OF MONTREAL
Hon. Warren Allmand (Notre-Dame-de-Grace):: Mr. Speaker, my question is to the minister responsible for the city of Montreal.
The lead editorial in yesterday's The Gazette stated:
A dark shadow is clouding Montreal's entrance to the 1990s as a
dynamic, progressive and prosperous city.
The shadow is cast by deepening poverty and misery, by an
expanding underclass of Montrealers with no jobs or precarious jobs,
substandard housing, poor health and little hope.
This assessment was made in a recent report by Paul Lacoste on behalf of the Montreal Centraide campaign.
Considering this shocking analysis, will the federal government now get together with the city of Montreal and with the Government of Quebec to develop a comprehensive city-wide plan to re-establish Montreal as a strong economic centre with good and productive jobs? When can we expect some action on these serious matters?


Hon. Benoit Bouchard (Minister of Industry, Science and Technology):: Mr. Speaker, I am always surprised when the hon. member for Notre-Dame-de-Grace makes such comments about Montreal, considering the situation in which the former Liberal government left Quebec in general and Montreal in particular and considering the programs that have been announced. The hon. member obviously did not refer to the announcement I made two weeks ago in southwestern Montreal, which was extremely well received by Montrealers, and to the efforts that have been made in eastern Montreal. Of course, we are not talking about the hon. member's riding, because it is probably in the

May 14, 1990
Oral Questions
best health of all those on the Island of Montreal, Mr. Speaker.
In view of all this, Mr. Speaker, I think that the hon. member for Notre-Dame-de-Grace knows very well that since the present Government of Canada, the Government of Quebec and the City of Montreal have implemented a package of measures, we are keeping the promises and commitments we had to the city of Montreal and the region in general.


William Warren Allmand: Mr. Speaker, this is not my analysis, but an analysis made by the Montreal Centraide campaign and The Gazette of Montreal. The plan that he put into operation last week was only for southwest Montreal.
In addition to the Lacoste report to which I referred, a recent survey by the Montreal Board of Trade found that Montreal companies are increasingly pessimistic about business conditions in that city.
Another report indicates that construction starts are down 31 per cent.
The regroupement des depts. de sante communautaire stated that one in four Montrealers are living in a state of poverty.
The Montreal Island School Commission said that poverty in Montreal is tied to illiteracy and to immigration conditions.
These are not our assessments-


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


William Warren Allmand: Yes, Mr. Speaker.
I want to know when the government is going to take these reports seriously-these reports, not our analysis-and do something about it?


Benoît Bouchard: Mr. Speaker, the member will not be surprised if I do not always agree with The Gazette.
I believe that we have done for Montreal what we said we would do, and we continue to do it.
The member does not seem to be impressed. He should go and see what we did in southwest Montreal and find out from the community groups what they think about what we did.
The hon. member should speak to the city of Montreal and to many other organizations in Montreal which recognize that with the way the Liberals left Montreal in 1984, we had a lot of work to do. But it is what we do, and we will carry on. We will give Montreal the pride to be a great city of Canada.


ATOMIC ENERGY OF CANADA LIMITED
Mr. Bill Blaikie (Winnipeg Transcona):: Mr. Speaker, my question is for the Minister of Energy who is responsible for Atomic Energy of Canada Limited. It has to do with reports today that the government might be considering throwing good money after bad in helping to complete the Candu reactor project in Romania.
Knowing what he does about the shoddy work record on that site and the contentions about the diversion of nuclear materials, heavy water, et cetera, could the minister tell the House whether the government is prepared to make the decision that this project is beyond redemption and not continue with that work in Romania?


Hon. Jake Epp (Minister of Energy, Mines and Resources):: Mr. Speaker, I have just a couple of points in answer to the hon. member.
First, with respect to the matter of the publicity relating to the diversion of heavy water, I point out to the hon. member that Canada was not involved. That should be kept in mind with respect to the publicity surrounding the diversion of heavy water from another country.
The second point that should be kept in mind is that all the moneys that Romania obligated itself to pay to date on the Cemovoda project have been paid up to the fourth quarter of 1989. There are no arrears.
In response to his question, the Government of Canada was approached after the fall of the Ceausescu regime by the present government for consideration of an extension of EDC credits on repayment terms and obligations such as Romania had met earlier. We have not made a decision on that issue yet.
May 14, 1990

With respect to any changes that would have to occur, obviously safety as well as technological and project management would have to be put into Canadian hands in order to meet the safety obligations that we have.


William Alexander (Bill) Blaikie: Mr. Speaker, knowing the desperation of the nuclear industry in Canada and knowing that it has a strong ally in the minister, I do not expect the government to be as rigorous as we would like it to be in making this decision.
The minister mentioned that Romania paid its debts on this account. It is no wonder it could pay its debts; the site was a forced labour camp and nobody in AECL managed to notice this. If, God forbid, they should go ahead with this project, would the minister please ensure that he sends people to Romania who have their eyes open and who are not so committed to the sale of Candu reactors that they do not notice over a period of years that the place is a forced labour camp, something which was attested to time and again in front of the external affairs committee and by others? Would he promise to send people there who are not so tied to the nuclear industry that they cannot see what is going on right in front of their faces?


Arthur Jacob (Jake) Epp: Mr. Speaker, along with Canada's international responsibility to the non-proliferation treaty, my obligation is to advance energy, including nuclear energy.
I point out to the hon. member that the province of Ontario has well over 50 per cent of its electrical generation in nuclear right now. It is moving toward 60 per cent when its present construction is completed. The point, I say to the hon. member, is that it is my responsibility to look at all energy forms rather than the biases that he, so often over the years while he and I have been in the House, has expressed.
At the present time, since the fall of the Ceausescu regime there are no military conscripts on site. I appreciate what he said in terms of other people working on the site during the Ceausescu regime. It is for those reasons that we are demanding certain changes, keeping in mind that there will be an election on May 20 and hopefully democracy will be restored to that country.
Privilege


PRIVILEGE
Mr. Speaker:: I should advise the House that I have a question of privilege from the hon. member for Skeena. Before the hon. member pleads his case, I want to suggest an approach to this matter which I think would be helpful.
First, I compliment the hon. member on having given to me in very great detail the sum and substance of his position. I want to let the hon. member know that I have looked at the material very carefully. I am not at this time ruling as to whether it is a question of privilege, but I must indicate to the hon. member that there is some doubt about that.
However, in the hon. member's letter supporting his question of privilege, he makes a serious argument that there was an intention to mislead as a consequence of contradictions in statements made by the hon. Minister of the Environment and material put forward by the hon. minister's department.
What I would ask the hon. member to co-operate with is my suggestion that this matter be adjourned until the minister gets back. I will take the information that I have as having completely secured the hon. member's right to raise the matter, but under the circumstances I want the hon. member to co-operate with the Chair in postponing it until the minister can be in his place.


James Ross Fulton: Mr. Speaker, I appreciate what you have had to say.
On the two points that I raise I think it would be quite appropriate to wait until the minister returns. In both cases, as you will see from how I have laid it out, they both relate to matters that happened in the House on Thursday and in relation to some documents that were made available to me either on Friday or over the weekend. I wanted to flag them, because this was my first opportunity to do so, but I am sure the Minister of the Environment would want to be here to hear the argument in person.


Mr. Speaker:: I appreciate the response of the hon. member.

May 14, 1990
Routine Proceedings



ROUTINE PROCEEDINGS


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


Mr. Russell MacLellan (Cape Breton-The Sydneys):: Mr. Speaker, pursuant to Standing Order 36, I have the honour to table a petition, certified correct as to form and content, from members and friends of Branch 126 of the Royal Canadian Legion in Westmount, Nova Scotia.
There are many signatures on this petition, and in part it states that the Government of Canada has introduced changes that will reduce home keeping services to veterans and substantially increase the costs of longterm care.
Whereas the veterans have already given service to this country and should not be targeted by those measures, the petitioners call upon Parliament to reject those budget measures which deprive veterans of proper services and increase their financial hardship.


Peter Andrew Stewart Milliken: Mr. Speaker, I am pleased to present this petition signed by numerous residents also largely members of a legion branch in Kingston, and in fact is signed by some in Napanee, Ontario, who are objecting to the cuts the government has proposed to the veterans services, particularly to the housekeeping costs for veterans and the additional charges for veterans in long-term care.
These petitioners call upon Parliament to reject the budget measures that impose these cuts and ask the government to reinstate them at the earliest possible date.
I am pleased to table this petition on their behalf.


Robert Daniel Nault: Mr. Speaker, it is my pleasure to stand before you and present these petitions, pursuant to Standing Order 36, on behalf of the constituents of Kenora-Rainy River.
Today I have 33 petitions, totalling 3,314 signatures of people in my riding, that again call on the government to change its mind and reassess the reasons for putting this particular legislation in place as it relates to the goods and services tax, knowing full well that it will put our country into a major recession and cause severe inflation that these Canadians know very well we cannot afford.


Mr. Ron Fisher (Saskatoon - Dundurn):: Mr. Speaker, on behalf of constituents from Simcoe, Rainy River, and St. Thomas, Ontario, I would like to present a petition in opposition to the goods and services tax.
It points out that it is a tremendously unfair tax on the basis that it is regressive in that it is taxing people who are least able to afford this kind of tax. It asks the government to change the tax system, for sure, but to bring in one that is equitable, progressive and taxes people according to their ability to pay.


QUESTIONS ON THE ORDER PAPER
[Stage Direction]
(Question answered orally is indicated by an asterisk.)
Albert Glen Cooper: Mr. Speaker, Question No. 304 will be answered today.


Mr. Harvard: Does Mr. Allan Gotlieb receive a salary for his services as Chairman of the Canada Council and, if so (a) in what amount per year (b) is it a full-time or a part-time salary?


Albert Glen Cooper: Please refer to reply to Question No. 214 answered March 23, 1990.
May 14, 1990


The Acting Speaker (Mr. Paproski):: The question as enumerated by the parliamentary secretary has been answered.


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


The Acting Speaker (Mr. Paproski):: Shall the remaining questions stand?


Some hon. members:: Agreed.



GOVERNMENT ORDERS

[Stage Direction]


[Stage Direction]
The House resumed consideration of the motion of Mr. Wilson (Etobicoke Centre) that Bill C-65, an act to provide borrowing authority, be read the third time and passed.
The Acting Speaker (Mr. Paproski):: Before recognizing the hon. member for Burin-St. George's, 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 Nunatsiaq-Goods and Services Tax; the hon. member for Drummond-External Trade; the hon. member for South West Nova-Fisheries.


Roger Simmons: Mr. Speaker, a few minutes ago I was responding to some of the points that my hon. friend from Trois-Rivieres had made. I recall that in particular he had talked about job creation and about the jobs that this government had created. He went a step further. If I were the Minister of State for Finance, I would not applaud until I heard how the gentleman from Trois-Rivieres put his foot into it. He went on to say that it was the quality of the jobs created that excited him.
It may excite him, but it does not much excite the people who live in the fishing communities of Atlantic Canada. Up until now these people have had good quality union rate jobs either in fishing boats or in fish
Government Orders
plants. There is a disaster in the fishery which is not of their creation, a disaster which is created very largely by the overfishing by Spain, Portugal and France, a situation that this government has aided and abetted over the past six years. I can give my friend from Simcoe Centre some figures to support that contention, as I shall in a moment. She could get the same figures by just calling the Department of Fisheries and Oceans, but I will recite them for her in a moment.
When the member talks and brags about the quality of jobs created during the administration of the gentleman from Baie Comeau, he ought not be so fast to brag when he realizes that people who have heretofore had union rate jobs in those communities in Newfoundland and Atlantic Canada generally are now being reduced to service type jobs, if jobs at all. Most of the jobs created during the life of this administration have been service jobs. They have been $4, $5, and $6 an hour jobs. That is the shame of it.
The gentleman from Trois-Rivieres in speaking and introducing this bill on third reading on behalf of the government also went on to talk about how the government is being managed effectively. When is this member going to get serious? It is one thing for him to read the script prepared for him by someone else, but he ought to at least pre-read it before the fact so that he can realize just how outrageous are some of the statements that he has been asked to read into the record.
To suggest to Canadians who have been watching the shenanigans of this government over the past six years that the government is being managed at all well is just a falsehood. Perhaps the member for Burlington does not know what happened recently. If you want an example of effective management, let me lay this one on you, brother. Have you heard that the government, when the Prime Minister went to Costa Rica, actually went to the expense of flying two limousines down to Costa Rica. Does the member for Burlington know that?


An hon. member:: Cadillacs?


Roger Simmons: The assertion by the gentleman from Trois-Rivieres is not that the Liberal government managed effectively. His assertion is that the Tory government manages effectively. I am attempting to demonstrate and to put into the record some examples so that the public of Canada who are watching can judge for themselves. The present example, the one I was giving to my good friend from Burlington, is that the

May 14, 1990
Government Orders
government decides that the vehicles in Costa Rica are not good enough for our Prime Minister.


Mr. Hawkes:: Liar, liar, liar.


The Acting Speaker (Mr. Paproski):: Order, please. The hon. government whip knows what he has to do. He has been around here for a long time. I know it is very warm outside and is also very warm in here, too. Sometimes members get excited, but I am sure the hon. member knows that he has to withdraw.


Frederick James (Jim) Hawkes: Mr. Speaker, in sitting here today and listening to him talk about an RCMP decision as if the government made it, I was impelled-


Pierre H. Vincent: It was the RCMP.


The Acting Speaker (Mr. Paproski):: The government whip should withdraw his comment.


Frederick James (Jim) Hawkes: Mr. Speaker, I would be only too happy to withdraw and point out that the member Opposite-


Some hon. members:: Oh, oh!


An hon. member:: I said you are not saying the truth.


The Acting Speaker (Mr. Paproski):: The hon. member for Burin-St. George's.


Roger Simmons: Mr. Speaker, parliamentary niceties aside, I am sure my friend the government whip was trying to make a point. I believe the point he was trying to make-and I will make it for him-was that I was not telling the truth when I suggested, alleged, or informed the House that two vehicles were flown to Costa Rica for the use of the Prime Minister who was going there on government business. That I understand to be the case.


Frederick James (Jim) Hawkes: That is true.
Mr. Simmons Now he says it is true. Thank you.


Frederick James (Jim) Hawkes: That is true. It was on government business, but it was the RCMP who made the decision.


Roger Simmons: He makes the fine distinction that it was not the government, it was the RCMP.


Frederick James (Jim) Hawkes: Are you going to tell the RCMP what to do?


An hon. member:: They do not tell you what to do.


The Acting Speaker (Mr. Paproski):: I realize that under Standing Order 43 there are no questions or comments for the hon. member. I know hon. members like to get their questions and comments in during a speech, but I would hope that hon. members would refrain so the hon. member can complete his debate.


Maurice Brydon Foster: Now, straighten them out once and for all.


Roger Simmons: Mr. Speaker, let me try one more time to say that I would find it passing strange if the Prime Minister did not want those cars there if someone decided to bring them anyway. I have no doubt that they were brought at the specific request of the Prime Minister. It also tells us volumes about his style of prime ministership. That is another theme that I won't-


Frederick James (Jim) Hawkes: How many agents have bullet-proof limousines?


Roger Simmons: Mr. Speaker, I think we struck a nerve here. Let me just quickly make this point and get off it. The point is that if you are going to brag about good government management, and I say to the gentleman from Trois-Rivieres, I am going to give some examples so the people of Canada can decide for themselves. The one I have put on the record concerns flying two limousines to Costa Rica and, by the way, finding out after the fact there is no gas for them. That is an interesting aside I should have mentioned. I do not think that constitutes good government management.


Frederick James (Jim) Hawkes: Give us an example.


Roger Simmons: Oh, the member wants another example. Why does he not get up and tell us about the 160 or so vans the government bought for the Open Skies conference because it wanted to drag a bit of luggage from the airport. Why does he not tell us about that example of good government management? I can give him examples. Let us go back to the Costa Rica objection, that somehow the RCMP is not government. The last time I checked the public accounts of this country, the RCMP expenditures were part of the public accounts. I believe that is still the case, but the member know that already.


Frederick James (Jim) Hawkes: You can't find a government example.


Roger Simmons: I have just given the member, soon to be minister, two examples already and there are many other examples, if he would like to have them.


Frederick James (Jim) Hawkes: Do you know what government does? The Minister asked if I know what government does, or does he mean do I know what this government does? It is hard to keep track of what this government does. It doubled the public debt, if the minister is looking for some examples of what the government did. It went from-


An hon. member:: You did it.


Roger Simmons: It's my debt, all of a sudden. You should make up your mind. If I wasn't there very long, I couldn't have driven up the debt as much as you say.


An hon. member:: That's right.


Roger Simmons: You cannot have it both ways.
We had a good Liberal government in 1968, too. A good Liberal government in the period leading up to 1968 led by Mr. Pearson.
Mr. Speaker, you will know that I have all the time in the world. There is no clock on me at all. So, as long as members opposite want to get rid of their frustrations, I will indulge them. No problem at all. If I do not get finished today, I have tomorrow and the next day. This is a bill that requires adequate discussion and I intend to do exactly that.
The next issue is that the goods and services tax is fair and equitable. I shouldn't take him seriously. He obviously sat down this morning and said "What eight, ten or 12 things can I get up and say that will be most incongruous or unbelievable?" He talked about government management and all the great jobs the government is creating. They are all service jobs, as we know.
Now he comes to the question of the goods and services tax. He may believe that it is fair and equitable. That is not what small business is saying. That is not what the economists are saying. That is not what 80 per cent of Canadians are saying. They are saying the opposite, that it is the most regressive and unfair tax. Even if none of those were saying that, the member himself would know it is a regressive tax. He will know if one applies an across-the-board percentage at all income levels, it is de facto regressive because a larger portion of low incomes
Government Orders
is devoted toward essentials such as housing, shelter, electricity, food, and so on, than would be the case with high incomes. The goods and services tax is a very regressive and unfair tax.
Nobody is arguing that we should keep the FST. What we are arguing is that the Minister of Finance should go back to his undertaking of 1984 in which he said that a new tax to replace the federal sales tax would be fair, equitable and revenue neutral. We know he has flunked on all three points. It is not fair, not equitable and, of course, it is a tax grab. It is taking in several billion dollars more than the manufacturers' sales tax, the so-called FST.
The hon. member for Trois-Rivieres should not read these scripts without reviewing them to see if he believes them because I am sure he does not believe some of the nonsense he said.
We come to the next profound wisdom he uttered. He said that the big bad Liberals on this side of the House offered no alternative to the goods and services tax. I like to be fair, and I think I quoted him very accurately. He said that, and he nods his head to the effect that he said it.


Mr. Waddell:: You are going to adopt the tax.


Some hon. members:: Oh, oh!


Some hon. members:: Hear, hear!


Roger Simmons: I say two things to my friend from the NDP. First of all, his leadership is over and if he must get involved, just lean down closer so your mike can pick you up.


Ian Gardiner Waddell: I said the Liberals are going to adopt the tax.


Roger Simmons: The hon. member for Trois-Rivieres said that the Liberals have no alternative to the goods and services tax. First, the role of an opposition is to point out what is less than perfect about the government's policies. On the goods and services tax, we have had no difficulty whatsoever finding some imperfections. If we had done no more than that, we would have served our role as Her Majesty's Loyal Opposition.
Being the thinkers we are, we went a step further. We knew those big, bad Tories are going to suggest, that we have no alternative. We went out and got a few alternatives. Let me outline them for the sake of debate?

