1990-03-07

Mr. David Walker (Winnipeg North Centre):: Mr. Speaker, as most members of the House know, Ethiopia is again close to facing another brutal famine. Already people are dying by the hundreds, and it is anticipated people will die by the thousands.
We are pleased to hear that Canada has agreed to provide additional moneys for food aid, but time is running out and the food is not yet reaching those in need. The international press reports of desperate conditions and significant change in the Ethiopian situation. Many people wonder how many years of famine are going to continue in Ethiopia before the situation changes.
At this time the solution is not only that of food aid, but that of politics. The Government of Canada must offer its good offices and reputation to help the people of Ethiopia come to terms with the fact that the country is no longer governed as it was in the first famine. The government has lost legitimacy and the rebels in the two provinces are now significant actors. It will take not only food aid but a major role in the Security Council and other international institutions for Canada to help with a solution.
We plead with the government to take a more active role in helping the people of Ethiopia and encouraging the international community to get more involved.


PEARSON INTERNATIONAL AIRPORT
Mr. Harry Chadwick (Brampton-Malton):: Mr. Speaker, an Environics poll carried out for the Department of Transport shows that people living in the greater Toronto area are two to one in favour of adding additional runways at Pearson International Airport.
This is in opposition to the poll I carried out in my riding last summer which showed that residents directly affected by the airport are almost two to one against expansion.
Out of 2,168 people polled, almost double the number polled by Environics, 37.4 per cent were in favour, 2 per cent were undecided, and 60.6 per cent were against.
I believe the apparent discrepancy in these two surveys can be attributed to the fact that those people polled by Environics are not people who live within the same proximity to the airport as the residents of my own riding of Brampton-Malton.
If we are to determine the effects of expansion on surrounding communities then we must ask those people who will be profoundly affected by expansion. Distortion of this important fact is not acceptable.


NICARAGUA
Mr. Bill Blaikie (Winnipeg Transcona):: Mr. Speaker, last week's election in Nicaragua was a democratic event that owes its existence to the Sandinista revolution. We can be assured that, had the American backed Somoza never been overthrown, democracy would still be a stranger to Nicaragua. So would literacy, community health care, land reform and the absence of death squads, to name a few of the benefits brought on by the Sandinistas.
Nevertheless, the people of Nicaragua cried uncle under the combined burden of the trade embargo, mistakes made by the Sandinistas themselves, and the prospect of continued war with the Contras, given the

March 7, 1990
widespread expectation that Washington would not have been as gracious as Ortega if its side had lost the election.
We must hope now that Mrs. Chamorro and Daniel Ortega will be able to build an understanding based on their once mutually shared abhorrence of pre-revolutionary Nicaragua. There can be no return to those days. Essential to preventing this is the total and immediate disbanding of the Contras, something that only Washington can ensure by cutting off the Contra support and in doing so showing its respect for the views of both Chamorro and Ortega.
This having been done, negotiations about the army in Nicaragua and other issues could proceed. In the meantime, the Canadian government should continue to keep Nicaragua an important country in its development aid programs and urge President Bush to do the right thing.


OFFICIAL LANGUAGES
Mr. Jean-Pierre Hogue (Outremont):: Mr. Speaker, I welcome this opportunity to report to the House that the Town Council of Outremont has made its position clear on the language question. The resolution passed at the public meeting on March 5 this year sets forth the town's present policy and its intention to continue to provide services in English, as necessary and appropriate, to its English-speaking minority.
I may add that the resolution passed by the council is practically identical to a resolution passed in English by the Municipal Council of Elliot Lake.
I join the Mayor of the Town of Outremont in expressing the wish that the resolution will be well received by the community in general and its individual members. This resolution demonstrates, above all that economic excuses often hide serious psycho-social deficiencies with respect to human values. Bigotry and racism all too often go hand in hand.


LOW LEVEL FLIGHTS
Mr. Bob Wood (Nipissing):: Mr. Speaker, I rise today to express my concern over the fiasco of low level flights in Labrador.
As associate critic for northern affairs, it is my position that we should be striving for a responsible development of our northern regions. However, this government has failed to consult Innu and Inuit Canadians properly before taking this decision to bid for a NATO training base and increase the number of low level flights in the region.
The present government seems to be falling into the habit of creating commissions to study the impact of its decisions after the fact. It did this with VIA Rail as well as with the environmental assessment of low level flights in Labrador. These actions epitomize the classic syndrome of putting the cart before the horse. Proper and comprehensive consultation must occur before decisions are implemented.
The attitude that "the sound of jets is the sound of money" only exemplifies the short-sighted approach that we should be trying to get away from.
It seems somewhat regressive that we would be creating the world's biggest battlefield in this era of closer relations and increased co-operation between east and west. Moreover, the increase of flight activity coupled with the sonic boom effect would endanger the wildlife and infringe upon the lifestyles of the thousands of people who inhabit the region and indeed would disrupt the delicate balance of the environment.


EDMONTON CONFERENCE
Mr. Scott Thorkelson (Edmonton-Strathcona):: Mr. Speaker, Edmonton was host to the great debate last Monday. It was sponsored by the Edmonton Chamber of Commerce as part of its debt reduction conference.
I would like to thank the Edmonton chamber for sponsoring the conference. They studied the debt situa-
March 7, 1990

tion in a responsible manner and came up with some thoughtful solutions. We all know who won the debate. I can quote CJCA panellist, Professor Tom Powrie, who said: "Michael Wilson won hands down".
Or perhaps I should quote David Bailey, the editor in chief of the Edmonton Sun who bluntly said: "Doug Young lost it".
The Edmonton Journal columnist Mark Lisac thoughtfully remarked: "Spectators saw Liberal finance critic, Doug Young, take on one of the real heavyweights in Canadian politics and get pounded into impudence."
Albertans love blood sports. Let's do it again.


CORPORATE TAXATION
Mr. John R. Rodriguez (Nickel Belt):: Mr. Speaker, I would like to welcome you and all Canadians to what will become a regular feature on Wednesdays. The NDP will present the corporate welfare bum of the week. Each week we will choose one winner from three nominees of large corporations that have not paid their fair share of taxes.
The nominees are Bramalea Limited. This property company did not pay any taxes from 1984 to 1988. Its net income increased in that period from $11.2 million to $41.2 million, but still no taxes paid.
The second nominee is another property company, Trizec Corporation which paid only $600,000 in taxes both in 1987 and 1988. Its net income for 1987 was $101 million. In 1988 it was $90 million.
Our final nominee is Hees International which, you guessed it, did not pay a penny in taxes from 1981 to 1987.
Now, for our winner-the envelope, please: The winner of corporate welfare bum of the week, Elees International.
The judges felt that this financial and management services company deserves the title as it seems to do little else than own other companies. Not to worry if our other two companies might feel slighted, Hees owns them-


Mr. Speaker:: The hon. member's time has expired.
Oral Questions FISHERIES


Mr. Stan Wilbee (Delta):: Mr. Speaker, Canada recently reached an agreement with the United States on the implementation of the free trade panel report on the export of unprocessed British Columbia salmon and herring. Under the agreement U.S. processors now have the right to buy, if they choose, up to 20 per cent of B.C. unprocessed salmon and herring this year and up to 25 per cent over the next three years.
Of this agreement, UBC professor Dr. Peter Pearse, who headed a royal commission into the B.C. fishery in 1981-82, said: "No foreigner is going to be able to take west coast fish unless they have been caught by a Canadian and a Canadian fisherman chooses to sell them. Last year, under the then existing rules, Canadian processors purchased more American fish for processing in Canada than vice versa.
All the evidence is that free trade in raw fish creates more jobs in Canada, not less. The Canadian fishing industry has shown it can compete on the world market and it is up to them to remain competitive".
With the combination of continued government management of the resource and private initiative to process and market the resource, the fisheries will remain strong and viable for the benefit of all British Columbians.



ORAL QUESTION PERIOD


Hon. Herb Gray (Leader of the Opposition):: Mr. Speaker, I have a question for the Prime Minister.
When the Premier of Saskatchewan spoke on television earlier this week, he said:
When the federal budget was introduced, additional pressures were put on our province. The immediate effect was a drop of $33 million in transfer payments from the federal government. Over the long term, an annual shortfall of about $100 million will occur at a time when the people of Saskatchewan can least afford it.
The premier went on to say that the budget, in combination with the Americans stealing our traditional wheat markets, and I quote: "amounts to the world declaring economic war on Saskatchewan".

March 7, 1990
Oral Questions
Will the government listen to the Premier of Saskatchewan, declare a ceasefire in its economic war with Saskatchewan and the other provinces, and withdraw its misguided budget?


Hon. Michael Wilson (Minister of Finance):: Mr. Speaker, surely the hon. member understands that there is no economic war, using his terms, when we are transferring to the provinces $34 billion next year. We are increasing those transfers by 3 per cent, which is the same as the increase in the federal government programs.
We are asking the provinces to share in this national problem of getting the deficit down. We must ask them to do that because of the size of those transfer payments. They represent about one-third of our program spending. We are asking them to be a one-third part of our expenditure control program. I think that it is only fair what we are doing.
He talked about the problems with international subsidy wars. My colleague, the Minister of Agriculture, has commented on those on many occasions. We are doing what we can, in international fora, in the trade negotiations and in the summit discussions where the Prime Minister has represented us. In many, many ways we are dealing with this international subsidy war problem.


Herbert Eser (Herb) Gray: Mr. Speaker, when I spoke of an economic war with Saskatchewan waged by this government, the term "economic war" was used by Premier Devine, a Conservative premier, in a speech on television. If the minister has any concerns about those words, he should take them up with Premier Devine.
In his speech, Mr. Devine also said:
I told the Deputy Prime Minister Saskatchewan people need a half a billion dollars right now to get ready for the spring seeding, and another $400 million just to compete with the unfair subsidies of foreign governments. I also told Mr. Mazankowski Canada needs a billion dollar contingency fund to keep us from becoming casualties in subsidy wars.
What specific answer will the government give to this plea for help from Saskatchewan, or will the minister just have to admit that the government still has no plans to help the farmers of Saskatchewan and the farmers across this country?


Hon. Don Mazankowski (Deputy Prime Minister, President of the Privy Council and Minister of Agriculture):: Mr. Speaker, I am sure that the Premier of the province of Saskatchewan would not be taking any lessons about how we might help farmers from the hon. member himself who has recently become interested in this matter as a result of Premier Devine's intervention.
As I indicated to the House yesterday-


Mr. Gauthier:: You are really scraping the bottom of the barrel.


Donald Frank Mazankowski: As I indicated to the House yesterday-


Jean-Robert Gauthier: What a cheap shot.


Mr. Speaker:: The hon. minister.


Donald Frank Mazankowski: I am not sure why the House leader for the Liberal Party is so sensitive-


Mr. Duhamel:: Because it was a cheap shot.


Donald Frank Mazankowski: -when we are discussing a very important issue. We are discussing a very important issue here.


Ron J. Duhamel: Be serious.


Donald Frank Mazankowski: I am serious, and when it comes to agriculture this government or this party has always been serious. It has in the past, it is today, and it will be in the future.


Herbert Eser (Herb) Gray: Mr. Speaker, it is clear from Premier Devine's speech that he certainly is not persuaded that the Deputy Prime Minister and his party have always taken such a concern for agriculture in this country. If that were the case, why did Mr. Devine feel it necessary to make that speech?


ATLANTIC FISHERIES
Herbert Eser (Herb) Gray: Mr. Speaker, Mr. Devine made his speech two days ago, but for the past two months it has been public knowledge that the Atlantic fisheries are in trouble, and the government has had plenty of time to organize a recovery program.
Mr. Speaker, although the Prime Minister was in Halifax yesterday, he failed to take this opportunity to announce a fisheries recovery program for the region.
March 7, 1990

Why didn't the Prime Minister announce a recovery program yesterday for the region's fishermen and processing plants?
This crisis has gone on far too long. When are we going to see this government come up with a real action plan?


Hon. Bernard Valcourt (Minister of Fisheries and Oceans):: Mr. Speaker, I think that if the hon. leader of the Opposition would care to recall this country's recent history with respect to fisheries, he would realize the Liberal Party is hardly in a position to tell us what to do since it is responsible for everything that led up to what has now become the Atlantic fisheries crisis.
The Prime Minister has refused and this government refuses-


Some hon. members:: Oh, oh!


Bernard Valcourt: They don't like the answer. They ask intelligent questions, but they don't want an answer!


Mr. Fernand Robichaud (Beausejour):: Mr. Speaker, my question is directed to the new Fisheries Minister, and I want to take this opportunity to wish him every success in his new post.


Some hon. members:: Hear, hear!


Fernand Robichaud: There has been a lot of talk about special assistance programs for communities affected by the Atlantic fisheries crisis.
The Prime Minister and other ministers have referred in very general terms to generous programs involving billions of dollars. The minister himself said last week that the Prime Minister had not made any promises. Last night, however, when faced with unruly demonstrators, the Prime Minister repeated his vague promises.
Is the new minister at liberty to tell us whether there will be a special aid program with additional funding, or is he going to give us more of the same and blame it all on somebody else, as he did just now?


Bernard Valcourt: Mr. Speaker, the communities I visited last week and the groups I spoke to do not consider the $130 million the government gave to these communities a few months ago to be a "rehash".
Oral Questions
I can tell the hon. member that in my consultations last week, and not to my surprise since I know Atlantic Canadians, not one group asked me or asked the government to throw money at the problem.
We have a serious situation in the Atlantic region. The government has already given a preliminary response. We must consider the Harris report; we must also consider how in the future we can best avoid a situation like the one we are now going through.
Furthermore, in recent months, the government has put in place mechanisms to come up with these solutions. And if the hon. member wants to know if action will be taken, the answer is yes. Measures will be announced as soon as they have been decided.


Fernand Robichaud: Mr. Speaker, it is still a "rehash" and what is more, we have to wait for it.

In the case of fishing communities that are losing their whole base of support when large companies decide to pack up and leave, will the minister exercise his authority and prevent the companies from transferring their boats and licences to other ports, so that these communities can continue to live from the sea and still be there when the stocks return to normal? Will he exercise his authority?
Hon. Bernard Valcourt (Minister of Fisheries and
Oceans): Mr. Speaker, I am quite amazed at the member referring only to the people affected by those announced plant closures.
Of course we are not talking about the thousands of employees who are already working in other plants that do function.


Mrs. Campbell (South West Nova):: Where?


Bernard Valcourt: In Lunenburg and other areas of Atlantic Canada.


Coline M. Campbell: Only in Lunenburg.


Bernard Valcourt: Any quick fix for the Liberal Party; it is famous for that. I do not think that is the way the way to deal with this matter now. There is no quick fix for a serious problem.
It is all right to blame us in the House and to blame the government for the situation, but as I said in Atlantic

March 7, 1990
Oral Questions
Canada-and every premier agreed with me, including Mr. Wells, Mr. McKenna, Mr. Buchanan and Mr. Ghiz-we have to work together and be the architects of the solution together.
We win nothing by just having mud thrown at us supposedly for being responsible for a situation which developed over a long period of time. We want good solutions and that is what we are striving for.


Some hon. members:: Hear, hear!


THE ECONOMY
Ms. Audrey McLaughlin (Yukon):: Mr. Speaker, my question is for the Prime Minister.
On December 13, 1989, the Prime Minister made a commitment to Atlantic Canadians that the government would respond to the crisis in the Atlantic fishery, and I quote, "with exactly the same kind of generosity and enthusiasm" that was shown to western farmers.
Will the Prime Minister assure Atlantic Canadians that the Atlantic Fisheries Adjustment Program that he referred to yesterday will ensure that Atlantic Canadians can remain employed in their own communities? Will he tell the House today what measures will be taken and exactly when?


Right Hon. Brian Mulroney (Prime Minister):: Mr. Speaker, my hon. friend raises the question of an adjustment program, but there is more to it than that.
As the Minister of Fisheries and Oceans has just indicated, the government responded initially with a $130 million package designed to deal with the immediate hardships encountered by those in fishing communities in Atlantic Canada.
We are now in the process of preparing an important response to the Harris commission which deals with conservation and other important policy measures to ensure that the resource is no longer depleted in the future and remains an asset for Atlantic Canada.
Third, there is a dimension to it which we are going to deal with in an Atlantic Canada adjustment package particularly designed for the fishery which we hope, following the minister's discussions with various premiers, fishing leaders, union leaders and plant owners,
will bring a definitive solution for fishermen in Atlantic Canada.
What we do not want to do is repeat some of the experiences of the past which solved the problem for a brief period of time and then caused it to recur again. We want a definitive solution in the interests of the people of Atlantic Canada.


Audrey Marlene McLaughlin: Mr. Speaker, my supplementary question is directed to the Prime Minister.
I have to say that Atlantic Canadians need a definitive solution too, but Atlantic Canadians are now without jobs. This problem has been known for a long time. It is not a new problem and the Prime Minister knows that.
Similarly, the crisis for Canadian farmers is not a new problem and it continues to get worse. This year in Saskatchewan alone the farm income is expected to go down 101 per cent, a negative farm income.
With spring seeding around the comer, the government says it is studying the problem. Farmers cannot wait for another study. They are losing their farms now. Will the Prime Minister act immediately to implement a specific farm support program?


Donald Frank Mazankowski: Mr. Speaker, of course it is an urgent problem and of course it is important to assess in a precise way the magnitude of the situation. Mr. Devine and other provincial governments are working together with us in doing just that.
As I indicated to the House yesterday, supplementary drought payment cheques are being distributed right at this very moment.
I want to remind the hon. member that the government's support for agriculture in the province of Saskatchewan is very great. It is very huge, as a matter of fact. For every dollar that the Saskatchewan government puts into agriculture, the federal government has put in between $10 and $12.
Now that is a pretty solid record and certainly does not say to me that the Government of Canada is avoiding the problem. It says to me that the Government of Canada is very cognizant of the problem. It has a solid track record and we are going to work with the provinces in trying to

provide the kind of solution to which the hon. member refers. I hope that we will have the support of her and her party when we bring it down. I am sure that we will.


Audrey Marlene McLaughlin: Mr. Speaker, the minister responsible for fisheries said that this government does not want to do a quick fix. Well, farmers in the west and people in the Atlantic region are seeing no fix.
My final question to the Prime Minister is very specific. When will western farmers and Atlantic fishermen receive the long promised support programs?


Martin Brian Mulroney: Mr. Speaker, the government responded very generously to the needs of farmers across Canada in the past and we have responded as well to the fishermen. We are working, as the minister has indicated, very closely with the producing provinces which are confronted with the kinds of problems that Premier Devine has described.
I have just returned from meetings in Atlantic Canada yesterday, including-


Fernand Robichaud: Very friendly meetings.


Martin Brian Mulroney: Yes, very friendly meetings, apart from a few of my hon. friend's friends who were there.


Some hon. members:: Oh, oh!


PRESENCE IN GALLERY
Mr. Speaker:: I wish to bring to members' attention the presence in the gallery of the Hon. C. Stephen Rogers, Speaker (Designate) of the British Columbia Legislative Assembly and Mr. Mark Rose, Opposition House Leader.


Some hon. members:: Hear, hear!


AGRICULTURE
Hon. Ralph Ferguson (Lambton-Middlesex):: Mr. Speaker, this week the Premier of Saskatchewan estimated that one-third of the farmers of Saskatchewan are facing an immediate debt crisis and an additional 20,000 farmers are worried about the possibility.
Oral Questions
Can the Minister of Agriculture tell this House today what assistance the government will provide for Canadian farmers, or is he waiting for an election to be called in Saskatchewan before he acts?


Donald Frank Mazankowski: Mr. Speaker, as I indicated to the House yesterday and again today, we are working very closely with the provinces in trying to put together a package that will respond to the needs to which the hon. member refers. I hope that we can do that in a time that would clearly demonstrate the government's intentions, with the support of the provinces, hopefully before spring seeding.


Ralph Ferguson: Mr. Speaker, since January 1 export prices for wheat have dropped by $10 per tonne. Yet grain stocks are at the lowest level they have been for many years. The minister refuses to recognize that his blind belief in the free market system, that no longer exists, is destroying the family farm in Canada.
When will the minister stop acting like a bushleaguer of international trade and fight fire with fire by introducing Canadian programs to combat American and European export subsidies?


Donald Frank Mazankowski: Mr. Speaker, I am almost tempted to talk about bushleagues but I won't because this is a very serious matter.
The hon. member knows that we have responded in the past and we intend to respond now because of the impact that the price war has on the income situation of all farmers who are producing grains and oilseeds. I think the hon. member is also aware that while the subsidy war still continues it has been reduced somewhat substantially. The Europeans, for example, were subsidizing to the tune of about $200 per tonne. Today it is about $80 per tonne. The United States, under their EEP program, is subsidizing in the order of about $20 per tonne.
In fact, since 1986-87 grain prices have strengthened and we certainly do not support the kind of price war that is going on. We are doing everything that we can in our power to resolve this trade dispute through the MTN negotiations and that will certainly provide the long term solution.

March 7, 1990
Oral Questions
We have, as a government, supported the farmers on the deficiency that occurred as a result of the trade war and we are looking at that again along with the drought program, the shortfall in cash to put the crop in, and all the other things related to that to develop the kind of package which I am sure the hon. member will support.


