1990-02-19

Hon.   Chas. L. Caccia@Davenport: Mr. Speaker, last Thursday in the debate on government motion No. 2 on language rights in Canada, I was denied the opportunity to participate. Since I was not recognized, the question was put to the House. Other members missed the opportunity to debate as well. In other words, the debate collapsed.
If you look at Hansard, page 8414, you will find the following:


@Acting Speaker: Is the House ready for the question?


Mr. Caccia:: No.


Mr. Speaker:: I am sorry but I cannot recognize the hon. member.
He is not properly dressed.
As you know, Mr. Speaker, the motion was subsequently carried without further debate.
My question of privilege today is the fact that I was not recognized for such debate. Might I add that my question of privilege is rooted on one basic question: Is our parliamentary institution well served when dress is more important than debate? In other words, is a tie more important than a message?
Mr. Speaker, under your leadership we have made great progress one step at a time. A balance has been struck between the individual rights of members in this Chamber and collective rights of the House so as to make this institution function and cany out the nation's business. We all appreciate that fact.
In the realm of individual rights, women in this Chamber can dress in a variety of ways according to
fashion and changing trends. I am glad of that fact and support it. The question now is whether the same flexibility can be extended for men as well. In making the case for modernizing the dress code for male members, may I quote the Deputy Speaker from page 6908 of Hansard of December 14, 1989, when he said:
I think most members are aware of the way members should dress in the House. It is stated quite clearly in Beauchesne's that the dress of members should be conservative, contemporary dress. That is the rule.
He added:
It does happen, when we have votes, that members may come in at the last second and may not technically fit the criteria set out in Beauchesne's. It is for that reason that in the past we have allowed those members their voting privileges. However, if the time came for the member to speak in the House then the decision of the Chair could be different.
Clearly the Deputy Speaker with his ruling left the door wide open, I submit. You will also find that last Thursday, at page 8399 of Hansard, the government house leader stated that debate on government motion No. 2 would continue for several days. Because of his assurance several members of the House, myself included, were taken rather by surprise when no member in the customary round of speakers rose to continue debate following the conclusion of the first round.
Therefore, at the last second I had to rise in order for debate to continue. My situation was therefore comparable to the one the Deputy Speaker described last December. Might I stress, Mr. Speaker, before concluding, that the only rule of the House that refers to members appearance is Standing Order 17. It states:
Every member desiring to speak is to rise in his or her place, uncovered, and address the Speaker.
I conformed with such rule last Thursday. While it is true Beauschene's is often quoted in the matter of member's dress, I think it is important to remember that Beauchesne is an interpretation of the rules, not the rule itself. The rules of the House are set out in the Standing Orders and I fully complied with Standing Order 17.

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Private Members' Business
To bring this Chamber into the 20th century you may want to address this question today: what is more important, jacket and tie or message and debate? Would you consider therefore, Mr. Speaker, referring this matter to the Standing Committee on Elections, Privileges and Procedure while at the same time providing us with your ruling for our guidance until the committee has reported?


Mr. Speaker:: The hon. member has raised a matter which has been raised in this chamber a number of times before. The hon. member is an experienced member and he puts the point with a certain eloquence.
I am of course concerned that the complaint that is brought in front of us is that, because of his dress, the hon. member was not able to enter into a debate which was at that moment about to collapse. It may well be that hon. members will want to change our present practices but I must be cognizant of what they are. In view of the circumstances, I will reserve my ruling and report back to the House and to the hon. member as soon as it is appropriate. I thank the hon. member.


Mr. Deputy Speaker:: Pursuant to Standing Order 30(6), the House will now proceed to the consideration of Private Members' Business, as listed on today's Order Paper.