May 14, 1990
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First, we said that a consumption tax ought to be fair. We are not the only people who say that. The Minister of Finance said it back in 1984. He said that the first principle of a tax is that it ought to be fair. We stand by that. In government we will stand by that. The tax must be fair.
Second,the tax must be equitable. The Minister of Finance said that in 1984.
Third, the tax ought not to be a tax grab. The Minister of Finance said that in 1984 although he is now perpetrating a tax grab on the Canadians.
Fourth, the minister said and we say that the tax ought to be visible. When people buy something, they ought to know what portion of the cost is for the goods and what portion is for the tax.
These are the four principles that we intend to apply to a federal tax to replace the flawed manufacturers' sales tax. These are just principles, but they are important principles even though they do not say very clearly what kind of tax to implement.
What we are doing now in opposition is not unlike what the Tories did when they were in opposition. One tries various ideas, but one really does not know until one is in government and sees the books whether what one is proposing is completely plausible. Subject to finding out just how bad a situation this crowd leaves us, one of the many good suggestions that we have been promoting with a lot of support is the single tax.
My hon. friend from Broadview-Greenwood has done a lot of work on this. I tell the hon. gentleman from Trois-Rivieres that we are getting a lot of support for that tax right from his own riding and throughout the province of Quebec. Indeed, the support for that tax has probably been most enthusiastic from the province of Quebec in terms of the mail that the hon. member for Broadview-Greenwood is getting.
The hon. members opposite shout that that tax is regressive. I think I heard the Minister of State for Finance say that. I want to tell him that that is not what his good friend and my fellow Newfoundlander, Michael Walker who heads up the very conservative think tank at the Fraser Institute in Vancouver, says. He is very supportive of the tax. He says it would be a considerable improvement and light years ahead of the government's proposed goods and services tax.
Michael Walker is one of many hundreds of informed, prominent Canadians who come forward to support this single tax. If the government wants alternatives we could offer all kinds of credible alternatives to what the government is proposing in this goods and services tax.
Let us not forget that what we are debating this afternoon is Bill C-65, an act to provide some borrowing authority for the government so it can rush out and borrow another $25.5 billion to keep afloat for another year. I take the view that borrowing itself is not a sin as long as one borrows within his or her capacity to repay and also, if it is for a reasonable purpose.
These are basically the two yardsticks that prudent individuals apply to themselves when they go out to borrow. They borrow having in mind their ability to repay the indebtedness, and they borrow for a good purpose. In individual terms, it is often a house, a car or any justifiable expenditure. If those two criteria are applied to personal borrowing or government borrowing, there follow a number of questions as to the government's ability to repay or how that ability could be improved. I touched briefly on that point when speaking before Question Period, earlier today. I indicated that the government has within its power changing the interest rate policy of this country.
I happen to think what is going on now is unconscionable. It is unconscionable in terms of what it is doing to the deficit, a matter that is of tremendous concern to people opposite-although one would never know it when one sees what they are doing to the deficit by allowing interest rates to continue very high. It is unconscionable when one realizes that we are fully 5 or
5.5	percentage points above American interest rates. So, the argument of attracting foreign capital does not really apply here. We have already put ourselves in a position that is more than competitive in terms of competing with American loan institutions to attract capital.
It is absolutely unconscionable in what it is doing to family budgets across the country. People who are locked into house mortgages have absolutely no control. They have no say whatsoever when asked to pay that extra $50 to $100 a month over and above what they should be paying. The government has allowed the interest rate to become unconscionably high. People who have consumer loans for cars, for home improvements, for university education, and made those commitments of indebtedness in good faith at a time when interest rates were
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considerably lower, are now caught, not by any misdemeanour they have committed, but by the terrible insensitivity of the government.
These people all across the country are now paying through the nose, many hundreds of dollars more a month for many families, for their house mortgages, car loans, consumer loans of various kinds, university education loans. They are paying much more than they ought to be paying. If only the government would come up with a fairer and a more sensible interest rate policy or, more to the point, would allow interest rates to fall somewhat.
Of course the government's answer is that it is protecting consumers against themselves. My experience with consumers is that they have more skill and a better track record in protecting themselves well than does the government. Indeed, consumers today would be reasonably well off if they were not saddled with those extra expenditures on mortgages, car loans, and those other expenditures.
Also, when talking about a borrowing bill, one raises the second question that I raised a few moments ago: Are the purposes for which the loan is being made justifiable and reasonable? I am thinking of individual personal consumer borrowing. Once that question is applied to the realm of government, of course, the borrowing is for many, many purposes, but all of which come under the general umbrella of providing hopefully good government for the country.
One must take some particular examples and ask whether the government's expenditure in certain areas is justifiable. I gave a couple of frivolous examples just now to show it was not, but I would like to come to the other side of the question: Is the government, in its stated objective of bringing down the deficit, not cutting in the wrong places, and how can it justify that kind of cut in the light of its request to the House today for another $25.5 billion in borrowing? I think particularly of two examples, and there are many I could give.
Student aid in the country is in an absolutely terrible mess. It is in that kind of a mess because of the frustration which parents and students feel at the gov-
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ernment for not having upgraded the criteria. These rules determine the amount of living allowance students can claim and the amount that parents are expected to contribute and they have not been changed since 1984. Not since the government took over has it changed the levels, despite the fact we have had some inflation and some increase in the cost of living over those six years. It is common knowledge that in 1990 one cannot buy a commodity for the same price it was six years before. Those people who are trying to get an education with very meagre means, in all parts of the country, are not able to access student aid.
What is student aid? Is it a government hand-out? No. It is a program drawn up by the former Liberal administration and, to its credit, continued by this administration-although a little more stingily, as I have said. It is a program that allows young men and women, who otherwise would not be able to go to university, to access some funding. It is not a government grant. We all know that. It is a loan advanced by the state to those individuals who are required contractually-they signed a contract-to pay back every cent of it with interest.
We are not advocating that there ought to be a Santa Claus approach, that all university education for all people who want it should be given out at no cost to them. Student aid, in effect, just defers the cost to them. It allows them to go to university while they are 17, 18 or 20 years of age and then, when they have some economic power and are employed, they can then pay back those amounts. That seems to me to be a very sensible approach.
That program, as good as it is, is being seriously undermined by the penny-wise, pound-foolish approach of the government. In nickeling and diming away at the deficit, the government sacrifices the university educations of thousands of Canadians from coast to coast.
I was in St. John's a few weeks ago and I attended that massive demonstration of students in post-secondary institutions in St. John's. Students who attend Memorial University of Newfoundland, the Cabot Institute and the Marine Institute came together, several thousand of them, to vent their feelings and to send a message about

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how the government is hurting them because of the freeze on student aid.
The problem could be cured with a stroke of the pen, but what a beneficial stroke it would be. It would send a signal to thousands of Canadians, young men and women, who are out there now with the knowledge that they are not able to get to university this fall because they cannot afford to go and, under the present rules, they cannot qualify for the necessary funding to go. With one stroke of the pen, the Minister of Finance or the delegated minister could solve this problem by just bringing the rules for student aid, the qualification criteria, up to 1990 standards.
So often in the House we are told, in effect, as I was a few minutes ago, that it is not enough to criticize, and asked: "How would you do it?" Well, I have just said to the minister, to the House and to the government, how we think it should be done. It is very simple. Be fair and apply 1990 guidelines to the student aid program, instead of allowing the 1984 guidelines to stay there. They are not only six years out of date, but are doing some real damage in terms of interfering with the capacity of thousands of Canadians to attend post-secondary education this fall.
I raised that issue as an example of how government spending rules can impact unfavourably or, to put it more bluntly, can hurt ordinary Canadians. There are many other examples.
We know the example of the women's funding issue. The government finally relented on that and agreed to extend the funding for another year. I am delighted to see that my friend, the minister responsible for the status of women is here. I want to say to her that, while the extension of funding took the heat off for the short term, she will owe it to women across Canada, and the cause they stand for, to go to bat to have that funding continued on a permanent basis.
In my riding there are two women's centres, one at Stephenville and one at Port aux Basques. As the minister will know, they have earned a reputation over the years of being among the better women's centres in Canada. I have seen some of the work that they do in terms of coming to the aid of people who are victims of family violence. I could cite some specific examples of
the good work that those women and their organizations have done in those two communities.
I like to think that perhaps one of the reasons that the funding was cut in the first place was that there was not a sufficiently good understanding of the work that was being done by some of those centres. If that is the case, insofar as the two centres I have mentioned are concerned, I am prepared to document for the government some of the examples of what is being done. Members of the House would be encouraged that tax money is being so well spent.
Under the aegis of the debate on this bill, I wish to address the whole issue of regional development, a subject I am sure my friends from rural Quebec would love to hear about. In fact, I would like to hear them talk about the issue because they will know that the policies of this government have devastated the capacity of rural Canada to survive, whether talking about the closing of rural post offices; the closing of rail lines in Newfoundland a year or so ago and now here on the mainland Canada; women's funding, which I mentioned has temporarily got a reprieve so we will not beat that one to death right now in terms of an example; or the cut-backs in ACOA, the Atlantic Canada Opportunities Agency funding.
In many ways the government's record on regional development poses the question: Why should we be voting for this government to borrow more money when it is not spending very well the last borrowings we gave it in the House a year or so ago?
Also, I want to comment on the fisheries aid package that was announced the other day. I wish the Minister of Fisheries and Oceans was here. I understand he is away on business and I am not criticizing him for that, but I do wish he were within the hearing of my voice at this time. I wanted to say to him, as I have said to him privately, that I believe the fish aid package will go some way to addressing some of the problems and easing some of the pain. I have no hesitation in saying that publicly, and I have already said it to him privately.
There are a couple of key issues that it does not address and he acknowledges at least one of these. Let me deal with that one first. It does not address the issue of the inshore fishermen, the so-called fixed gear fishermen. The Minister for International Trade in his re-
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sponse during Question Period earlier today essentially acknowledged this matter as well.
I want to again use the Newfoundland example, although I am sure that colleagues from other provinces could use ones with which they are familiar. Part of my riding on the southwest coast includes a number of communities that depend exclusively on what we call the fixed gear fishery, or the hook and line fishery. I am thinking of communities such as Grand Bruit, La Poile, Petites, Rose Blanche, Isle aux Morts, Burnt Islands, Fox Roost, Margaree, Port aux Basques, and Codroy.


Mr. Edwards:: Channel?


Roger Simmons: The member for Edmonton Southwest is right. There used to be a-


Mr.   De@: How do you explain only 200 people?


The Acting Speaker (Mr. Paproski):: I would hope that hon. members would allow the member to finish his speech. The hon. member for Burin-St. George's has the floor.


Roger Simmons: Mr. Speaker, I thank the member for Montmorency-Orleans for his question. It does not relate to fish. I could be unkind and suggest that he does not want me to talk about fish, but I do not think that was the burden of his question. The question was, how do I explain the number of people who showed up on the Hill for the GST protest on the weekend?
Well, I was not among them, not because I am for the GST, but I happened to be in my riding. I am sure that would apply to a number of other people. However, I am sure he is aware that this past weekend we celebrated one of the most marvellous institutions that we have in this country, called Mother's Day. He will understand that the organizers made a mistake on the weekend, they set up an absolutely impossible and terrible choice, asking the people to choose between their mothers and the future of their country. It is a very hard choice. Many people who were out kissing mom, sending her notes, or taking her to dinner were nevertheless realizing that next year or the year after when they take her out, it is going to be even more expensive because they are going to have a 7 per cent goods and services tax.
I was talking about the fisheries aid package. The fishermen in those communities who use the fixed gear equipment were not helped at all. There was not one red cent for them. That is not a new statement. The minister
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is aware of that, and the Minister for International Trade acknowledged as much today.
If I heard the minister of trade's answer correctly, I understand that at the end of the season, the government will look at the situation and see what kinds of incomes those people have had. I have news for the minister of trade. It is the end of the season. He is from Newfoundland and he should know that the so-called winter fishery on that coast runs from the first of January to the end of March. Also he should know that it is well beyond the end of March and that I have been giving him the figures both by letter and in this House. I will give them one more time. I will pick one of the communities that I mentioned a few moments ago, the community of Rose Blanche. In that community, there are 147 licensed inshore fishermen. Three years ago, during the winter fishery, the period January 1 to March 31, those 147 fishermen landed four million pounds of fish. In the same period this year, those 147 fishermen, given one or two who may have died or retired, landed not four million pounds as they did three years ago, but fewer than 200 pounds; they landed no fish at all. The fish just are not there. The season is over.
If the Minister for International Trade is saying today that they are going to wait until the end of the season, I say to him that they have already waited a month or so too long, because the season ended at the end of March. I will be following up with him as a result of his answer to my colleague from Beausejour earlier today on that particular issue.
If I may return to the fisheries aid package, there are two points I want to make. The first one I have just dealt with. A whole group of people, many thousands of fish plant workers as well as fishermen are affected because of the domino effect. If the landings are down from four million pounds to nothing in a particular community, then there are no fish to be cut and no work in the plant for those several hundred workers of that plant and also for the many other plants along that coast.
Literally thousands of inshore fishermen and thousands of inshore fish plant workers really do not know today, as we sit here, where the next dollar is coming from. We are not talking about getting enough income to get UI stamps to qualify for unemployment insurance. We are talking about enough income to put bread on the table today. They are not reaping enough from their fishing efforts to pay for gasoline and the expenses of the

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boat, let alone to put bread and butter on the table. There are in very desperate straits. They have a need that this government ought to address right now.
This disaster has happened through no fault of those people. They did not do anything. They did not stay in bed because they were lazy. They did not refuse to buy bait. They did all the things that they were supposed to do. They baited their gear the night before, put it in the baited trawl unit, went home and snatched four or five hours sleep, got up at 2.30 or three o'clock in the morning, put the tubs of gear and fuel aboard the boat, put their lunch aboard the boat, and sailed sometimes for as long as two or three hours to the fishing ground. They did that in the months of January and February, in the worst kinds of weather. So do not let anybody suggest that we have a lazy group of people on our hands. That hardly sounds like laziness to me.
The work ethic I have described is not exclusive to Newfoundland. I see other members in this Chamber who represent other fishing constituencies. I understand that the work ethic is no less honoured by its practice in those constituencies than it is on the southwest coast of Newfoundland. That is the way it should be.
The point I wanted to draw to your attention, Mr. Speaker, is that those people, through no fault of their own, despite their best efforts day in and day out, six days a week, every day except Sunday, have come up empty. They do not have enough money to put bread and butter on the table as a result of their efforts day in and day out. That is the first issue that the fish aid package does not address.
Another issue has to do with the money that is being paid to those communities whose fish plants are under the gun. I am thinking of communities like Gaultois and Grand Bank in my riding, Trepassey in the riding of the gentleman from St. John's West, also St. John's, or as we call it back home, the South Side Hills, the south side plant. These are four plants that are affected.
Other plants that are seasonal operations are affected. The Burgeo plant in my riding, which used to be a 12 month plant, has been cut back now to a six month plant. The workers are uncertain, because there is a rumour that the company is talking about selling that plant. That might be a blessing in disguise, but we will not know that until we get more information. That is an important issue but another issue.
I want to come to the question of Gaultois, Grand Bank, and Trepassey and the south side St. John's plant. If you read the actual print, the fish aid package states that money is being put in to assist those communities. I have no doubt that there are ways that those several millions of dollars, in the case of each of the communities, can be expended to be of some help to the communities.
What I put to the minister today during Question Period, and what I hope he will take up, is the suggestion that the funding made available for the community adjustment program ought to be applied to trigger Clause 5 of the FPI, the Fishery Products International privatization agreement.
In the agreement between the Government of Canada and the government of Newfoundland and Fishery Products International at the time that FPI moved from government hands to become a private enterprise, that clause provides that if at some time the company decides that it wants to close one or more plants, the Government of Canada and/or the Government of Newfoundland can keep those plants open by providing the incremental funding.
Nobody is suggesting that government ought to fund that ad nauseam forever and ever. However, if we do the things that Dr. Harris and his panel recommend, and if we get control of the foreign overfishing issue, we are told the stocks are going to rebound in five or six years. That is a different issue, but if we believe the government's assurances, in a matter of time that will be taken in hand. I have a strong view on that, but I am trying not to get sidetracked from the point that I want to make.
If we believe the government's agenda on foreign overfishing and believe the scientists and Dr. Harris and what they say about rebuilding the stock, we have to


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conclude that four or five years down the road we are going to have a fairly healthy northern cod stock and a fairly healthy stock in 3PS, that area between St. Pierre and Miquelon and the south coast of Newfoundland, the Burin peninsula and Fortune Bay of Newfoundland.
If that is the case, here are my questions. If we are going to be back in five years to where we were three or four years ago, where we had enough fish to keep all the fish plants going, why are we dismantling what is clearly today's excess capacity? Why are we encouraging skilled labour who know how to process this fish to go on to other occupations, and in many cases move out of the community because that is what going to other occupations means in most cases? Why are we dismantling the plant facilities and getting rid of the skilled labour to process those fish, if we are going to need both four or five years from now?
Is it not a much more sensible proposition to keep that capacity and those skills, even if it requires some government dollars in the interim three or four years? Again, I am not asking for the government to find some more money. I am saying to it, why not apply some of the money put aside under the fisheries aid package to address that particular situation, to keep the plants open at Trepassey, Gaultois, Grand Bank, and in St. John's south side?
There are so many issues that come to mind when debating the borrowing bill. I wanted to talk about the government's cut-back in social housing and the devastation those cut-backs are creating. I wanted to talk about the fact that the government is bringing us very close to the brink of a recession, but I am sure other colleagues in this debate will pick up on those issues. There is a great need for social housing in this country and this is not the time to cut back on it.
I am sure others in the debate will want to pick up on that theme. Over the last hour and a half or so, I have had an opportunity to give you some of my views on the issue. Thank you for your indulgence, Sir.


Mr. Ray Funk (Prince Albert-Churchill River):: Mr. Speaker, it is quite an experience to follow a speech of that duration and scope.
Certainly I will not try to deal with the vast range of issues in which the previous speaker indulged himself. However, I would have to say that I find myself in a
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somewhat unusual position. In a certain respect, I agree with what both Conservative and Liberal spokespersons have said in this debate so far.
In other words, I agree with what the Liberals have said about the Conservatives, and I agree with what the Conservatives have said about the Liberals. When we are talking about borrowing $25 billion with the fiscal and monetary mess that this countiy is in, if we are looking at this question honestly, I think they are each probably equally culpable. We have seen the same kind of tax policies and high interest rate policies in response to inflation from both Liberal and Conservative governments.
Certainly, when we look at this borrowing bill and the amount of money that it represents, we have to be honest about the kind of deficit that this country faces. The kind of interest payments that it takes to maintain the borrowing on that deficit is something that we cannot live with forever. The question is: Who is going to pay down that deficit? Who is going to bear the brunt? In other words, on whom will the pain fall?
I contend that the pain right now and under the policies that have been followed by successive Liberal and Conservative governments has fallen by far the most heavily on low and middle-income Canadians in the outlying regions of the country, in northern Canada, the prairies and the maritimes. The less wealthy regions of the country have borne much more than their share of the burden of reducing the deficit.
In my own province of Saskatchewan, we are in the middle of what might well be considered not only an economic calamity but one that is threatening the whole future of that province. It is a social calamity, a political calamity, a calamity of confidence in hope of the very future of the province. In 1987 we saw 361 business bankruptcies in Saskatchewan. In 1988 we saw 453 bankruptcies. In 1989 we saw 556 small business bankruptcies, the people who create the jobs in that province.
What are these people getting out of the fiscal and monetary policies of this government? They are getting higher interest rates which increase their costs of inventory, the cost of borrowing for any expansion they might want to do in the face of what is already a poor economy, and they are getting the goods and services tax.
I do not think anybody, even on the government side, argues that, in its initial phases and far down the road, the goods and services tax is going to be a disaster to the