HAMILTON HARBOUR COMMISSION
Mr. Stan Keyes (Hamilton West):: Mr. Speaker, my question is directed to the Prime Minister. The chairman of the Hamilton Harbour Commission, Peter Lush, who was appointed, by the way, by the Prime Minister, is both the listing agent and owner of a real estate firm selling property which the harbour commission wants to buy.
The Commission has already purchased land from the same real estate firm of which Mr. Lush was a member when he was a member of the harbour commission. Would the Prime Minister not agree that this is a blatant conflict of interest?


Hon. Doug Lewis (Minister of TVansport):: Mr. Speaker, my hon. friend will know that the Hamilton Harbour Commission operates at arm's length from the government.


Some hon. members:: Oh, oh!


Philip Derek Lewis: It is financially self-sufficient. My hon. friend is-


Some hon. members:: Oh, oh!


Jean-Robert Gauthier: Is that short arms or long arms?


Mr. Axworthy (Winnipeg South Centre):: Why, it's almost independent.


Philip Derek Lewis: They either want to hear it or they don't.


Mr. Speaker:: The hon. minister.


Philip Derek Lewis: I do not want to dredge up any old allegations that might embarrass my friends opposite. This issue was thoroughly reviewed by the commission at the time the original allegation was made and we are satisfied that there was no conflict of interest.


Stan Kazmierczak Keyes: Mr. Speaker, old allegations on a new member of Parliament won't cut the mustard.
The Hamilton harbour commissioners were established by an act of Parliament. That act of Parliament states quite clearly that the corporation shall not have any transactions of any pecuniary nature either in buying or selling with any members thereof directly or indirectly-
Back in 1986, Peter Lush admitted that he would not become a harbour commissioner if it meant giving up the listings his firm had. That is property, of course, that the Hamilton Harbour Commission was interested in buying.
Does the Prime Minister not agree that Mr. Lush has one of two options: He either gives up his listings or he resigns from the commission.


Philip Derek Lewis: Mr. Speaker, if my hon. friend has any information which impacts on conflict of interest which he is prepared to give, I suggest that he give it to me. Otherwise, why doesn't he see if he has the nerve to make that same allegation outside the confines of this House.


LOW-LEVEL FLIGHTS
Mr. Robert E. Skelly (Comox-Albemi):: Mr. Speaker, in a statement in Halifax yesterday the Prime Minister expressed scepticism that NATO would proceed with the Goose Bay low-level test flight facility given the reduction of tensions in eastern Europe.
My question is directed to the Prime Minister. Given widespread Canadian opposition to the facility and the disastrous impact it will have on the way of life of the Labrador Innu, will he exercise Canadian sovereignty on this issue rather than passively leaving the decision to NATO and, in the interests of the Innu and all Canadian people, cancel its bid to NATO for the low-level test facility?


Martin Brian Mulroney: Mr. Speaker, I think the NDP members will have to make up their minds. On the one hand they ask us to promote job creation in Newfoundland and Labrador. When we try to bring in thousands of jobs for the benefit of Newfoundland and Labrador, they are the first people to be opposed before it even has an opportunity to be examined carefully by the people in Newfoundland and Labrador.
March 7, 1990

The Government of Canada, as a member of NATO, was approached with a proposal which we agreed to submit to environmental review and to cabinet consideration if NATO decided to proceed.
I indicated yesterday in Halifax that in light of recent developments, I personally-not NATO but I personally-was somewhat sceptical as to whether the entire project would, in the light of these new circumstances, appear. My hon. friend cannot take yes for an answer.


Robert Evans Skelly: It is seldom that we get yes for an answer or any answer at all from that side, Mr. Speaker.
Given the disastrous cuts to native programs in the department of the Secretary of State, would the minister not consider it advisable to create jobs in Canada and that rather than stripping native organizations of their leadership, cutting out native media altogether, eliminating the basis of native broadcasting and eliminating friendship centres, the place to create jobs would be in those programs rather than in a test flight facility that the Prime Minister himself considers obsolete and is sceptical about?


Martin Brian Mulroney: Mr. Speaker, I do not consider it obsolete at all. I did not express a view in regard to any degree of obsolescence. I simply responded-


Ms. Mitchell:: You're obsolete.


Martin Brian Mulroney: Well, my hon. friend says I am obsolete. Hang on to your hat. In 1992 we are going to make the NDP obsolete in this country.


CANADIAN ARMED FORCES
Mr. Guy Saint-Julien (Abitibi):: Mr. Speaker, my question is for the Minister of National Defence.
On March 2, a Canadian Armed Forces CF-18 broke the sound barrier in the Gatineau-Hull-Aylmer area.
Can the minister tell us what regulations the Canadian Armed Forces have for CF-18 pilots concerning flights in Canada? Will you communicate with Canadian Armed
Oral Questions
Forces officials to prevent a recurrence of such an incident?


Hon. Bill McKnight (Minister of National Defence):: Mr. Speaker, I thank the hon. member for his question. I can inform him as to the regulations that govern supersonic flight. According to CFP 100(3), Supersonic Flights-I know the hon. member for Brant would know that by heart but I wanted the rest of the hon. members to know.
Mr. Speaker, this is important. The member asks a question that is important.
Aircraft shall now be flown at supersonic speeds:
a.	except in an emergency or when otherwise directed by the CDS
or an OCC;
b.	below flight level 300-
c.	at any altitude within 25 nautical miles of a built-up area -
d.	unless directed by a NORAD controlling agency.
The hon. member brings this issue to our attention and I will bring to the attention of the House that the pilot in question, because of the investigation, has been grounded and appropriate action will be taken.


Ms. Catherine Callbeck (Malpeque):: Mr. Speaker, my question is for the Minister of Energy. This year's energy Estimates show a $246 million cut for conservation and alternative energy. How can the minister support these cuts when this government says that a clean environment is a priority?


Hon. Jake Epp (Minister of Energy, Mines and Resources):: Mr. Speaker, there were cuts made in the budget for my department in a number of areas and that is supported by me. I take responsibility for those cuts. It was necessary to do so to bring down the deficit and have the economic well-being that we need in order that energy can grow as an economic factor.
Also we have to move away from the direction of the former government, through its NEP, in that we had vestiges of the NEP. Namely, if there is a dollar to be found let's spend it because we will have energy efficiency. That is just not the way to go.


Catherine S. Callbeck: Mr. Speaker, the United States is very concerned about its deficit and it has increased spending in this area. Without continued

March 7, 1990
Oral Questions
government leadership and support we are going to lose our lead in this whole area to the United States and Europe.
Will the government stop discriminating against alternative energy through its taxing and spending and give alternative energy the priority it deserves?


Arthur Jacob (Jake) Epp: Mr. Speaker, I find that passing strange from that member. I was in Charlottetown a few weeks ago where the biomass project was put into place on which we spent $7 million per capita. That was one of the highest expenditures for alternate energy in Canada. I wish she would start saying thank you for those kind of things rather than the kinds of things she is saying.


IMMIGRATION
Mr. Sergio Marchi (York West):: Mr. Speaker, my question is directed to the Minister of Immigration and it concerns the Federal Court decision which ruled that the minister's refugee backlog system is illegal. Irrespective of whether the minister has read the court decision, she knows full well that there is much confusion over the present status of that system.
Can the minister clarify for the House whether the current backlog system is conducting business as usual, or whether she has issued directives through her officials to suspend those operations until that system is changed or abolished altogether?


Hon. Barbara McDougall (Minister of Employment and Immigration):: Mr. Speaker, I would like to remind the hon. member, who should not have to be reminded of this, that the judgment did not concern the whole of the backlog review system. The case challenged a single part of the backlog clearance process, which was the frontend humanitarian and compassionate criteria, the guidelines that went out.
This backlog clearance was established to deal with claims in the refugee status and the determination remains the primary issue. I want to remind him of that.
I can tell him that within the department the backlog clearance system is proceeding. The interviews are continuing to take place, but the decisions on those
interviews are being held in abeyance until we see the written reasons for the judgment.


Sergio Marchi: Mr. Speaker that answer is simply incredible. If the front end is bad, what makes you think that the back end is going to be good? It is like arguing that you take the front end of a car off and expect it to run.
The Federal Court has rendered a decision-


Mr. McDermid:: Which end are you referring to?


Mr. Crosbie:: Which end are you speaking from?


Mr. Speaker:: Order. Perhaps the hon. member could put his question.


Sergio Marchi: Mr. Speaker, my question is again directed to the minister. She has a responsibility to take this Federal Court decision in the serious context that it was given. Does she not believe that, together with the other condemnations of her system, this judicial ruling is serious enough for her not to continue with business as usual, but to suspend those systems currently in place, to try to develop a system that is fair and to try to give justice to individuals who have been waiting in this backlog for some four to five years? Does she not think it is time that she wakes up and smells the coffee and does something about it?


Barbara Jean McDougall: Mr. Speaker, I would point out that if I did what the hon. member is suggesting those people would have to wait an awful lot longer. The approach we are taking was actually endorsed by the standing committee. It is the right approach for dealing with the backlog.
I would also remind him that one of the reasons that there are so many people waiting is that the members of his party in the other place, not for the last time I may add, held up something so that thousands and thousands of people were added to this backlog.


Mr. Dan Heap (TVinity-Spadina):: Mr. Speaker, my question is also for the Minister of Employment and Immigration. It concerns Mr. Justice Jerome's decision that the minister's guidelines were illegal and wrongful because they contradict the Immigration Act. This is not the first time that this government has bungled on this matter, either before the Senate's work or after the Senate's work.
March 7, 1990

I would ask the minister whether, in view of the hardship visited on people for some years now, including the members of her own immigration staff, and in view of this added delay for which she is responsible through that guideline, she will direct her staff to prepare a speedy system for landing all persons in that backlog according to basic criteria of health and security.


Barbara Jean McDougall: Mr. Speaker, if the hon. member is really interested in fairness, he will know that the case-by-case review we are conducting on the backlog is consistent with the legislation now in place which is functioning for people who are arriving in Canada today. A case-by-case method is the most fair way of dealing with people in the backlog.
It is our view, in keeping with natural principles of the rule of law and case-by-case, that this is the way to conduct the backlog despite the difficulties. Our job is to try to overcome any of those difficulties in the process as they arise.


Daniel James Macdonnell Heap: Mr. Speaker, the minister knows that her $100 million two year program has now become more like a $600 million six year program. Therefore, the fairness that she undertook is simply not available to these people who must wait and to the whole immigration department which is being disrupted by this program and the drain on its staff.
Therefore, will the minister do what I requested before. Will she at least undertake to use the broad guidelines for de facto, long-term residents of Canada which had been in place and operating for years until she interrupted them with her narrow guidelines? Will she direct her staff to begin today to use those broad and lawful guidelines for all persons in the backlog, including the several thousands who were wrongfully rejected?


Barbara Jean McDougall: Mr. Speaker, I want to clarify this for the hon. member. I do believe he really does know that the guidelines that were established at the front end of the system did not mean that if people did not meet those guidelines they were expelled from the country. It simply meant that they went to the next stage in the
Oral Questions
process and there is, at the end of that process, another humanitarian and compassionate review.
We have bent over backward to ensure that this system is fair. That does not mean that there may not be ways that we can improve the process, and I am always looking at ways to do that. But to suggest that this has disrupted my entire department is totally wrong and out of context because the department has worked very hard to ensure that this system will work. I can assure the hon. member that we are going to do everything in our power to make sure that it does.


JUSTICE
Hon. Bob Kaplan (York Centre):: Mr. Speaker, my question is for the Minister of Justice. I want to begin by congratulating her on assuming the portfolio and wish her well.


Some hon. members:: Hear, hear!


Robert Phillip Kaplan: Mr. Speaker, I want to raise important unfinished business with her. When the royal commission investigating the Donald Marshall case, the Micmac Indian, reported its findings of racism underlying the federal system of justice and, in fact, the Canadian system of justice, I asked the minister's predecessor to reply to the 20 recommendations that were made for action by the federal government. The minister then replied that he was waiting for the Government of Nova Scotia to act.
The Government of Nova Scotia acted; it acted a month ago. Racism is too urgent for delays like this. I want to now ask this minister to reply to the recommendations which were made for federal action.


Ms. Kim Campbell (Minister of Justice and Attorney General of Canada):: Mr. Speaker, I would like to thank the hon. member for his good wishes which I accept with pleasure.
I believe that the hon. member's characterization of the response of my predecessor is not quite correct. The former Minister of Justice made it very clear that the Department of Justice is reviewing the recommendations of the Donald Marshall inquiry and will provide a full and comprehensive response quite independent of what has been done by the Nova Scotia government.

March 7, 1990
Oral Questions
We have participated in the creation of a panel which is reviewing the conduct of judges in Nova Scotia. I would like to add also that, aside from any initiatives that the Department of Justice may take, this is a subject of which the Government of Canada has not been unaware.
With reference to other departments, in my previous portfolio the Department of Indian Affairs and Northern Development engaged in some very interesting initiatives in this area recently, putting out, if I may speak on behalf of my colleague, a report on native policing, for example, which is now out for consultation broadly in the Canadian public. As well, provisions for negotiating self government also provide some opportunities for looking at questions of the administration of justice.
I think the recommendations of the Marshall inquiry are extremely important and require the kind of deeply considered review that the Department of Justice is now undertaking. I look forward to bringing forward the response of my department to the House at the earliest possible opportunity.


Robert Phillip Kaplan: Mr. Speaker, I certainly appreciate a considered review by the department, but the province of Nova Scotia, which had about 60 recommendations to look at, was able to respond a month ago.
I want to ask the minister in particular, what is her response to the recommendation for the establishment of an independent review mechanism for cases of wrongful convictions which could have been used in the Donald Marshall case or which could, for example, be used in the case of Fred Ruddick who is also arguing that he has been wrongfully convicted?


A. Kim Campbell: Mr. Speaker, I think the hon. member would agree that that is a very significant recommendation and would represent a significant change in the way the federal government has dealt with those cases in the past. It requires due consideration.
The reason the Nova Scotia government was able to respond more rapidly to the recommendations of the Marshall inquiry is that under the Constitution of Canada the administration of justice is under provincial
jurisdiction. It is, therefore, able to make much more direct responses to those recommendations.
We will consider all the recommendations of the Marshall inquiry and report at the earliest possible opportunity.


THE ECONOMY
Hon. Roy MacLaren (Etobicoke North):: Mr. Speaker, my question is for the Minister of Finance.
The minister has frequently said that international pressures drive up interest rates in Canada. During the past months interest rates have risen rapidly in Japan and Europe and have remained high in the United States. The minister nevertheless claims, in his recent budget, that somehow in Canada interest rates will be reduced from 13 per cent to 11 per cent and then to 9 per cent.
Will the minister explain how he will achieve those forecasts against the international trends?


Michael Holcombe Wilson: Mr. Speaker, first let me welcome my colleague to one of his cameo appearances in the House of Commons.


Some hon. members:: Oh, oh.


Michael Holcombe Wilson: Mr. Speaker, we are neighbours. We can talk like that to each other.
The hon. member has raised a very important issue, that is the level of interest rates in this country. We have pointed out our concerns about inflation and the reasons why we believe our interest rate policy is an appropriate one.
Inflation in 1988 was 4 per cent. In 1989 it was 5 per cent and earlier this year it was 5.5 per cent. Clearly there are pressures there that we must deal with.
I am confident, though, that we will be able to see some turnaround in these inflationary pressures and, with that, we will be able to see some reduction in interest rates consistent with the projections that are put out in the budget.
I would point out to my friend, as he and others have pointed out to me in the past, that we do have some room to manoeuvre here in relation to other countries. A year ago the interest rate spread between the United,

States and Canada was 1.75 per cent. It is now 4.75 per cent, so that gives us some opportunity to get rates down if the inflationary performance does warrant that.


Roy MacLaren: Mr. Speaker, I thank the minister for his kind words. I should have preferred that he had once again referred to things that I have written about his policies, since my royalties go up each time he does so. The result is that I am probably the only person in Canada who ever benefits from his budgets.


Some hon. members:: Oh, oh!


Roy MacLaren: I would remind the minister that he has been consistently wrong during his six years in office, wrong without exception about his interest rate forecasts. The minister knows that as well as I do. He has never once made an accurate forecast about interest rates in this country.


Mr. Speaker:: I would ask the hon. member, given the fact that this is the last question, to put his question.


Roy MacLaren: The minister has said, contraiy to his earlier statements, that he does believe that international pressures help drive interest rates in Canada. Therefore, will he agree that the interest rate forecasts in his budget are already unrealistic and that Canadians can expect another budget before year end?


Michael Holcombe Wilson: Mr. Speaker, the fiscal year has not started. I do not know why we are talking about another budget before year end.
What I would draw to the hon. member's attention, since he does have some idle time these days, is the publication put out in January which discussed the Department of Finance projections in relation to the actual outcome and also in relation to the forecasts that are made by a group of private sector forecasters that we monitor regularly.
The Department of Finance is number two of the 25 private sector forecasters. Clearly our record over the past five years has been a very good one.
I might also point out that the deviation on the budget deficit for this government in the last five years has been $2.6 billion. For the previous five years under the Liberal administration, it was some $26 billion or 10 times the
Routine Proceedings
deviation from the projections that we put out. That gives an indication of the accuracy of our forecasts.


BOARD OF INTERNAL ECONOMY
Mr. Speaker:: I have the honour to inform the House that the Hon. Harvie Andre, member for the electoral district of Calgary Centre and the Hon. Robert R. de Cotret, member for the electoral district of Berthier- Montcalm have been appointed as members of the Board of Internal Economy.

-for the purposes and under the terms of Chapter 42 of the first supplement of the Revised Statutes of Canada, 1985, entitled An Act to amend the Parliament of Canada Act.



ROUTINE PROCEEDINGS

[Stage Direction]
1989-90 SUPPLEMENTARY ESTIMATES (C)

Hon. Robert de Cotret (President of the Treasury Board):: presented a message from His Excellency the Governor General transmitting Supplementary Estimates (C) of the sums required for the service of Canada for the fiscal year ending March 31, 1990 and, in accordance with Section 54 of the Constitution Act, 1867, recommending these Estimates to the House of Commons on March 1, 1990. The message was read to the House by Mr. Speaker.


Robert René de Cotret: Mr. Speaker, I would like to move, pursuant to the provisions of Standing Order 81(5) and Standing Order 81(6):
That the Supplementary Estimates (C) for the fiscal year ending March 31, 1990, laid upon the table earlier this day, be referred to the several Standing Committees of the House as follows:
Since there is a detailed allocation of the Estimates to various committees, and the list is lengthy, if it is agreeable to the House, I would ask that the list be printed in Hansard as if it had been read.

March 7, 1990
Routine Proceedings


Mr. Speaker:: Does the House agree?


Some hon. members:: Agreed.
[Editor's Note: List referred to above is as follows:] lb the Standing Committee on Aboriginal Affairs Indian Affairs and Northern Development, Votes 8c and 15c. lb the Standing Committee on Agriculture Agriculture, Votes 5c, 15c and 20c.
To the Standing Committee on Communications and Culture Communications, Votes 10c, 40c, 50c, 55c, 75c and 80c. Secretary of State, Votes lc, 5c and 30c. lb the Standing Committee on Multiculturalism and Citizenship Secretary of State, Vote 15c.
To the Standing Committee on Consumer and Corporate Affairs and Government Operations
Consumer and Corporate Affairs, Votes lc, 5c and 25c.
Governor General, Vote lc.
Privy Council, Votes lc and 5c.
Public Works, Votes 2c, 5c, 15c, 22c and 30c.
Secretary of State, Vote 25c.
lb the Standing Committee on Energy, Mines and Resources
Energy, Mines and Resources, Votes 40c and 45c.
To the Standing Committee on Environment
Environment, Votes lc, 5c, 10c, 15c, 20c and 25c.
lb the Standing Committee on External Affairs and International Hade
External Affairs, Votes lc, 2c, 10c, 15c, 30c, L35c, L40c and 55c.
lb the Standing Committee on Finance Finance, Votes lc, 17c and 18c.
National Revenue, Votes lc, 5c, 10c and 15c.
To the Standing Committee on Forestry and Fisheries Fisheries and Oceans, Vote lc.
Forestry, Votes lc and 10c.
To the Standing Committee on Human Rights and The Status of Disabled Persons
Justice, Vote 10c.
To the Standing Committee on Justice and Solicitor General Justice, Votes lc, 5c, 15c and 35c.
Solicitor General, Votes lc, 5c, 10c and 25c.
lb the Standing Committee on Labour, Employment and Immigration
Employment and Immigration, Votes lc, 6c, 10c, 15c, 17c and 20c.
Labour, Votes lc, 5c, 10c and 15c.
To the Standing Committee on National Defence and Veterans Affairs
National Defence, Votes lc, 5c, Lllc, 15c and 20c.
Veterans Affairs, Votes 3c and 5c.
lb the Standing Committee on Health and Welfare, Social Affairs, Seniors and the Status of Women
National Health and Welfare, Votes lc, 5c, 10c, 15c, 25c, 35c, 50c, 55c, 60c, 65c and 70c.
To the Standing Committee on Public Accounts Finance, Vote 25c.
lb the Standing Committee on Industry, Science and Technology, Regional and Northern Development
Indian Affairs and Northern Development, Votes 30c, 35c, 40c and 45c.
Industry, Science and Technology, Votes lc, 3c, 10c, 25c, 30c, 32c, 33c, 40c, 70c, 80c and 85c.
lb the Standing Committee on Transport Privy Council, Vote 25c.
Transport, Votes lc, 5c, 17c, 20c, 25c, 26c, 45c and 70c.