PRIVATE MEMBERS' BUSINESS-MOTIONS   FEDERAL PENITENTIARIES LITERACY PROGRAMS

['I regret to interrupt the hon. member, but his time has expired.']
Mr. John Brewin (Victoria) moved:: That, in the opinion of this House, the government should consider the advisability of expanding literacy programs in federal penitentiaries.
He said: Mr. Speaker, I am pleased to rise today to ask the House to endorse the motion I placed on the Order Paper calling on the government to consider the advisability of expanding literacy programs in federal penitentiaries.
This of course is International Literacy Year and I am rising to ask the House to address itself to a particular aspect of the problem of illiteracy in Canada, the quality of our programs in Canada's federal prisons.
We in Parliament have a special responsibility for the level of programming in Canadian prisons. We have no excuses in this House if the job is not properly done. We cannot blame the provinces, school boards, colleges, universities, municipal governments or the general community. We have only ourselves to hold responsible for the fact that our programs are not adequate.
It is important at the outset of Literacy Year that we in this House call on the Correctional Service of Canada, the Solicitor General and the government to address this and that we in this House focus our attention on this particularly sensitive and difficult problem.
Let me say at the outset that I acknowledge the Correctional Service of Canada is working at the problem. It has had in place for some time a literacy initiative program. The issue is whether the program is satisfactory and sufficient to deal with the problem. I hope that members of the government will rise today and tell us in detail and in specific terms that that is exactly what is happening. The information I have indicates that the programs are lacking, and this is expressed in statistics and in human suffering. A survey in 1989 demonstrated that 65 per cent of our prison population is functionally illiterate. This means that 65 per cent of the people in our prisons Cannot read simple instructions on a cough syrup bottle, cannot fill out simple forms, cannot understand sections of the Charter of Rights, or pick out correct numbers from a list or page of numbers. In the general population, there are in the area of 22 per cent to 24 per cent who are functionally illiterate. That in itself is a scandal in this country, but 65 per cent of our prison population is currently illiterate and we must do something about it.
The federal government program presently in place is called the Adult Basic Education Program. This program is, to the extent that it is in place, attempting to come to grips with the problem. I want to pay particular tribute to the previous Solicitor General, Mr. Kelleher, who actually convened a national conference in 1987 on offender literacy. Unfortunately, the current administration appears not to be following up on the concern and initiative shown by the previous Solicitor General. I may add that even that Solicitor General neglected to invite
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those most directly concerned with the program, the prisoners and ex-prisoners.
In 1989, a special study funded by the Secretary of State was undertaken by the John Howard Society. The researcher involved with the society was Kimberley Pate and her report was filed in August, 1989. This report reviews thoroughly the adequacy of the literacy programs in our prisons and I rely heavily on that for the comments and criticisms that I have.
In addition, as critic for the Solicitor General for the New Democratic Party, I have received probably a thousand letters from prisoners in our institutions. The recurring theme in these letters is the inadequacy of the programs in prisons. I hope this debate will focus some attention on the problem and perhaps start some action on it.
The first problem is that the program is compulsory. Prisoners are forced to take it if, after a test, they are demonstrated to be "functionally illiterate". The compulsory element of the Correctional Service of Canada program was trashed by the conference in 1987, yet it continues to this day. The element of compulsion flies in the face of every pedagogical understanding currently at hand. It simply does not and cannot work. The John Howard Society report of 1989 confirms that.
Let me refer the House to some of the comments made by inmates who were interviewed in that study. One said:
It is really stupid, you know. They (the CSC policy developers and program ministers) cannot really believe the old saying about how you can take a horse to water and it will finally drink once it gets thirsty. Forcing people who are already embarrassed and have been taught to keep all your weaknesses hidden in places like this, in jail, to then sit in the beginning classes where everyone can see you are dummy-man, that is just plain stupid. The only reason most of us say we want to learn stuff is to play the game and get out. We waste everyone else's time, for them who really want to learn. Know what I mean? Maybe if they stop forcing the issue we might really go on our own.
The second problem is that in developing the program there was no consultation with the users of the program. It is hard to imagine, but it is true. There was no discussion with prisoners or inmates about the nature of
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the program. There is no ongoing effort to evaluate with them what kind of program should be undertaken.
Third, the program resources have been stolen from other educational programs, contrary to the clear commitment of the Solicitor General at the time the program was instituted. Instead of taking the program from research, travel, consultants, where they said they would, they have taken it from the other educational programs in the institutions.
That reduces those programs to a new level of inadequacy and removes the incentive for proceeding into the higher levels that really count in the final analysis, getting a job once the inmates are out.
Another problem is that the testing on this program is completely inadequate. The test program was developed over 20 years ago in California. It is denounced in every review of the literacy program, and as I understand it, the Correctional Service of Canada has already conceded that the testing program is inadequate. I want to hear today that there in fact has been a change.
Although it is an unwritten rule, there are targets or quotas established for the institutions in order that the Correctional Service of Canada can look good when asked questions in Parliament about this program. There are a number of problems with those targets. First, they are easy to manipulate. Even more important and more significant is that the targets encourage the staff to work with the students who are up to a grade 6 to grade 8 level. That means they are ignoring the students at the lower levels, the students who most require the kind of help that an effective literacy program can be.
Let me refer again to the Pate study, page 16:
If this is indeed the case then the ironic result of the CSC ABE
initiative may be that proportionately less time may now be being
devoted to working with this group than was the case prior to
Kelleher's program announcement in 1987.
The tutoring, according to the study, is inadequate and is not trusted by the participants.
The program is simply not reaching the targeted prison population. At least half of the prison population who need the program are not taking any program at all, notwithstanding the compulsory nature.
Finally, there is no follow-up. Once the prisoners leave prison no facility is provided through the Correctional Service program in which they can maintain,