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small business community. It is the centrepiece of this government's fiscal and economic policies.
Farmers in Saskatchewan are in a situation where there is a very good possibility that there will not be any net income for those farm families at all in the coming year. They will not have a single dollar to spend after the expenses have been paid, much like what has been described by the previous member in respect of fishermen in the maritimes. The expenses of farming will eat up every dollar of income that those farmers will get.
I did some checking in my own region, and the Prince Albert Farm Credit Corporation office reports that of its 2,900 accounts, 916 or 33 per cent are in arrears. That means that one third of the farmers cannot pay their bills. Certainly, low prices and other factors have been a contributing cause to that fact, but the high interest rates that have been paid over the last 10 years or so have also been a contributing factor.
It is very discouraging to the young people in that province who started farming in the last 15 years when they see real incomes and the prices of their products decline. At the same time, they see interest rates rise. Thirty per cent of the farmers right across the province are in that kind of situation. Those farmers are asking me: "Where is the money that has been promised by this government? When is it going to get there? Where is it going to come from?" This government has got itself into such a fiscal and economic mess that it cannot afford to pay any more.
Four months ago, the Minister of Agriculture said yes, there would be money to assist the prairie farmers fight the international grain wars and other problems that they were facing. Sue weeks ago there was an announcement that there was $500 million available and that the minister would be negotiating with the provinces in an attempt to up the ante on that. In fact at that time, he was demanding one-to-one dollars with those provincial treasuries.
That is a ridiculous proposition. The very provincial economies and provincial budgets that are being asked to share this money are the ones that are being negatively impacted. How can a treasury, such as the treasury of Saskatchewan, match a one-to-one dollar when its very tax revenues are dropping like a stone because of the crisis that it faces?
In Canada, the situation we are then left with is that our national government is the only government in the world that is asking its local level governments, in other words its state or provincial governments, to pick up the burden of fighting the international subsidy war which is driving prices down. The European Common Market, the United States and all our competitors are doing it at the national level.
The national governments are taking responsibility, as they should, for matters of international trade and for making sure that the bank accounts of individual farm families are not the ones competing in international grain wars with the treasuries of the European Common Market and the United States.
We have the total absurdity in the province of Saskatchewan where 23,000 people were forced to leave the province in the last year. They were faced with fiscal and economic policies that were designed to fight inflation in a few metropolitan areas such as Toronto, Montreal and Vancouver. In our own province, and in many rural areas of Canada it is the people there who are fighting dis-inflation, de-inflation.
The net value of farms, homes and businesses is falling. There is no inflation at all. There is de-inflation. That is what people need to fight in those regions of the country, and the government's fiscal and economic policy takes no account of that.
The problem we got ourselves into stems from a fundamental change in the government's public, fiscal and monetary policy that occurred about 20 years ago. I think it can be honestly argued that both Liberal and Conservative governments have been equally culpable in making this massive shift in fiscal and economic policy.
The hon. member says that an NDP government would have also been responsible for making this shift in policy, if it had ever been elected.
I would like to remind the hon. member that the New Democratic Party governed my home province of Saskatchewan for 11 years, 1971 to 1982. During that period, through good times and bad times, that party managed to run a surplus budget in every budget year and managed to provide the citizens of Saskatchewan with some of the best programs seen anywhere in the country. There was great innovation in a wide variety of programs. At the same time, they managed to balance their books. I think that is an example of what you can do if you not only pay
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attention to where you are spending money but also to where you are collecting it.
The shift from the corporate sector, the share that the wealthy in this country pay, to the individual taxpayers is very clearly laid out in the following figures. In 1950 the proportion of taxes paid by the corporate and individual sectors were roughly equal. By 1988, individual Canadian's proportion had risen from 35 per cent of revenue to 47 per cent. Corporate tax revenue has gone down to 12 per cent from 40 per cent in 1950. In 1988 terms, if the corporate sector contribution matched that of Canadian families, we would have a surplus of $18.5 billion instead of a $30 billion deficit. That would certainly cast a much different fiscal and monetary light on the situation that we are in today. We would be able to afford the programs for farmers, women, children, fishermen and regional development which the government argues it is not possible to fund.
As well as raising income tax, this government has raised sales and excise tax revenue from $14.1 billion in 1984-85 to $28.8 billion in 1989-90. That is before the GST, which will only compound the problem. With the theory that you need high interest rates to fight inflation and with the government admitting that the GST is going to cause even more inflation, we are going to get into another vicious circle of more inflation from the GST, causing higher interest rates. It is no wonder that not only economic forecasters but individual Canadians are seeing the economy of this country in ever more gloomy terms.
A second point needs to be made about the GST in the context of the fiscal and monetary policy of the government. It has a very insidious effect on the general thrust of government policy. This is due to the role of government traditionally being seen as having something of a redistributive responsibility to make sure its fiscal and economic policies raised the income of all Canadians. The idea was to have a wider tax pool to draw from so that more people had more income in order that the government could raise more revenue. That is only an effective kind of fiscal and monetary policy if in fact taxes are based on net incomes.
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With taxes based on consumption, that kind of economic theory no longer applies because all the government needs to do is tighten the screws further on individual taxpayers with very little regard for their ability to pay. The balance that an individual has left to spend as disposable income, with what the government draws in taxes, is very little. Therefore, there will be very little difference with what the government collects under a consumption tax like the GST.
We see the hypocrisy that Canadians are confronted with when they are being lectured that they are not supposed to try and catch up with the inflationary effects of government policies such as the GST and high interest rates. There is the looming threat of wage and price controls and other kinds of Draconian mechanisms. At the same time we see the Governor of the Bank of Canada, the architect of this policy, raising his own wages and those of his senior officials by 35 per cent. We see executives having their salaries raised by 18 per cent and this government taking no countermeasures. This is not on salaries that ordinary Canadians receive, but salaries in the $250,000 to $400,000 a year range.
I would like to speak in more detail about the effect of high interest rates and some of the commentary around this high interest rate policy. In appearing before Commons committees, the Governor of the Bank of Canada has said that the high interest rate policies are not working. Yet he maintains that. We have heard western premiers say that the high interest rate policies are a disaster for that whole region of the country, yet we see the policy maintained.
A year ago when interest rates were much lower we saw the finance committee of the House of Commons, with representatives of all parties, table a report stating that high interest rate policies were leading us to economic disaster and a possible recession.
We have seen an interest rate policy which now has us with interest rates 5 per cent higher than rates in the United States, as opposed to the historic 2 per cent. What does this mean? It means that any perceived or potential benefit from the free trade agreement in terms of reduced tariffs has been more than wiped out by the high Canadian dollar.
We have an interest rate policy that is crippling our exports. Through its direct effects it is crippling anything positive there might have been from the free trade agreement. In fact this entire high interest rate and high dollar policy is contradicting everything this government

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has said about the necessity of replacing the manufacturers' sales tax with the GST. The argument has been that this is to make our exports and exporters more competitive. At the same time the government is raising interest rates and pursuing a high dollar, which is make them much less competitive.
In fact this indicates that we have become much too dependent on hot money, on capital that will move at the slightest fluctuation in interest rates and rely far too little on internal mechanisms to generate capital, employee controlled investments, our own pension funds, co-operatives, community development based initiatives, and different kinds of locally based investments that would in fact be possible if Canadians were left with their own money to spend.
I would also like to mention briefly the effect of the high interest rate policies on home owners. The Homebuilders Association has said that whereas two years ago
475,000	Canadians were able to afford new homes, now only 270,000 Canadians are able to afford new homes. In other words, the number of Canadians able to afford new homes has been cut in half in just two years. Less than 12 per cent of people under the age of 45 years can afford to buy the average priced home in this country. In our own province of Saskatchewan the situation has become so ridiculous in fact that there are only 82 new home starts in the first months of this year.
I would like to conclude by saying that the fiscal monetary policy represented by this borrowing bill is a disaster for the country as a whole and a disaster for individuals coast to coast. The deficit has become an excuse to pursue a monetarist, Thatcher-like agenda of cuts to ordinary Canadians, cuts where they hurt the most, and massive tax benefits and breaks to wealthy Canadians. It does not have to be this way. There are alternatives.
A 3 per cent cut in the interest rate would yield $4.8 billion. Tax measures that would equalize the amount of tax paid and bring in a fair tax system would yield another $12 million to $13 million. The vast part of the deficit that we currently see could be eliminated by very common sense measures. That would allow us to invest in the kind of things like a decent education system for
our children, the infrastructure of this country, the environment, and regional equality.
However to do that we need a mixed economy. We cannot rely only on one sector. We cannot leave decisions and the ability to make investments in the hands of one sector. The government, the private sector, and the community sector all have to work together to get this fiscal and economic mess we are in under control and to get Canada moving again.


Mr. John A. MacDougall (Parliamentary Secretary to Minister of Energy, Mines and Resources):: Mr. Speaker, I would like to make a few brief comments with regard to Bill C-65 and the Borrowing Authority Act, which would permit the government to borrow up to $25.5 billion to meet its fiscal requirements.
I want to draw the attention of the House to an article which appeared a few weeks ago in the Ottawa Sun entitled "Bankrupt". It is quite an article. It states:
Argentina, once one of the world's richest nations, is broke. The treasury is empty, inflation is raging at over 7,000 per cent per annum and unemployment has reached 25 per cent.
Argentina is self-sufficient in oil and one of the world's leading exporters of meat, grain and produce.
I think that indicates what Canada is all about. It is quite interesting. The article continues:
Back in 1945, Argentina was still rich from exporting food to a warring world.
An army general named Juan Peron seized power with the backing of the nation's labour unions. Peron's strategy was simple.
Promise workers ever-increasing salaries, subsidized food and housing, health care and all sorts of other benefits.
The government would employ anyone needing a job.
Over the last number of weeks and years that I have been in this House, there have been indications by some parties that this is what they would like to do.
Bankruptcy does not happen overnight. It takes a number of years. You can see where Argentina, a country that was once self-sufficient and proud, is sitting today compared to where it was in 1945. Today, it is dealing with an annual inflation rate of 7,000 per cent and an unemployment rate of 25 per cent. It certainly makes Canadians realize how important it is to address the concerns of the deficit of this country.
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The government recognizes the seriousness of the large growing public debt. Since 1984 the government has taken action to bring the debt problem under control.
We have some new members in the House elected in the 1988 election. They should be made aware of the climb in spending from $12.3 billion in 1968 to $109.2 billion in 1984. That is an average of 14.6 per cent per year. The deficit of the federal government climbed from $400 million in 1968 to $38.3 billion in 1984. That is a 96 per cent increase. The national debt climbed from $18.1 billion to $199.1 billion, an increase of 1,000 per cent.
It is interesting to watch Question Period time in and time out. I had the opportunity to be a member of the opposition between 1982 and 1984. You would almost think that on September 5, 1984 that this debt was something like a mushroom. All of a sudden, those who had been in power for 17 years or so had were not willing to tell Canadians at that time that there was this type of debt.
We also hear claims about government financial structuring being in dark economic times. I think it would be worth while to put on the record and refer back, if we are talking about dark economic times, to figures indicating that unemployment climbed by more than a million, from 358,000 in 1968 to 1,384,000 by 1984. The unemployment rate climbed from 4.5 per cent to 11.2 per cent. Turning to inflation, items that cost $1 in 1968 cost $3.22 in 1984, an increase of 222 per cent. We have been hearing a lot about interest rates in the last number of weeks, that they have sky-rocketed and out of control. However the Leader of the Opposition never refers back to 1981 when the Bank of Canada rate climbed to 21.24 per cent, the chartered bank prime climbed to 22.75 per cent, and a five-year mortgage to 21.75 per cent. We never hear these figures.
It seems that every time we tiy to indicate to Canadians that there is a very serious problem, there are still people who would like to say that the problem only started in 1984. Really, the problem that we are dealing with is the mismanagement of the economy prior to 1984. That is the problem with which we are faced. It would be interesting had we had the opportunity to come in here in 1984 with a zero deficit and had been able to move forward with all the programs that we would have liked to.
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There is one other area I want to make comparison to. It indicates the way that the policies of this government are working correctly. I want to review the employment and the unemployment statistics for northern Ontario. This is only up to December 1989, but it gives a reference in this regard. In 1984 the rate in north eastern Ontario was 14.9 per cent and the annual at the end of 1989 it was
8.1	per cent. This is a change of minus 6.8 per cent. In north western Ontario in 1984 the unemployment rate was 9.7 per cent and the annual in 1989 was 5.9 per cent. That is a minus 3.8 per cent. The total unemployment in northern Ontario was 13.6 per cent in 1984. The annual average in 1989 was 7.5 per cent. That is a difference of
6.1	per cent.
For those individuals who want to say that this government has not been able to control or look after the future of this country, I think those figures indicate that the policies put forward by this government are the correct policies.
I would like to add a little good news, because we continue to hear day in and day out about the negative stuff. They say that the country is headed down the shooter and that since 1984 this government has done everything wrong. It is funny that we keep coming up with figures such as 1,604,000 jobs have been created since September 1984 and 966,000 jobs have been created for women. The national unemployment rate has fallen from 11.6 per cent to 7.7 per cent. The youth rate has fallen from 18.2 per cent to 11.9 per cent. Business investments in new machinery and equipment has climbed by 103 per cent since the 1984 election, and
215.000	new homes have been built in 1989 compared to
135.000	in 1984. The number of Canadians living below the poverty line has fallen by 757,000 since 1984, including 259,000 fewer children and 229,000 fewer adults.
It is very interesting to hear all the negative information that is given, but the reality is that this government is moving forward in a lot of ways to ensure that there is a stable future in this country.
Let us look over what the federal government has done in the province of Ontario to ensure stability there. I would just like to look at a few of areas. Again, we never hear about the good things that are going on. I think it is only right when talking about a borrowing bill and fiscal management that we look at the way in which the Minister of Finance and the Prime Minister have

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done such a superb job in ensuring that the enhancement and opportunities for all Canadians are there.
We can look at the agricultural side with the federal government participating with a $30 million tobacco assistance program or at the establishment of a bank for surplus maple syrup, which helps a lot of eastern Ontarians. I know my colleagues from the province of Quebec would certainly applaud this type of program. The federal government provided $6.5 million for renovating the veterinarian college in Guelph. The list is so long that I just do not have the time to continue.
However I just want to go to a few other areas. I noticed earlier that a colleague from the NDP was mentioning housing. An agreement in clearing the way to construct 6,700 non-profit housing units in Ontario has been signed by the federal and provincial ministers of housing. I should congratulate our Minister of State for Housing. He is doing a superb job, not only in Ontario but across this country. Earlier this month I had the opportunity to participate in a sod turning ceremony in New Liskeard.
In March 1989 in Ottawa, Ontario a working agreement to fund literacy initiatives in the province was developed. Funding arrangements were announced in June 1989. These projects are part of a $110 million federal literacy strategy announced in September 1988.
I would like to break it down into parts where I think it is so important. We talk and hear about the ongoing process of regional development over the next five years. This government has recognized how important regional development is. In recognizing this we have put $225 million to be spent in regional development in Ontario. Part of that is $100 million of expenditures under IRAP, or the older DREE programs.
I would like to touch on the area of northern Ontario because I want to applaud the Prime Minister, the minister of industry, the government House leader and the finance minister for really looking at this area with initiatives that can help. I would like to talk about FedNor and the way that we have been able to develop a program that has given the opportunity for investment in northern Ontario.
It also has given an opportunity for a board to be set up with a system of offices, whether we are looking at Thunder Bay, Sault Ste. Marie or Sudbury, where officers are working directly with everyone in northern Ontario. We are looking at a program that has $55 million of new money available. In fact, we have topped it up with another $14 million in the budget this year. On the night of the budget, it was interesting to hear members of the opposition crying that FedNor was dead. Instead, this government recognized regions of the country, like northern Ontario, and increased the budget by $14 million.
With money such as that we have been able to do projects, whether it is the Sudbury Nuetrino Centre, which is world class, whether it is a new plumbing fixtures company in North Bay or whether it is money toward the winter Nordic games in Thunder Bay.
We are going through some very difficult times in my area. It is one of the unfortunate facts when you live on resources. When you have been involved in forestry or mining for a number of years, as a mine opens you know it is one last day before it is going to close. We have gone through some difficult times both in the iron ore and the gold and silver sector. With a combination of five cabinet ministers, the Prime Minister and a striking committee, we have been able to resolve some of the difficulties and change some of the problems we are facing.
The other part of the FedNor program is to ensure that tourism, loan guarantees or the opportunity to establish co-operation between both provincial and federal departments does indeed take place.
The PC government income tax reform proposals means a fairer system with lower rates which will benefit all Ontarians. Earlier, we heard about tax and tax reform but we never heard the good part. It is that 300,000 Ontario residents will no longer pay federal income tax. Almost 4.5 million have seen their taxes cut. Small business tax rates have been cut and a full $500,000 capital gains exemptions for small business began in 1988.
Agriculture continues to enjoy one of the lowest tax rates of any sector with the lifetime capital gains exemption for farmers remaining at $500,000.
Ontario's economic output is estimated to increase by
1.1	per cent after the 13.5 per cent manufacturing sales tax is replaced with the 7 per cent GST. As someone who
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was involved in business for 18 years prior to being elected, I can say how confusing this tax system is.
We are competing in an international market-place. We are competing where products come in from outside the country. We are also competing with products that are built here in the country. We must ensure the opportunity for fairness, for the manufacturers to be successful not only in this country but to be able to compete on an international basis.
Another problem we faced was dealing with companies with tax licence numbers, whether they were sawmills or mines, at the end of the year. The auditors might suggest that the company can claim this case of paper towels because it is used on the production line. Revenue would end up getting a whole raft of invoices from individual companies stating "We believe that this should be clarified and be part of tax exemption". So, Revenue Canada, an accounting company and the individual company would have to try and resolve these problems. The new tax system will be easier and fairer for all Canadians. As we all know, no one likes to pay tax.
We are dealing with the same arguments we heard about the free trade agreement. Individuals are using scare tactics in order to enforce their political beliefs on individuals. They will know better once this tax system is in place and individuals earning under $30,000 a year get their first cheque on or about December 15. They will realize it is a Christmas gift.
I was at home on the weekend and a constituent told me that after having the opportunity to read and understand the process, while he does not like to pay the tax but now can understand what we are dealing with.
The Economic Council of Canada stated that the free trade agreement will lead to the creation of 95,000 new jobs in Ontario. I know the opposition has a job to do , but the fact is that the stability of the country is a result of the actions of the government. As a result of these expenditure actions revenue measures, the deficit in 1989-90 has declined by almost $8 billion from that of 1984-85 when it peaked at $38.3 billion. This represents a reduction of 45 per cent in the deficit-to-GDP ratio.
The growth of the debt has slowed dramatically and is now roughly in line with the growth of the economy's output of goods and services. Behind these improve-
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ments in the government's deficit there are even more significant changes in the ongoing structure of government spending and revenue.
The government now has a $9 billion operating surplus. The cost of government programs is more than completely financed by ongoing government revenues.
With the annual deficit of $30 billion, debt interest costs increase $3 billion each year just to service the annual build-up in debt. This means that the operating surplus has to improve by $3 billion each year just to keep the over-all deficit from rising. The problem is compounded by the vulnerability of the government's fiscal situation to increases in interest rates.
This exposure to interest rate developments was dramatically illustrated in late 1988 and through 1989. With the economy at capacity and inflation pressures mounting, higher than anticipated interest rates added about $6.5 billion to public debt charges in 1989-90 relative to the fiscal framework projected in the February, 1988 budget.
In response, the April, 1989 budget introduced substantial expenditure reductions and revenue measures. With the actions in this budget, the government was able to set out a fiscal framework designed to deal with Canada's fiscal problems.
Since the April, 1989 budget, inflation pressures have proved to be more strongly entrenched than expected. This has resulted in interest rates remaining higher than expected. Further fiscal action has been necessary to hold the fiscal framework set out in the April, 1989 budget.
When we talk about that, we should mention the fact that there was a budget just brought down in the province of Ontario. It is quite interesting to read that the real growth is projected at 1.7 per cent but the planned spending increase is at 6.8 per cent. This indicates to me one of the greatest problems we are facing. We are trying our utmost to ensure that we have stability in this country and we are trying to do our utmost to ensure that we have a steady economy going. However, how can we do it when the province of Ontario will not try to curtail its increased spending but only ensure that we are going to have more pressure put onto our dollar, causing higher interest rates.

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Mr. Speaker, I know that you are giving me a signal that my time is coming to an end. Our actions in the February 1990 budget, together with measures announced by the President of the Treasury Board in December, reinforce the momentum of earlier measures. These ensure that the goals of the April 1989 budget will be reached.
In closing, I want to say that I think that this government and this finance minister should be applauded for the manner in which we are managing the economy and ensuring the future of our children and our grandchildren. I hope that we can look at quick passage of this supplementary money.