[Stage Direction]
Motion agreed to.

Right Hon. Joe Clark (Secretary of State for External Affairs):: Mr. Speaker, a week ago today, I had the distinct privilege, on behalf of Canada, to meet with Mr. Nelson Mandela on his first voyage outside South Africa since he was confined to prison 27 years ago. I want to report to Parliament on our conversations, and also on my brief visit to Namibia, in whose struggle for independence Canada has played such a vital role.
Lusaka, Zambia is the headquarters of the African National Congress in exile. Mr. Mandela came to consult with his national executive, some of whom he had never met. He wanted also to meet those countries and institutions which have played a leading role in the struggle against apartheid. The Prime Minister, whom I represented, was one of the first invited to Lusaka, which is a sign of the respect that Canada has won among the
March 7, 1990

people on the front lines of the fight against apartheid. That is a tribute to the resolve of people throughout this House and across the country. But it also creates a responsibility for Canadians to continue our leadership in new circumstances which, while more promising than the decades of impasse on apartheid, are also more challenging and complex.

The House knows the changes which have swept South Africa in recent months:
-the historic Harare Declaration of the African National Congress which accepted the desirability of peaceful, negotiated change in South Africa;
-the election as President of South Africa of F.W. De Klerk, a man who seems committed to initiating real change;
-the unbanning of the African National Congress;
-and the triumphant release of Nelson Mandela from prison on February 11.
The stage is now set for historic progress towards a truly democratic and non-racial South Africa. But we have only just begun. The state of emergency is still in force. Political prisoners remain detained. The pillars of apartheid remain. As Kenneth Kaunda said in Lusaka, Mr. Mandela is now free, but he is free only to live in an apartheid system.

I think it important that Canadians understand the spirit in which Nelson Mandela approaches this phase of events in South Africa. He referred to his meetings with President de Klerk, and the Ministers of Justice and Constitutional Affairs of South Africa, and said he is convinced that they are true reformers who seek a new social contract in South Africa. But, he noted, these are but three men who face the same party structure responsible for the development and the maintenance of the repressive regime of apartheid. They deserve to be encouraged, but neither he nor the world could ignore the history of the national party or the forces of retrenchment which lie in waiting. Mr. Mandela believes that pressures must be maintained until real change occurs. Expressions of intent are not enough to warrant relaxation of pressure.
Routine Proceedings
Mr. Mandela was unambiguous on this issue: the greatest assistance which could be offered by the outside world to the African National Congress is to maintain sanctions. Indeed, he spoke of intensifying sanctions, and I have asked him to indicate where and how he thinks this should occur.
Commonwealth heads of government, in Kuala Lam-pur last year, agreed that Commonwealth pressure would remain unyielding until there was "evidence of clear and irreversible change." The Commonwealth Committee of Foreign Ministers, which I chair, will meet in Nigeria, in May, to assess the evidence of change. The African National Congress has agreed to work with us in that process.
The headquarters of the African National Congress will return to South Africa and the organization, unbanned, will lead the effort to secure a non-racial democracy in South Africa. Thousands of ANC members and followers will have to be relocated inside South Africa. Offices will have to be established. A new infrastructure must be built. The ANC, at the same time it is negotiating, will also have to focus on equipping the black leadership in South Africa for the responsibilities of economic management and political governance.
The ANC asked me for Canada's direct assistance in meeting the costs of its reintegration into political life inside South Africa. I noted the firm policy of successive governments of Canada not to support political parties in other countries. We will, naturally, continue to support specific humanitarian, education and other programs which meet the needs of the ANC. A delegation from the African National Congress will come to Ottawa within a month to discuss specific areas of co-operation.
I also made the point that there are thousands of private citizens in Canada who would want to support the return home of the African National Congress. This resource should be tapped, and I have initiated discussions with representatives of the three parties in Parliament to identify individuals and strategies which can be offered to the ANC to help them secure substantial private Canadian support.
A great challenge facing the ANC is to level the playing field as it approaches negotiations with the government. The South African government will be able to draw on all the wealth, expertise and resources which apartheid has put at its disposal. The ANC is dispos-

March 7, 1990
Routine Proceedings
sessed and disadvantaged in this regard. Successful negotiations will require a greater equality of resources and expertise. That is an area where Canada can help.
Finally, the ultimate success of a non-racial South Africa will depend on the capacity of both blacks and whites to exercise both political and economic power. Economic exploitation lies at the heart of apartheid and, by and large, black South Africans have been shut out of the experience of running industries and businesses. Therefore, I told Mr. Mandela that we will look urgently at additional programs to provide potential black leaders of industry with practical experience in running large corporations in both the private sector and the public sector.
In their telephone conversation of February 13, the Prime Minister invited Mr. Mandela to visit Canada. He has suggested that it might be appropriate for Nelson Mandela to address this free Parliament. Mr. Mandela looks forward to coming to Canada to express directly his appreciation of the support of Canadians.
The impression I took away from two days of meetings is of a man who is strong, serene, wise and generous. He is a person of principle, but also of practicality and flexibility. To emerge from prison after so long a punishment and to retain an understanding of the concerns of his jailers is extraordinary. Mr. Mandela disproves the notion that history is made only by impersonal forces. The course of South African history will be determined in large measure by this man and by his counterpart in Pretoria.
Canada will maintain sanctions until there is clear evidence of irreversible change in the apartheid system. But we intend also to encourage President de Klerk in his courageous and moderate course. Foreign Minister Pik Botha has written to me suggesting that Canadian experience might be particularly helpful in developing negotiated solutions for South Africa. I have responded by proposing that Mr. Ted Lee, the head of our legal branch, and Canada's former Ambassador to South Africa, visit the region to assess areas where Canadian expertise might be of use. I made it clear to Mr. Botha that any expertise we might offer must be available to all
parties in the negotiations. Mr. Lee will be in South Africa in early April to consult with the government, the ANC and other relevant parties.
The nature of the South African challenge has changed. The opponents of apartheid outside South Africa must be as sensitive and generous in encouraging the process of change as Nelson Mandela has been in leading it. Canadian non-governmental organizations have brought great honour to Canada in their fight against apartheid. I will be meeting with them within the next two weeks to discuss how Canadians together can best pursue this fresh prospect of finally ending apartheid.
After my meetings in Lusaka, I paid a brief visit to Namibia, which will celebrate its hard-won independence on March 21. Canada will be represented at the independent celebrations by my colleague, the Minister of External Relations and International Development and by a small all-party delegation from Parliament. For years, Namibian independence was a hostage to apartheid; now Namibia is leading the way for its neighbour South Africa. It is a remarkable example of a successful transition to a non-racial democracy, of the holding of successful free elections, of the drafting of a constitution without peer in Africa. The Namibian success points to what is possible when reason overcomes emotion and compromise replaces prejudice.
During my conversations with President-elect San Nujoma and his ministers-designate, I expressed both Canada's congratulations and our intent to continue to contribute to the development of a stable and prosperous Namibia.
When I was called to the platform to welcome Nelson Mandela to Zambia, President Kaunda said that Canada, though far away, had earned the right to be considered a "front line state" in the fight against apartheid. Because we are a western democracy, a diverse society, a successful economy, our role may be even more important in this sensitive new phase of the campaign to establish a non-racial democracy in South Africa.


Hon. Andre Ouellet (Papineau-St-Michel):: Mr. Speaker, I would like to extend to the minister our appreciation for his willingness to address the House,
March 7, 1990

whenever possible, on matters pertaining to foreign affairs.
We Liberals welcome the minister's efforts to meet with Nelson Mandela at an early time. It is important that Canada maintain a high profile in the international effort to persuade South Africa to abandon apartheid. The Liberal Party is currently of the view that recent developments, while encouraging, cannot mask the reality that apartheid is still practised as a rule of law in South Africa. Therefore, we share Mr. Mandela's view that now is not the time to relax sanctions against the South African government.
We on this side of the House feel no need to soften our opposition to apartheid and those forces that support that policy now that Nelson Mandela is finally free. I know the minister will agree with our position stated recently by our Leader that "Apartheid cannot be reformed. It must be abolished."
I know the minister would also agree that will only be possible if the South African government moves to lift the state of emergency, release all remaining political prisoners, and repeal all legislation which give the legal framework to institutionalize racism in South Africa, including the Population Registration Act, the Group Areas Act, the Land Act, as well as the entrenchment in law of segregated health care and education and the homeland system.
As Canadians, we cannot be satisfied with the stated good intentions of the de Klerk government, including its support for negotiations with the African National Congress. As recently outlined by the South African President on February 2, we know very well from experience that promises to hold negotiations are no substitute for actually sitting down at the table. Negotiations once begun can always be broken off.
I suggest, therefore, that the acid test of the South African government's commitment to abandoning apartheid-the only test that Canadians should abide by in considering any change to our sanctions policy-would be their actions during these negotiations, including their position on repealing apartheid legislation.
I would hope that the minister made these points, or will make these points, clear to the South African
Routine Proceedings
government so that there can be no misunderstanding as to where Canada stands now on this issue.
As to the minister's suggestions to Mr. Mandela that he consider renouncing the arms struggle as an instrument of the African National Congress in its battle to make South Africa a truly democratic and non-racial society, Liberals support that view. I will remind the minister that our leader, Mr. TUrner, made that point very clear in his meeting with the ANC president, Oliver Tambo when Mr. Tambo was in Ottawa three years ago.
The Liberal Party would like to encourage the minister to follow through with his offer of continued assistance to ANC sponsored projects in South Africa and other programs designated to help the victims of apartheid. We would hope that these efforts are not compromised because of the government's continued cuts in foreign aid.
As far as the African National Congress as a political party, I want to assure the minister that we will certainly co-operate with his effort. We are willing to participate in whatever actions or non-partisan committees that could be created for this effort. Therefore, I want to inform this House that Senator, the Hon. Alasdair Graham, has been designated by our party to participate on our behalf in any discussions leading to the creation of a private, non-partisan Canadian group of supporters for the ANC.
I do hope that these private efforts will not be a substitute for whatever actions or direct help that could come from the Canadian government in other activities that are not of a political nature.
Finally, I would like to make a short comment on the minister's visit to Namibia after his meeting with Mr. Mandela. Like all Canadians, we share a sense of joy in the birth of that nation to be officially celebrated on March 31. We will move immediately to extend a hand of welcome to Namibia, to the councils of the Commonwealth and the United Nations. I would also hope that the Government of Canada would consider Namibia a priority for continued economic assistance.
I am concerned, however, about the continued uncertainty surrounding the status of Walvis Bay, the only major seaport in Namibia. I would have expected that the minister discussed this matter while in Windhoek, making clear Canada's view that South Africa must return control of that port to the Namibian people.

Routine Proceedings
As I did not hear the minister speak to this issue in his statement today, I would like to ask him if he could inform the House as soon as possible what is happening with that situation, and what Canada could do to help facilitate Namibian efforts to gain control over this port, so clearly vital to their economic growth.
In closing, let me thank the minister on behalf of many Canadians, not only members of Parliament but Canadians throughout the country who appreciate his work and his effort as Chairman of the Commonwealth Committee of Foreign Ministers. What he is doing is very important and appreciated. But I want to remind him that the work is far from being finished. There is still a lot to be done. It will take skill, determination and certainly not to conclude too quickly that the work is over. I wish him well in his efforts.


William Alexander (Bill) Blaikie: Mr. Speaker, I would like to begin by thanking the minister for making a statement in the House, as is his habit, and a welcome habit at that, it gives everyone an opportunity to comment from time to time and to hear each other out on a variety of issues.
All of us felt a tremendous sense of relief and celebration on February 11 when Nelson Mandela was finally released after 27 years in prison. Events surrounding that day and other events in South Africa remind me of the biblical passage which speaks of setting the captives free and giving sight to the blind; the captive in this case being Mr. Mandela and the blind being the white community in South Africa. We hope that the vision of the white community in South Africa will continue to improve and grow towards the day when we have a non-racial democracy in South Africa. We hope that captives will continue to be freed and that all political prisoners in South Africa very soon will be released.
I was mindful, while listening to the minister, of the opportunity I had along with other Canadian parliamentarians, including the hon. member for Waterloo who is here in the House today, to meet with members of the ANC in Lusaka during a visit to that city on our way home from Namibia in September last year. Many of the people we met with on that day for lunch had not been able to be physically present in their homeland of South Africa, for periods of almost as long as three decades. I
am very happy to think that many of them may be able to return to South Africa and that Canada, either through the government or through the arrangement that the minister spoke of through fund raising in Canada, might be able to facilitate that return, both of those individuals and the ANC now that it is longer banned in South Africa.
The minister made the point that what has happened so far is only a start and certainly this is indisputable. The structures of apartheid remain. As I mentioned before, there are many prisoners still to be released who are still detained, and the state of emergency remains. All these things remain to be done.
Nevertheless, I do not think anyone would contest that this is a period of great hope and expectation. That period of hope and expectation is largely related to the remarkable person and personality of Mr. Mandela. I think in many respects he was an unknown as long as he was in prison, but having been released, has now emerged as a person with a strength of character which in a variety of ways may just be able to bridge, along with the obvious abilities of Mr. de Klerk, what sometimes seems like an unbridgeable gap in South Africa. We hope that these two people and others will be able to successfully contend with the forces in both their camps and be able to come to a successful negotiation in the near future.
With respect to sanctions, it is not just a question of maintaining sanctions. It is also a question of more effectively enforcing those sanctions which are already in place. This is something that I know that the committee which the minister heads has addressed itself to and which it should address itself to even more thoroughly in the upcoming meeting.
It may also be a question of intensifying sanctions, something the minister acknowledges in his statement, if indeed that is what Mr. Mandela and others come to request. If that request is made, then I would suggest that the government would have to consider complying with that request. That remains to be seen.
These will be difficult times in the homelands. I was just looking at the news before I came into the House and saw that violence has broken out in another homeland, in addition to the violence that already broke out in Ciskei.
March 7, 1990

There are going to be a great many negative images as well as positive images on the television screen and in the news about South Africa. We should be clear that none of what we see should dilute our resolve to see the democratization process through, and that this is a time for a great deal of patience and understanding.
The minister spoke of the reception which Canada received in Lusaka and the honour which has been brought to Canada. I would like to emphasize that the honour which has been brought to Canada and the honour in which Canada is held by the leadership in Africa with respect to the anti-apartheid struggle is due in large part to a variety of Canadians all across the country; and to non-governmental organizations, churches and coalitions that have been struggling along for years trying to bring attention to this problem.
In many respects, without wanting to be too partisan about it, they have been pushing governments to take the lead and to do more. Certainly, their work has paid off in what the Canadian government has done so far and what we hope the Canadian government will do in the years to come. It is because ordinary Canadians have been seized with this issue and have refused to drop it that governments over the years have been forced to pay attention to this issue. It is no less so in the United States of America where black Americans have made this an issue which has forced successive American governments to pay attention. In this respect I was glad to see that there was a relative absence of self-congratulation in the statement. The credit that has come to Canada in terms of the anti-apartheid struggle is a credit that belongs to a great many Canadians and belongs more to the people of Canada than to any particular government.
I was also interested to see the theory of history embedded in the minister's statement when he said that Mr. Mandela had persuaded him that history was not the result of impersonal forces, and that sometimes people can make a difference. I think that is true.
Unfortunately, I feel that way about our country at this point, only on the opposite side of the fence. I feel that way about the Prime Minister. I think that had we a different person in charge of the country, the country
Routine Proceedings
might have a better chance of surviving. But persons do make a difference. In this case it is a negative one.
I would like to say a word about support for the ANC. I am aware of the arrangements being sought by the minister with the three political parties in Canada. I presume that will proceed to some kind of conclusion. But the minister made an interesting point when he said that successive Canadian governments have refused to support political parties in other countries. I think that is a worthy tradition. The government should have used that principled position as a basis on which to criticize the action of the United States in Nicaragua when it chose to fund a political party outside the United States of America, in this case the opposition which recently won the election. The minister will know that I asked him to do that in committee. I still have not heard any words of criticism in that regard. If this is a principle worthy of upholding in Canada and by the Canadian government, perhaps it is something we should suggest to our neighbours.
With respect to Namibia I would like to begin by congratulating the great many Canadians who have been involved in that struggle and, of late, those many RCMP officers who I am sure had an incredibly different experience in Namibia, some of whom recently received an award as a result of their work there. Perhaps some day members of Parliament might have an opportunity to sit down with some of the officers who served there. I think it would be a good idea to get a feeling for the experience they had.
Namibia is one of the great successes of the United Nations, of the international community and of reconciliation. I remember coming out of Namibia in September feeling myself that this thing was going to work, and that the only thing that might cause it not to work was people continuing to mistrust each other. There were certain people who could not believe that South Africa might actually allow this thing to happen. There were other people who could not believe that SWAPO would not think up some devious, violent scheme to intimidate voters in particular areas of the country.
I think those of us who came out of Namibia at that time had the feeling that people had come to the point where they were willing to trust, willing to forgive in many respects, and willing to take a chance on the future. That worked. I hope that is the kind of spirit

March 7, 1990
Routine Proceedings
which is now informing and instructing the change in South Africa. Indeed, I hope it is the kind of spirit that is informing and instructing what is happening in other places around the world where people are seeking their freedom.
I am thinking now of Lithuania where I happened to have a chance to be just a week and a half ago. I think a similar kind of spirit exists there, a spirit that I hope Mr. Gorbachev will respect when the day finally comes-as I am sure it will-when the new Lithuanian Soviet makes some declaration or move toward independence.
The Namibian example, if you like, cannot be uncritically transferred. However, it is a model that needs to be adapted to a variety of different situations whether in Cambodia-


Mr. Prud'homme:: Palestine.


William Alexander (Bill) Blaikie: I hear an hon. member saying the Middle East. I wonder if the minister had an opportunity to meet with Mr. Arafat when he was in Lusaka to discuss with him events in that part of the world where we know so much work needs to be done. The spirit that seems to be motivating and helping to resolve so many other conflicts in the world has yet to really manifest itself in the Middle East.
Perhaps if the minister had the opportunity he could say either in the House or at some other point whether he had a chance to talk to Mr. Arafat at that point. Watching the news we saw on the same screen the Secretary of State for External Affairs, Yasser Arafat and Nelson Mandela. Considering all the things I have heard in the last ten years said about the NDP when we got up to say encouraging things about these characters and when I consider some of the things said by the minister himself, I sometimes wonder how fast the world can change.
It is not just in the Soviet Union; it is right here in Canada. People are embracing and hugging people with respect to whom they were formerly quite critical of others for even saying good things about them.
A great many good things are happening in the world. Namibia is one of them. We hope that as a result of the release of Nelson Mandela that South Africa will be added to that list and subsequently many others as the world finally comes to the realization that W. H. Auden was right when he said that we must love one another or die.


Some hon. members:: Hear, hear!


Charles Joseph Clark: Mr. Speaker, I rise on a point of order. I do not want to establish a precedent. However, a question was raised with regard to Walvis Bay. If the House is agreeable, I would be prepared to report very briefly on conversations with respect to Walvis Bay.


William Alexander (Bill) Blaikie: And Mr. Arafat?


Charles Joseph Clark: And Mr. Arafat.


Some hon. members:: Agreed.


Charles Joseph Clark: I did discuss the question of Walvis Bay with both representatives of the government-elect of Namibia and with representatives of South Africa present in Namibia.
I have the impression that the matter is under fairly active discussion between the two parties. I had the impression that neither wanted it to become again, at least for the moment, a matter of active public debate. Thus I did not push it publicly.
The position of Canada is clearly known by both sides, which is that Walvis Bay belongs to Namibia. I think the House would agree that the best way to resolve the problem is by agreement between the parties, and that may well be under way.
Among the people at the meeting to greet Mr. Mandela at, I think, the specific invitation of Mr. Mandela, was Mr. Yasser Arafat. I took the opportunity to speak to him briefly to encourage the PLO to continue the course of moderation that it has demonstrated in the Middle East.
I also indicated to him that I thought it would be helpful if he would take one further step along that path of moderation and lead to the withdrawal of Article 19 of the Covenant of the PLO.
It was not a lengthy conversation, but I thought it was useful to take advantage of our presence there together to exchange words.


Mr. McLean:: Mr. Speaker, I wonder if there would be agreement of the House for me to make a brief comment as one who has lived in Africa and who has been following this issue.


Some hon. members:: No.


Mr. Speaker:: There does not seem to be agreement.
March 7, 1990


CONFERENCE OF SPEAKERS IN ZIMBABWE
Mr. Speaker:: Pursuant to Standing Order 34, I have the honour to present to the House a report on the meeting of the Conference of Speakers and Presiding Officers of Commonwealth Parliaments held in Zimbabwe on January 7 to January 12, 1990, in both official languages.
[Editor's Note: See today's Votes and Proceedings.]


COMMITTEES OF THE HOUSE
Mr. Jim Hawkes (Calgary West):: Mr. Speaker, I have the honour to present the thirty-third report of the Striking Committee.
[Editor's Note: See today's Votes and Proceedings.]


STANDING COMMITTEE ON ENVIRONMENT
Hon. Marcel Danis (Minister of State (Youth) and Minister of State (Fitness and Amateur Sport) and Deputy Leader of the Government in the House of Commons):: Mr. Speaker, I have two motions for unanimous consent approval of the House.
First, I move:
That seven members of the Standing Committee on Environment be authorized to travel to Vancouver, B.C., March 19 to March 23, 1990 to attend the Globe 90 Conference, and that two committee staff members do accompany the committee.


Mr. Speaker:: The House has heard the terms of the motion. Is there agreement?


Some hon. members:: Agreed.


[Stage Direction]
Motion agreed to.
Routine Proceedings

Marcel Danis: 
Jean-Robert Gauthier: Mr. Speaker, there has been consultation, and I an confirm that the Official Opposition agrees with the motion put forward by the minister. We also agree that the motion as drafted has no legal consequences and does not change the Parliament of Canada Act.


Mr. Angus:: Mr. Speaker, I wish to confirm that there has been detailed consultation on the motion put forward by the deputy House leader. I wish to indicate that my caucus supports the motion and the statement made by the minister in moving the motion.


Mr. Speaker:: Does the minister have the unanimous consent of the House to move the motion?


Some hon. members:: Agreed.


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


Some hon. members:: Agreed.


[Stage Direction]
Motion agreed to.
[Stage Direction]
March 7, 1990
Routine Proceedings PETITIONS

Mr. Les Benjamin (Regina-Lumsden):: Mr. Speaker, I have two sets of petitions to present to the House. The first is to indicate that names are still coming in from citizens of Canada regarding the clawback of the old age pension and the family allowance.
I have 47 more names to add to the thousands that have already come in from the city of Regina in which these citizens humbly petition the House that this clawback undermines the fundamental principle of universality of Canada's social programs and discriminates against recipients of Old Age Security and family allowance benefits by making them bear an unfair burden of tax irrespective of geographical location or other factors.
Wherefore the undersigned petitioners pray and call upon Parliament to abandon this proposed measure which singles out Old Age Security and family allowance benefits.


VIA RAIL
Leslie Gordon Benjamin: Mr. Speaker, I have 15 further petitions on another matter which will not die and which will remain alive for many years to come in which some 1,238 Canadians petition Parliament to rescind the cuts to VIA Rail, to re-equip VIA Rail and to allow it to function in a manner which will allow it to succeed. These reductions in budget and service could lead to the disappearance of one-third of Canada's railway system.
They therefore request Parliament to maintain VIA Rail as Canada's present national network, to upgrade the system with new equipment and to give VIA Rail a sufficient budget to maintain its national mandate for passenger service.


GOODS AND SERVICES TAX
Mr. Derek Blackburn (Brant):: Mr. Speaker, I too, rise under the provisions of Standing Order 36 with petitions containing several hundred names of petitioners from various parts of Ontario, mainly southwestern Ontario, who are totally opposed to the GST.
They call upon Parliament to reject the current proposal for a goods and services tax. In addition to that they
want reform of the taxation system so that there is an effective minimum tax on wealthy individuals and corporations.
I therefore present these petitions on their behalf. They have been certified by the Clerk of the Table.


BILL C-43
Mr. Bill Attewell (Markham-Whitchurch-Stouff-ville):: Mr. Speaker, I, too, rise under the provisions of Standing Order 36. The petition of the undersigned residents of Ontario who number over 800 humbly show that each and every child is a unique human being and deserves to be protected by law from the first moment of his or her life and that Bill C-43 would legalize the killing of unborn children and give to them no real protection under law, wherefore the undersigned, your petitioners, humbly pray and call upon Parliament to defeat Bill C-43.


EXTERNAL AFFAIRS
Mr. Jesse Flis (Parkdale-High Park):: Mr. Speaker, pursuant to Standing Order 36 it is my duty and honour to table more petitions on behalf of a Canadian citizen, Mr. Yih-Sheh Leo, who was arrested unlawfully and imprisoned in Thiwan. These signatories are in addition to the thousands of others that have already been tabled in this House.
The petitioners urge the Canadian government to take immediate and effective measures to secure Mr. Leo's release, including some of the following steps that they want this government to take: one, issue a public statement expressing Canada's concern over Canadian citizens' rights being violated; two, instruct the Canadian embassy in Japan or the High Commissioner's office in Hong Kong to send a representative to Taiwan; three, appoint a lawyer to handle his case; four, request Canada's allies which have representatives in Taiwan to assist with the case.
The petitioners are disappointed that the government has not responded to previous petitions. I ask through you, Mr. Speaker, to seek the government's immediate action in this case.
March 7, 1990


BILL C-43
Iain Francis Angus: Mr. Speaker, I have a number of petitions to table this afternoon. All have been certified correct by the Clerk of Petitions.
The first one is signed by 29 residents, primarily of the community of Thunder Bay which I represent, but also includes the former member for Oshawa, Ed Broadbent who has signed it as well.
The petitioners humbly pray and call upon Parliament to reject any proposed restrictive abortion law and to enforce the Canada Health Act by withholding transfer payments to provinces that do not provide universal access to abortion services.
I might add that my son, Adam, also signed that petition. It is a nice thing to know that one's child follows in his father's footsteps.


GOODS AND SERVICES TAX
Iain Francis Angus: Mr. Speaker, I have a number of petitions signed by residents, primarily of the riding of Thunder Bay-Atikokan, all dealing with the proposed goods and services tax. These residents who have signed the petitions at the Top Buckle Ski Shop, the senior citizens apartment on Donald Street, Johannen's Variety, Art's Junction, Thunder Bay and the Atikokan Legion all call upon this government to reject the goods and services tax and to find a more appropriate way of raising government revenue.


RCMP DRESS CODE
Mrs. Barbara Sparrow (Calgary Southwest):: Mr. Speaker, I have the honour today to present some petitions with the signatures of 15,323 people. They have been certified under Standing Order 36. These people come from Alberta, Saskatchewan and British Columbia and want to retain the uniformity of the RCMP uniform.
These petitioners humbly pray and call upon Parliament to preserve the distinctive heritage and tradition of the RCMP by retaining the uniformity of the dress code with all the recognizable colour and trappings that have such great historical value for this country. The pride and esprit de corps should not be jeopardized by any concessions to religious or ethnic minorities which result in changes to this truly great police force and its proud traditions in uniform.
Routine Proceedings
This brings the total signatures for these petitions that I have presented in the House to over 140,323.


TAX BENEFITS FOR NORTHERN AND ISOLATED AREAS
Guy St-Julien: Mr. Speaker, today, pursuant to Standing Order 36,1 wish to table a petition from Matagami concerning the recommendations of the Task Force on Tax Benefits for Northern and Isolated Areas.
Matagami is without question an isolated area, and that is why your petitioners consider the Brunelle recommendation to be discriminatory, unfair and inefficient as it concerns the northern tax benefits system. It offers no encouragement to people in the North and no incentive to make use of northern resources.


GOODS AND SERVICES TAX
Mr. Peter Milliken (Kingston and the Islands):: Mr. Speaker, it is my pleasure to present a petition signed by dozens of constituents in Kingston who are opposed to the goods and services tax proposed by the government.
They call upon Parliament to agree with those of us who sit on the opposition side of the House to oppose the goods and services tax, to reject the goods and services tax and to vote the bill down.
I know that in presenting the petition some of my colleagues on the other side of the House are facing pressures from their constituents to follow our good example and do likewise.


VIA RAIL
Robert Evans Skelly: Mr. Speaker, I have a number of petitions to present certified correct under Standing Order 36.
The first one has to do with the continuation of the VIA Rail service. As I pointed out before, this is a timely petition since Vancouver Island has been able to retain, through court action, the VIA Rail service on Vancouver Island by having the Supreme Court of B.C. declare that this is a condition by which British Columbia entered Confederation and that should Canada decide to cancel passenger service there it would be a unilateral breach of the terms of union and B.C. would end up out of Confederation.

March 7, 1990
Routine Proceedings
These petitioners are calling on the government to eliminate the reductions in budget and service and improve the Vancouver Island version of VIA Rail.


GOODS AND SERVICES TAX
Robert Evans Skelly: Mr. Speaker, I also have two petitions relating to the goods and services tax from various points in my constituency on Vancouver Island in which the petitioners call on the government to do away with the goods and services tax and to bring in a tax which is more fair in its application rather than taxing the poor and consumers more heavily than the rich.
That petition is signed by approximately 150 to 200 people, adding to the thousands of petitions I have presented in the past on this issue.


FORESTRY
Robert Evans Skelly: Mr. Speaker, I have a third petition which relates to the forest resource development agreement that is in danger of being scuttled by this government and yet has provided needed forest restoration in British Columbia and also needed jobs in the forest industry in British Columbia, plus the prospect of jobs in the forest industry in British Columbia's future by replanting our forests and making sure that we have a thriving stand and a solid working forest in that province.


NUCLEAR FREE ZONE
Robert Evans Skelly: Mr. Speaker, I have a final petition that calls on the government to set up a nuclear free zone in British Columbia that would allow no ship carrying nuclear weapons to be given access to our ports and waterways, that the designation include passages through our waters en route to Na-noose Bay and in all the waters around the Canadian Forces maritime experimental and test ranges near Nanoose Bay, British Columbia, and that all governments be required to provide, in advance of their arrival, assurance that ships visiting our waters carry no nuclear weapons and have no nuclear reactors on board.
Unfortunately, Mr. Speaker, I have no record of this petition being certified, but I am sure it would be supported unanimously by this House.


TAXATION
Mr. Len Taylor (The Battlefords-Meadow Lake):: Mr. Speaker, I have a petition certified by the Clerk of Petitions pursuant to Standing Order 36. It is my pleasure and duty to table this petition in the House which is signed by residents of my constituency, particularly from the communities of Edam, Saskatchewan and Big River, Saskatchewan, who attended meetings that I held in those communities.
The petitioners note that the government has not addressed the unfair taxation system currently in place which permits wealthy individuals and corporations to pay little or no federal tax while forcing lower and middle-income taxpayers to bear more of the national tax burden.
The petition calls on Parliament to reject the current proposals for the goods and services tax and to reform the taxation system so that there is an effective minimum tax for wealthy individuals and corporations.


QUESTIONS ON THE ORDER PAPER
[Stage Direction]
(Questions answered orally are indicated by an asterisk).
Mr. Albert Cooper (Parliamentary Secretary to Government House Leader):: Mr. Speaker, question No. 241 will be answered today.


Mrs. Gaffney: Did the government purchase any automobiles for the Open Skies Conference it hosted in February of 1990 and, if so (a) what number (b) at what cost (c) what will the government be doing with the automobiles now that the Conference is over (d) if the government intends to sell the automobiles (i) to what persons (ii) in what locations (iii) on what dates (iv) at what cost will they be sold?


Hon. Paul Wyatt Dick (Minister of Supply and Services):: No automobiles were purchased for the Open Skies Conference.
However, sixty-five Chevrolet Lumina sedans and fifteen Chevrolet vans were leased from General Motors of Canada Limited for the total sum of $1.00. All vehicles will be returned to General Motors for their inventory.
March 7, 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 be allowed to stand?


Some hon. members:: Agreed.



MOTIONS FOR PAPERS


Albert Glen Cooper: Mr. Speaker, would you be so kind as to call Motion for the Production of Papers No. 19.
P-19-Mr. Boudria-November 24, 1989
That an Order of the House do issue for a copy of the current list
of all companies, strip clubs and other similar establishments to have
received funding or loans directly or indirectly from the Federal
Business Development Bank since 1972.


Albert Glen Cooper: Mr. Speaker, the document requested cannot be released under the Federal Business Development Act, Section 37(2) and the Access to Information Act, Sections 19 and 20, and the Privacy Act, Section 3, which preclude the release of information which is not general in nature and which, by its release, could allow or result in direct personal financial gain or loss by a person or a group of persons.
All the bank's relationships with its clients are commercial and as such are subject to the commercial confidentiality principles implied by the above sections.
I therefore ask the hon. member to withdraw his motion.


The Acting Speaker (Mr. Paproski):: Is it the pleasure of the House that the Notice of Motion for the Production of Papers No. P-19 be deemed to have been adopted?


Albert Glen Cooper: No. I ask that it be transferred for debate.
Routine Proceedings


The Acting Speaker (Mr. Paproski):: Transferred for debate?


Peter Andrew Stewart Milliken: Mr. Speaker, I rise on a point of order. As the parliamentary secretary knows, the hon. member for Glengarry-Prescott-Russell is away today.
The point I want to make is that this request for details of funding is surely in part public. Mortgages are registered as security for this funding in most cases. The hon. parliamentary secretary must know this and surely, if the mortgages are public documents, there is no reason why the parliamentary secretary should not give the answer.


The Acting Speaker (Mr. Paproski):: I believe the hon. member wishes to have it transferred for debate. He can make his points then. Thank you.
I wish to inform the House that because of the ministerial statement, Government Orders will be extended by 33 minutes.


Peter Andrew Stewart Milliken: I rise on a point of order, Mr. Speaker.


The Acting Speaker (Mr. Paproski):: The hon. member for Kingston and the Islands on a point of order.


Peter Andrew Stewart Milliken: Mr. Speaker, some three weeks ago, on February 14,1 rose on a point of order in connection with these Motions for the Production of Papers and I pointed out that these matters have been long delayed.
One of the earliest of my notices was placed on the Order Paper on October 25. The parliamentary secretary made an undertaking. I could quote his words. I do not think it was just because it was Valentine's Day that he was so pleasant, but he said, as reported at page 8324 of Hansard:
I think the member has made a reasonable request.
And I thought I had too. He continued:
I will investigate to make sure that my hon. friend gets a very
decent answer to his question, and I will get it for him as soon as
possible.
I have been patiently sitting here since February 14, three weeks ago, and I still have not received any response whatever from the kind-hearted parliamentary secretary. I know that he would not want to participate in a cover-up, but I suggest that the denial of information to Parliament effectively is a cover-up of the government's program. They have an obligation to answer to Parliament and give us this information. We are not getting answers at all. We have only had one dealt with

March 7, 1990
The Budget
today and the notice was put on the Order Paper for that one on November 24.
I respectfully request the hon. parliamentary secretary to give the House the information to which we are entitled. In fact, for the one he has dealt with today he has refused the information. I think it is evidence of an attempt by the government to cover up the facts and to stop Parliament from having access to the information that Parliament is entitled to have.


Albert Glen Cooper: Mr. Speaker, after listening to the hon. member I am a little confused. Was he referring to his Question No. 214, or was he referring to Motions for Papers P-16 and P-18?


Peter Andrew Stewart Milliken: I am referring to Motions for Papers P-16 and P-18. Those are the same motions I referred to in my point of order on February 14, Valentine's Day, when the parliamentary secretary was so kind-hearted.


Albert Glen Cooper: Mr. Speaker, I am sure I was kind-hearted because it was Valentine's Day and I was thinking of my sister who celebrates her birthday that day. It put me in a very good mood.
The bottom line is that in looking at the information I have it looks as though those two motions should be dealt with fairly soon. I gather that they are with the chiefs of staff from the two departments and I should be seeing them relatively quickly. I will do my best, as I always do for this particular hon. member, to try to get them in as quickly as I can.



GOVERNMENT ORDERS


[Stage Direction]
The House resumed from Thesday, March 6, consideration of the motion of Mr. Wilson (Etobicoke Centre) that this House approves in general the budgetary policy of the government.
Peter Andrew Stewart Milliken: Mr. Speaker, I rise on a point of order.
This is a debate on the budget, as Your Honour has heard, the principal financial statement of the government, and there is not a single member of the government in the House to hear this debate. I think it is an outrage and they have an obligation to be here.


Albert Glen Cooper: Mr. Speaker, two people can play the game when we get into the question of absence of members of the House of Commons. Even though he has not been here that long, the hon. member has a lot of parliamentary experience. He knows that comment is out of order.
Second, I also want to say to the hon. member that we have been dealing with petitions and a number of things. We will have our ministers here in the House to make sure they listen to this important debate, because we believe it is important.


Jean-Robert Gauthier: Mr. Speaker, just to re-emphasize the point. Indeed, it would be nice if a minister of the Crown could listen to one of his own members, who is commenting in a debate that is of very great importance to Canadians, the budget. We would like to have one minister in the House; two if they could. That would be ordinary and customary.


Albert Glen Cooper: Mr. Speaker, I want to assure my friends that it a custom that we always try to accommodate. I have certainly sent out word to get in a couple of ministers.


The Acting Speaker (Mr. Paproski):: I think we can carry on with debate with the hon. member for St. Catharines.


Mr. Ken Atkinson (St. Catharines):: Mr. Speaker, I might indicate that my intention is to have a 10-minute speech and a 5-minute question and answer period and share my time with one of my colleagues.
I am pleased today to take part in the debate approving in general the budgetary policy of the government. This is the sixth budget brought in by the Minister of Finance, and he has continued his record of fiscal responsibility to deal with the legacy of debt left by the previous administration, while at the same time creating the climate for non-inflationary economic growth.
As a result of policies aimed squarely at spending restraint, the government has reduced the deficit from its peak of $38.3 billion in 1984 to $30.5 billion in the last fiscal year. That is a decline of almost $8 billion, and this
March 7, 1990

decline is to continue. Just as important, direct borrowings of the Government of Canada in capital markets are also down about $8 billion since 1984.
In the April 1989 budget the government set out a five-year plan to cut the deficit in half by 1993-1994, to eliminate government borrowings in capital markets after that year, and to begin to pay back government securities, Government of Canada bonds, and other debt instruments securing the debt.
This budget confirms the fact that we are still on a course to meet the goals set out in the last budget. First, it will ensure that the deficit continues on a downward track. Second, it will help to create the conditions needed to ease inflationary pressures. This will lessen the burden on monetary policy and increase the scope for interest rates to come down. Lower interest rates will contribute to further reductions in the deficit, and this will set the stage for the economy to make the transition to strong, sustained growth.
There are three basic points I wish to speak to with regard to the budget. They are interest rates, government spending, and the impact this budget will have on my home province of Ontario. As I mentioned previously, and contrary to what those across the House would say, the high level of interest rates is only a symptom of the over-all problem we face in Canada. The real problem is the underlying inflation which drives up interest rates. There is no magic wand with which to lower interest rates. This would only serve to fuel inflation, thus compounding the problem. If we do not deal with these inflationary problems at this point in time, we could see a return to the economic conditions which persisted in the early 1980s. This includes the recession we know so well that was created. The painful lesson of despair, sinking confidence at home and abroad, and the personal hardships endured by all too many Canadians during that period will not be repeated.
There are may people in my region concerned with the high interest rates. The automobile manufacturers see the high interest rates and the resulting high value of the Canadian dollar as a very real impediment to their ability to compete in the car market. People who work in the construction industry see residential housing and all of their projects affected by high interest rates. Some would
The Budget
even say that the high value of the dollar concerns those merchants who see individuals going to the United States seeking better bargains. These people would like to see interest rates reduced immediately, but they do not want to see the return of the spectre of inflation and high interest rates approaching 20 per cent, haunting them again as it did in the early 1980s. They want to see the cause of high interest rates removed in order that rates will come down and stay down and that their future security will not be threatened. Non-inflationary growth is the goal that this budget helps to accomplish.
The government has set in place a number of policies in order to expand the potential of the economy for non-inflationary growth. This budget with its emphasis on expenditure control, as well the policies of privatization and deregulation, the free trade agreement, the retraining programs under the Canadian Jobs Strategy, and the replacement of the manufacturers' sales tax with the goods and services tax will result in the potential growth of the economy expanding to 3.25 per cent to 3.5 per cent from the present 2.75 per cent which existed in 1984. Without these changes there was even a danger that the potential for non-inflationary growth in the economy would contract.
Intertwined in this entire matter is the question of expenditure reduction in order to deal with the annual deficit and ultimately the national debt. The national debt is approaching $350 billion and interest on that debt for the current year will be approximately $41.2 billion. Over the last five years the government has managed to turn the deficit in program spending to a surplus of approximately $13 billion. The deficit this year will be $28.5 billion. The budget sets us on a course to continue reduction in this annual deficit in order that we can provide more flexibility to the government to protect programs that Canadians desire.
Presently we spend approximately 35 cents of every tax dollar taken in on interest on the national debt. It is generally acknowledged that approximately 80 per cent of the debt is held here in Canada by our own citizens. However, we still have to this debt to those individuals who hold Canada bonds, treasury bills and other Government of Canada securities. This results in an income