Peter Andrew Stewart Milliken: Mr. Speaker, I am pleased to be able to take part in this debate today, on third reading of the government's borrowing bill, because it gives an opportunity to review the really disgraceful financial performance of this government, that we have been witnessing in this House, for me only since November of 1988 but for other members on this side it has been since 1984. The disastrous consequences of those policies are coming home to roost on Canadians, as they are faced with massive tax increases, in addition to the numerous tax increases they have already had under this particular government of incompetence.
I wanted to start by referring to the speech just made by my hon. friend who spoke about the increase in the Ontario budget. Ontario has a Liberal government and I am sure that fact is not lost on hon. members opposite. It certainly is not lost on the general public in Ontario because I think they realize with that government the difference between competence and incompetence.
Here, in Ontario, they have a government which is able to balance the budget. It inherited a very substantial deficit from its Conservative predecessor government and it has managed to bring that deficit completely under control. It managed to have a surplus last year on its accounts and this year it has budgeted for yet another surplus, in spite of the fact that a $490-million cut in its transfer payments to that province has been announced in the Minister of Finance's budget. In addition, a $1.2 billion cut in transfer payments has been applied to that province since the current Minister of Finance became
that minister in 1984. In other words, the province of Ontario has suffered greatly at the hands of federal government in terms of the funds that were made available to it. In spite of that, it has managed to arrange for a balance in its budget.
It was interesting to listen to the hon. member bleating on with his figures trying to blame every shortcoming of the present government on previous Liberal governments, doing his best, to make it appear that all the blame could be laid there, which even the Minister of State for Finance knows is nonsense.
He neglected to talk about the Ontario civil service because he knows that the province of Ontario is one of the best managed in Canada. I would not want to draw any unfair comparisons with other Liberal provincial governments in this country, and there are some very, very good ones, but the one in Ontario is, I submit, an outstanding example of fiscal prudence and responsibility.
What we need to do is look at the figures for the civil service in Ontario. This government has made a great trumpeting cry about how oversized the civil service was and has announced that it has cut 12,000 jobs, I believe, from the civil service since 1984. Anyone who has any familiarity with the way the civil service works knows that all the government has done is cut the jobs and fanned the work out on contract to their fat-cat Conservative friends. That has been going on now for five years and it continues. One can look at the figures provided on the number of civil servants per person in the population. Ontario, which administers such extensive programs as health care, education, and maintenance of highways in the province, has a civil service of 83,300 people. Ontario's population is 9,598,000, so that there is a ratio of 115.2 people for every civil servant in the province of Ontario.
Compare that with the government of Canada which, after all, does not bear such heavy responsibility for such intensive programs in any part of Canada, except possibly in the Territories. It has a civil service of 294,400. The population of Canada at 26,151,000 yields a ratio of population to civil servants of 88.8. With 88.8 as compared with 115.2, one gets some idea of why the federal government has difficulty curbing its expenditures and getting them under control.
May 14, 1990

There is something else that the hon. member who just spoke neglected to mention. He spoke about the great control the government had exercised on government expenditures. Let us take a look at revenues. In 1984-85, the year he said was such a dreadful year for Canadians, government revenues were $70,898,000,000. In 1988-89, the last full financial year, they were $103,981,000,000, an increase of some $32 billion over the five years of Tory mismanagement.
That is the kind of record we are supposed to be proud of. This is a record the government says is a great one. Well, I think it is a disgraceful record and I think most Canadians agree. If the government is so great, why does it not resign, put its record on the line, and go to the people to see what they think about the record.
That $103 billion, incidentally, was the revenue before the goods and services tax comes in. The government itself admits that the goods and services tax is going to be helpful in reducing the deficit which means it is going to produce more income than the current manufacturers' sales tax. Finally, that admission has been made. It is right in the document.
The government, through its incompetence, keeps raising taxes and spending more at an alarming rate. Spending has gone up by the same amount over the same period. Yet, the government says the reason for its inability to control expenditures and its requirement to raise taxes is all because of the previous government. Everything is blamed on the previous government. Every time we hear speeches from members on the other side, they harp back to the good old days of the Liberal government, telling us that if it was not for those profligate days everything would be coming up roses now.
Well, it was not the Liberal party in 1984 that promised to bring fiscal responsibility to Canada. It was not the Liberal party that said the deficit was going to be reduced to almost nothing within the first term of office of the government. It was the Conservative party that made those promises. It was the right hon. Prime Minister who made those promises. Of course, there is now a string of broken promises.
The Minister of State for Finance said-he did not use these words, of course-that the reason the government could not keep its promises is because of those bad old days. In fact, he knows that the reason for the problem
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now is the complete inability of the Minister of Finance to manage the affairs of the country and the government. The whole cabinet is party to those decisions. I submit they are all equally to blame and they are all equally incompetent.
Another criticism we hear from the other side is that never, ever, does the opposition make suggestions on how to bring about a balanced budget. The government somehow feels it is our responsibility, as elected members of the House but sitting in opposition to the government, to provide the government with all the answers. I do not think we need to do that and I will not go into all the answers. But I will suggest that the government itself pays for its advice on how to solve its financial problems and, having paid the money, it ignores the advice.
This year, the Economic Council of Canada prepared a very significant and detailed statement called "Legacies" in the form of their twenty-sixth annual review. The Council is the primary economic advisory board, if you like, to the government. It was designed and created in the 1960s over the objections, I may say, of the Conservative party of the time. It did not think it was such a hot idea and I urge the Minister of State for Finance to look at the speeches given on those occasions by the right hon. Mr. Diefenbaker, then Leader of the Opposition. He felt it was a bad idea. I do not know exactly why, but he was not much of an economics expert himself. In fact, the only government I can recall that has managed worse than this one in this century was the one headed by the right hon. John George Diefenbaker, and Canadians expressed their views on that government in the elections of 1962 and 1963.
The fact is the Economic Council of Canada published this review and it contained certain information for the government. How much did the advice contained in this report cost? Well, I do not pretend this is the only publication of the Economic Council, but I checked the Estimates for last year. The total estimated budget for the Economic Council was $9,515,000-roughly a $ 10-million exercise. There are 118 people shown on the list as person-years working at the Economic Council and they produced a report. They produce more than this; I do not belittle their efforts. In fact, I suggest that this report is probably pretty good. It certainly details the problem that the Minister of Finance whined and whim-

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pered about for months, once the election campaign was over. That was the national debt.
So, it presented this report. It was available to the government. My recollection is that it was available before the Budget was handed down-I do not know the date it was tabled in the House, but my recollection is that it was available. It contained information that would have helped the Minister of Finance balance his budget had he really wanted to do so.
We know, of course, that this is all a lot of frilly talk and nonsense. The Minister of Finance has no more interest in balancing the budget than he had in 1984 when he made the promise to Canadians that he would do it. In the 1985 budget, he told us that the deficit this year would be less than $15 billion. We all know that, in fact, it is double that. He was just dead wrong. He was wrong is 1985, he was wrong in 1986, 1987, 1988, 1989, and, I suggest, he is wrong in 1990.
Let us look at what the Economic Council of Canada suggested. In great detail, the council gave arguments that the Minister of Finance has used, stating that the national debt was a serious problem for Canada. Then it said:
Within the realm of what is controllable, we consider the following possibility.
The Minister of State for Finance might want to listen to this because he may need this kind of advice. He may soon be replacing the Minister of Finance who has not been very successful.
Suppose a two-year freeze (in nominal terms) were implemented in five areas of government spending, effective from 1 January 1990 to 31 December 1991. Normal expenditure growth would resume on 1 January 1992 in the affected spending categories. There would be no "catch-up" -i.e., the reduction in spending attributed to the freeze would not be recouped. Thus the level of government spending in the categories affected would shift downward. For the purpose of our analysis, we chose the following areas as those being affected by the freeze: capital assistance to business; subsidies to business; transfer payments to the provinces; the indexing factor for family allowances; and the hiring of federal public servants. (We assumed that the provinces would respond to the cut in revenues by raising provincial personal income taxes.)
Now, I note that the Minister of Finance took this advice in part and, of course, you can guess which part he took. He took the part that put the freeze on the payments to the provinces. He decided to put the squeeze on them instead of putting any squeeze on his
caucus colleagues who are the big time spenders in the big time league here. Later, I will provide some examples of their profligacy, but I will leave that for a few moments to finish this point.
The Economic Council also said:
If such a freeze were implemented, the reduction in government spending from the base-case level would be $4.6 billion in 1992. A revenue loss of $1.6 billion would also occur, however, as the immediate effect of the freeze would be to lower the level of economic activity.
By the end of 1992, therefore, the improvement in the government deficit would be about $3 billion. By itself, the freeze would advance the "crossover" date by two years -
-that is the cross over from a deficit to a surplus- -from 1998 in the base case to late 1996.
Suppose that, in addition to the freeze, an easier credit policy were to be instituted, so that by the end of 1991 nominal rates of interest would be lower by about 2.5 percentage points (250 bases points). Under those circumstances, borrowing costs to the federal government would be reduced by about $7 billion in 1992. In addition, easier credit would stimulate the economy, thus replacing some of the demand lost as a result of the spending cuts. This would turn a revenue loss into a revenue gain. By 1992, the budget would be in balance, and by 1995 a strong surplus would be recorded. If such a policy were pursued for the duration of the decade, a substantial portion of the existing debt stock could be paid down.
There you have it, in black and white, from the Economic Council of Canada. The Economic Council was paid $10 million to provide this advice, among other things, and the Minister of Finance ignored the advice. He took it in part, but he took it in very selective bits. I submit that he chose the part that he felt he could sell, because he could force the costs onto other people and onto other governments, and he ignored the part that applied to his own misspending. I submit it shows a complete lack of concern for Canadians. What he did was to say: "We are not willing to bite the bullet on anything. All we are willing to do is pass on our debt problems to the provinces and let them muddle through as best they can."
Not only is it unfair because it hurts the smaller provinces and the ones that are least able to pay, but it helps to divide the opportunity within Canada for a national government to assist in ensuring that Canadians in all parts of the country have equal opportunities. If Ontario is able to pick up these cuts in federal transfer payments easily because of its very significant and substantial tax base, how can it be fair for a smaller province to be expected to do the same and administer
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the same programs? We have been making this point in the House for months.
The government does not care about the remote parts of Canada. It is prepared to write them off for the sole purpose of ensuring that it can win seats in central Canada. That is all that is of interest to it. One only has to look at the last set of election results to realize how precarious the government's position is. In the province of Ontario, the government barely won half the seats in the province. In fact, this party did exceedingly well in that province. The fact that so many of us are here from eastern Ontario is testimony to the government's failure to sell its vision of Canada, even in large parts of Ontario. I realize Quebec was a different situation, but I am sure the next election will correct that.
This Economic Council report perhaps did not get all the publicity it might have received when it was tabled. Perhaps that is why we have not heard a lot about it. Certainly, we have not heard the Minister of Finance discussing it at any length, but it certainly attracted some attention in other places.
One was the Canadian Federation of Independent Business in its pre-budget submission to the Minister of Finance which, of course, he would not receive in person. It had to be delivered. The federation strongly recommended that the minister look at the report of the Economic Council and adopt the recommendations contained in it.
Other groups made similar submissions to the Minister of Finance and called on the government to stop the cuts in areas that were going to be damaging to the regions of Canada. Yet, the government continued on its merry way, ignoring the advice of the Economic Council and choosing instead to adopt its own set of advice which will leave us with a substantial national deficit in Canada throughout the remaining term of this government and for many years beyond. The Minister of State for Finance, I am sure, could give us the figures for the deficit that the minister is projecting for the next few years. I would suggest that if Canadians are to take the minister's figures at face value, at least the one for five years from now-and I assume it is going to be in the $14 billion or $15 billion range-it should be doubled.
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Certainly that has been the experience with this government in the past.
The figure that the Minister of Finance gave us in 1985 in his budget was that the deficit this year would be under $15 billion. In fact, we know it will be more than $30 billion. The minister's projections are consistently wrong and I suggest that when we hear them we should double them, at least if we are projecting a few years ahead.
The other thing that I thought might be useful is to look at the government's own document, A New Direction for Canada; An Agenda for Economic Renewal. This was the document that was tabled in the House of Commons on November 8, 1984. It was supposed to be the great new policy paper that explained the wonderful things that were going to happen to Canadians through the next five years of Tory mismanagement. Certainly it did indicate a certain weakness in government.
I am glad to see that the Minister of Transport has joined us. His knowledge of control of government expenditure, I know, is substantial. I am sure that in the next year he will cut the cost of the Department of Transport by reducing the gouged salaries that are being paid to the officers of Canadian National. Having closed down the railway in Canada, supposedly to cut government subsidies, the government now takes the extra subsidies and piles it into its own pocket.
These payments should not be allowed. This government should roll those increases back. That is where the money is going. Where are the profits going? They are going into the pockets of the directors in the form of increased fees. It should not be happening. This government says it needs the money for the railroads. It closed down a whole lot of lines in \TA Rail and now it is going to pay the people who did that hatchet job additional money. That is unfair.


The Acting Speaker (Mr. Paproski):: Questions or comments? Debate. The hon. member for Ontario.


Mr. Rene Soetens (Ontario):: Mr. Speaker, I appreciate the opportunity to participate in this debate today. I must extend to you my condolences. I am on duty now. I have been sitting here listening to a speech. From four until seven on Monday afternoon I am obliged to come to this House and represent the interests of my party, as do a lot of our other colleagues. We have to sit and listen to speeches. I have just listened to a speech for 20 minutes

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and I only have to listen to this kind of speech for three hours a day. I understand that you have to listen to this day in and day out for five days a week. My condolences are extended on the basis that you have to tolerate speeches of this nature that castigate or credit the government. I do have great sympathy for you.
I am really pleased to participate in the debate on this borrowing bill. We are asking the people of Canada to allow the federal government to borrow another $26 billion or so. That is an awful lot of money. I would be just as happy to stand here today and say that we are not borrowing any money, that this is a bill to pay down some of our debt.
Unfortunately, that is not what is in front of us today. We are having to borrow money. Why are we having to borrow money? There is no secret to it. We are spending more than we are collecting. That is it in a nutshell. We are here to ask for money to pay the bills for those things we are going to spend money on.
I listened to my colleague opposite who just finished speaking. In his whole debate did he make one suggestion about where the government might have spent a little less money, or where the government might have cut $500 million here, $2 million there, or $3 billion there? Did you hear any concrete suggestions, Mr. Speaker, as to how the government might further cut its expenditures? No. In fact, you did not hear any concrete suggestions at all from the member for Kingston and the Islands. I understand that. Ele will argue that that is not his role.
The member did bring out the book called "Legacies" put out by the Economic Council of Canada. He quoted from that book. We have all received copies of that book. He did make some valid comments about the recommendations contained therein. I say comments, but really what he did was read what they said. But did he say he agreed with their recommendations? No, he did not. Did he say he disagreed with their recommendations? No, he did not.
Let me just refer back to their recommendations so that you can determine for yourself whether you think that we as a government are moving in the right direction. He was quoting from page 28 and 29 with regard to an alternative Canadian policy. It says:
There would be no "catch-up"-i.e., the reduction in spending
attributed to the freeze would not be recouped.
That relates to their recommendation for a two-year freeze in five areas of government spending. For their purposes they chose as one of the areas to be affected by the freeze the capital assistance to business. Well, as you know, in the budget there were in fact a number of capital assistance programs cancelled. They were not just frozen but out and out cancelled. That is what the business community wanted. In fact, in the process in which I was involved on the goods and services tax we travelled across Canada and heard more and more business groups saying to cut out the grants to business. You will find that in fact the government did exactly that.
Did the member who spoke previously agree with that? I appreciate he is a Liberal so he really does not want to show his position on some of these issues.


Mr. Richardson:: Or he does not know.


René John Soetens: Or he does not have a position, or he does not know. That is right.
Subsidies to business was another point he referenced. As I have just mentioned, we have addressed the subsidies to business. In fact, our position now is that business subsidies are in fact loans that are repayable, unlike the kind of loans that previous governments were involved in.
I can recall a loan from a Liberal government of the past to a trucking company which hauled material back and forth between Montreal and Toronto. Did that government honestly believe that if a certain trucking company went bankrupt goods would stop flowing between Montreal and Toronto or vice-versa? It did. It lent that company money. The company went broke anyway and the end result was that goods still travel back and forth between Toronto and Montreal. The difference is that it took an awful lot of taxpayer money with it. That is the difference between Conservatives and Liberals. We do not make loans of that nature.


Mrs. Catterall:: No, you specialize in strip clubs.


René John Soetens: Here is another one. The member mentioned transfer payments to the provinces. If you read all the newspaper articles from across this country and listen to budgets of various finance ministers or treasurers from the various provinces you know that they are criticizing the federal government for not freezing transfers as was recommended by the Economic Council of Canada. We only increased them 3 per cent. Can you imagine? We did not give them less money, we did not
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give them the same money, we gave them 3 per cent more than last year, which is not what the Economic Council of Canada is recommending. Did my hon. colleague who just spoke say that was good or bad? No, he did not talk about that.
Another recommendation was that the indexing factor for family allowance be cancelled. I did not hear my hon. colleague say that he agreed with that. He must, I guess, because he brought out this book and he quoted the recommendations so I have to presume he agrees with that philosophy of deindexing family allowance. Well, that is not a policy that we espouse. It is not one we are following but it seems, since he wanted to use the reference, that he must agree with that.
The book talks about the freeze on the hiring of federal public servants. Of course, Mr. Speaker, as you know, in this budget we in fact are reducing the number of employees by some 1,000 over-all. So we have done some of the things recommended here and some we do not quite agree with, because it is not fair to out and out freeze transfers to the provinces.
My colleague did refer to the good province of Ontario. He and I are both residents of the province of Ontario and we both represent constituencies in this provinces. He proceeded to compare the government we have here in Ottawa with the government that exists in Toronto. He talks about competence. I am not going to suggest that either government is incompetent. I think there are elected officials in both jurisdictions trying to do the best they can with the resources available.
One the the differences is that the Liberals in Ontario inherited a government which, for 42 years, had been well managed. They did not inherit a budget circumstance where 50 cents of every dollar that was being spent was borrowed money. We had a deficit of $38 billion federally versus a deficit of some $1.5 billion provincially. He did not seem to want to mention that that really changed the lifestyle.
He talked about the budget surplus in the province of Ontario. I am a resident here and I recall how the Ontario Treasurer really raised the roof that our supposed cut-back in transfer payments was going to desperately affect his budget. Well, they were able to increase their spending by 6.8 per cent while we held
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ours to 3 per cent. What was the matter with them? Why did they not hold their spending to a 3 per cent increase? They were able to do 6.8 per cent more even though, he argues, we cut their transfers by $490 million.
As you know, we did not cut their transfers. They got more money than they got last year but, having said that, they still increased their spending by 6.8 per cent. I am happy that they were able to have a budget surplus this year. That is the way it should be. But did you hear him mention the employer health tax that was put in place across the province of Ontario? I do not think you did. Although that tax was in last year's budget it came into effect this year and that employer health tax in fact is an added burden on Canadian industries substantially in excess of what they were collecting through the old OHIP premium basis.
The member talked about the federal civil service. We have reduced our civil service by 12,000. The province of Ontario has increased theirs by 8,000. We went down 12,000, they went up 8,000. Ontario only had 83,000 civil servants so it only took it five years to increase it by 10 per cent. Having increased it by 10 per cent, is the service the province of Ontario is providing better and more efficient than what was in place five years ago? I can honestly and very comfortably say to you, Mr. Speaker, that it is not better.
In fact let me give you some very clear examples of where it is worse. The whole morale in the system has been destroyed. There is a psychiatric hospital in my constituency. It used to report to one minister and one ministry for its funding, its programs and the delivery of its service. It now reports to three different ministries, three different deputy ministers, and the end result is that it cannot get any decisions out of any one of the three. The whole morale and service of that hospital is suffering badly because of that kind of inequity.
All right, the government is spending more money in Ontario. It is kind of proud of what it is doing. Last year it provided funding to the school boards in my constituency to allow them to build, in the region of Durham, some five new schools. This year it is giving them not one dollar for capital construction. One might argue that maybe my constituency does not need more schools. I should advise you, Mr. Speaker, that today as I stand here debating this issue we have over 200 portable classrooms in my constituency. At this time next year,

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without the addition of any new school facilities, it will probably be in the realm of 225.
How does the province of Ontario justify not putting any money into a high growth area that needs schools? It justifies it because it hired 8,000 civil servants. The salaries of those 8,000 civil servants would in fact pay an awful lot of school bills.
Things are different between the federal and provincial governments. Our hands are tied because we inherited a deficit that we had to deal with, whereas the Liberal government of the province of Ontario inherited a very healthy, stable economy from a previous provincial government with a budget that was well managed. That is absolutely contrary to what we inherited here in Ottawa.
I mentioned at the outset that nobody from the Liberal party, and certainly not the previous speaker, came up with any suggestions about how we could perhaps borrow less than the $26 billion. As you know, we came up with the GST proposal in our report and I note that the member did not really comment on that. The same report to which he was referring talked about the improved competitiveness of the Canadian economy. This report talks about the 9 per cent GST. When this was written, that was to be the rate of the GST. It talks about how much better it is going to be for the Canadian economy to deal with deficit reduction and the competitiveness of the Canadian economy. He did not get around to quoting those.
This report does comment on a reduced GST rate and suggests there would be some benefits to that. We came through with that. It is interesting that he ignored those comments in this book as well. That is understandable. One only wants to quote those statements which support one's particular view. I understand that.
I would like to come back to that GST report which the finance committee brought forward. I was a member of that committee, and quite proud to have been so. We came in with some excellent recommendations.
One of the recommendations we made was to establish an expenditure review committee. Many witnesses who appeared before us said that we have to cut spending. We did not allow those witnesses to pass on their comments about where we ought to cut spending because that really was not the role of the committee. Instead, we established a subcommittee and recommended, after the GST report was in, that the finance committee invite Canadians to make a submission to it as to how the federal government could cut some of its expenses.
At our first meeting, members of the Liberal party and the New Democratic Party who were members of that committee decided that they were not going to participate. They did not want to have anything to do with any submissions on how we might reduce our expenditures. They walked out.
Therefore, we know they are not interested in reducing expenditures. We know they are not interested in looking for ways of reducing expenditures. More to the point, they are not interested in allowing Canadians, who have some good ideas, to tell them their ideas.
You should be aware, Mr. Speaker, and maybe proud of the fact, that this committee carried on its process. We invited all those Canadians who had made submissions to the goods and services tax committee to come back and give us their expenditure reduction ideas. Unfortunately, we did not get an awful lot of submissions, but you can be rather proud that one of the better submissions we got was from the Edmonton Chamber of Commerce.
I know that your constituency is in Edmonton, Mr. Speaker, and you will be happy to know that there are some people who made excellent submissions and certainly the Edmonton Chamber of Commerce was one. We will certainly deal with that in committee.
The hon. colleague who spoke previously talked about the GST and how it was going to be a cost to Canada. He might consider it a cost. I happened to attend a meeting this morning in Toronto of an industry group that generally does not pay tax. To me it was a perfect example of why the government has to proceed with the goods and services tax.
It was a meeting of an industry that sells comic books. I did not know this detail until I spoke to this group. When you sell a comic book that is stapled together, it is taxable. If it is not stapled together but bound, it is not
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taxable. The difference as to whether it is taxable or not is a staple.
The fourth edition of a comic book in the same year, even though it is stapled together, is not taxable.


Lee Richardson: This is the current system?


René John Soetens: This is the current system; the system that my colleagues here to the left want to keep in place.
Further, if there is an ad for something taxable in that fourth edition comic book that is not taxable, all of a sudden that book becomes taxable again. This is the stuff that my hon. colleagues on the left are all in favour of. That is one of the reasons why we got rid of it.
It was explained to me this morning by the group that is involved in this particular industry that by removing the federal sales tax from their inputs it is going to be more competitive with all kinds of comic books and games and novels that are imported into this country. They had clear examples of where they were uncompetitive because of the Canadian tax structure. They were positive about how they would do more business. That is, in fact, what the Government of Canada said.
Referring again to this book that my hon. colleague used a little while back, the Economic Council of Canada says we will do more activity by the elimination of the federal sales tax and replacement of it with the GST. We will do some $9 billion or so in extra economic activity. That is jobs. That is investment. That is a return to Canada of increased economic activity. That is healthy and that helps the deficit because, as you know, Mr. Speaker, taxes are inevitable under our system. As a result of that $9 billion of increased economic activity, people will pay more taxes and that helps to reduce the deficit. There is a very positive relationship between the GST and the deficit. My hon. colleague just ignores the fact that the GST will have anything to do with improving the over-all deficit projection.
There are some very clear, very concise moves that the government has taken on the goods and services tax which will in fact yield increased economic activity and will result in a reduced deficit.
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Colleagues down the way are upset that the government would reduce its deficit, and I can understand why. So far they have been totally bereft of any policies. Their only hope for an election platform for the next election campaign is that those mean, bad Tories did not reduce the deficit. Their fear is that if we reduce the deficit, which we are going to do, they will not have anything to campaign on because they are totally bankrupt of ideas. Not only are they bankrupt of ideas, but I understand that their party is not all that well heeled financially either. In addition to being bankrupt of ideas, they might be bankrupt of over-all thought processes. There is another perspective that might be of interest.
I have another point to make about industrial competitiveness. I am glad the hon. gentleman quoted this book because it has an awful lot of very good information in it which he chose to ignore. It says:
- Canadian productivity growth rates have exceeded those in the United States. According to figures compiled by Statistics Canada and the U.S. Bureau of Labour statistics, this is especially evident in transportation and storage, utilities, construction, and finance, insurance, and real estate- Since all of these industries produce important inputs to manufacturing and resource production, their strong productivity growth gives a boost to Canada's competitiveness.
I guess he did not see that. Just so that you are aware, Sir, that is on page 12.1 would hope you would look that particular paragraph up as well because you may find it very interesting. Of course, there are an awful lot of very good quotes in this book on Canadian competitiveness. Again, I am pleased that the hon. gentleman used that book because it provided me with an opportunity to explain it all.


Peter Andrew Stewart Milliken: You would have used it anyway.


René John Soetens: Actually you are right. I probably would have used it anyway.
The other point I would like to come back to is this idea of provincial governments being, shall we say, asked to carry the burden because we are reducing some of our expenditures. I mentioned, as an example, that in my riding, although there is a desperate need for schools, the provincial government chose not to fund one additional classroom.
I should also point out that in my riding in the last provincial campaign the provincial Liberals came in and said that it was going to fund an addition to our hospital of 125 beds. Mind you, the towns of Ajax and Pickering

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would have to raise some $7 million before the provincial government would kick in its share.
Needless to say that $7 million has been in the bank for a year, it seems that the provincial government has come along and said that it is sorry, it cannot fund it this year. There is an election coming, so maybe during the election it will fund the hospital.
I guess I am suggesting that over all the federal government has done a fine job of controlling its expenditures. I am sorry that I have to debate a bill to borrow $25 or $26 billion more, but maybe next year we will be debating a bill to borrow an awful lot less and the Liberal party will have given us, I am sure, all kinds of ideas on how we can borrow less money.


Peter Andrew Stewart Milliken: Mr. Speaker, I of course enjoyed the numerous references in the hon. member's speech to my own. I know that he has now had a good long look at "Legacies", the twenty-sixth review of the Economic Council of Canada. I did not forget anything in the report, I just did not have time to read all the figures and statistics out of it which, clearly, he found of such interest.
The fact remains that the report made it clear that the budget deficit could be brought under control if the Minister of Finance took certain steps, and there was a recommendation contained in there. I used the recommendation as an indication that the government does not need advice from us on how to bring the deficit under control when it is paying $10 million to the Economic Council of Canada to provide it with that advice.
The fact is that, even if we were to provide the advice, this government ignores it. We have the evidence there in the form of the Economic Council of Canada report. We have seen the evidence in the Minister of Finance's own budget. He has clearly ignored the recommendations.
Will the hon. member tell us why it is he thinks the Minister of Finance has ignored these recommendations and is letting the deficit remain high, in fact go up? He referred in his speech to the deficit going down. It has not gone down, it has gone up over last year. He knows that. I know he would not want to mislead Canadians into thinking that the government is doing something that it patently is not.
Can he explain why it is, in his view, that the Minister of Finance has ignored this advice and is increasing the deficit at a time when he says it is so important that it be reduced?


René John Soetens: Mr. Speaker, I would be happy to respond to that. From all the information I have, the deficit for
1989-	90 was $30.5 billion. The projected deficit for
1990-	91 is $28.5 billion. My first response to the hon. gentleman is that $28.5 billion is less than $30.5 billion. Now that is Conservative counting, not Liberal counting. I just point that out.
Second, he asked about some of these recommendations. Why did the finance minister not accept them? That is the difference between us. It recommends that we should freeze transfer payments to the provinces. We know that there are provinces in this country that cannot afford to have a total freeze. He ignores that. He would just a soon that provinces like Saskatchewan, Manitoba, Alberta, Newfoundland and Prince Edward Island be frozen. Well, we know, as Conservatives, that we cannot do that.
It refers here to the indexing factor for family allowance. He says that we should deindex those things. Well, his party is going to have to make up its mind. The last time this government tried to deindex something, some five years ago, those people railed against it. They are going to have to make up their mind. Do they agree with full indexing, or do they not? It seems, if they are going to ask why we did not follow these recommendations, that they are either for them or they are not. It seems that they do not have the courage to take a position on these particular programs.
We are willing to take advice. Yes, we did not take all of their advice. But since he wants us to, why does the hon. gentleman not say: "You were right to take the advice of the Economic Council of Canada and put in place the goods and services tax"? Maybe he did not want to take that particular portion of these recommendations into consideration in his questions and comments.
He is going to have to make up his mind. He wants us to freeze payments to the provinces that do not have the abilities, and he does not want us to put the goods and services tax in place. Now, which of these recommendations of the Economic Council of Canada does he want us to follow?
May 14, 1990


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


Marlene Catterall: Mr. Speaker, I am so glad I came in to hear the member for Ontario speak. It was somewhat confusing initially, but I must say it has inspired me. It was confusing because when I first walked in I thought I was in the Ontario legislature. I was pretty sure I had taken a wrong turn somewhere between Ottawa West and Parliament Hill, because we were talking about the fine performance of the Ontario government in controlling its deficit and its spending. Then I heard the member for Ontario-and maybe he is a little confused because of the name of his riding-complain about the goodies that have not been coming to his riding.
What did he expect to happen when his government reneged on cost shared programs with the province? Did he expect that the province of Ontario was going to let children go hungry because there was not enough money for social benefits? Did he expect that it was going to cut back on day care because the government was refusing to meet its commitments to cost share that program? Or, did he expect that it was going to kick kids out of university because the government was cutting transfer payments for post-secondary education?
I am sorry if the government's own actions are coming back on its own members in their own ridings. They have nobody but themselves to blame.
Then, as I listened a little further, I honestly thought that a miracle had happened and suddenly we, the Liberal opposition, were in government and that the people opposite were in opposition. I heard the member attacking the policies of the Liberal party. I thought how wonderful, here we are controlling the economy and the budget and they have nothing to do but criticize what they anticipate or project to be Liberal policies. It has put me in very fine form to comment on this borrowing bill.
We are borrowing $25.5 billion. That means we are adding that much to the national debt of $362 billion. The government likes to pretend that the amount of money we are borrowing and the amount of debt we have have absolutely nothing to do with the annual deficit that
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Canadians are paying. Of course it does. What you pay in annual payments depends on how much you already owe.
One thing that has struck me as I have looked at the budget documents is that five years ago the deficit was fairly evenly split between paying for programs and paying interest on debt. Now the deficit is not even enough to cover the cost of our borrowing. All the deficit goes to pay interest on debt, and then a good chunk more comes out of operating budgets to pay the interest on the debt.
It is also important to point out that this $25.5 billion is not the full extent of the government's borrowing this year; that it is actually $28.5 billion. One of the ways in which the government reduces the amount it actually goes out to the financial markets to borrow-down to $25.5 billion-is by borrowing from the federal superannuation fund.
One of the most contentious issues for many years around this place has been the lack of adequate return to the federal superannuation fund and the lack of action by the government on improvements to the fund that are required under our charter which it has refused to implement up until now. These are improvements that it has made already to pension funds of federally regulated bodies.
Why is it withholding this money, these proper and merited pension adjustments from public servants? The answer is quite simple. It is because it wants to hold them off and use them as bargaining chips against deindexing seniors' pensions, as it has done with many other elements in its budget.
The government likes to keep the federal superannuates' fund rich and healthier than it needs to be to meet its obligations and to meet benefits that public service employees have been entitled to ever since the Charter of Rights and Freedoms was passed. It does so because it likes to borrow from it so that it can pretend to Canadians that it is really borrowing less than it actually is.
I want to talk about one other aspect of the borrowing of Canada that I think has not been addressed until now. It is the amount of borrowing from non-residents. In the last five years non-resident borrowing has gone up from just over 10 per cent to nearly 20 per cent. The cost of this borrowing to Canadian taxpayers is pretty horren-

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dous. Non-residents who lend money to Canada and get paid interest on those loans pay no taxes in Canada.
Let me just give you the figures, Mr. Speaker: 20 per cent of our borrowing is by non-residents-$50 billion of domestic debt is held by non-residents. If we assume a 12 per cent interest rate-and I doubt if we can count on that until the end of the year-that means $6 billion is going out of the Canadian economy to non-resident lenders. That is $6 billion which, if it were lent and paid in Canada, would be generating tax revenue back into the coffers of the government.
The amount of revenue that the government is forgoing by borrowing nearly 20 per cent outside the country is anywhere between $1.5 billion and $1.7 billion. This bill is borrowing darn close to $2 billion more than it needs to simply because the government has not controlled foreign borrowing and is paying interest out of the country and not collecting tax on that interest.
Meanwhile, what has it done to Canadians? While it is paying tax-free interest to non-residents, it has dropped the ability of Canadians to be tax free on the first $1,000 of interest they earn on what they have lent to their own government.
Mr. Speaker, $3 billion of this borrowing bill is just to cover the reserve for foreign denomination borrowing. The government needs to have a very close look at the impact of its foreign borrowings and its borrowing of foreign denominations on the deficit of the country.
The other thing that strikes me as we add more debt is the extent to which over the last few years we have sold off through privatization the assets of the country. It makes no sense to me to sell the House to pay the oil bill, which is what the government has been doing as it has privatized over 22 government operations or Crown corporations.
Canadians might accept selling off their assets which they have paid for if they knew that the sale of those assets was going to pay off the debt so that the deficit and the amount of interest they pay could in fact be reduced. But, no, the sale of the assets of Canadian taxpayers has been used simply to pay more interest and to keep on adding to the operating budget.
This budget has been characterized as the no tax budget. It is important to notice that borrowing would be much higher if the government had not managed to transfer much of its responsibilities to others.
I want to talk about 12 different items that to me are new charges on Canadians. It does not matter if we call them taxes or not. They are new charges on Canadians. They are the equivalent of raising taxes.
The first thing we had better remember is that this is the GST budget. Boy, if that is not a whopper of a new tax, I do not know what is. Some 260 million dollars of the borrowing in this bill are attributable only to pay for advertising to tell Canadians that they like a tax that they know dam well they do not like. It is to pay for several thousand new tax collectors so Canadians can be policed to make sure they are not escaping one whit of one dollar of a new tax that they do not like.
We are looking at a $6 billion increase in taxes to Canadians through the GST. They are now paying $18 billion in federal sales tax. The government will collect $24 billion to end up with a net revenue of $18 billion. In the meantime it will pay all the administrative costs of sending out $8.7 million in cheques to compensate partially for this new tax. What a waste of money.
Second, this is the budget that will increase both municipal and provincial taxes to pay for services that the Government of Canada has a commitment to cost share fifty-fifty. It is now reneging on that agreement. It is failing to meet its commitments in important areas such as education, social services, and day care-all of which are cost shared programs. The result of that is going to be an average of $576 over five years that Canadian taxpayers will have to pick up in additional municipal or provincial taxes to compensate for what the government is not now paying for.
Third, one of the more blatant items in this bill is fees for students. There is a 3 per cent charge on students who qualify for student loans only because they have already proved they are too poor to go to university without getting a loan. Now we are telling them that they have to pay fee on top of that.
Fourth, we have to remember that this is the clawback budget. This is the budget in which the government says that seniors and children's benefits and nothing else will be taxed at 100 per cent for some seniors, some children, and some families. Millionaires can make an extra $1
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million and be taxed at no more than 25 per cent. Yet the benefits payable to seniors and children this year become taxable at 100 per cent.
This is the year in which the government starts getting the unemployed, the workers and the employers to pay through their fees for obligations that have up until now been the responsibility of the Government of Canada. Even though Bill C-21 is not through the House yet, the government is collecting those extra taxes from the employed. It is collecting those extra taxes from the employers. It is collecting them from the unemployed by not paying them the benefits that they are now entitled to.
Is the government saying to people who are supposed to benefit from this bill: "We will also make your benefits retroactive to January 1, because we have made the charges retroactive to January 1"? No, it is not. It is saying: "We are gouging you starting January 1, but you are not benefiting until this bill gets through the House".
This is the year in which the personal income surtax effectively goes up to 5 per cent. This is the year in which deindexing of personal income tax deductions means a 3 per cent rise in taxes paid and a 3 per cent loss in the value of tax credits.
Eighth, this is the year in which the proportion of taxes from individuals increases again while the proportion of taxes from corporations drops by 3 per cent.
This is the year in which we see an elimination of funding, not to the government's own programs, not to cabinet ministers who now have the ability to pull twice as many people out of government departments to help them in their political offices. We are eliminating funds to those in society who are the least powerful, who most need the support of the government to solve their own problems and to communicate their needs to government. I will be coming back to that.
This is the year in which we see a continuation in the reduction of the corporate tax rate that has taken place in the last couple of years. It will go from 36 per cent down to 29 per cent.
I want to talk about a couple of the changes that are part of the budget which has led to this borrowing bill. I
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want to talk about the people who are being deprived of funding and then where some increased spending is going, spending that I really do not think Canadians want to be paying for.
I want to talk about the reduction in funding to native Canadians and in particular the absolutely unforgivable cut to native newspapers and native broadcasting. The very survival of native languages is dependent upon the native languages newspapers that will be wiped out by these cuts. Meanwhile, the government has the audacity to suggest that aboriginal languages should be mixed in with heritage languages, and that it should start spending money on an institute while the languages die in the communities of Canada's native people.
This is the year in which the promotion of tolerance and understanding is being undermined in this budget. Cuts to heritage language programs represent a threat to the preservation and understanding of ethnic languages and cultures, and to the values attached to the preservation of these ideals.
This is the year in which we have seen the cut that has been restored only temporarily to women's centres so that women can act to redress their own inequitable situation in Canadian society. Need I remind hon. members that when the economy suffers it is women who suffer first and suffer most.
On the other hand Canadians are being asked to borrow for these types of things. They are being asked to pay $1.6 million to redecorate a cabinet minister's drop-in centre in Halifax; $3 million for ceremonial and state occasions so that politicians can stand up on platforms and get applauded; $160 million to the Boeing Corporation, although I think it is actually $166 million; and $32.6 million to CSIS.
At the same time not one whit, not one cent is going to replace the $450 million that the government over the last five years has cut from spending on alternative energy and conservation. I think we know where the priorities of this government are.
The most important issue for Canadians is the environment. Yet this government in its two mandates has cut spending on alternative energy and energy conservation-the most important contribution we can make to cleaning up the air that the whole world breathes. That

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spending has been cut from $500 million to $50 million, and the budget does nothing to redress that.
It cuts investment in the education of our young people. It cuts investment in science and technology that will secure a prosperous future for Canada and for future generations.
I would be remiss if I did not stand up and speak against this package of borrowing and all the changes in priorities that go with it that I think are entirely contrary to the kind of nation that Canadians have come to be proud of.


Mr. Bill Attewell (Markham-Whitchurch -Stouff-ville):: Mr. Speaker, I would like to ask the member for Ottawa West whether she understands compound interest or not.
It is a fact that when we assumed government in 1984 that the national debt was approximately $200 billion. While we have reduced the deficit every year, there still has been a deficit. While the books show that we have paid interest, we really have not paid it to the tune of the deficit each year.
The national debt is now-and I want this on the record-$350 billion, the hon. member might think that this government is responsible for that. But that is not the case.
Compound interest over the last five and half years accounts for another $120 billion. The total debt of the country which can be directly attributed to the Liberal government of 1984 and to the Liberals prior to that time-and they had something like 15 years of deficits- is $320 billion which must be placed directly in their laps. We should take responsibility for $30 billion, which is the difference between $320 billion and $350 billion. We will do that because we are working on that as well.
I want the record to show that this $320 billion which is the albatross that is on the people of this country-our children and grandchildren-should be placed right over there.


Marlene Catterall: Mr. Speaker, aside from the rather condescending manner in which the member started his comments, does he not think that after nearly six years in office it is time to start acting like a government and not an opposition party? Does he not think it is time to stop
blaming a party that has not been in office since 1984 for the financial mismanagement of his party over the last six years?


Lee Richardson: The question is: Do you understand compound interest?


Marlene Catterall: Of course I understand compound interest. Do not be so condescending!
I also understand that one pays off one's debts when one sells off billions of dollars worth of assets. One does not keep on paying more money into operations. One does not keep on adding to the costs of government.