March 7, 1990
The Budget
redistribution program from the taxpayers to those individuals who can afford to buy the Government of Canada securities. This is obviously a type of income redistribution that no one in the country wants. If this process were allowed to continue we would see the government merely taking tax dollars from its citizens and repaying it to individuals who can afford the securities. We would not be able to fund the programs which Canadians want and we would not be able to provide any new programs such as those for the environment, child care, or any other area. The only way continue to attack this problem is through expenditure reduction. The budget tabled by the finance minister is aimed at achieving these goals. It reflects what is necessary in Canada today, living within our means. We cannot continue to spend money we do not have.
These expenditure reductions are being shared by all individuals in Canada. This causes difficulties for people everywhere. The easy course would be simply to continue spending and as a result increase the annual deficit and the national debt and put the day of reckoning on the backs of our children. I do not want to leave that legacy to my children. It is difficult, but I was not elected to be representative of convenience, supporting only those policies that are currently popular and easy. We have to look to the future and ensure that it is a bright one, not clouded by debt inherited by these children from their parents, with the added responsibility of supporting their parents as well. It is incumbent upon the government to take a leadership role and follow a course of action that is responsible both to the people we represent and to future Canadians.
The expenditure control plan outlined in the budget is designed to spare those individuals who personally cannot afford to see transfers reduced. Examples are old age pensions, spouses' allowance pensions and the unemployment insurance program which are exempt. Also exempted are the equalization program and Canada Assistance Program transfers to those provinces receiving equalization. There has also been a freeze in EPF funding. The provinces of Ontario, British Columbia and Alberta are being asked to shoulder a larger proportion of the expenditure reductions at the present time because of their more prosperous positions. Ontario must bear its share of the load because it stands to benefit greatly from a healthier national economy.
Ontario has a great responsibility within Confederation. The debt is a national problem and the country is counting on Ontario to help with its share of this burden.
Since the government took office it has been totally committed to being responsible with spending from the public purse. In that light, it is quite frustrating to see Ontario increase its spending in the last five years by close to 10 per cent per year and increase its public service by over 7,000 individuals, while the federal government has held its own spending to about 3.6 per cent per year over the same period and reduced its Public Service by 12,000 person-years to levels equal to those of the 1970s.
As I mentioned previously, the federal government is paying 35 cents of every revenue dollar just to cover the debt charges.
Critics have said that the freezing of the EPF funding will have a negative impact on the areas of health care and post-secondary education. It is interesting to note, however, there have been no conditions attached to this funding since 1977. The province is free to allocate the money in any manner it wishes. It cannot be said that it goes directly to health care or to post-secondary education when one realizes that the spending of the Government of Ontario increased at the rate of 10 per cent per year. I am sure that they will not have to increase their taxes or increase their deposition, but they can follow the lead of the federal government and cut their expenditures and reallocate their priorities in order that health care and post-secondary education receive the commitment that it should.
The other important fact for Ontario residents is that no new taxes have been proposed in this budget. My constituents have been quite clear in their expectations that expenditure reductions be undertaken and that taxes are not to be increased. The Minister of Finance has definitely listened to the people.
The overriding concern in the country today is the deficit and the national debt. Some people say that the government is preoccupied with this problem and they want to return to the easier, more comfortable days when the government simply ignored the matter and continued its spending and put off the day of reckoning to another generation. This is the easy way out. We cannot return to those policies without inflicting a great deal of damage on the country. This budget illustrates that this government is prepared to stay the course, to see the reduction of the deficit and the ultimate repay-
March 7, 1990

ment of the debt. This is the only action that will ease the inflationary pressures in the economy in order that interest rates can be reduced to an acceptable level, secure programs which Canadians value and set us on a course for sustained growth. This is the type of economic conditions which all Canadians want to create, and they want to see the leadership and courage necessary to ensure that these goals are attained.
This budget will take us into the next century in a strong position to take advantage of the increasingly competitive climate to which we are proceeding in the world. We do not want our children to look back and ask the question why we did not have the courage to deal with the problem when we knew it existed. Indeed this budget shows the courage to make the tough decisions and to do what Canadians have asked: be a government that looks into the future and implements the policies necessary to secure that future.


Mr. Joe Fontana (London East):: Mr. Speaker, I was most interested in my hon. friend's comments. I do not know how he can some of the things that he did with such a straight face, because I am not sure that Canadians are buying it. I have a number of questions for him. Perhaps he could answer them more specifically.
The member talked about this budget and its assumptions. Every major group in this country has questioned the very assumptions that this budget talks about, namely interest rates at 11 per cent. The member knows that current interest rates are 13.5 per cent, that growth rates are unrealistic and that the Minister of Finance has admitted the budget will increase unemployment rates.
Five budgets ago the same Minister of Finance had indicated that if everything had been as he predicted in 1985, the annual deficit would be $15 billion today. Yet we know that he was dead wrong then and is dead wrong now, because we still have a $30 billion deficit.
I wonder if the member could also answer for me why he believes-and he comes from Ontario-Ontario should be penalized. Is it because it is doing such a good job, because it has a surplus in its budget or, as he indicated, because it is spending too much? Which is it? Why penalize the prosperous parts of Canada that in fact
The Budget
make it possible for this country to provide services to the rest of the country?
How could he say to the Canadian people that there are no new taxes in this budget when it specifically mentions the GST to the tune of $1.9 billion and also mentions those other tax measures that were in previous budgets, such as the deindexing of family allowances, personal exemptions, and so on?
I wonder if the member would be good enough to give the straight facts to Canadians.


The Acting Speaker (Mr. Paproski):: The hon. member for St. Catharines has two minutes.


Kenneth David Atkinson: Mr. Speaker, I would be happy to answer the member. Ontario has not been penalized in this budget.


Joseph Frank (Joe) Fontana: A 5 per cent cap; that's a penalty.


Kenneth David Atkinson: Ontario has been asked to share in the consideration of the reduction of the problem. Ontario has had its spending increased by an average of 10 per cent over the last five years, every year. Obviously a period of restraint would have been in order. Why did it increase the public service by 7,000 people? It was not necessary. All these programs have come into effect. It seems that whenever a Liberal government gets into office the spending starts all over again.
It was very interesting to read the results of the debate that occurred Monday night, how the Minister of Finance was up against the representative from the Liberal Party and how the editorial said that it was no contest whatsoever. It went on to say that there is no alternative to the GST being offered by the Liberal Party and asked what is going to happen? It certainly has not come out yet. We are still waiting for it. The editorial went on to say that getting the Liberals back into office and having a GST would be like giving matches to pyromaniacs. I think that is a fair characterization of what would happen.


Mr. Jim Edwards (Parliamentary Secretary to Minister of Communications):: Mr. Speaker, I appreciate the opportunity to participate in the budget debate, particularly since I had the opportunity earlier this week, on Sunday evening and Monday, to be a participant in the

March 7, 1990
The Budget
excellent national exercise put on by the Edmonton Chamber of Commerce, a national conference on deficit reduction.
There are three ways in which a country can lose its sovereignty: when it disintegrates internally or from external threat, when it loses its sense of self, or when it loses control of its economic agenda.
This government has put in place long-term strategies to meet each of those challenges. National reconciliation leading to Meech Lake which will bind our country together, honouring and nurturing our cultural institutions, and the agenda for economic renewal announced November 8, 1984 and followed since.
The Meech Lake Accord is at a crossroads of success. Beyond the text and principles of the accord itself the very idea of Canada is being questioned, not just Canada as we know it, because if any significant portion of our country does leave Canada is gone perhaps forever.
We have a fundamental debate going on. What is Canada? Why Canada? What price, Canada? We are at risk of losing our sense of self. We are constantly at that risk. We need a strong national broadcasting system, public, private, educational and community, to show each other to ourselves to foster a Canadian consciousness. We need to encourage in bom Canadians the same awe, pride and humility demonstrated weekly in dozens of citizenship courts throughout the land by those who take the oath of allegiance. All of this is for nought if we lose our way economically.
The budget of February 20,1990 is another logical step toward freeing Canada from the stultifying strait-jacket of debt which threatens to remove our freedom of purpose. If we had not taken stringent action on February 20 there is a scenario which overwhelms one. We would have had interest rates rising to the 13.5 per cent to 16 per cent range over the next two to three years. We would have had a $20 billion long-term overseas placement of debt which in itself would have required a substantial increase in the personal tax and/or extensive cuts in social spending and universality.
There are a great many challenges before us. They have been met in this budget to some extent, but I submit not to the fullest extent. We had measures affecting my own home province of Alberta. We had the
announcement of the termination of the federal government participation in the OSLO project which does not necessarily signal the end of that project.


Joseph Frank (Joe) Fontana: The minister said it was gone.


James (Jim) Stewart Edwards: The engineering studies will continue and as proposed in the original OSLO agreement there will be a review in July 1991 to determine the economic viability of the project at that time.
I listened with interest to my friend from the Niagara Peninsula talking about the Ontario situation and the transfers to Ontario. Alberta is in precisely the same position as Ontario vis-a-vis this budget in terms of the transfer payments. Further to that, our two provinces are affected identically in terms of the elimination of the incentive program for the oil and mining industries. We are all sharing. We are asking the provinces to share in the burden that we have assumed ourselves at the federal level. The economic agenda has comprised the free trade agreement, the privatization initiatives and tax reform. My friends were just debating the question of the debate last Monday night which, again, was done under the auspices of the Edmonton Chamber of Commerce.


Jean-Robert Gauthier: A select crowd at $100 apiece.


James (Jim) Stewart Edwards: The crowd was select. It was Canadians from coast to coast on national television.


Jean-Robert Gauthier: Read the Edmonton Sun.


James (Jim) Stewart Edwards: Here is the verdict from a journalist of The Edmonton Journal, Mark Lisac, who is not known as a fan of the current Government of Canada. He wrote:
The next time the Chamber of Commerce invites Finance Minister Michael Wilson it should have him pick on someone his own intellectual size, or somewhere close to it.
The article continued:
Wilson did well on a radio phone-in show earlier in the day too. I don't know how the GST idea stands up after his visit to Alberta, but we sure saw a demonstration of political leadership.
With all the budget and all the tax reform there is an underlying concern in the nation. It is summarized in a letter I received in my office just the other day from a constituent who wrote:
I wish to respond to your reply to my wife's McDonald's GST Coupon, which was an eye opener for myself.
March 7, 1990

Subsequent to your explanation I have jumped off the "Band Wagon" of resistance to the GST in view of my enlightenment.
Because I was not aware of all the factors and considerations associated with MST and the GST I naturally resisted change and seemingly unwarranted tax. After discussion with my wife and with an urgent desire to protect our children's future we have decided that we would prefer to see GST applied to restaurant meals at a higher rate rather than having a higher GST rate applied to basic groceries and goods. We do appreciate the need for GST if our commitment to lower the deficit is sincere.
There is the nub of the entire debate. My sense of the mood across the country, particularly in Alberta, is: "Look, we will support this idea of tax reform if you folks are serious about wrestling the deficit to the ground". That was reinforced by the work of the national conference on deficit reduction held on Sunday and Monday of this week.
The summation of the findings of the various committees of that conference was as follows. On the issues of government administration, the advice of Mr. Joe Martin, the rapporteur of that particular committee, was that government should get out of operations and back into governing; that all Canadians should recognize, all of us, the limits of government; that there should be an elimination of duplication among levels of government; that certain privatization initiatives should take place, such as the privatization of airports; that the following services should be contracted out: tax collection, prisons and payrolls; and that consideration should be given to turning Public Works Canada and Supply and Services Canada into Crown corporations in order to put their operations on a more rational basis.
The distinguished economist Dr. Maureen Farrow reported on social programs. She came to the observation that many of the programs which we have in place today were founded in the 1960s and met a 1960s situation. They were programs designed to frustrate regional adjustment to a dynamic economy. She said that incentives must encourage adjustment and universality should be amended and shifted to targeting. She favoured addressing the insufficiencies and the inefficiencies in such programs as health care. As well, she felt that all social programs should be capped as of today in current dollar terms, that governments should then re-allocate the diminishing thought using in-house skill
The Budget
sets, that time and notice should be given to Canadians in pension schemes so that they could make adjustments to real market conditions. No more indexation, said she, and all Canadians should begin to manage their expectations.


An hon. member:: It must have been a Tory caucus meeting.


James (Jim) Stewart Edwards: No, this was not a Tory caucus meeting. This was a national conference on deficit reduction.
The summation of the conference was given by the distinguished management consultant and financial adviser, Mr. W. D. Grace, who chaired the economic affairs committee. He concluded that the Government of Canada should immediately put a cap on spending at the current $103 billion, that there should be appointed a non-profit broad-based body to publicize the deficit to condition Canadians to the problem that is before us, the threat of the debt, and then evaluate and publicize all items of government spending. I believe that the Auditor General would be of great assistance in this regard.
I summarize the findings of the National Conference on Deficit Reduction held in Edmonton this week to indicate to friends, particularly friends opposite, that it is not a grinch budget that we have before us, but rather that a strong body of Canadians are calling for a further diminishing of the expectations of Canadians and what the Government of Canada does for them and to them.


Jean-Robert Gauthier: Mr. Speaker, in all fairness, my friend from Edmonton quoted a couple of articles from the Edmonton newspapers. I know he has read the poll that was done by the Edmonton Sun in Edmonton, of Edmontonians, and the verdict was that indeed the critic for the Liberal party won the debate hands down. Eighty-nine people said "yes", at least 50-some said "maybe, Mr. Wilson", and the others were not too sure.
I want him to be honest and fair with us and tell us that indeed the press does have this balanced view and approach to the news. As a former broadcaster I know he would want to be fair. Would he not agree with me that indeed the Liberal critic, The hon. member for Gloucester, indeed won that debate.

The Budget
I have a second question for him. He talked about fairness. He talked about sharing and the fact that this budget addresses the problem of sharing among Canadians. Will he explain to me how a poor person living in Edmonton, a poor person living in Alberta, or one living in Ontario differs from a poor person living in the maritimes? Is not poverty equal all over the country and should be addressed in terms of poverty levels, not whether you live in one province or the other?


James (Jim) Stewart Edwards: Mr. Speaker, I appreciate the questions of my friend opposite. In response to his second set of questions, the whole idea of tax reform as we have it before us now is designed to impact favourably on lower and middle-income Canadians. It is a demonstrable fact which no one, including the renowned Liberal finance critic, has been able to rebut. Canadians with an income of less than $30,000 will be better off after tax reform than before.
Insofar as Albertans are concerned, as the Minister of Finance indicated in the debate on Monday night, the manufacturers' sales tax siphoned $685 per Canadian, per Albertan, out of the province of Alberta. The goods and services tax will mean a net increase of $5 for the average Canadian out of Alberta. But in terms of economic growth, and this is what our Liberal friends forget, the tax reform measures moving from the MST to the GST are the greatest net benefit to the province of Alberta, with projected economic growth of just under 3 per cent as opposed to the national average of something under 2 per cent.
My friend refers to polls that were taken following the debate. I was not aware of the one he refers to but I would refer him to the one taken by K 97, another distinguished Edmonton medium, which found that 98 per cent of those who watched the debate found that they did not believe the Liberal finance critic. They did not believe him, let alone saying who won the debate.
Now, if you were to examine the Edmonton Convention Centre floor you would find that even the most distinguished caretaking and custodial staff have not been able to remove the gore of the Liberal finance critic from that floor.


George Albert Proud: Mr. Speaker, I am pleased at the opportunity to express my concerns regarding this budget.
Along with my colleagues I am honoured to represent in this House the voice of Canadians whose needs and concerns have been ignored by the government in its plans. When I look over this budget I see negative, regressive policies in almost every area. What really jumps off the page is the way that a supposedly national government is making the most vulnerable groups of Canadians bear the brunt of its mania to cut the deficit. These groups include veterans, women, natives and people who live in geographically and economically isolated regions of Canada.
The Minister of Finance is very fond of telling Canadians that we must all join in the effort to cut the deficit and the public debt. Average Canadians suffered under last year's budget and will continue to suffer under this year's budget as well as under other policies introduced by this government.
My colleagues on this side of the House have done a very thorough job of showing how this budget will hurt Canadians without doing much to help our deficit and debt situation, so I intend for a few minutes to discuss several areas of special concern to me and my constituents.
While all Canadians view the government's policies and plans apprehensively, Atlantic Canadians have even more reason to be suspicious of this government's action. In the weeks leading up to the 1990 budget we remembered how our region was hammered in last year's budget. Having given our pound of flesh last year we dared to hope that the government would make some attempt to help the Atlantic region as it enters an economic crisis of unprecedented proportions. I refer not only to the fisheries crisis, but also to our high unemployment level, to the effects that the base closures and reductions are already having on our economic growth, to the slashing of our rail services, to the changes to the unemployment insurance program and to the fundamental sense of alienation on the part of Atlantic Canadians. We feel this way because we have seen no evidence during the past year that the government cares about this region. The failure of the government to include an Atlantic aid package in this budget plus its continued neglect of regional development only deepens the feeling of anger and of alienation.
	
March 7, 1990

Last year's budget promised continued high levels of regional development spending, but what followed was cut-backs to the Atlantic Canada Opportunities Agency, which the government tried to disguise by stretching ACOA's mandate without allocating more funds. Having seen through this smokescreen one can understand why Atlantic Canadians are suspicious of the government's plans for the continuance of ACOA. The recent budget announced that ACOA grants would be eliminated and that ACOA would only provide loans in the future. This was unacceptable, since entrepreneurs in the region need the government's support in their endeavours more than their counterparts do in central Canada, for obvious reasons. So, the government modified slightly its harsh stance by announcing that changes will be made in ACOA's project funding criteria, which will allow it to provide grants in some cases and which will raise the ceiling for direct contributions to projects. This is a positive move. However, to prove that it has a firm commitment to Atlantic development, the government must stop sending out mixed signals. Regional development policy is fundamentally altered on a regular basis. It seems to follow a patchwork strategy and constant change means that the Atlantic business community is always having to second guess itself. This is hardly a sound regional development strategy.
Atlantic Canadians are receiving very clear signals that the government is abandoning our transportation infrastructure. First, the government killed VIA Rail which is vital to a region which needs affordable, accessible rail travel.
Now it starts to whittle away at Marine Atlantic, the Crown corporation which operates ferry services in Atlantic Canada. Marine Atlantic will lose over $9 million in the next two years, a move which will result in either reduced services or higher fees, neither of which is good for passengers or business in this region. Prince Edward Island's economy in particular will suffer from this decision.
Another step in the government's abandonment of the region's transportation infrastructure is the cut-back in small craft harbours. The program will lose $29 million over the next five years. As well, the budget announces that the government will: "implement alternative management and operational policies for existing harbours". Are we to infer that this means the privatization of small craft harbours or higher user fees for fishermen? This
The Budget
simply cannot be borne. Our communities are already under siege.
"Under siege" is a good way to describe how all Canadians feel about the budget cut-backs in Established Programs Financing which contributes to provincial health care and post-secondary education.
If a budget is a symbol of a government's priorities and values then this measure is a sad comment on the soul of this government. The finance minister's rallying cry that we must all help to fight the deficit takes on a whole new meaning. He means that deficit reduction will be carried on the backs of the young and the sick.
Let me add my voice to the chorus of outrage against this government's appalling lack of compassion and respect for veterans. It cannot be stressed enough that Canadians owe these men and women a debt which can never be fully repaid. They fought or were willing to fight for their country only to see now the government which claims to represent that country turn on them. In our time of need they were there. Where is the government in their time of need? The government plans to charge board and lodging to approximately 1,500 veterans under long term care and it will increase the rates for those already paying. The government carries this outrage one step further by eliminating the heavy housecleaning program that helped veterans live in their own homes. This government intends not only to deprive veterans of affordable long term care but of their dignity and independence as well. Having already fought for Canada, veterans should not be enlisted in the so-called war against the deficit.
All Canadians are questioning why they have been drafted to fight a war that they did not instigate. The Conservative government has had six years of economic growth and increasing revenues, but we have also had six years of Tory mismanagement of Canada's economy and finances. Now, as the country slides into a recession, we are hit with another bad news budget. The Tories will say it could have been worse, and Canadians shudder at the very thought.


Mr. Garth Turner (Halton-Peel):: Mr. Speaker, my hon. friend has raised many interesting points in his budget discourse. I have a comment and a question for him.

March 7, 1990
The Budget
The debt that the government inherited in 1984, roughly $170 billion, of course has suffered the evils of compound interest over the years, and about 80 per cent of the additional debt that has been added is due to that interest factor. The debt, as we all know, now stands at around $350 billion a year which is appalling by all our standards. To service that debt this year will take interest of roughly $41 billion.
As has been pointed out in this Chamber this afternoon, that money mostly will be paid to Canadians. It will mostly be paid to Canadians who hold Government of Canada bonds and treasury bills. Now, these are not in general poor Canadians. They are generally wealthy Canadians. They are wealthy investors who have had the extra money to invest in treasury bills and bonds.
It seems to me that this is a massive transfer of money from taxpayers to wealthy investors. I do not understand why the opposition members are not hollering about this amazing transfer of wealth from the have-nots to the haves. They keep saying the Tories are doing things for their rich friends. But this is wrong. This is bad social policy to be transferring tax money into the bank accounts of the wealthy.
Would my hon. friend not agree that this practice has to end quickly? If he does not accept the government's way of doing it, what is his alternative?