Bill Attewell: I do not believe you understand compound interest.


The Acting Speaker (Mr. Paproski):: Order, please. One question at a time.


Lee Richardson: We are waiting for the answer.


The Acting Speaker (Mr. Paproski):: On a questions or comment the hon. Minister of State for Finance.


Hon. Gilles Loiselle (Minister of State (Finance)):: Mr. Speaker, the hon. member said that we had a deficit in the current account, apart from the debt which was building up, to pay for Old Age Security and the programs that the Liberals had put in place. We had to borrow $16 billion. How can you pay a debt in that kind of situation? We have turned that around. Now we have a surplus of $9 billion. That is a $25 billion turnaround in our operation to start paying for the debt the Liberals left us.


Marlene Catterall: Mr. Speaker, I cannot leave that on the record. The member has suggested that somehow Old Age Security is a draw on taxpayers. He knows very well that when the Old Age Security was introduced in the early 1950's it was a contributory plan. It remained as a contributory plan on the income tax form until the mid 1970's when that line was taken off the tax form.
The rate of tax was not reduced because the line came off the tax form. Canadian taxpayers have continued since 1952 to pay for Old Age Security. His is the government that is denying them the return on their investment.


The Acting Speaker (Mr. Paproski):: Does the hon. member from Markham have a supplementary question?
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Bill Attewell: Not really, Mr. Speaker, although I do not think the hon. member for Ottawa West really has dealt with compound interest. She does not seem to agree that the Liberal party is responsible for $120 billion of the $150 billion growth in national debt over the last five years.


Marlene Catterall: Mr. Speaker, in the last five years this government has had an opportunity through increased employment, declining interest rates, a better world economy and a trade surplus like we have not enjoyed for over a decade to deal with that deficit, not to continue compounding it.


Mr. Ron MacDonald (Dartmouth):: Mr. Speaker, I have been just outside in the lobby listening to the debate of my colleague for Ottawa West. She has made a lot of sense, as usual. She made a lot more sense than some of the comments from the other side.


Lee Richardson: That makes two of you in this room who think that.


Ronald MacDonald: We have the western peanut gallery hurling insults over here. If the hon. member would like to speak, I would gladly cut my comments short so that we could listen to his impassioned plea about the deficit.
One of the things I would like to ask my colleague concerns this government's absolute apoplectic pursuit of problems concerning the national deficit. I, like many Canadians, listened during the last election campaign and over and over again we heard the government and ministers of the Crown telling us that the deficit was under control. We heard that there was no problem with the deficit, that this government had spending under control. Every time we turned a corner we heard that every promise of the government during that campaign was not a promise, it was a spending commitment and that it had all the funds necessary.
I would like to ask my colleague from Ottawa who understands the pulse of Canadians very well what she thinks about this absolute flip-flop the day after the last general election. On one hand we had no problem with the deficit and the next day we had a complete preoccupation with it.
Does she think this group opposite was completely truthful in its campaign rhetoric?
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Marlene Catterall: Mr. Speaker, I am glad to have the opportunity to answer that question concerning sacred trusts and a commitment to child care. All of these things were budgeted for and suddenly we did not have the money for them the day after the election. I think it is clear that Canadians have a litany of broken promises and broken commitments.
I just want to say to my colleagues who persist in perpetuating a myth that I do not understand compound interest that anybody understands the way to avoid paying interest on interest on interest on interest is to start paying off your debt, not sell your assets without paying off your debt.


The Acting Speaker (Mr. Paproski):: On that basis, questions and comments are now terminated.
On debate the hon. member for Calgary Southeast.


Lee Richardson: Mr. Speaker, I think it might be helpful to members, just so that they do not have to keep bringing in the heavy-hitters to balance their speeches, to give a little background to explain how we got into the situation that we are in today.
The member who just spoke wanted to walk away from the fact that the Liberal government in 1984 left this country with a $200 billion debt. Few Canadians have a real grasp of the magnitude of $200 billion. It is an awful lot of money.
The debt increases every year. It continues to increase, and not just until we get to a point where we can bring in enough revenues to pay not only for all the programs Canadians enjoy, but to pay the interest on the national debt. That was something which the hon. member for Markham-Whitchurch-Stouffville pointed out so well. I was delighted with his comments. He attempted to explain, before he was rudely interrupted, compound interest and how this $200 billion that our government inherited in 1984 would have grown by $120 billion to be, today, $320 billion if we had done nothing else.
But that is not the largest part of the problem. To be saddled upon entering government with a debt of $200 billion was not enough of a legacy for these Liberals to leave behind. After 20 years of profligate spending and waste and increasing expenditures every year for 20 years, they left us in a position in which we had built-in structured expenditures in this country to pay for all the worthy and worthwhile programs of government. I refer to seniors' pensions, family allowances, payments to those in need, as well as the maintaining of government

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operations such as airports, Customs, et cetera. They had fixed expenditures in the year we took office amounting to $87 billion.
You just cannot turn off the tap on these fixed expenditures and say: "We are going to lay off all those people. We are going to shut down 10 per cent of the runway. We are going to close off part of our border. We are not going to give 100 per cent of pensions to people every year, people who have paid into them. We are not going to take care of those people on unemployment". You do not turn the tap off instantly on those programs. These are things that over a period of 20 years Canadians had come to learn to expect from government.
We had fixed expenditures which demanded $87 billion in revenue every year, plus a $200 billion debt with a $22 billion interest payment. When we became a government we found a bill every year for at least $100 billion. On the other hand, we had a fixed revenue base of only $80 billion. How can that be? Surely, the Liberal government would not have established a system where it expended $100 billion a year and brought in only $80 billion. The whole tax system-our income tax system, our corporate tax system and our excise tax system combined-brought in only $80 billion. Yet, for 20 years it continued to expend more than it brought in.
It is interesting to note that, in the years 1970-75, the Liberal governments of the day increased expenditures from one year to the next on an average by 17.9 per cent. How is that? If you folks want more out there and you want to re-elect the Liberals, let us buy you at the rate of 17.9 per cent a year every year.
In the next five years they had some conscience. A little guilt snuck in and they said: "We cannot keep doing this to the country. We are running the country into the ground." In a great effort to reduce expenditures, in the period 1975 to 1980, the Liberals only increased by an average of 10 per cent per year. I do not know how many people across the country were getting wage increases at 10 per cent a year, but the Liberal government did not have any problem in its low-spending years to increase at the rate of 10 per cent a year. It lost some seats and the government at the end of that period because it had
shown such restraint. It went from 17.9 per cent spending increases annually down to 10 per cent.
The Liberal government was not able to buy enough votes so the people of Canada elected a Conservative government in 1979. Unfortunately, it was a minority government. Aided by the socialists, the Liberals were able to defeat that government. We got them again, Mr. Speaker, and they came back with a vengeance. The Liberals said: "We could not get re-elected when we only increased our budget 10 per cent a year. We are not going to let that happen again." By golly, they got right after it. From the period of 1979 to 1984, before we kicked them out, they increased the rate of expenditure every year by an average of 14.1 per cent a year.
Canadians said: "Wait a minute. We have had enough of this nonsense. All they do is spend and get this country further into debt." When this government took office in 1984, the accumulated debt of the Liberal party was $200 billion. We had a fixed rate of expenditure of $100 billion and it was bringing in only $80 billion. The first thing one has to do before addressing the national debt is at least to get revenues up to expenditures or expenditures down to revenues.
Where was the money being spent? I think Canadians know where the money was being spent. Thirty-three per cent was in direct transfers to persons. These were transfers to pay pensions, unemployment insurance, family allowance cheques and all the operations of governments. Those expenditures, increasing at the rates I spoke of earlier, made the country grow. It had been increasing over the previous 15 years at outrageous levels and this government said it had to stop. We are going to try to increase revenues broadly and to increase the level of the economy so that we have more people employed and more jobs for Canadians. Let us make the economy more effective and productive. When we have more people working and more companies creating jobs,the burden is spread out. More people are paying tax and tax revenues will go up. Individual taxes do not go up. The base is spread. More taxpayers mean more tax revenue comes in, and that is what it attempted to do. I must say did a very good job.
The record shows that, for the period from when it was elected in 1984 to today, the increase in spending in Canada of the Conservative government has been 3.5 per cent. In the first five years of the Liberal government it was 17.9 per cent. In the next five years, it was 10 per cent per year. In the next five years, it was 14.1 per cent.
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When the former Leader of the Opposition, Mr. Turner, was finance minister, the Liberals had a 24 per cent increase from one year to the next. There was an increase in expenditures of 24 per cent in one year.
What has our government done? On average, since this government was elected in 1984, expenditures have risen 3.5 per cent.


Peter Andrew Stewart Milliken: Rubbish.


Lee Richardson: It is right here in the Public Accounts. It is available to any Canadian. Those are the facts. It is not the hyperbole and nonsense we have been hearing from the Liberals this afternoon. That is a fact and there it is in black and white.


An hon. member:: It is over 7 per cent.


Lee Richardson: We are talking about program spending. It is what we have control over in terms of a government and what we have control over in terms of our spending. What we do not have control over is paying off their debt.
The member says it was 7 per cent. Admittedly, we do have to have to pay the interest on the debt. The debt that was $200 billion when we took office is now up to $350 billion. Of that interest, $120 billion is simply compound interest that was here when we arrived as a government in 1984.
This government has shown fiscal responsibility. Since it was elected six years ago, instead of raising expenditures at a rate of 17 per cent or 24 per cent, government spending has increased 3.5 per cent. Inflation has been over 4 per cent. So, in real dollar terms, federal spending has actually been reduced over that period.
At the same time, because of the increase in the economy, we broadened the base. More people are working. A total of 1,604,000 jobs have been created in Canada since 1984 and 86 per cent of those jobs are full-time. In contrast, 89 per cent of the jobs created by the last Liberal government were part-time jobs. A total of 966,000 jobs have been created for women. This represents 60 per cent of the total jobs created.
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In 1984, when this government was elected, unemployment was 11.6 per cent. Across the country today, it is considerably reduced. It has been consistently at the level of 6.5 per cent to 7 per cent ever since. It is 7 per cent today. We still have a low unemployment level because more Canadians are working. When more Canadians are working, they pay taxes. They broaden the base. The more people paying into the pot, the greater the revenues for the country.
The expenditures that were up here with the Liberals and the revenues that were down here been brought together. In 1987 they actually crossed. For the first time in a long time, when the Conservatives came in, Mike Wilson took two-and-a-half years to get to a point where we were bringing in as much money as we were spending. We were not spending more money than we brought in, with the exception of interest on the debt.
Since 1987, and for every year since 1987 that this government has been in office and Michael Wilson has been finance minister, we have had a surplus budget. We have actually brought in more than we have spent on government programs. Wouldn't that be great? It would be great. We could lower taxes right away, but we still have to pay the compounding interest on the Liberal debt.
We are on the right track; we are going in the right direction. Instead of spending more than we bring in every year, we have turned it around. In the past four years, we actually spent less than we brought in, and we are starting to pay the interest on that national debt. In 1994, when we will have passed it to a sufficient point, we can then start to attack the principal of that debt and benefit all Canadians.
I want to get into a number of other areas, because I have heard such outrageous statements made by some of the opposition members this year. I thought it would be helpful for Canadians to get a grasp of what kind of mess the Conservatives inherited back in 1984. It is simply not fair to say: "You cannot keep going back there and blaming those Liberals. Gosh, they were thrown out of office six years ago."
Unfortunately for all Canadians, we could not throw out their debt with them. We inherited that debt. Had we

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done anything else, that debt would have grown to $320 billion today, simply compounding the disgraceful economic performance of 15 years of Liberal governments.
I might just leave it at that point. I would be delighted to answer any questions that the Liberal research establishment can come up with if one of the members would like to read one of them to me.


Peter Andrew Stewart Milliken: Mr. Speaker, the hon. member knows that what he says is inaccurate.
As I started to say in my speech, although unfortunately I ran out of time, there is a litany of problems with this government's financial management. I could not get to this part of it when I was cut off earlier, so perhaps I can refresh the hon. member's memory now.
"A New Direction for Canada: An Agenda for Economic Renewal"-I daresay the hon. member does not have a copy of this-was the title of this gobbledegook that the Minister of Finance tabled in the House on November 8, 1984. It was shortly after the election, the hon. member will recall, and this was supposed to tell us about what the Tory government was going to do for Canadians.
It stated that if it left existing policies in place, certain things would be just absolutely dreadful. The government said that by 1990-91 the federal deficit would reach $37.3 billion if it did not do anything about it. It is forecast at $28 billion. With interest rates going the way they have been, we know it is going to be a bit more than that. It will be very close to the $37 billion that was predicted if it did nothing.
It has done stuff. The government has hiked taxes 31 times. It also promised that it would bring spending under control in its fight against the deficit. We know that program spending has increased substantially, 4.6 per cent in 1986-87, 7.6 per cent in 1987-88, 3.1 per cent in 1988-89. This year it is supposed to go up-


Lee Richardson: It didn't go up this year.


Peter Andrew Stewart Milliken: Yes. Program expenditures. It is ignoring all the increases in the expending on the debt. In addition, the prediction was that program spending would reach $103 billion, under the status quo budget, by 1990-91. This is what the Minister of Finance said would be so dreadful, so absolutely frightful in 1984. Yet,
according to the government's plan, spending is going to be $109 billion. How did it get so much higher?
This was supposed to be a worst case scenario if the government did nothing. It has done something. It has botched up, that is what it has done. The government has hiked taxes. It has taxed Canadians to the hilt and it still has not managed to do anything to bring government expenditures under control.
In addition, the government predicted that government revenue under this worst case scenario, if nothing was done, would get to $100 billion by 1990-91. According to the current plan, it is going to be $120 billion. What happened? This was a worst case scenario. In fact, everything is worse than predicted. Why? Because the Minister of Finance, I suggest, is incompetent. He should resign, get out, and let someone else run the administration of the country. Does the hon. member not agree with that?


Lee Richardson: Mr. Speaker, I find it difficult to constrain my laughter at the humourist from the Liberal Party. He has the audacity to stand up in this House and speak to all Canadians about the alleged incompetence of this finance minister. The Liberal party finance minister who later became leader of the Liberal party and very briefly Prime Minister of Canada had increased expenditures 24 per cent from one year to the next. Then he stands up and asks for the resignation of the present Minister of Finance and criticizes him for having a budget increase this year of 3.1 per cent. It is on the record.
Mr. Speaker, you have just heard him criticize our finance minister for having a 3.1 per cent increase. We hear this from the people who brought us average increases of 17.9 per cent for five years, 10 per cent increases for the next five years and for the last five years of their government, annual increases in government expenditures of 14.1 per cent. Yet he has the audacity to stand up in this House and ask for the resignation of a finance minister who has been able to keep program expenditures to a rate this year of 3.1 per cent. I will leave it to Canadians to decide who is humourous and who is going to get this economy back on its feet and Canadians working again.
Ron MacDonald (Dartmouth): Mr. Speaker, I commend the member for Calgary Southeast for his presentation today. I listened with a great deal of bemusement to his remarks.
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My question deals with the fact that right up to 1984, the governing party opposite begged Canadians on their knees every election campaign to let them take over. Yet every time we talk about the economy I do not hear the members getting up and saying, well, here is how we fixed everything. What I hear is that they have a case of selective amnesia. It starts the day after the 1984 election and the only thing they can refer to is pre-1984, which is subject to a great deal of interpretation and which most Canadians are not terribly concerned about. What Canadians are concerned about is your inability to deal with the economy in a consistent and fair manner and in accordance with your words during election campaigns.
I would like to ask the hon. member exactly what type of course give in his caucus that they have such a selective memory loss, and can find nothing to explain away the problems that this country has other than to say it is somebody else's problem.


Lee Richardson: Mr. Speaker, I do not know how these guys like to keep walking into this. I give them credit for leading with their jaw. They want to come here and get it right in the kisser. They say to me, selective memory, I do not think there is any Canadian who needs a selective memory to know the kind of debt these Liberals left us with.
The annual deficit has fallen from a record $38 billion in the last year of the Liberal government to $28 billion in 1990-91. In dollar terms, the deficit has been cut by one-fourth. In 1984 the deficit was 35 cents on every dollar. This has now fallen to 19 cents. We do not have to talk about anyone's memory. These are facts and anyone can see them in the public accounts and are available to the public.
This government has shown fiscal responsibility. We have had to make some tough decisions, limit some programs and cut some spending, but we are getting this country on its feet again. Is it working? I mentioned earlier a total of 1,604,000 jobs have been created since we came into office in 1984. Of those, 966,000 have been created for women. The unemployment rate has fallen from 11.6 per cent when the hon. member party's was in office to 7.7 per cent in February.
People are working in Canada. Canadians are productive now, and we do not have a government wasting their money and spending more than it brings in. The day of reckoning has come. This government is dealing with it, and we are solving the debt problem that the Liberals created.
I could go on, Mr. Speaker. I would love to answer more questions from my colleague, because it is kind of fun to straighten him out and to tell Canadians what a mess they left.
When these people talk about resignations of finance ministers, we just have to look at the record I talked about today both in terms of the legacy left by the Liberal party and the remarkable progress that has been made since 1984 by the current Minister of Finance. I think we should put a statue on Parliament Hill of this Minister of Finance.


René John Soetens: Mr. Speaker, I would like to ask the member for Calgary Southeast about legacies that have been left.
Our finance minister has been chastised for what he, in the minds of the opposition, has been doing. I would like to ask the member for Calgary Southeast if he would care to comment on this. In the last majority Liberal government did they not, in that year of the $38 billion deficit, forecast something in the range of a $33 billion deficit and were out some $6 billion in their forecast?
In the year before that when they forecast a $28 billion deficit, in fact it was $33 billion. They were out substantially. If you go back through five finance ministers who they had in that last term of office, they were all big shooters and all out on their forecasts. Here we are as the new government and we have had only one finance minister. Each and every year, he has been within $1 billion of what he forecast. Would you care to comment on that?


Lee Richardson: Mr. Speaker, I think you know and certainly the people in Edmonton Northwest know that what the member for Ontario has just said is absolutely true.
I want to comment on the representation made by the hon. member for Ontario, and the accuracy of forecasting of previous Liberal finance ministers who were out $6 billion a year in any of their forecasts. This government

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has never been out by as much as $1 billion. When the hon. member was giving those numbers, I thought he might have been giving us something else.
When talking about $38 billion deficits and the Liberal party, they did not even include the deficit in the UIC account. That is $10 billion. They kind of shoved it under the desk somewhere. "Let's not include that in the national debt and in the deficit. We have separate accounting for that one." It is only when this government came clean and said to Canadians in 1984: "We are not going to kid you about the situation in the economy. We are going to lay it all on the table."
We keep dragging these things out. Every time we open another closet, more ghosts jump out, we see more bills left over from the Liberal government. But we have it on track. We turned it around since 1987. We are now running surpluses in our program budget. It is all on the table. It is all up front for people to see. Canadians know about the economic situation in this country. They know it is not easy, but they know we have taken the tough decisions. We are taking the proper direction to get over this mountain of debt and see the future of a prosperous, economic Canada.


Ronald MacDonald: Mr. Speaker, I am in a jolly good mood after listening to all the blarney that I just heard from my hon. colleague from Calgaiy Southeast.
As I said earlier, I flew here today and I was a little cranky when I got here. After listening to the world according to the member for Calgary Southeast, I find that there is still some pleasure in stretching the facts and selective memory and life. It is called blarney.
I rise today to participate in this debate on the government borrowing bill, Bill C-65, in which the government is attempting to borrow untold billions of dollars to finance its misdirected economic policies. The hon. member from Calgary Southeast and his colleagues read very well from the notes given to them by the propaganda section of the Department of Finance, but as hard as they try, Canadians do not appear to be listening. If Canadians were listening and buying the drivel that is coming from the government benches opposite, I think the member's party would be a little better than 15 per cent in the polls. I should not have to tell that to the hon.
member-especially one who comes from Calgary, that bastion of Torydom.
I am sure everybody realizes that it used to be a given that Alberta always would elect Conservatives, that Alberta was Tory-Tory land. Well, I can tell you that because of this government's economic agenda things have changed, even in Tory Alberta.
Did I just hear the Minister of Transport say, "Right on"? I think he did. Even in Conservative Alberta, Toryism is a bad word. It is a word that is no longer said without a few expletive deletives-which are unparliamentary and therefore I cannot put them on the record of this place. But if there are a few Conservative members here who have not heard what they are being called in that province I will gladly see them outside the Chamber and let them know just what they are-unless, of course, their delicate ears can't take it.
We have just gone through six years of a Tory agenda. It has been an agenda of deceit and mismanagement. The Conservative party came into power in 1984 after a world-wide recession. Now the hon. members on the other side do not want to admit that, but it was a world-wide economic recession. They came in at the tail end when the recovery was beginning. The framework was already in place for economic recovery, thank goodness. We did not have people starving in the streets because Liberal economic and social policies ensured that the safety nets were there to catch Canadians. To listen to some of the members opposite, they would have preferred it if those people had starved in the streets. They would have preferred it if the people who lost their jobs during the world-wide economic recession somehow managed to get their keep in the garbage dumps or begging from the affluent on Bay Street.
Well, Liberal policies were quite different. The deficit increased, but it did so because Liberal social programs worked. And, Mr. Speaker, I for one am not about to sit down and apologize to that group opposite for saving the livelihood and future of many Canadians during that period of time.
But in 1984 these guys and gals came forward and said: "We've got a better way. Elect us and life is going to be rosy. We are going to create so much wealth across this country. We are going to ensure that the Liberal social policies and programs are maintained. We are going to
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ensure that there is not one chicken in every pot but two."
But what we did not know in Atlantic Canada was that they might have been giving us a chicken but they were taking our fish. We know that now, Mr. Speaker. These people came to power in 1984 on a thinly veiled Liberal agenda. They tried to be Liberals. They tried to talk about social progressivism. They tried to talk about a marriage between free enterprise and management of an economy and government intervention when necessary to support the regions of this country least able to look after themselves, and people in that same circumstance.
Well, perhaps the biggest lie-and this will go down in history I am sure-that we have ever heard in a campaign was what the Conservative party handed out during the election campaign. I alluded to it earlier in a question and comment. What I said was that every time the New Democratic Party or the Liberal party put a plank forward in their campaigns, the Tory party would dismiss it.
I remember the Minister of Finance saying-and I hope your selective memory is turned off and you can hear it clearly now-that these were not promises. These were spending commitments. Well, if they were spending commitments that were made in the fall of 1988, they were written with disappearing ink. The day after these rogues got re-elected they came into the Chamber and all of a sudden the books were changed. Surely to goodness from 1984 to 1988, if they had any competency at all, they would have been able to find out where the books were.
Either they were so incompetent between 1984 and 1988 that they did not know what fiscal and economic circumstances they had at their disposal in 1988, prior to the campaign, or they did not tell Canadians the truth. I don't know which sin is worse. I will leave that for the electorate to decide at the next election.
The government came back saying: "We've got the money. We've got the programs". I do not know how these ladies and gentlemen opposite can sit in their seats when they know very well that the day after the election campaign, all of a sudden, the Prime Minister's polls told him he should go out and spook the Canadian public about the deficit because we convinced them during the
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campaign that it was not a problem. If the deficit is a problem, we had better spend some taxpayers' money to change their minds. That is exactly what they set out to do.
The non-problem deficit in November all of a sudden in December became this onerous, triple-headed monster that would devour the Canadian economy. The Tories would rally on their horse to save Canadians from that terrible fate. What did they do? They reneged and squelched on every promise and commitment. I will not call them promises, I will call them what the Minister of Finance called them. He called them spending commitments. The government squelched on its commitments.
What has the government done since being elected? Government members are in this Chamber today asking us to approve Bill C-65, the borrowing authority, which will mean that we agree with their spending priorities.
They used to talk about jobs, jobs, jobs but in actual fact it has turned into cuts, cuts, cuts. Look at what they did in regional development. It is a big shell game. They can talk their best rhetoric on the other side of the House about windows, five-year averages, seven-year averages, you can put flour and milk in and make a nice cake for the people of Atlantic Canada, the fact of life in relative terms, and I quote very loosely because I do not have exact figures in front of me.
The Atlantic Provinces Economic Council has done studies which show in relative terms that the degree of disparity between central Canada, or Canada on average, and Atlantic Canada has grown. You do not have to be a mathematical wizard to sit down and look at the indicators to see that. Look at the level of unemployment vis-a-vis the percentage of national unemployment in 1982,1983, 1984,1985, 1986 and 1987. You will find there is a growing gap between the rich and the poor in this country. The government says: "Yes, but everyone is better off than in 1982, 1983, 1984." We were in a recession then.
What I am trying to put forward to members opposite is that during the intervening years of recovery-and some have recovered much quicker than others, it has taken place world-wide-the government should have taken the opportunity, if it had a heart, to redistribute the new resources to the poorer areas of the country to

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try to alleviate the real triple-headed monster, regional disparity.
In effect, what the government has done is bring in one of the most regressive fiscal regimes in the history of this country. It has done this at a time when linguistic and racial tensions have increased in this country. Now it has added a new one called regional tension.
If any members doubt the passion with which I speak, they should go to a community in Atlantic Canada that has been shut down because of this government's neglect of regional economic policy. The only department that was seen to be an agency to promote a policy within the central government structure of regional development has been dismantled by Bill C-3. There will not be a department responsible to cabinet for regional development in Atlantic Canada. It will be done through agencies.
In the last 18 months, the government has allowed $1,221 billion in regional development agreements to lapse in Atlantic Canada. The more we cried in this House and the more we asked the minister responsible for ACOA to give us figures, the more he tried to get into five-year or seven-year averages. The buck stops at the desk of those individuals in Atlantic Canada who feel the bite of this government's economic policies. The fact is, of $1,221 billion in economic development agreements, this government has only put up $274 million to renew them. You do not have to know how to add and subtract very well to know that is $1 billion short.
The Deputy Prime Minister said on a number of occasions that he was so committed to a national passenger rail transportation system in this countiy that his government was going to do it right. They were going to modernize and update the system so that we would have a modern, efficient national transportation system. The now Minister of Transport gets up and says: "We had to kill it to save it". That is basically what he said. He said: "The corpse looks fine. We have saved the corpse. It looks wonderful". But they killed the dream of a national rail transportation system from coast to coast.
The new Minister of Transport is laughing. Well, Mr. Minister, if you could go to Nova Scotia and see what people think about your economic and transportation policies, on Cape Breton Island and all through mainland Nova Scotia where you have cut the train, maybe you would be smiling somewhere else right now. You
would not be smiling in this Chamber, because you have lost the faith of the people in those respects. Not just here, but in northern Ontario and western Canada as well.
We have also seen a government that talked about how concerned it was about social programs. These are the masters of doublespeak. These are the great pretenders on the national stage.
They came in with a bill that in effect attacked our seniors' pensions. In that bill they did not say "claw back" because they do not like to call a thing for what it is. We said: "You are going to claw back those seniors' pensions". They said: "No, no, we are not".
There is a thing called Consumer Price Index, minus 3. It means that as inflation goes up, it is not fully indexed to inflation. The seniors now know, six months after that is passed, exactly what it is going to mean to them now, in 10, 15, and 20 years time.
They were so concerned about redistributing wealth in this country that they cut Established Programs Financing, EPF, a fundamental tenet of economic policy in this countiy, whereby this countiy thought it was fair, just and necessary to keep this countiy together, to ensure that there were programs of national standards in health and in post-secondary education.
In Nova Scotia in the next few years, according to the government's own documents, we are going to lose $80 million. That is in a province of less than a million people. I do not know if they think the salt air grows loonies on trees down there or what. But I can tell you right now that because of this government's cut-backs and the transferring of economic responsibility for its deficit, they have now caused the budget surpluses of the provinces of Nova Scotia and P.E.I. to be turned into budget deficits. In turn that has been passed on to the poorest municipalities in this country, the municipalities in Atlantic Canada.
On equalization, I am told that in January an official from the office of the Minister of Finance met with officials of the Ministers of Finance of Atlantic Canada. He said: "There is going to be a minor modification to equalization. Do not worry about it". When the Minister of Finance of P.E.I. was preparing his final budget document before he presented it to the public in Prince Edward Island, they called from the office of the Minister of Finance and said: "That little adjustment is
May 14, 1990

maybe going to be a little bigger. Instead of being $600,000, it is going to $13.5 million".


An hon. member:: Shame.


Ronald MacDonald: Thirteen and a half million dollars to a province of about 140,000 people. That is not chicken feed. Those are real dollars for real programs that are necessary.
We had a debate in this House last week about the at and east program. They certainly did not mind coming after Atlantic Canadians on the at and east program. They had basically earmarked every program of support and equalization in this country for the garbage bin. That is what they have done because they are playing the politics of the centre. The politics of the centre says: "When you do the numbers folks, if we only have x number of dollars to spend, we are going to spend them in central Canada". That is what it says.
The minister rolls his eyes. How else can you say it? You have cut billions of dollars from regional development. In the regions of this country you have severed the national rail transportation system and at the same time you support the policies of the Governor of the Bank of Canada, and those very policies of the Governor of the Bank of Canada do what? They are supposed to be there to slow down growth in the golden belt in southern Ontario. Who has to pay the piper? Just businesses in southern Ontario? Just consumers in southern Ontario? No. This government is putting people in my riding out of business because it is supporting or telling the Governor of the Bank of Canada what the interest rate policy should be.
If anybody ever doubts that the Governor of the Bank of Canada knows what it is like to suffer, then they should have seen him on television the other night when he was chased by reporters. After coming from a committee hearing and being asked: "Do you think you should speak to average Canadians?" "Oh", he said, "I think the members of the committee are the people who are supposed to speak to average Canadians."
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I can understand how the Governor of the Bank of Canada could say that. There are not too many people, average or otherwise in this country, who make the salary that that man makes and would have the gall and the audacity to take a 29 per cent increase at the same time that he is manipulating the economic lever of interest rates to their highest level in years and telling Canadians to tighten their belts. "Do with less. Those of us who got more, boys, we are rolling in the dough". That is exactly what he did.
We have seen this government increase taxes 33 times since 1984.1 do not know how government members can get up and look at themselves in the mirror in the morning. Go and talk to somebody who is on a fixed income and living below the poverty line. These people still pay income tax because our tax system still needs major reform. If you ask those individuals who are on pensions or on an annuity: "Are you better off today than last year or the year before?", they will tell you that they are not.
This government has a regressive taxation policy. There are no loopholes for the average Canadians. There are no loopholes for the seniors in my riding who are trying to live on poverty wages. There are no loopholes. There certainly is for the upper income levels. The government has shut down women's centres right across this country. It even went after the veterans.
I tell you, Mr. Speaker, I am a proud member of the Royal Canadian Legion. I was at the Royal Canadian Legion in Dartmouth, the Centennial Branch, and I was flipping eggs on Sunday, because I try to do my bit to make sure that those good service organizations like the Royal Canadian Legion have enough money coming in so they can sustain themselves.
This government has broken the trust that was placed in it by many Royal Canadian Legion members when it decided to change some of the Veterans Affairs programs. If the government members think that they are going to still join in the camaraderie that is legendary in Legions across this country, they have not visited since this last budget came down.
With regard to the proposed changes to the Unemployment Insurance Act, Bill C-21, that members opposite are apoplectic about because the Senate of Canada is holding it up at this point, people in Nova Scotia are trying to tell the government to change things. The

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Senate of Canada, God forbid in this day and age, has more support right now as an unelected body than the government opposite. The Senate knows that the government's economic policies are leading to economic and regional tensions that we simply do not need.
One of the aspects that I want to talk about concerning the UIC bill is how this government comes in and talks about how it is trying to make the system more fair. I spent Saturday in the communities of east Preston and north Preston. These communities are the largest indigenous black communities in Canada. They have been there for many hundreds of years. The economic problems that they find themselves with are problems that could be addressed easily by a government that had the wherewithal, the courage and the political will power to deal with them.
I am speaking directly to the members opposite. There is a major problem in that community. It is six miles from the largest metropolitan area in Atlantic Canada. There are over 5,000 souls who live there. It is the largest indigenous black community in Canada. They have suffered for far too long from a lack of attention by successive governments of whatever political stripe. We are now in a situation where this community is crying out for assistance. If I have a 7 per cent unemployment rate in the city of Dartmouth, they are suffering a 30 per cent unemployment rate. There is systemic racism, a thing we never like to speak about either in this Chamber or elsewhere. There is systemic racism at work. There are young blacks in that community who see themselves with no future and have asked repeatedly for the federal and provincial governments to sit down, take some of the billions of dollars we are talking about today, and direct it into the community. They are ruining lives out there. This government and the government of the province of Nova Scotia are ruining the futures of many of those individuals because they have the economic and policy tools to make a real difference.
I have been dealing with the minister responsible for the Atlantic Canada Opportunities Agency. Hopefully, we are making slow progress. I have met on at least one occasion and have spoken to the minister of employment twice in the House about putting some flexibility into the programs. As yet, the flexibility is not there.
Today in The Daily News, one of the largest distribution newspapers in the metropolitan Halifax-Dartmouth area, there was an article on the front page with a big headline. One of the councillors, Mr. Wayne Adams, who is a member of that community, said that if governments do not act soon and use the resources that are theirs to give the community the tools it needs to get out of this collaring which has taken place for two centuries in that community, there will be major problem and perhaps civil disobedience.
I call on the members here when we are dealing with all these government expenditures to put a little heart in their deliberations on the other side and to put a little pressure on members of their cabinet so that when we talk about those who need it the most, not just regionally but in the sense of some minority groups across this country, they do not all suffer equally under the knife of fiscal restraint. If everybody suffers equally under the knife of fiscal restraint some bleed a lot more than others, and they are members of minority groups across this country and people that live in the poorest regions.


Mr. Clement Couture (Saint-Jean):: Mr. Speaker, I am very pleased to make a few comments on Bill C-65 to provide borrowing authority. Here is how I would my express views. It is quite obvious this time around that if the government needs to borrow $25.5 billion to meet its cash requirements it is due to the fact that the problem is not recent and dates back to a number of years. Lets us go back to the early 70s when the government could operate with a $300 million budget surplus and a national debt of $17.2 or $17.3 billion. It was at that time that the expenditures of the Canadian government began to rise dramatically. Expenditures went up by something like 17.9 per cent. For the second term they increased by 10.1 per cent because the government had decided to cut back on its own outlays. Over the third term, from 1980 to 1984, the annual increases averaged 14.1 per cent. Needless to say all these higher expenditures put a lot of pressure on the government's cash requirements.
In 1984, when the Liberal government was defeated, we took office looking at a financial statement showing an annual deficit of $38.3 billion and a national debt of about $200 billion. We finally took over as a government with a plan of action and a definite goal. The government had put its cards on the table and was quite prepared to
May 14, 1990

begin the task of reducing the deficit and the national debt.
With the kind of financial pressure I have just described, it is quite clear that we need a few years to set our financial house in order and get back on the right track.


Mr. Hogue:: Stagnation it was!


Clément Couture: Economic stagnation indeed.
In 1984 the government took very positive measures designed to balance the Canadian budget. By that I mean the government set its sights on bolstering the country's economy and worked relentlessly to create new jobs so that Canadians would be able to lead a decent life. It was a complete turn around as compared with the situation that had prevailed during the 14 preceding years.
Considering that we went from a $300 million budget surplus in 1970 to a $38.3 billion annual operating deficit in 1984, I must say that one has to be really unable to manage the financial affairs of the nation to post such a pitiful performance. Today's borrowing authority is the result of that performance. The government needs to borrow $25.5 billion, a figure which is altogether justified in light of everyting I have just said.
The first thing the government had to do between 1984 and 1988 was to reduce the annual rise in expenditures. The figures bear repeating because they are quite simply mind-blowing: 17.9 per cent in the first term-this is an annual average, of course-10.1 per cent in the second, and 14.1 in the third. When the new Conservative government took over in 1984-and I can say this with a clear conscience, Mr. Speaker, because I was a Canadian citizen at the time, not a Member of Parliament-it had a very precise and soundly structured plan of action with clearly defined objectives. Sure enough, we saw the government implement this plan of action right from the beginning. From 1984 to 1988 the increase in annual expenditures dropped to 3.6 per cent and the annual operating deficit declined from $38.3 to $28.1 billion. That in itself was quite an achievement. During that same period we created over 1.5 million new jobs for the benefit and to the satisfaction of Canadians.
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But the government did not choose to sit on its laurels and kept on steering the same course, following the same policies and setting the same objectives. In 1988 it chose to stay the course by limiting spending increases to 3.2 per cent over the next four years.
A while ago I heard my hon. colleague from Calgary Southeast (Mr. Richardson) say that, since 1984, expenditures in Canada have risen by an average of 3.5 per cent a year, which is the exact figure.
Our economic performance is worth mentioning. We created a lot of jobs and restored the faith of many Canadians in their economy.


Jean-Pierre Hogue: Yes!


Clément Couture: Canadians who, through their entrepreneurial spirit-


Jean-Pierre Hogue: Thanks to the Minister!


Clément Couture: -and their leadership, played an active role in the economy by creating new jobs and improving the general situation in this country. I think Bill C-65 now before the House is quite justified in light of the economic performance between 1970 and 1984. Since 1984, spending has actually been cut, as demonstrated by the figures I just mentioned. Naturally, this kind of commitment requires cut-backs. Obviously, the government must limit its spending, ensure an acceptable standard of living for Canadians, assist in the development of certain sectors, but it must also make budget cuts. I believe this government has done a great job.
A while ago I heard people talk about budget cuts to VIA Rail.
Of course, when no one in a country or region takes the train any more, I wonder why we must maintain rail service for those regions. If there is no one on board, if no one needs the train to travel, I think that it must be cut. Our government has understood that very well, unlike the Liberal government which for over 14 years understood absolutely nothing and left us a very difficult situation that it will take several more years to correct. We are now definitely on the right track. The deficit has dropped from about $38.3 billion in 1984 to $28.1 billion. In 1994, the deficit will probably be less than $10 billion. That is what the people opposite do not understand.


Mrs. Campbell (South West Nova):: Interest rates are now at 15 per cent.

May 14, 1990
Adjournment Debate


Clément Couture: Naturally, we cannot confuse interest rates with all that. We are talking about borrowing authority and treasury requirements-that is what we should be talking about, but we can talk about interest rates for 30 seconds.


Jean-Pierre Hogue: We understand.


Clément Couture: Interest rates-Naturally, our monetary policy is designed to get Canadians through economic situations with the government in control. We remember very well that the Liberal government did in 1979, 1980 and 1981 when it lost control of demand pressures.


Jean-Pierre Hogue: Deplorable!


Clément Couture: Interest rates were 22, 23, 24 per cent-


Jean-Pierre Hogue: Unacceptalbe!


Clément Couture: -which our government and our Minister of Finance absolutely do not want to see happen again. As long as there will be inflationist pressures in the country, I think it is perfectly appropriate to use the monetary policy to alleviate those pressures for the benefit of all Canadians in years to come, because we do not we want 24 per cent interest rates anymore. You have allowed that, but we are not going to allow it. We are going to manage this country in such a way that, by 1994, we will have met our goals.
Mr. Speaker, I believe this delineates precisely Bill C-65, an Act to provide the government with the borrowing authority it needs to replenish its cash flow. I guess the members opposite also know well where this requirement comes from. It is not new, it goes back a number of years and results for a large part from the very poor economic performance of the former government which, of course, forces us today to take the necessary steps to put the government and indeed Canada in its proper place.


Mr. Plamondon:: Mr. Speaker, I would like to congratulate my colleague from Saint-Jean on his excellent speech, particularly when he reminded us of what the opposition did when it was in power. The hon. member would probably like to tell us about the disastrous effects that the 22, 23 and 24 per cent interest rates under a Liberal government had on his riding of Saint-Jean. Could he give us a few examples of what happened in his constituency when the interest rate was 22 per cent and investments dried up?


Clément Couture: With pleasure, Mr. Speaker. In 1982-83, interest rates in the country were going unchecked. The then Minister of Finance did not attempt to use the monetary policy to control inflation and prevent interest rates from reaching 24 per cent. Obviously, when interest rates fluctuate between 20 and 24 per cent, the vast majority of businesses experience major difficulties. In our riding, like everywhere else in Canada, some had to close up shop because they could not meet their expenses.