George Albert Proud: Mr. Speaker, I thank my hon. friend for his comments and questions. As we talk about ordinary Canadians and wealthy Canadians, there are many ordinary Canadians who buy Canada Savings Bonds, and pick up money in this way.
My concern about the whole deficit reduction plan in general is, as I have said in many, many speeches in this Chamber, that we have heard this hue and cry every day about deficit reduction. We hear about putting more debt onto the middle and low income people. I still have not got an answer to the question that I have raised so many times, about why, when we went through a period of five years of great economic growth where the government had billions of dollars in surplus funds, we are in this deficit situation today.
Why was it not at least taken care of at that time instead of letting it grow so that that transfer of money to wealthy Canadians continued on through that period?
I know that ordinary men and women out on that street, everybody, is concerned about this debt. We wish that we could wave the magic wand, but I am afraid that is not possible. We all have to suffer this burden and do everything we can to bring it down.
My question over the last number of months has been why greater concern was not paid to this from 1984 to 1989. Suddenly, through no fault of the government in particular, the economy is going into a tailspin. Now, at all costs, we have to do things that we should not be doing at this time in our lives. We should not be raising interest rates. We are into a tight economic situation and at the same time the poor are taxed even further because we have to reduce this deficit. I just cannot understand why it could not have been done earlier when times were better.


@Deputy Speaker: Questions and comments are now terminated. Debate. The hon. member for Winnipeg North.


Mr. Rey Pagtakhan (Winnipeg North):: Mr. Speaker, the annual statement of the Minister of Finance reflects the mind and the heart of the government of the day. In this context, budget '90 reflects to Canadians the lack of candour of this Tory government and the uncaring attitude with which it treats the most vulnerable members of our society.
Where, one may ask, is the evidence? I refer my hon. colleagues to the statement of the hon. Minister of Finance. Referring to the expenditure control plan of the government, he said:
In designing the measures we were sensitive to the financial circumstances of individual Canadians as well as governments. We have exempted major transfers to persons. These include elderly benefits, family allowances, veterans' allowances and unemployment insurance benefits.
The truth has to be fully said. This government has just finished hitting these programs this past year, and it has recently pushed through this House the clawbacks on baby bonuses and old age pensions and the unemployment insurance restrictions, despite great concerns raised by the Liberal opposition. Now this government has the gall to proclaim that it has exempted these benefits from the cuts in this year's incoming budget.
This is the first piece of evidence of the hypocrisy of this budget.
March 7, 1990

"There will be no new taxes in this budget", said the Minister of Finance. Does this government really think that Canadians can be made to believe that the GST which is becoming more properly known as the gouge and squeeze tax is not an inherent part of this proposed budget? All provincial governments have complained about this proposed tax measure. This government has responded by passing to the provinces the burden of greater expenditures to maintain their social programs at current levels. The provincial governments therefore face the unpleasant task of having to increase their own taxes. This is the second set of evidence of this government's hypocrisy.
Parenthetically, this government has in the last six years introduced an average of five different tax increases per year, now a total of 32 tax increases over this period of time.
The third piece of evidence for lack of candour on the part of this government is reflected in the action it took last December when it withdrew its promise to reduce the tax rate for middle income Canadians. On top of this the surtax was increased from 3 per cent to 5 per cent.
There are many more signs of this government's lack of candour. Due to the time constraints allotted to me, I can only discuss one more piece of evidence and it is very relevant to the question asked by my colleague from the government side to my colleague who just spoke before me.
The Tory government has portrayed the impact of our national public debt as though it entails the same burdens and dangers as the debts of private individuals and business companies, of provincial and municipal governments, and of a host of Third World developing countries.
The total national debt is not essentially the same as these other debts. Professor Ruben C. Bellan, an Emeritus Professor of Economics writing for Policy Options, issue of January-February, 1990, reminded us that only one of the categories of obligations comprising the total national debt truly corresponds to the types of debt I have alluded to above.
What are the facts? In 1988 the government paid the Bank of Canada $2,110 billion as interest on bonds it held. The bank, after taking into account its operating expenses for the year, handed over $1,938 billion back to
The Budget
the government. The government did not point out that it got back 92 per cent in revenue of the interest paid by the Bank of Canada.
The government also failed to point out that it collected a lot of revenue from the same Canadian public to whom it paid billions of dollars in interest on the bonds that Canadian taxpayers hold. They are not necessarily wealthy Canadians. A significant number of ordinary Canadians like to save with Canada Savings Bonds.
The Minister of Finance said:
This year alone interest payments will cost us close to $40 billion,
equal to $1,500 for each and every Canadian.
The minister failed to advise us that a significant component of this debt paid was returned to the government as revenues through the Bank of Canada or as taxes collected from Canadian bond holders. He failed to advise us that the government paid interest to non-Canadian residents on only 16 per cent of bonds denominated in Canadian dollars and that the debt owing to non-residents in 1988 which was payable in foreign currencies was only 4 per cent of the total national debt. Failure on the part of this government to fully disclose all essential financial information and analyses is tantamount to misleading the Canadian public, that is, that the total payment on interest are debts paid without corresponding government revenues.
In other words, the government magnified the fear in the belief that we could buy this budget even if it is a budgetary policy sans sensitivity and heart.
This government has used the absolute magnitude of the total national debt as an excuse to sell this heartless budget, invoking that ultimately we would not be able to pursue our social policies and programs.
As Professor Bellan points out, if one looks at the facts they contradict frequently made statements that the consequences of federal budget deficits are completely negative, "that they are responsible for high interest rates and inflation, that the government's borrowing to finance them 'crowds out' private borrowers from the country's capital markets."
The financial and fiscal history of Canada in recent times does not corroborate the assumptions of this government. The series of large deficits that has occurred since 1981 has been accompanied by a reduction in the Canadian rates of interest and inflation rate, and

March 7, 1990
The Budget
by increases in the amount of capital made available to the private sector by the country's financial institutions".
In fact, when the record is further considered, it becomes obvious that large deficits have not severely limited policy options. Professor Bellan has correctly pointed out that "Canada's national debt has increased 70-fold since 1939 and interest payments are now 200 times higher than what they were in that year. Yet, in 1939 the federal government did far less for Canadians than it does today." Indeed, today the government of our country maintains three major programs-unemployment insurance, family allowances, and medicare-that did not exist in 1939 and contributes far more to education and welfare.
Speaking of welfare and other forms of social assistance programs, this government has tried to excuse itself for capping the Canada Assistance Plan ceilings by saying that the cap only affects the three richest provinces.
Well, we know that the Canada Assistance Plan is the funding program for welfare payments and services to the poor and that half of Canada's poor live in those three richest provinces. Therefore, they stand to suffer, as correctly observed by Mr. Leonard Shiffrin of the Winnipeg Free Press, issue of March 1, 1990.
As you can see, Mr. Speaker, this government has not been fully candid with Canadians. Not only has the government not been candid, but it has conveniently excused itself to be a government without a heart. It has recently started to chip away at the universality of our social programs and now it has decided to start killing the one program that is completely targeted to the poor. The poor stand to suffer even more when they want to pursue further education and when they get ill.
The freeze on transfer payments in the proposed budget is another blow to Canadians. Three times since 1986 this government has imposed measures that have reined in Established Programs Financing.
If this trend continues, if this Tory government continues its assault on transfer payments to provinces, Ottawa will cease to pay a single penny for medicare in any of the 10 provinces by the end of this decade. When this happens, medicare as we know and cherish it today, will be dead and each province will have its own different health scheme. In each province the system will become
segregated, much like it is in the United States. For the rich there will be a first-class private system. For the poor there will be inefficient, underfunded, overcrowded health care system.
Ten years ago the federal government paid for 51 per cent of the cost of medicare in Ontario. Under this government, it is now 37 per cent. After this new budget, this percentage will continue to decrease.
Transfer payments from Ottawa for my home province of Manitoba are depended upon for 38 per cent of its revenues. While health programs have been increasing between 7 and 9 per cent per year, the transfer payments which cover this vital program have not been increasing at this rate.


Peter Andrew Stewart Milliken: Mr. Speaker, I want to commend the hon. member for Winnipeg North on his excellent speech. One of the things I know he has listened to this afternoon is a lot of talk about how popular the goods and services tax is becoming in Alberta. In his province, in spite of the Minister of Finance's protestations that there are no tax increases in this budget, the people of Manitoba, I have no doubt, are awaiting with dread the imposition of the goods and services tax this government has proposed.
I am sure he will have read in the Supplementary Estimates C, that were tabled by the President of the Treasury Board earlier today, that the Department of National Revenue is requesting authorization from Parliament to spend an additional $100 million, $82 million of which is for the Customs and Excise branch. I assume, although I have not got the details of these expenditures, of course, that these are to pay for the tax police to administer the goods and services tax and to pay for the additional office space required by these tax police so they can exercise their functions, gouging and screwing this money out of the Canadian people.
I noticed that the Department of Thxation is getting an extra $20 million. I assume that is for more tax police there.
Are these measures ones that are popular in Winnipeg North?


Rey D. Pagtakhan: Mr. Speaker, I would like to thank my colleague for the comments. Certainly, the constituents of Winnipeg North are adamantly opposed to the GST.
March 7, 1990

In fact, it is popularly known in my constituency as the gouge and squeeze tax.
I would like to point out to my hon. colleague and particularly to the opposite side that the real danger in this budget, which has failed to claim that the GST is part of its underpinning, lies not so much in the numbers that are now threatening most of our social programs, but in the trend it establishes. That is not my original view. It was the informed opinion of The Citizen in the February, 21, 1990 issue.
I have just learned from the Estimates today, if I can follow the comment of my colleague, that the proposed budget wants to cut about $2.5 and $1.75 million from the National Health Research and Development Program and from the Child Care Initiative Fund. These are programs involved in securing funds for AIDS, for natives, for alcohol, drug and sexual abuse programs, programs for seniors and children, and those directed against family violence. It demonstrates that this government has misplaced priorities. The first to suffer will be the most vulnerable sector of our country.
If I may conclude, Mr. Speaker, if this government really cared about Canadians it would not be decapitating fundamental programs for the sick, the poor, the homeless, the natives, the seniors and the students. Instead, it would be candid with Canadians about the full meaning of our total national debt. It would not exaggerate the burden of interest payments and high inflation and use it as an excuse. Instead, it should institute stimulative fiscal polices that will guarantee the well-being of Canadians today and tomorrow.


Joseph Frank (Joe) Fontana: Mr. Speaker, my friend and colleague, the associate critic on health for our party, said something very important and I think it bears repeating. Perhaps if he has a minute or so he could essentially explain and expand on his statement that he feels that universal health care, as we know it in this country, may very well be in peril because of what has happened with respect to the reduction in transfer payments to the provinces.


Rey D. Pagtakhan: Mr. Speaker, I thank my colleague for his pointed question. The Minister of Finance on several occasions has said: "We have only cut, we have not decreased". In Manitoba, in this current 1989-1990
The Budget
budget, there has been a decrease of at least $3 million in the total budget for transfer payments.
Ms. Frances Russell, a learned columnist of the Winnipeg Free Press, has estimated that if we continue this trend by the end of this decade there will be no more universal publicly funded non-profit medicare. So I would say that if this current trend continues this government is signing the death certificate of medicare.


The Acting Speaker (Mr. Paproski):: On a point of order, the hon. whip for the New Democratic Party.


Iain Francis Angus: Mr. Speaker, as you will know, yesterday in this House, by consent, my colleague the member for Regina-Lumsden, accommodated a minister of the Crown by reversing the speaking order. It is a common courtesy that is extended in this House from time to time.
I am advised that in the rotation today inadvertently we may have been deprived of our normal speaking position. It is my understanding that there have been three members of the government and three members of the Liberals speaking in order and we had assumed, quite frankly, that the member for Comox-Albemi would be the next speaker for us and he had planned accordingly.


The Acting Speaker (Mr. Paproski):: I have already talked to the hon. member for Comox-Albemi. I mentioned to him that the way the rotation is today we recognized two members of the Conservative party for 10-minute speeches and two from the Liberal party. Now that the Associate Defence Minister is here she is going to be recognized and then I will go to the hon. member for Comox-Alberni.
Yesterday I was very lenient with the hon. member for Regina-Lumsden too. He got about 28 or 29 minutes for his speech, talking about leniency. The Chair is trying to be lenient with everybody in the House, particularly with the opposition. The Associate Minister of National Defence.


Hon. Mary Collins (Associate Minister of National Defence and Minister responsible for Status of Women):: Mr. Speaker, I appreciate this opportunity to share my views on the government's recent budget. As Associate Minister of National Defence I am going to speak briefly about the budget and Canada's Armed Forces. But first I would like to discuss the budget as it affects Canadian

March 7, 1990
The Budget
women in my role as minister responsible for the status of women.
The government has made a very clear commitment to the women of Canada since it was first elected in 1984. We have honoured this commitment, not just in promises but with real and substantial action.
Since 1984, the number of women in decision-making positions in commissions and agencies of the federal government has increased by 100 per cent. We have set in place a plan for equal pay for work of equal value in the federal Public Service and we have improved the pension benefits for Canadian women.
When we were first elected there were only three women deputy ministers. Today there are 21. Prior to our first election there were fewer than four women ambassadors. Today there are 13. Back then, in the old days, there was only one woman out of the nine on the Supreme Court. Today there are three.
The changes for Canadian women go even further. There has been a decrease of about 757,000 Canadians living in poverty since this government has been in office. This number includes 229,000 women and 259,000 children.
On the job creation side, 61 per cent of the new jobs that have been created have gone to women, a higher ratio than the average entering the workforce. This government improved job training for women to the Canadian Jobs Strategy. We have introduced a $25 million program for immigrant women and improved child tax credits for low-income families.
In 1986, we introduced employment equity legislation, and I sat on that committee. In 1988, we introduced for the first time a $40 million special program initiative to deal with family violence, an issue which causes me a great deal of distress, as I know it does colleagues on all sides of the House.
I am now one of six women in the federal cabinet, when we were first elected there were only two. For the first time in Canadian history there is a woman Minister of Justice and Attorney General of Canada and I congratulate my colleague, the hon. member for Vancouver Centre.
This government has not neglected the women of Canada. In fact, we plan to do even more and we will do more.
While we must continue to address the needs and rights of Canadian women, we also must address the threat of a large and growing national debt. It must be brought under control if we, as a country, want to continue to grow and prosper. We must continue to reduce the deficit if we are to build a secure future for all Canadians, men and women.
We all know that deficit reduction is not without its pains. All Canadians are contributing to this national effort in order that we secure our economic future. To achieve a lower deficit we need to build a new national partnership that works with an economic agenda and a plan for the future. This budget is part of such a strategy.
A lower deficit means lower inflation, lower interest rates and less of a debt burden. A lower deficit also means we will have more flexibility to make choices about our priorities as Canadians. We will not be bogged down by that debt. For example, we will be able to invest in new programs for the environment, for regional development, for the advancement of women or to lower taxes.
Reducing the deficit is part of a long-term economic plan that is building a stronger and a more competitive economy which is essential for the advancement of women and for their equality.
Canadians have told this government that they want spending cuts. I know my constituents have, as I know they have across the country. We have listened to those Canadians and we have acted on their wishes. In fact, to date, 70 per cent of our deficit reduction has been on the spending side.
As well, as part of the strategy and part of this year's budget, some $1.6 million has been cut from the women's program budget of the Secretary of State. I want to clarify that. Although it is in my colleague's budget I am concerned and involved in that issue.
Some people have said that this will mean the closure of women's centres across the country. I want to make it clear that this government is not closing women's centre. The women's program was not designed to provide funding for social services. That, in effect, is what has happened in certain parts of the country where federal government funding from the Secretary of State has, in effect, been used for the provision of social services, a responsibility, I think we all recognize, of the province.
March 7, 1990

So we have to find new partnerships and assist these centres, where they are providing essential services which are not otherwise available in communities, to continue to work with their local communities in partnership with provincial governments and other sources. In fact, the women's program will work with these centres to help them find other sources of funding.
Under the women's program, under the project funding, there will be increased funds and it is expected that well over 500 projects can be funded, a number of which will obviously be delivered by women's centres. In fact, some of the women's centres in Canada have operated purely on project funding. Other women's centres in Canada have not indeed received any federal funding but have received their support from other levels of government and from the community.
I also want to make it clear that we are not sacrificing local groups at the expense of others. National funding, for example, is not gaining at the expense of local. In fact, four of the national groups have had their core funding discontinued which is in line with the policy to move away from core funding and supporting project funding which requires, of course, accountability for the individual projects.
In addition, the Secretary of State will be redeploying core funding to project funding by reducing four other national groups' budgets by 20 per cent. This redeployment will enable their program to respond to the needs of the most disadvantaged women's groups across the country. When we talk about those we think of the aboriginal women, the new immigrants, the visible minority women and the disabled women, those who really are at a disadvantage and who obviously need the focus of attention the most.
In addition, I am sure that you are aware, Mr. Speaker, that this government continues to support the work of the Canadian Advisory Council on the Status of Women, which will be reporting to me, in order that they continue their research, their advice and their advocacy role.
It is worth noting that even after the reductions to the women's program by the Secretary of State, there will be $9.6 million in that program, which is a considerable
The Budget
amount of money and certainly more money than existed when we took office in 1984. It is well over the $8.4 million available at that time. With this money my colleague says that he will be able to support over 500 projects focusing on areas of family violence, economic equality and social justice.
In spite of these cuts, and we know that all areas of government have to participate in this, this government remains committed to the women who need help the most-women who have the double disadvantage of being immigrants, members of visible minorities, women with disabilities and aboriginal women. Those programs in the Department of the Secretary of State remain and some, in fact, have increased funding and will be able to assist, either through women's centres or other programs, work and projects for women in those groups.
We are also committed to ending violence against women, or working towards that. I am not sure we could ever say we can end violence in our society, but we obviously have to work in assisting those women who are victims of violence and work towards eradicating the causes as well.
The reduction in the women's program will not affect our participation in the government-wide initiative to address family violence. These initiatives, led by Health and Welfare Canada, along with five other participating departments, represent a commitment of $40 million over five years by this government. Of this initiative, the Canada Mortgage and Housing Corporation has $22.2 million for capital funding of 500 shelter units.
I can assure the House that this government will continue to support and address the needs of all Canadian women. There are other areas that we will look to in my new areas of responsibility. I will work with my colleagues to identify and address those issues and initiatives that we can move forward with to ensure that women work towards, not only full equality but independence and self-sufficiency in our society. That, I think, is a goal that we all, men and women, share together.
I also have responsibilities with another department and I will move on to that. I would like to spend a few minutes talking about the 1990 budget as it relates to the the Department of National Defence. We now find

March 7, 1990
The Budget
ourselves in a world which is very different from that which we knew a few short years ago or even a few months ago. As a result of the dramatic changes in Europe and the fiscal restraints here at home, we are conducting a review of our current defence policy to ensure that this policy and our program remain sound. The very positive nature of the changes in Europe allow us to take the necessary time to ensure that this review will be thorough and ultimately in the best interests of Canada.
Canada welcomes the prospect of a free and democratic Europe, where the possibility of war, we hope, will be virtually eliminated. This prospect is what we and our allies have been working toward for nearly 50 years. Its development is a tribute in part to the collective efforts of the individual countries of NATO and the members of their armed forces. Canadian servicemen and servicewomen, as well as the civilian employees of DND, should be proud of their contribution to this process.
In our defence policy review, we will examine how we can best fulfil Canada's defence needs in light of our current fiscal realities and in the ever changing international situation.
Needless to say, this review will prove to be a complex process during such a tumultuous time and it is too early to speculate on its outcome. However, I can say that its purpose is to ensure a realistic mandate for the Canadian forces and the resources to do the job.
Obviously we have our work cut out for us. We must reconcile the present fiscal restraints with the still pressing task of reducing the gap between the military commitments and our capabilities in these rapidly changing times.
We are committed to protecting Canada's interests, namely, to contribute to collective security and defence and to play a key role in international peacekeeping. In this role I think not only Canadians but people around the world have recognized the tremendous impact that we have had and the contribution that we make.
As the world changes, so does Canadian society and so must the Canadian forces. Such changes are often difficult but unavoidable.
The Canadian forces are redefining their place in Canadian society and it remains our job to make Canadians understand the crucial role that they will continue to play in the protection of these interests.
I see the maintenance and protection of Canada's interests as a key role for DND. Part of that key role perhaps goes beyond what Canadians traditionally think of when they think of defence.
We need to protect our resources and our territorial integrity.
We must inform Canadians about the role of defence in maintaining our interests.
We must explain to Canadians not just what we are doing now, but what needs to be done and DND's importance in establishing and maintaining sovereignty over the second largest country in the world.
The protection of Canada and Canadians goes beyond boundary patrols. DND must also become more involved in the war on drugs in this country.
The Department of National Defence is committed to doing its part to aid other departments of government in the interdiction of drug traffickers. We are working with the RCMP to track unauthorized or suspicious vessels and aircraft.
In addition, DND has become more involved in protecting our environment.
In 1989, when the forest fires raged through Manitoba, the Canadian forces airlifted close to 6,000 Canadians out of threatened areas within a matter of days. We could say that thousands of lives may indeed have been saved by DND personnel through this initiative.
DND is able to respond to situations like this because we have the equipment and skills to provide security to our country and our citizens.
Now, more than ever, Canadians must come to understand that national defence can and does affect their lives in many positive ways. DND is not and never has been a one-dimensional institution.
Prior to the finance minister's budget there has been a great deal of speculation about the impact of the 1990 federal budget on the Canadian Armed Forces. Some had said that the government had planned to cut our money, affecting upwards of 15,000 members. Others had said that we should reduce or eliminate our resources in Europe. These people were wrong. At this