PROCEEDINGS ON ADJOURNMENT MOTION

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

Mr. Jean-Guy Guilbault (Drummond):: Mr. Speaker, I welcome this opportunity to draw the government's attention to the situation in the textile and clothing industry.
On May 24 last year, almost a year ago, I asked the Minister for International trade about fraud charges laid by Canada Customs against Canadian textile importers concerning merchandise manufactured in Korea, shipped to front companies in Japan and transhipped to Canada as merchandise of Japanese origin, thus violating bilateral agreements and section 17 of the Export and Import Permits Act.
Since Canada's major textile companies happen to be in my riding and I am a former textile worker, I am of course very much concerned about the industry.
Mr. Speaker, perhaps I may recall that the textile industry and its principal customer, the clothing industry, have close ties. The latter industry buys nearly 40 per cent of textile production, which represents as much as half of its production costs.
Like Canada, the riding of Drummond has a great deal at stake in the textile and free trade talks.


May 14, 1990

More than 3,000 jobs in the riding of Drummond depend on the textile and clothing industries, which is some indication of the very important role still played by these industries in our region's economy.
The main companies are Celanese, Dominion Textile, Consoltex, Textiles Monterey, Textiles Dionne, Teintur-erie Elite, Drummond Hosiery and a number of others.
Mr. Speaker, to give some idea of the importance of a company like Dominion Textile in the Drummondville area, this company generates a wage bill of $20 million annually, pays $400,000 in taxes to the town of Drummondville and contributes over $50,000 to various social activities. It employs 700 people.
Swift Textiles Canada, a division of Dominion Textile Inc., because of its denim manufacturing facilities has one of the most modem plants in the world. The streamlining of these facilities over the past year, will have required over $30 million in investments and this, without any subsidy.
In the Province of Quebec, Dominion Textile provides jobs to 5,300 people in its Sherbrooke, Magog, Valley-field, Grandby, Trois-Rivieres and Drummondville plants.
Many wonder at the size and scope of Canada's textile and clothing industry. The textile industry, which consists of 1,070 plants, has 63,800 employees, 43 per cent of them women. The plants are mostly concentrated in Quebec and Ontario, these two provinces providing respectively 52 per cent and 41 per cent of all the jobs. The remaining jobs can be found mostly in the Atlantic Provinces.
This industry has a total annual sales figure of $5.8 billion. Exports account for approximately 11 per cent of that amount, some $660 million. On the other hand, imports represent nearly one-third of the domestic market.
Ever since the early 1970s, Mr. Speaker, the textile industry has maintained its share of the domestic market at a fairly constant level, which is 70 per cent. Imports come mostly from other industrialized nations, especially the United States. Since 1980, however, countries where production costs are very low are exerting increasing
Adjournment Debate
pressure on industrialized nations; they account now for one-fourth of all imports.
As to the clothing industry, it is made up of manufacturing plants which supply clothes to consumers and other industries. Some 99 per cent Canadian-owned, the 2,500 plants which provide jobs to approximately 113,000 workers are mostly located in major urban centres in Quebec (60 per cent of jobs), Ontario (30 per cent), and Manitoba (6 per cent). Moreover, nearly 75 per cent of the jobs are held by women who represent the majority of the nearly 30,000 industry workers who are working at home.
The industry sales figure has been estimated at $5.7 billion a year, including $4 million in exports. Imports, on the other hand, represent approximately 2.1 billion a year.
In recent years, thanks to the help of the Canadian Industrial Renewal Board, industry leaders made a concerted effort to boost their competitiveness by applying new technologies to the various production stages such as computer-assisted design and manufacturing. So far these efforts alone have not made it possible to offset the cost advantage enjoyed by exporters from low-wage countries.
The stakes are high, Mr. Speaker: more than half the jobs in the Canadian textile and garment industry are in Quebec where 55 of the 75 ridings depend on that industry.
Canada's textile industry is modern, capital intensive and well managed, yet it is small when compared to that of the United States where close to 50 per cent of all our textile imports come from. In less than eight years they will come in duty-free. True, Canadian manufacturers will have gained access to the American market, but this will call for huge investments in Canada and great marketing expertise.
The Free Trade Agreement with the United States has to be a major adjustment challenge for Canadian producers.
The government intends to reduce Canadian duty on textiles to levels close or identical to that of the US.
The outcome of the Uruguay round of negotiations concerning lower tariffs will not be made public before year's end.

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Adjournment Debate
Finally we are not at all sure that the signatories to the multifibre agreement will agree to put the textile and garment trade back under standard GATT regulations.
Canadian textile producers will face a challenge if ever the multifibre agreement falls apart.
In Europe for example, according to Le Figaro of October 27, 1989, there is some talk of returning world textile and garment trade under stricter GATT regulations concerning such things as export subsidies, dumping practices, or trade mark and design piracy.
The article also refers to the fact that new cases of unfair practices are uncovered daily.
Finally, Mr. Speaker, with respect to the current Geneva negotiations, I should like to hear from the minister what is the government position concerning stricter GATT regulations, and does the government intend to harmonize these discussions with the position of the European Economic Community?


Mr. Bill Kempling (Parliamentary Secretary to Minister of Employment and Immigration):: Mr. Speaker, I am pleased to have this opportunity to respond to the question raised by the hon. member for Drummond both here this evening and in the House on May 24 last last year regarding the investigation by officials of Revenue Canada and External Affairs into the trans-shipment of Korean polyester filament fabric through Japan.
As the hon. member knows, seven companies in Montreal and two in Toronto were charged under Section 17 of the Export and Import Permits Act. That section deals with furnishing false or misleading information to obtain an import permit. These cases are currently before the courts so I am unable to comment on the specifics of those cases.
These companies were charged based on evidence seized during raids on the offices of a number of textile importing companies in March of last year. The Special Trade Relations Bureau of External Affairs and International Trade Canada has been investigating the alleged circumvention of the Canada-Korea textile restraint agreement for the past two years. It was alleged that the Korean mills had been shipping finished polyester fabric to shell companies in Japan. These companies would then ship the fabrics to Canada with documentation
stating that the goods were of Japanese origin. Documents seized in the raid confirmed these allegations and enough evidence was gathered to lay charges.
Since the laying of charges last year, we have imposed additional documentation requirements in support of applications for import permits for a range of man-made fabrics sourced from a number of countries, including Japan. These applications must now be accompanied by a certificate of origin issued by a competent authority in the exporting country or a mill certificate endorsed by the manufacturing mill.
Departmental officials met with Japanese officials last June in order to tighten up the certification of origin system to prevent further occurrences of such transshipments.
There have also been two rounds of consultation with Korean officials in order to negotiate compensation for the circumvention of our bilateral agreement. It appears that the Koreans are prepared to provide some compensation in terms of future quota. We are currently preparing further information and a third and hopeful final round of consultation is anticipated later this year. It appears the Koreans are anticipating the results of these consultations as they are yet to fully allocate the 1990 polyester fabric quota to their exporters.
We consider this to be a serious breach of our bilateral restraint with Korea and we intend to seek full compensation. Officials continue to monitor imports of textiles and clothing from all sources and action is taken quickly if trans-shipment or circumvention is suspected.


GOODS AND SERVICES TAX
Mr. Jack Iyerak Anawak (Nunatsiaq):: Mr. Speaker, I am pleased to take this opportunity to return to the subject of the goods and services tax. I want to remind the government again how harmful this tax will be to northerners.
On February 19,1 asked the Minister of Finance in the House of Commons to exempt northerners from this unfair tax. My question to the minister dealt with the high cost of living in the north, and I cited as examples the cost of some basic groceries in Clyde River, a community on Baffin Island in my constituency.

I had just returned from a visit to that community, and while I was there I had made a point of going to the grocery store. I paid $5 for one dozen eggs, over $9 for a 5-pound bag of potatoes, $4.29 for a litre of milk, and over $8 for a dozen apples.
In southern Canada prices for these same items are one-half to one-third lower, yet my constituents have to pay shockingly high prices for the same basic foods every day. Many have to pay these prices on an average income of about $10,000 a year.
Unemployment rates in the Northwest Territories are high. The over-all unemployment rate of the Northwest Territories is about 16 per cent. The rates in the regions which comprise my constituency are however much higher. In the Baffin and Kewatin regions, the unemployment rate is about 21 per cent. In the Kitikmeot, the rate is 31 per cent. In several communities, the rates are close to 80 per cent. Many people are therefore living on fixed incomes: unemployment insurance, social assistance and pensions.
The point I was making to the minister was that many of my constituents are hard-pressed to make ends meet now. When someone on a fixed income has to pay $4.29 for a litre of milk and more than $9 for a 5-pound bag of potatoes, that individual has not much disposable income left once the groceries are bought. Even though basic groceries will not be subject to the goods and services tax, almost everything else my constituents need will be subject to the new tax.
The minister says there will be no GST applied to the transportation of food. That is all very well and good, but the goods and services tax will be charged on virtually every other good transported to the north. I do not think the minister has grasped the fact that there are no roads to the communities or between the communities in my constituency. The government also does not seem to understand that the communities I represent do not have large shopping plazas or even the variety of stores that southern Canada does.
In the small settlements, residents order food and other necessities from stores in southern Canada. Fuel, clothing, and construction materials have to be flown in during the winter months or barged in on the sea-lift in the summer. These items are not cheap; nor are the
Adjournment Debate
freight rates to ship these goods up to the north. Air freight from Ottawa to Iqaluit, for example, is close to $3 a kilogram for goods between 45 and 200 kilograms.
Fuel, clothing, and construction materials will be subject to the goods and services tax. The transportation of these basic goods will also be subject to the goods and services tax. With the kind of cost increases these goods will bear, people will have to cut back on their purchases. Either people will cut back on the groceries they buy in order to buy other goods such as clothing, or they will cut back on other goods in order to buy the groceries they need.
Last October, I asked the Minister of Finance for the studies he said he had that showed the north would be better off with the goods and services tax. He did not produce them last October and to date he has not produced them. The Minister of Finance is virtually the only person who thinks that this tax will benefit northern Canada.
The minister said in the House in February in reply to my question that the GST is very positive for the industries of the north. The Government of the Northwest Territories does not share his optimism.
I would like to quote from brief of the Government of the Northwest Territories to the House of Commons Standing Committee on Finance last October: "The goods and services tax has the potential to seriously harm our important industries. In so doing, the tax would hamper our efforts to build greater economic self-sufficiency in the Northwest Territories. The long-term benefits to production in the Northwest Territories predicted the federal finance department are very doubtful and, even if positive, will be relatively small. Any such benefits are unlikely to be large enough to offset the short-term costs of the new tax. We expect that any gains from increased output will be enjoyed mainly by owners of large businesses or by temporary employees from the south. Long-term residents of the Northwest Territories, particularly small business owners and those participating in the traditional economy, are unlikely to share those benefits".
Service industry products such as tourism or trade, are more expensive in the north, and higher costs will affect competitiveness. The tourism industry is an especially important and growing industry in the Northwest Terri-

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Adjournment Debate
tories. It stands to be substantially hurt by the goods and services tax.
Small businesses are facing enormous GST compliance and administration costs. These businesses do not now have any sales taxes to administer, and accounting services are not available in small communities.
In summary, I can only repeat what I have said on several other occasions in this House concerning the goods and services tax proposal. The GST is unfair. It is unfair to all Canadians, but it will place a particularly heavy burden on northerners.
Whether the tax is 9 per cent or 7 per cent, northerners cannot afford this additional imposition. The proposed sales tax credit will not offset the increased costs for low income residents in the north. The government has not considered the unique northern economy, nor has it considered northern consumers in its GST design.
I urge the government again to reconsider. Scrap the GST.


Pierre H. Vincent: Mr. Speaker, the hon. member is concerned about the high cost of living in the North and the impact of the goods and services tax, the GST.
First, let me reiterate that the North, like all other regions of Canada, will benefit from the introduction of the GST. By removing federal sales tax from business inputs, the GST will have a very positive effect on capital-intensive, resource-based industries such as mining and oil and gas. These industries are important to the economy of the North and the member's region.
Overall, our analysis indicates that national economic output will expand by 1.4 per cent, or about $9 billion. The North will share in these gains; its economic output is expected to grow by about the national average, 1.4 per cent. This expansion in economic activity will benefit all Northerners by creating permanent jobs and, of course, raising real incomes.
The hon. member expressed concern about the cost of food in the North. The government recognizes the level of prices of such commodities in the North; that is why
the income tax system provides benefits to residents in northern areas.
With respect to sales tax, it must be realized that under the existing federal sales tax, groceries bear some indirect sales tax imbedded in the price of the product from the beginning of the production chain. This occurs because many of the inputs used to produce food, like building materials used in processing plants, for example, are taxed. As well, the vehicles transporting the groceries to the North, loading equipment and motive fuels all currently bear federal sales tax.
In total, groceries currently bear about 1 to 2 per cent federal sales tax indirectly.
Under the GST, the sale of basic groceries will not be taxed. And, in contrast to the existing federal sales tax, the input tax credit mechanism under the GST ensures that all the indirect tax now imbedded in the price of groceries will be removed. As a result, the cost of basic groceries will be reduced by 1 or 2 per cent under the GST.
To ensure that sales tax reform is fair, a key element is the refundable GST credit paid to low-and modest-income Canadians. Credit cheques will be mailed four times a year, and the first cheques will be sent in December 1990, before the GST takes effect.
Indeed, the refundable GST credit will ensure that families earning less than $30,000 a year will actually be better off in 1991 than they are under the present system.
In summary, the GST will provide important benefits to residents of Northern Canada by improving potential economic output, creating jobs and raising income levels.


FISHERIES
Coline M. Campbell: Mr. Speaker, I asked my question of the minister on March 9. At the time, I was asking about trying to keep people of the area in their communities during the downturn until the aid package came.
As a supplementary question, I mentioned to the minister that we needed a new reassessment of the stocks in the Scotia-Fundy before any further steps were taken. I cannot emphasize enough that the fishermen in southwestern Nova Scotia are not convinced that the department's current stock estimates are accurate. Just ask the 50 or 60 fishermen who occupied the
May 14, 1990

Department of Fisheries office in Yarmouth last Tuesday in protest of the lack of quota for inshore draggers so far this year; ask the 500 or so people who turned out today to talk about the proposal that was given to them late on Friday in answer to their proposal. They are not happy with the assessment.
I should add that the fishermen are not alone in their suspicions about stock assessment in the Scotia-Fundy. Mr. Leslie Harris, Chairman of the government's independent review of the northern cod stock told me in committee that he also thought that the methods currently being used in the Scotia-Fundy were not good enough for such an important fishery.
I would like to tell the House and the people across Canada about the 500 people who were there this afternoon and what they were looking for. They were looking for their fair share of the natural resource outside their area.
Their history has been of year-round fishing. They have had lobster, herring, scallop and groundfish in the past. They had access to markets. In a county like Shelburne County, according to the report I had done for me, fish represents 100 per cent of the economy of Shelburne County. It represents 50 per cent of the economy of Yarmouth County and 60 per cent of the economy Digby County. Those counties have had access to those markets, have had access to the fishery for as far back as there have been settlements in those areas. At one time we had the healthiest fishery in Atlantic Canada. We don't today.
Over the last six years in this fishery, their quotes have decreased on rather bad stock evaluations. No one will say that there is not haddock. There was not haddock in the 1970s. They have seen a freezer factor ship given a licence to take pollock, which was the old stand-by fish in that area, a freezer factory ship that should be going for the underutilized species.
They have also seen what happened in the off-shore within that area. They have seen foreigners. Today, one fishermen, Joey Nickerson, said in that meeting that he had gone out for silver hake. He has a 45 foot boat. He was beside these foreigners fishing for silver hake. I
Adjournment Debate
think he said the foreigners had 180 per cent pollock. It was not silver hake they were fishing on Brown's.
Brown's was closed to all the local boats in that area, but he could go to Brown's if he fished silver hake. That is a 45 foot boat along side these huge foreign freezer factory ships and big trawlers fishing about 60 miles from shore.
It does not make sense to the people. It does not make sense to me. It should not make sense to the opposition. It should not make sense to the minister. What are his departmental officials telling him? Who are his departmental officials allowing to get to him? The big foreigners, the off-shore? Certainly not the inshore fishermen who have been looking for a meeting with the minister or with any other ministers concerned with the groundfish.
Along with this they have been kept from going to what we call the Easter which is above Halifax. There are people who have fished there all their lives, eight years or longer, and they are not allowed to go at this time of the year into that area.
The other day I brought up in the House that there was a silver hake box with 42 foreigners fishing there when our fishermen cannot even go there. It is right next to the closed spawning area. The same dividing line that goes with the silver hake box for the foreigners is a dividing line for the spawning pollock. The foreigners are allowed to go there and fish at this time of year, but not our own boats.
The other thing that they have been faced with over the last six years is no clear stock evaluation. I have referred to the fact that Mr. Harris has said that before.
About 10 days ago they put in a proposal to the department. After at least five years, if not longer, of talking about a mesh size with the departmental officials at least five times a year, they have come to the agreement that they should have 130-square mesh. The department sends back 140-square mesh. There is never an agreement between the departmental officials and these fishermen. There is frustration. There is going to be some hard feelings. I am sure the minister would not like to see happen the threats that were being talked about today just because his officials are not playing fair with the people.

May 14, 1990
Adjournment Debate
They are asking for 25,000 pounds a trip, each week, for 40 weeks. There are approximately 250 boats that we are talking about and there are 112 licensed foreigners out there fishing within our 200-mile limit. There is also a freezer factory ship fishing within our waters, close to our coastal waters, and now the offshore.
I plead with this House that what is happening to the three counties I have mentioned should not be happening anywhere in Canada. This government is strictly looking to please an offshore that was bailed out again. The National Sea Products and the Fishery Products were bailed out again last week by being able to close those communities. Not that they left the boats; they still get the plants, but the government pays out $150 million.
We do not want that to happen in that area. We want fish. We want an evaluation of the stocks, and we want fair share of the natural resource that is at their doorstep.


William James Kempling: Mr. Speaker, one of the difficulties with answering these questions is that from the time that question is asked there is an add-on and we get into an area that does not cover the actual reply.
The hon. member has asked about the government's plan for addressing the problem of the Atlantic fishing industry, particularly the assistance that will be provided to communities in the Scotia-Fundy region.
The $584 million Atlantic Fisheries Adjustment Program recently announced has three major elements: rebuilding the fish stocks, assistance to adjust to the current reality of lessening employment in the fishery, and economic diversification both within and outside the fishing sector. All these elements will contribute to stabilizing and generating employment opportunities in fishing communities affected by the TAC reductions.
By placing additional resources of $150 million into the needed scientific research, data and information collection, monitoring, and enforcement, we are taking the long-term measures necessary to rebuild stocks so that employment from the fishing sector can be optimized.
Changes to the Fisheries Act will be introduced shortly. They will also enhance protection of fish stocks by strengthening statistical reporting requirements and increasing penalties for fishing and habitat offences.
As exemplified by the recent meeting with Mr. Marin of the European Economic Community, intensive diplomatic and legal initiatives are under way to address the problem of foreign overfishing outside Canada's 200-mile limit.
I am confident that all these measures, taken together, will rebuild our fish stocks so that they can once again support a viable, thriving industry.
The government and all Atlantic Canadians must face the difficult reality that the fishery cannot support all who seek employment in this area. That is why $120 million of federal contribution to the Plant Workers Adjustment Program is so important. This initiative to help plant workers and trawlermen who lose their jobs will be developed in full consultation with the provinces, the companies, and the unions. It will offer affected workers the financial means to make choices about their future.
The $146 million funding for economic diversification, which will augment the over $2 billion the federal government will spend on regional development in Atlantic Canada by 1993-94, has been provided to give fisheries dependent communities the leverage needed to diversify within and outside the fishery. Communities will be encouraged to look at such new opportunities as under-utilized species, aquaculture and new fish product development, while outside the fishery, development in tourism, ocean industries and other sectors will be considered.
Communities will be empowered to make their own decisions to create lasting employment. When you take into account these elements and the $158 million previously announced for short term assistance and addi
May 14, 1990

Adjournment Debate
tional fisheries enforcement capacity, I think it is clear that the government is committed to the workers of the Atlantic fishery.


The Acting Speaker (Mr. Paproski):: The motion to adjourn the House is now deemed to have been adopted.
Accordingly, the House stands adjourned until tomorrow at 11 a.m., pursuant to Standing Order 24(1).


[Stage Direction]
The House adjourned at 7.31 p.m.