March 7, 1990

crucial time when our department and our armed forces are being asked to become more flexible and more involved in a wider variety of activities, it would be unwise to allow our numbers to be cut back below a minimum level.
In brief, the defence budget will be reduced by $210 million in this fiscal year and a further $270 million in the following year.
These budget cuts mean that increases in defence spending over the next two years will be limited to 5 per cent, and with inflation currently at the level of more than 5 per cent we will not enjoy real growth but will merely hold the line against inflation in the coming years. Some have called for much deeper cuts. Quite simply, Canada still only spends about 2 per cent of its GNP on defence, compared for example, to the United States which spends about 6 per cent.
There is also a new buzzword in the air; the "peace dividend". Canada has enjoyed this dividend during the past decades, but more dramatically when defence bore the brunt of the government's deficit reduction in April of last year with a $2.74 billion reduction over five years. In fact, when combined with this year's reductions, we have suffered a cut of $3.4 billion over that period.
Canada simply does not have the flexibility which some of our allies enjoy, without seriously damaging the operational effectiveness of the Canadian forces. Yet, we have been able to act in, I think, a responsible fashion to the current fiscal demands.
There will be a reduction of about 1,500 in the size of the regular forces over the next few years. The size of the national Defence quarters will be scaled down and we will reduce our defence liaison staffs in London, England, and in Washington. In addition, reductions in the size of the DND civilian workforce can be expected. No further base closures are expected and capital projects currently under way will likely proceed. But in any future scenario the replacement of equipment for the Canadian forces must remain a high priority.
I would like to remind the House that this government is not prepared to place our sovereignty or security at risk. The current and projected defence budgets represent what this government believes is the essential
The Budget
minimum necessary to safeguard Canada's vital interests.
I would like to say a word as well about the reserves who are such a vital part of this role. We still intend to increase their numbers, improve their equipment and training, assign them to essential and specific tasks and continue to reduce the disparities between the regular and the reserve forces.
We all have a role in helping to resolve the deficit. This government has taken tough but decisive actions. The measures we have taken reflect the seriousness of the situations. We have acted in a responsible fashion.
This budget will build on the achievements of the past five and a half years by working to ensure a more prosperous and secure future for all Canadians. As we achieve more control we will gain greater flexibility and independence of action to act on priorities.
Reducing the deficit will ease the inflationary pressures and create the climate for lower interest rates. This, in turn, will reduce our reliance on foreign investors and strengthen our sovereignty as a nation. The direct results of these actions will be a healthier fiscal position, a healthier economy.
This budget will cut the deficit by half by 1993-1994. It will put the country on a clear path of substantially reducing the burden of debt. Solving our deficit and our inflation problems now will let us build for a secure and rewarding future. It will mean a responsible government with the financial room to manoeuvre, to maintain valued programs and take on new challenges. It will mean a dynamic economy that provides rising living standards and new opportunities.
This budget will mean a confident country that is competitive abroad and in control of its own destiny at home.


Mrs. Maheu:: Mr. Speaker, I listened to the last part of the minister's speech. If I may ask you to depart somewhat from your role at National Defence and make a connection with your responsibility for the Status of Women, when considering the budget cuts, how do you perceive the future role of women within our armed forces, at National Defence? Will they go back to office work? Will your budget cuts affect those who entered the armed forces most recently, including women? How do

March 7, 1990
The Budget
you think women will perceive of your dedication to promoting their status in our armed forces?
As you may have suspected, I am thinking of what happened out West when you congratulated another cabinet minister on his extremely degrading comments about one of our colleagues in the House of Commons. How do you expect Canadian women employed in the armed forces to count on your support, considering budget cuts totalling several million dollars and your comments in Western Canada about the Minister for International Trade?


Mary Collins: Mr. Speaker, I appreciate the opportunity to respond to what I think is a very important issue and one that I have in just over the past year been very much involved in, that is promoting the role of women within our armed forces.
As the member may be aware, a number of trials had taken place over the previous years to work at integrating women into all roles and occupations in the armed forces. Prior to that time women had been excluded from many trades and occupations because they were said to be non-combative and that women could not do those jobs. That work had been proceeding and there had been actions taken before the Canadian Human Rights Tribunal and the decision of the Canadian Human Rights Tribunal last February was that all trades and occupations should be open to women.
I fully supported that decision and, as you know, the government accepted that decision and said we will proceed with its implementation. I am really pleased to see what is developing within the armed forces. It is not easy because there are areas where women have never been involved before. But I look, for example, at the air force. We have the first two women fighter pilots. I think they are the only ones in the world. We have women in all areas of the air force, even as helicopter pilots. As I go across the country and speak to them, they basically are saying that it is really working well. They are not being discriminated against. They really feel they can aspire now to the highest positions.
Within the navy we face some challenges. There were some real concerns about how it would work with women being on ships and away for perhaps 30 days. There were
concerns for the families back at home as well. We have addressed those. We have tried to concentrate on building up enough women on any ship. Having just one woman on a ship would make it very difficult. We will convert ships slowly and that is working out very well.
Within the army, women are now applying for and being accepted in all the trades and occupations. There are some difficulties in the infantry. We have had a number of women apply who have gone to training and have either dropped out of training or have not been successful. It is an extremely physically demanding occupation. I have been out in the field and it is very strenuous. Many women really do not want that kind of work but some are succeeding. It is going to be important to build up enough of a mass in order that we can really address those issues.
Several months ago I appointed a minister's advisory board on the integration of women in the armed forces. It is made up of very excellent men and women from across the country who will be monitoring the integration of women and advising me on what is happening and if there are problems so that we can make sure that this fully works. We have one of the few armed forces in the world that is actually doing this and many other countries are watching us. So I am very excited by this.
In addition, we have to recognize the special problems and the family responsibilities that many women have. I convened a conference several weeks ago on social issues and the Canadian defence. It is very important for an organization such as ours, the largest government department,-we impact the lives of several hundred thousand people-to really be aware of what the social issues are, the social change that is occurring in society and how we as an organization can be ahead of the game, whether it is family issues, technology issues, or the role of women.
We brought together academics, business people, military people, all sectors. The whole process was very exciting. I see it as the beginning of a process to influence and sensitize our people and other people about what we can do as an organization. I hope that as an organization we are going to be in the very forefront in many of these areas.
March 7, 1990


Ms. Dawn Black (New Westminster-Burnaby):: Mr. Speaker, I offer my congratulations to the new minister who is responsible for the status of women. It is the first time she has spoken in the House under her new responsibility and I welcome her to that role. I know that we will be working closely together and I shall have a number of questions for her.
The recent budget is a real attack on women. This budget has cut the funding by 100 per cent to almost 80 women's centres across Canada. These women's centres are often the first place a women turns to, a woman who has been battered in her home, a woman who has been sexually assaulted on the street, a woman who has been sexually assaulted in her home. Often the first place they go to is a women's centre. They go to these women's centres because there are dedicated volunteers who have worked in the community, who have correlated information on support services, information on transition homes, and information on counselling services. This is where most often an abused woman will turn to find out what resources are available to her in her community. It is a big step when that woman makes that break through into a woman's centre. Now many of these centres are going to close because of the draconian measures of this government in its budget.
One out of every two women who turns up at a transition home today is turned away because of lack of space. The minister spoke about Project Haven and spoke about the commitment of this government to battered and abused women. But we know that already one out of every two women has the door shut to them when they turn up there, sometimes with their children, looking for sanctuary.
At the same time, this government has increased the budget by $33 million to CSIS. It has increased the budget by $114 million relating to the minister's other responsibility to the Canadian Armed Forces in Europe, at a time when the Berlin Wall is crumbling, at a time when eastern European countries are looking to a more democratic way of life.
I would like to ask the minister how she can justify her position as minister responsible for the status of women in the light of what this government is doing to women? This government is trying to muzzle women. This government has its foot on their throats, and wants to shut women up. How does the minister justifies her role in
The Budget
that government and in that cabinet that is silencing the voices of women?


The Acting Speaker (Mr. Paproski):: The hon. minister has only two minutes to answer the question.


Mary Collins: Mr. Speaker, I would like to thank the hon. member for her good wishes. I know we will have differences of opinion but I think there are many of these issues we are dealing with that are not really partisan issues. I hope men and women in all parts of this Chamber do care about them and that we can work together. I know particularly on the concerns of women we do share that real concern.
First, I would like to say to the hon. member, because perhaps there is misunderstanding in some areas, that the budgets of the transition houses are not affected by the recent changes in the budget. What is affected is the core funding to the women's centre, which was designed under that program for education and advocacy work. I recognize what happened over the years is that some of them obviously get involved in providing service.
Perhaps this is a good time to make the recognition that the Secretary of State does not have the money to do that. That is not his mandate. His mandate was advocacy, and I think that advocacy has worked very well.
The mandate for looking after and providing services, whether it is counselling or support services for women is the responsibility of a broader group of other levels of government and other programs. We should be addressing those, not just through the Secretary of State's budget, because it does not have those kinds of resources. That, indeed, if I can say to the hon. member, is where we are going to be working with our colleagues at the provincial level, and with colleagues from other departments.
As I mentioned earlier, the family violence fund is there. We will be looking at resources through that. We are looking through other resources in the Secretary of State's department to assist aboriginal and visible minority women.
Could I also say to the hon. member that it has been said there are 77 women centres affected by these reductions. I think approximately 44 of those are in Quebec where the amount of money that is provided by the federal Secretary of State is a very nominal amount of money. It varies $6,000 to $8,000. It does not mean

March 7, 1990
The Budget
that they will close because most of their resources come from other sources.
In British Columbia and Newfoundland, where the primary resources have come from the federal government and the provinces have not been participating to date, we obviously have to look for new partnerships to ensure the provision of services to women, whether it is through women's centres or whether it is through other agencies and communities. This provides us an opportunity to look at these issues. I have been concerned that quite often it has only been poor women who have been looking at these issues. We need to get a lot more women involved and they are going to get my help. I can tell you the women are going to get my commitment to help with these problems and I ask for your support.


@Deputy Speaker: I regret the hon. minister's time has expired. Resuming debate with the hon. member for Comox-Albemi.


Robert Evans Skelly: Mr. Speaker, as it works out, I am very pleased to follow the Associate Minister of Defence in this debate on the budget.
When you look through the concerns that are facing Canada today, I think if you polled Canadians, you would find that 100 per cent of the people in Canada are concerned about the budget. They are concerned about the deficit that this country is facing and what the implications of that deficit are, both for ourselves operating in the present and for our children in the future. What is going to be the future for them if they have to bear the tremendous weight of this deficit that has been built up over a series of governments right through the 1960s, 1970s and 1980s.
In facing the issue of the deficit, we realize on this side of the House, as do members on the government side, that there are basically three alternatives that the minister can take in order to deal with the deficit. He can raise taxes.


Peter Andrew Stewart Milliken: Which he has done 31 times.


Robert Evans Skelly: The Tories definitely know how to raise taxes. My colleague says they have raised taxes 31 times.


Mr. Larrivee:: To pay their debt.


Robert Evans Skelly: I was always under the impression that when you took over a house and took
over the mortgage, it is now your debt, and you are the one with the responsibility for paying the debt. You assumed the mortgage. You have the responsibility, you have the power, and you are supposed to be developing the programs. It is too late to blame the Liberals. We all know that they were at fault in the previous government. You guys are at fault now and you have the responsibility for dealing with the issue now.
You have raised taxes. Thirty-one times since 1984 this Tory government has raised taxes. I will tell you, Mr. Speaker, from the point of view of the people on this side of the House, there are no further opportunities to raise taxes on the poor and the middle income people in this country.
I am not saying that there is no opportunity to raise taxes, because there are those who, over the last five or six years, as a result of the Tory preference for raising taxes on the poor and middle income people, have escaped taxes altogether.
The wealthiest people in this country, the highest income earners in this country, have actually received a $1,000 dividend on their taxes from this Tory government since 1984. Why is it that the rich get paid and the poor pay more under a Tory government. It is because it is a Tory government.
The other group that got away with paying taxes over the last several years from 1984 until 1990 is those 80,000 to 90,000 profitable corporations, some of the ones that were mentioned by my colleague from Nickel Belt this morning as the top award-winning corporate welfare bums. In spite of the fact that they make profits, in spite of the fact that they do very well, thank you very much, as a result of the tax relief that they are granted, they end up paying no tax at all. As a result, the tax burden in this country is not distributed fairly and a large section of the income earning population of Canada, which has the ability to pay sufficient taxes to help pay down that deficit, is not paying their share. That is why we have such a serious deficit problem in this country.
The other thing that could be done in order to trim the deficit is to cut expenditures. The minister who just spoke is an example of an area of the Canadian government where we can cut expenditures. We all have to take a little bit of the pain when we are talking about

expenditure cuts. In this budget, not everybody is sharing the pain equally.
We had a legitimate right to believe that there was going to be a peace dividend as a result of the reductions in tensions in eastern Europe. Even in the United States and in other of our NATO allies, people are looking at the opportunity for this peace dividend to re-orient their economy, and reduce the heavy expenditures. After all, the expenditure to maintain the defence component of NATO is $957 billion annually. A small percentage of that expenditure would wipe out poverty in Canada this year. A small percentage of that expenditure would wipe out some of the most serious diseases plaguing people on this globe that result in thousands of children dying every single day of starvation and diseases like dysentery which is caused by poor food and water supplies, or the lack of food and water supplies.
With $957 billion our defence system could take a very small percentage of that cut, reallocate it towards other programs, towards helping our children, towards eliminating poverty, towards providing the services that my colleague for New Westminster-Coquitlam was talking about. We could have done a great service to the people of Canada had we taken advantage of that defence dividend in this year, without undermining the effectiveness of our armed forces in doing the things that our armed forces should be doing, and that is protecting Canadian sovereignty, cleaning up the problems of the environment that have been created in Canada, and using our forces deployed internationally at the behest of the United Nations for preserving peace throughout the world and further creating, as a result of that investment in defence forces, an additional peace dividend that we could reap again at home to re-invest in social programs.
One of the ways to deal with this deficit is raise taxes on those who have not been bearing the burden all along. The second way to deal with the deficit is to take advantage of that peace dividend and cut some of the programs that we no longer need as a result of the changes world-wide. The third way to deal with this deficit, and this was an option available to the Minister of Finance, was a gradual reduction in the interest rates that are established in this country. Everybody in this Chamber recognizes that interest rates are far too high. They are stifling our economy. They are making it impossible for people of modest means to buy housing.
The Budget
As a result, it is a serious problem in economic development at home. We need a reduction in interest rates.
In the weeks leading up to the announcement in the budget, I think that a scam was perpetrated on this country by the Minister of Finance, the Prime Minister and by the Conservative Government of Canada. I will tell you what the scam was. I think it was based on a number of planted stories and a number of actions by government which led Canadians to believe that the burden of deficit cutting was going to be shared equally among all sectors of the Canadian economy and among all sectors of Canadian society. That is precisely what has not happened in this budget.
Let me tell you what the scam amounted to, Mr. Speaker. First, there were the planted stories. You will recall the series in The Globe and Mail and in other newspapers, the interviews with military officers at the Canadian Forces Base at Lahr, interviews with students at the military and officer colleges, interviews with members of the general staff who expressed their concern and uncertainty about what was going to happen to the Canadian Armed Forces in the future, and how they were going to fulfil their role after all the cuts they had taken in the past. That planted story seemed to indicate, and left Canadians with the impression, that the military was going to share its burden in terms of cuts in order to attack the deficit. That was not the case.
The other story that was planted, was the story about the Canadian Manufacturers' Association and the Business Council on National Issues attending public meetings and making statements that, yes, business has to take its fair share and bear its share of the burden in terms of cutting the deficit. Some editorialists even suggested that this was a self-sacrificing attitude on the part of the Business Council on National Issues-it would have been the first demonstration of such an attitude-and on the part of the Canadian Manufacturers' Association. In fact, nothing was further from the truth. The Canadian Manufacturers' Association and the Business Council on National Issues said that that grants to businesses should be cut or should be converted to repayable loans.
The biggest draw on our resources and on the taxpayer's resources, is not grants to small businesses, the most innovative, employment intensive, product developing businesses in our economy. The biggest drain on the resources of the Dominion of Canada and its exchequer is the drain of the tax expenditures to huge corporations with absolutely no productive results in terms of increased employment or increased economic and indus-

March 7, 1990
The Budget
trial capacity. That has been identified, even by the Nielsen report, as the biggest drain on the resources of this country. Every member on the other side knows that is one series of expenditures that was never touched by the government in this budget. As a result, that group of people, the largest, wealthiest corporations in our society, in our country, do not pay their share. As my colleague from Nickel Belt pointed out, they do not pay any taxes at all in terms of 80,000 to 90,000 of those corporations.
What the people of Canada were looking for in terms of this budget was a little fairness in spreading the burden of that deficit equally among all people in society.
The women's centres in Port Albemi in my riding and in Courtenay will shut their doors on April 30. Courtenay has already shut down now, because the staff does not have time to help women because they are out trying to raise money. In Port Albemi, they are going to be shutting their doors on April 30.
The women's centre in Port Albemi received a generous grant from the federal government of $26,000 a year. Its contribution to fighting the deficit was 100 per cent of that grant.
As my colleague, the leader of the NDP pointed out yesterday, Fletcher Challenge, a major forest company operator in British Columbia, paid zero taxes. What is its contribution to the deficit? As my friend from Nickel Belt pointed out, Hees International, a very profitable corporation, paid zero taxes. What is its contribution to the deficit?
Those were simply planted stories that implied that the defence department was going to be paying its share. It was a planted story that implied that big business was going to be paying its share. Guess what? Those folks did nothing to shoulder their share of the burden of that deficit.
The most cynical scam that was perpetrated on the people of Canada was done by the Minister of Finance between January 11 and January 18 when he dumped the interest rate in Canada by about 29 basis points. I think
he did it on purpose. His purpose in doing that was to panic the currency markets in order to suggest to Canadians that if we reduced interest rates it was going to result in a problem of a declining dollar and serious problems with our currency.
Why did he dump the interest rates at 29 basis points all at one go? If the minister had adopted a more gradualist approach, he could have lowered interest rates by the same amount and more without disturbing the currency markets, without giving them the sense that there was going to be a free fall in interest rates and a free fall in the Canadian dollar which would have created problems with our trading partners, especially in the United States which reacts poorly to a low Canadian dollar. Why did the minister do it? I think it was an attempt to deceive Canadians into believing that interest rates could not be reduced by dumping them all at once instead of taking a more gradualist approach.
Having perpetrated those three scams on the people of Canada, the minister then brought in his budget. It was a very deceptive kind of budget. Having set the stage through those planted stories and through interest rate drive, the minister then tried to imply to Canadians that we were all going to bear the burden equally. But in fact some bore the burden more harshly than others.
I would like to talk for a moment about the budget of the Secretary of State and how it relates in particular to aboriginal organizations. The government has not been too happy with aboriginal organizations over the last little while because they see the impact of federal Conservative policies on their people. Mr. Speaker, you and I know that aboriginal organizations represent some of the poorest of the poor people in Canada, some of the most disenfranchised and powerless people in Canada, people who have a claim under our Constitution for recognition of the role that they played in the development and the history of this country, and they are not recognized in that Constitution. They are people with a legitimate case of unfinished business that needs to be negotiated with this country.
Over the years, the Prime Minister has recognized that, the Parliament of Canada has recognized that, but in this budget the government has put an end to its recognition and support for aboriginal organizations in Canada. Essentially, the government is implementing

the Buffalo Jump provisions of the Nielsen report that was brought down in 1985. The government is saying that native Indians and aboriginal groups are no longer entitled to the support of the Canadian people, that they are going to have to go it on their own, and as far as this government is concerned the policy with respect to aboriginal people is integration, assimilation and cultural annihilation. That is the policy of this government with respect to Indian people.
How do you do it? First of all you wipe out their leadership. In that same Secretary of State's budget that eliminated 100 per cent of some of the women's centre core funding across Canada including two in my riding, the budget of the Assembly of First Nations, the leadership organization of the status Indians of Canada, was wiped out to the tune of 100 per cent. Was there any consultation in advance? No consultation. Was there any discussion in the words of the Associate Minister of Defence in terms of generating new partnerships for fund raising? No discussion about new partnerships. Was there any discussion about getting project moneys, even though you do not have the core funds to operate an office or hire the people? There was no discussion.
The Prime Minister made a promise on April 18,1985, denying the Buffalo Jump document was government policy and saying that he intended to carry on an important relationship with native people and that there would be no cuts in funding without prior consultation. Were any of the promises of the Prime Minister kept? Absolutely not one of those promises was kept. This was a direct attack racially motivated against the native people of Canada.
In the Secretary of State's budget, what is the excuse that the government has for cutting all of the funding of native print media, about $3.4 million? As the clock ticks, that is the interest on our debt. How can these people possibly be accused of contributing to the deficit? With $3.4 million, they employ 108 people who will end up on unemployment insurance as long as it exists and then on welfare. These people have been trained as a result of their journalism experience as journalists, reporters, printers and other technicians involved in that trade.
The Budget
In the native broadcast media as well, people will end up out of work and programming will be cut back. All of the work that these people have done to improve native literacy, to protect native languages and to communicate between native society and Canada's society as a whole in order to reduce racial tensions and increase tolerance between peoples is going to be wiped out with a stroke without a bit of consultation between this government and those groups.
What other possible explanation is there? These people are not the people who are responsible for the deficit. Their pittance of $9 or $10 million contributes next to nothing to the deficit compared to the drain on our resources through tax expenditures to large corporations and the failure to tax profitable corporations. These people are not responsible for the deficit.
The only explanation for the cuts sustained in this budget by native organizations is that this government, for political or other reasons, opposes the native Indian people of Canada. It is attempting to suppress their leadership and ability to communicate with the rest of us Canadians the legitimacy of the grievances they have against us, grievances based on historical claims to this country, claims to self government within our Constitution, and to be treated equally in terms of health care, social programs and their participation in Canadian society. It is a direct attack on native people, in the very same way that this government has taken the attack against women in this country.
The minister mentioned that women's centres had become involved in the provision of social programs. That is a complete and utter falsehood. Absolutely false. I have gone down to the women's centres in my riding and talked to women. They cannot afford, on a $26,000 budget in the case of the Port Albemi Women's Resources Society, to be providing social programs. How can they do it out of $26,000? It does not make sense. It is a silly, inane comment. It is a silly criticism of the role of women's centres.
Those centres provided resources in terms of help and direction. They referred people to social services and they gave women the confidence, the courage and the ability to take advantage of those services.

March 7, 1990
The Budget
This budget is a bad budget. It is not going to deal with the deficit. Canadians are not going to respond to it as something that deals with the deficit, because it does not allow Canadians to shoulder the burden of that deficit fairly. Some people are paying more than others.


Mr. Greg Thompson (Carleton -Charlotte):: Mr. Speaker, I am pleased to be able to partake in this important debate today on the budget that was introduced by the finance minister just a few short days ago.
This budget is the sixth by the present finance minister. It is a continuation of this government's commitment to our fiscal plan as outlined in the election of 1984.
If we take a look at the election of 1984, and why we came to power and defeated the former Liberal government, it was simply because of the Liberals mismanagement of the economy in the years running up to 1984.
In 1984, when we took office, government spending was completely out of control. No matter how hard or how strongly the opposition members want to argue that point, they cannot argue it convincingly because spending was completely out of control. They were unable and unwilling to manage the economy of this country. The Canadian public ousted the Liberals in 1984 for a very good reason. We have stuck to our agenda of attempting to come to grips with the problems we inherited in 1984. If you will allow me, Mr. Speaker, I will go through some of the problems we inherited and the steps we have taken to rid ourselves of those particular problems. It has not been easy and it will not be easy, but we are going to do it.
If we were to check the record of Liberal government spending over the 15-year period between 1970 and 1985, we would see it reveals that the Liberal Party increased program spending by 18 per cent between 1970 and 1975. It increased spending by 10 per cent in the next five years and, on average, something in the order of 14 per cent per year between 1980 and 1984. There is no economy or country in the world that can sustain that kind of growth in spending. Canada was no exception.
The continued borrowing on the part of the Liberal government got out of control. What happened, Mr. Speaker, as you and everyone in this Chamber can well remember, is that it led to 20 per cent inflation rates. A
20 per cent inflation rate in itself is bad enough, but that was coupled with double digit interest rates.
What happened? The economy went into a tail-spin and continued in that tail-spin. The reason is that the Liberal Party never wants to come to grips with reality. It wants us always to take the sugar-coated pill, to buy our way out of trouble. Fiscal responsibility means absolutely nothing to that party.
For those years that I have mentioned, what that party did was simply the same thing a young, undisciplined child would do if he or she were given a credit card with no sense of responsibility and no sense of what a citizen should do. That is exactly what that party did. It led us down the golden path, only to find at the end of it that there were certain realities we were facing.
Consequently, when we inherited the government in 1984, we had a $200 billion plus debt.


Peter Andrew Stewart Milliken: No, you didn't. It was $170 billion.


Gregory Francis Thompson: They can argue that we did not have it. I ask them to talk to anyone who is an accountant, anyone with a sense of responsibility and let them check the books. It was a $200 billion plus debt that we inherited. It does not take a rocket scientist to understand the problem we inherited.
We inherited a $200 billion plus debt at interest rates over 10 per cent. What are we talking about? We are talking about paying interest on a burgeoning debt that was just impossible for the Canadian people to continue to bear.
We took steps immediately to correct that because it is something that we cannot climb out from underneath in a short period of time. We have been in office since 1984, and there is not a Canadian here who will say that we have not taken steps to correct that situation.
The difference between us and members of the Liberal Party is simply that they will take the easy road out. The easy road out is to do absolutely nothing.


Mr. LeBlanc (Cape Breton Highlands-Canso):: The
easy road in.


Gregory Francis Thompson: That is exactly it, the easy road into power. He could not have said it better, coming from the opposition party itself. The easy way into power to do absolutely nothing, to stand back and let the economy roll on. They stick their heads in the sand, something for

which they are famous and which they have done for the last 20 years, but they do absolutely nothing about it.
What do they want to do? In the final analysis, if they do nothing they are just passing the problem on to their children and their grandchildren. Mr. Speaker, you are old enough to have grandchildren. Maybe I am not and maybe some of the guys doing all the hollering are not. However, believe me, if we had not come to power and if we did not come to grips with it, it would have been their grandchildren who would have inherited this debt.
The figures are alarming. I will go through some of those a little later.
I would like to talk now about our plan for the future. It is one thing to cut expenses, and we have done a good job on that; we have cut expenses. Some of them have been troublesome and difficult to deal with as none of us want to lose services. It is difficult. As the man said, "cut expenditures and cut expenses and cut programs, but don't cut programs that involve my province or involve me as an individual. Lay it on to somebody else".
That is exactly what we are doing here with the GST. I want to try to bring this into the light because part and parcel of this budget is the GST in a sense. We have to come to grips with expenditures, but on the other side we have to come to grips with the revenue side of this thing: the raising of dollars to pay for the services which Canadians want and need.
What is the Liberal Party telling us about the GST? I think most of its comments can be summarized and are reflected in the recent debate between its finance critic, the member for Gloucester, and our finance minister when they met in Alberta on Tuesday evening, I believe it was. What it was, again, was simply false promises. The finance critic's response to the GST on national television when the Minister of Finance asked him "would you scrap the GST" was simply: "Absolutely, absolutely, we absolutely would". Three times he used the word "absolutely" until he had to spend the night in Edmonton and think about what he had said. Then, the first thing on
The Budget
Wednesday morning when they put a television camera in front of him, he took those words back.
Why? It was because some of the Liberal candidates seeking the nomination for the leadership of the party disagree. Why do they disagree? It is because they know that reality is staring us in the face. Reality is staring Canadians in the face, and we have to come to grips with it.
To give an indication of what reality means, yesterday I was speaking to my brother who lives in Fredericton, New Brunswick. He did not have an opportunity to vote for me because obviously he lives in a different riding. I cannot pretend that my brother has always been a Conservative; maybe he is not at all. One thing he said to me yesterday was: "Gee, it must be difficult for you, Greg, when you go back home and you have all these pressing issues on the table". He talked about the difficulty with the budget. He talked about the GST. As far as the GST is concerned I said that what I feel when I go back home now is that Canadians are realizing there are no options there.
We have to give Canadians more credit than what the opposition party is willing to give them as to their level of intelligence. Canadians know that if you spend money you have to be able to pay the bills. That is something members of that party have not realized and will never come to grips with. They are not going to change.
Let me quote from an editorial which appeared in The Edmonton Journal about the debate on the GST between our party and the Liberal Party. It refers to the finance critic and states: "His views expose the empty posturing and promises made by that Liberal Party". That is what it is. The article stated that the finance critic, Mr. Young, entered the debate burdened with all the old Grit spending baggage of the Trudeau years. No one could have expressed it any better.
Members of the Liberal Party talk about what they will do if they form the government.
I will tell you what they will do if they form a government. They will do what they have done every time they have ever formed a government. They allow us as a party to make the tough decisions that have to be made. They then say that they are going to dismantle

March 7, 1990
The Budget
what we have done. We can go through many of those election years where we actually handed the election to that particular party because we were willing to tell the Canadian people the truth, and they did not want to tell them the truth-never have told them the truth.


Peter Andrew Stewart Milliken: Always have.


Gregory Francis Thompson: Listen to that. The member himself does not believe it because he has a big smile on his face. He is smiling. He doesn't believe it.
The debt that we inherited in 1984 was a problem for us as a government. No one can deny that we have done a good job in managing that. By the year 1993, if we stay the course-and our party is determined that we are going to stay the course-our borrowing requirements in 1993-94 will be a zero. Our borrowing requirements will be absolutely zero. The Canadian people are demanding that we take action, and we have taken action.
I am proud to stand here and say that I support the government on this budget. I support the finance minister. And the Canadian people support us.


Francis G. LeBlanc: Mr. Speaker, since the hon. member seems to blame all problems faced by his government on the previous Liberal government, who have not been in power for six years, I would like to ask him how many more years his government requires to deal with the problems that they have not been able to face over the last six? The debt has doubled, deficits are at the approximate same level as they were when they took office. How many more years does this government need before it will learn how to manage the economy?


Gregory Francis Thompson: Mr. Speaker, I was hoping my hon. friend would ask that question. It simply points out that they never listen.
You will recall, Mr. Speaker, that about two minutes ago I mentioned that by the year 1993-94 our debt requirements or our borrowing requirements will be absolutely zero. That is exactly the point I am attempting to make. The answer to the question, if he can do anything at all in terms of simple grade school arithmetic, is that it is a 10 year period. If we keep them out of office for 10 years we will have accomplished our goal. We will have reduced our borrowing requirements to absolutely zero.
I am going to ask the hon. gentleman to go back to grade school, or at least get his calculator out because I am convinced that my grade four son could come up with the figures he is asking for.


Mr. David Bjornson (Selkirk):: Mr. Speaker, I appreciate the opportunity to rise today as the representative for Selkirk to speak on the government's budget of February 20, 1990.
The key to understanding this budget is understanding the debt. Our national debt is $350 billion. It is what we owe the investors who lent the previous government money to help it pay in a small way for the effects of the recession and more so for its runaway program spending which was rising at an annual rate of 12 per cent. When spending begins to exceed revenue so significantly the result is what we have right now, a debt crisis.
Make no mistake, we have to repay this debt. We either do it now or our children will have to foot the bill, with interest. As a father of three children, I do not want them to inherit this burden. You might well ask why we in the Conservative government have not paid off the debt. After all we have raised taxes and have had five years of strong economic growth.
Well, that is a fair and important question. In 1984 the debt was $200 billion. Even though the government was in debt it was still spending more on programs than it was taking in in taxes. It is borrowing more money just to pay the interest on the debt. It is as if you go over your limit on your credit card and you have a cash advance from your credit card to pay your debt on your credit card. It makes no sense to me.
The bottom line was we inherited a government that was $200 billion in debt, borrowing money to pay the interest and spending more on programs than it was taking in in taxes. What have we done about it? We recognized that the first step towards paying off the debt was to eliminate the operating deficit. We had to stop spending more money than we made. We cut spending, we raised taxes and we closed loopholes.
After just two years we eliminated the operating deficit of $16 billion. We have today an operating surplus of $9 billion. Seventy per cent of this $25 billion turnaround is the result of reduction in government spending. Unfortunately, all the time we have been working to eliminate the operating deficit the interest on the original $200 billion has been accumulating. Interest
March 7, 1990

alone on the debt since 1984 has been $120 billion. Eighty per cent of our debt today is a result of the previous government.
Sometimes we are criticized for blaming the previous government for the debt problem. That does not wash. The fact of the matter is we are sitting on a mountain of debt incurred by our predecessors and the facts bear that out. Our opposition is asking us why, after five years, we have been unable to fix the mess they gave us. We, as a government, get enough criticism for the things that we have actually done, never mind getting it in the ear for policies we had no influence over.
I hear complaints from numerous constituents about government spending. Several months ago I polled the views of my constituents on the national deficit. I asked two questions. The first was: "Are the government deficits and the accumulated national debt a serious problem to you? If so, should the government raise taxes? If so, which ones?". Second, "Should the government cut program spending to reduce debt?"
I asked these questions to determine the economic issues that were of the greatest concern for my constituents. I would like to address the concerns raised by the people of Selkirk and to illustrate how this government has responded to their concerns in this budget. Ninety-six per cent of the people who responded stated that the government's deficit and the national debt are of serious concern to them, but 45 per cent said the government should not raise taxes. We as a government have listened to the concerns of Canadians. There are no new taxes in this budget. Of the 55 per cent who said the government should raise taxes, 82 per cent stated that the corporate tax should be raised.
This, in fact, was accomplished in the 1989 budget. A significant amount of revenue will be raised through the large corporation tax, for instance. The changes in taxation to this sector are expected to raise an additional $1 billion.
Sixty-eight per cent of the respondents said no to the federal government reducing transfer payments to the province of Manitoba. Substantial deficit reduction cannot be achieved without affecting transfers to the prov-
The Budget
inces. They are simply too large a part of the federal expenses to be ignored.
In the fiscal year just ending, tax and cash transfers to provincial governments will total more than $35 billion. They have risen at an average annual rate of 6.5 per cent since 1984-85. During the same period spending on federal programs in general has been held to an average annual growth rate of 3.6 per cent, which is below the rate of inflation. Under the budget's expenditure control plan transfers to provinces are expected to grow by about 3 per cent on average over the next two years, roughly the same rate as all the other program spending.
The EPF transfer to Manitoba will be limited to the same per person level as it was in 1989-90 for the next two fiscal years. Equalization transfers, which in Manitoba are more than EPF, are expected to continue to grow with the national economy. This means that they will grow much faster than other federal spending. Growth of social assistance transfers to Manitoba under the Canada Assistance Plan will also be unaffected because the budget exempts provinces which receive equalization from the 5 per cent cap on growth of these payments.
The result of those transfers to Manitoba under the three major programs, which in 1989-90 total $1.7 billion, are expected to rise in the next two fiscal years to $1.8 billion and $1.87 billion respectively.
I am not suggesting that there is no effect on Manitoba.
There is.
The reduction in the rate of growth of transfer payments represents just under 1 per cent of the provincial government's revenue. But I believe the effects can be coped with as federal and provincial efforts are made to ensure that each tax dollar is spent more carefully, and as all Canadians adjust their expectations of what in current circumstances the federal government can be expected to deliver.
Returning to the survey responses, 66 per cent stated that agricultural spending programs should not be reduced. The farmers of Beausejour in my riding of Selkirk will be glad to know that there have been no reductions to any federal government agricultural program. Farm-

The Budget
ers in Manitoba have already received their cheques on the basis of the multi-year disaster benefit program.
The last major point I want to raise is the fallacy that we have not done our part, that the federal government has not cut enough of its own budget.
We have reduced the Public Service by 12,000 person-years. We are governing in the 1990s with 1973 staff levels because we are managing more efficiently. We have reduced the deficit as a percentage of the GNP every year since 1984, from a high of almost 10 per cent to below 4 per cent. We have kept our spending below the rate of inflation every year.
That is a better record than every province and better than even the private sector. However, I would like to make special mention of the government of Manitoba which has been among the leaders in low percentage increases in its program spending.
The federal government has done its part to cut the deficit. We have got the scars and popularity to prove it.
In conclusion, the budget is fair in its demands and promises clear rewards in the form of a healthier economy, greater financial security for all levels of government and for all Canadians. It offers a positive future for our children.
Mr. Francis G. LeBlanc (Cape Breton Highlands -
Canso): Mr. Speaker, I welcome the opportunity to participate in this debate on the second Tory budget since my election. There are many things that can be said about this budget. I would like to address them under the general theme of fiscal management or, more accurately, the lack of it since the government came to power.
The finance minister is approaching his sixth year on the job. The effort that was tabled on February 20 demonstrates the signs of a man who has never learned the fundamentals of the job, or has simply just given up trying.
I was a federal public servant in Ottawa when the finance minister released his agenda paper on November 8, 1984. The paper proclaimed:
The growing public debt has become a severe handicap to economic
progress and the most serious obstacle to economic growth. Continued
high deficits and growing debt will increasingly undermine confidence,
put upward pressure on interest rates and reduce prospects for growth.
Moreover, they increasingly constrain the federal government's ability
to discharge its responsibilities for over-all economic management
and effective economic leadership.
The agenda paper warned of the consequences of the debt if it reached the feared level of 1990-1991 of the $400 billion it projected as its unacceptable scenario. The minister promised strong leadership directed at attacking the national debt and bringing down high deficits.
It is true deficits were unacceptably high in the two or three preceding years as Liberal governments struggled to guide Canadians through the worst economic recession of the post-war era, a recession that was global in scope and which was the culmination of deep-seated inflationary pressures, not the least of which were two major world energy shocks in the 1970s.
Even though world economic conditions were unfavourable for Canada throughout the seventies, annual budgetaiy deficits either in absolute terms or as a percentage of GDP were never as consistently high as during the last five years under this government. The previous Liberal governments before the Tories came to power had begun to turn the economy around and to bring unemployment and inflation down.
Moreover, with world oil prices falling and the U.S. economy experiencing strong growth, this government had the relatively easy task of presiding over a generally buoyant economy due mainly to more favourable trends around the world.
As the Minister of Finance knows, this was the ideal time to bring deficits down to zero, reduce the national debt and to provide room for lower interest rates to prolong the recovery. But what did the Minister of Finance and his colleagues in the government do during this period? They fiddled, flustered, fulminated and raised taxes 31 times, increasing government revenues by over $170 billion over this period.
What happened to the national debt? It just mushroomed. It ballooned. During the last five years and up until the forecast in the 1989 fiscal plan for 1991, the debt grew to some $379 billion-almost the $400 billion the Minister of Finance predicted in his worst case scenario back in November, 1984.
What did the Minister of Finance do in the intervening years? He gave more tax breaks to his corporate buddies while cranking up taxes on ordinary Canadians. He promised expensive toys to the military, such as the nuclear submarines. He promised billions for major
March 7, 1990

energy projects. He promised to maintain the UI program and to invest in a new child care program for all Canadians.
During the last election campaign the Minister of Finance assured Canadians that all these promises were not promises but spending commitments and fully accounted for within the fiscal framework. Then came the election and Canadians were suddenly advised that, no, the cupboard was bare. There was no money for a national child care program. There was no money for the Polar 8 ice-breaker. There was no more money for regional development. ACOA was going to have to be reprofiled. The government would have to bail out of its unemployment insurance program, after being a financial partner in this program for the past 50 years.
We were told that Canadians would have to pay a massive new sales tax, the goods and services tax, which would tag an extra 7 per cent on to the price of virtually everything we buy. This tax was no longer revenue neutral but was designed to fight the minister's new deficit reduction fervour.
Now we have the February 20 budget, the budget of a tired finance minister in a tired government.
Let me read a few choice morsels from this document. "The deficit for this year is on track at $30 billion". That is what this budget document says. The finance minister now regards a $30.5 billion deficit as an accomplishment.
Then the minister stated: "I am proposing a two-year expenditure control program that will affect all areas of government spending with the exception of income support programs for seniors, families and veterans, unemployment insurance, as well as the equalization
The Budget
program and Canada Assistance Plan payments to lower income provinces".
What he then sets out to do in typical Tory fashion is to attack the economically less powerful members of our society-the veterans, native people, students, those he missed in the April, 1989, budget-and to pass off his government deficit problems on the backs of the provinces.
Here is another quote: "Implementing the expenditure control program this year will require the patience and understanding of Canadians". That is the understatement of the century.
Here is the classic capitulation. "The economy is in a period of slower growth. This is not surprising, nor should we try to avoid it".
Higher interest rates and a higher dollar caused by five years of fiscal mismanagement are driving Canada into a recession and we should sit back and enjoy the ride.
Finally, one more quote from the budget: "This is the future we have been building since 1984." This is the budget of a Minister of Finance who has given up and is too proud to admit it. It is an admission of defeat. It is a cryptic call to the Prime Minister for a portfolio change. I urge the Prime Minister, be merciful to your faithful friend and to Canadians; withdraw this budget and give the minister another job.


Some hon. members:: Hear, hear!


The Acting Speaker (Mr. Paproski):: It being 6.31 p.m., this House stands adjourned until tomorrow at 11 a.m., pursuant to Standing Order 24(1).


[Stage Direction]
The House adjourned at 6.31 p.m.
[Stage Direction]
Thursday, March 8,1990