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increase and improve any progress they have made while they were on the inside.
This is a program that is improperly and inadequately funded, has not been thought through, that is developed without consultation with the people who are taking the program. The tutoring and teaching is below standard. There is no follow-up, and the very foundation of the program undercuts its effectiveness. This is taking place in a section of our population where the pay-offs for an effective literacy program would be most significant.
What do we do about it, Mr. Speaker?
First, there is client involvement. Obviously there has to be some thorough discussion with inmates in developing the program.
Second, we have to end the mandatory requirement.
Third, there should be the provision of financial incentives to take the program.
Fourth, community and volunteer teaching needs to be written into the program so that there is seen within the institution to be some level of independence by the teachers. As well, it can form part of a program of increasing the ability to relate to those who are on the outside and in the general community.
Fifth, we have to improve the peer tutoring that has apparently shown some positive signs. It has also shown some negatives. Those negatives need to be addressed.
Sixth, there has to be an improved information network across Canada to know what is working and what is not working.
Seventh, and perhaps most important, there must be an integration of the literacy programs with other life skills programs in our prisons. It has to be part of a package that will assist those who need the benefits that a good literacy program can bring. It has been said that literacy has a certain political attractiveness. It is easy for a minister to institute such a program in that area.
We need to focus on genuine life skills and the literacy program needs to be seen as part of that. That may also
help to undercut some of the stereotypes within the prison that seem to be undercutting the program.
Eight, there must be some effective follow-up with some programs designed for that purpose.
With those remarks, Mr. Speaker, I ask the House to give positive consideration to this motion. I appreciate that under the practice of this House, it is not likely today to come to a vote, but I hope it will have the support of members. I hope the Correctional Service of Canada is listening and that the Solicitor General will give his undertaking to this House that there will be in this literacy year some very specific personal attention from him to this important program in Canada's prisons.
Let me conclude by putting this in the larger context, and if I may be permitted a mild partisan note, to put on record the position of the New Democratic Party at its most recent convention in Winnipeg on the issue of literacy. At that convention the New Democratic Party adopted the following resolution:
That the New Democratic Party supports the development and implementation of policies to ensure every adult full access to and participation in adult literacy programs which would be developed in co-operation with the provinces, the literacy community and the trade union movement. Such policies would:
1.	include all the necessary types of funding mechanisms at levels adequate to allow adults to exercise their right to participate in free adult basic education;
2.	assume the involvement of large numbers of literacy workers in recognition of the fact that the volunteer sector cannot meet all the needs of illiterate adults;
3.	recognize the need for a range of programming options including community-based programs and on-the-job programs sponsored by trade unions which respond to the needs of individuals and groups;
4.	assume the provision of adequate facilities, relevant learning materials and related services such as child care, transportation and counselling;
5.	be part of a larger policy initiative to attack the economic and social conditions which contribute to the continued existence of adult illiteracy;
6.	direct funding to Indian and Northern Affairs to improve basic education on reserves and ensure access to a grade 12 education on reserves; and
7.	expand literacy programs in federal penitentiaries.
I commend this program and the resolution to the House and I ask for your support.
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Mr. Bob Horner (Mississauga West):: Mr. Speaker, the motion before us is to consider expanding literacy programs in federal penitentiaries. The federal government and Correctional Service Canada support this motion, as do I. The federal government and the CSC have already taken measures required to deal with the problems posed by illiteracy among inmates in federal penitentiaries.
The dignity of the individual, the rights of all members of society, the potential for personal growth, and the development of human beings are essential considerations in the effort to help offenders to become law-abiding citizens. The CSC initiative is in response to the Throne Speech of October, 1986, in which the federal government committed itself to co-operating with the provinces, the private sector and voluntary organizations in developing ways to allow Canadians to acquire the degree of literacy required to take full advantage of the benefits of an advanced society.
Following a series of visits to several penitentiaries, the then Solicitor General assessed the extent of the problem and decided to tackle the problem head on. The Solicitor General declared that improving basic adult education programs was a priority for Correctional Service Canada. As a result, the CSC launched a three-year program to reduce functional illiteracy among federal inmates by 5 per cent annually between April 1, 1987, and March 31, 1989.
It is important to note that my hon. friend criticized the program because there were quotas imposed. There has to be an objective in place. The CSC used the definition of functional illiteracy adopted by UNESCO, and that is the equivalent of a grade eight education. Because of the various educational systems that exist in Canada, the CSC uses the completion of grade eight in language and mathematics as a standard for purposes of comparison.
According to the mission statement of the CSC, Correctional Service Canada, as part of the criminal justice system contributes to the protection of society by actively encouraging and assisting offenders to become law-abiding citizens while exercising reasonable, safe, secure and humane control.
The CSC knows how illiteracy affects inmates. An inmate who can neither read nor write is ill equipped to face the demands of everyday life or to find a job. Even
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though it has not yet been possible to establish a direct correlation between illiteracy and recidivism, the correlation between unemployment and a lack of basic education and technical skills cannot be disputed.
According to Statistics Canada unemployment is highest among those with less than a grade eight education. Standardized tests have also shown that the illiteracy rate among inmates is more than twice that of the general Canadian population. When considering the many factors that contribute to crime, we must recognize that illiterate people have fewer options, less choice and greater difficulty in improving their lives than those who can read and write.
In practice only 150 inmates were able to complete grade eight in 1986-87. It was decided at that time that the objective for 1987-88 would be to have five times as many inmates complete the basic adult education program, for a grand total of 750. The objective for 1988-89 would be 1,200 more inmates, and for 1989-90, 1,800 more. The over-all objective of CSC was therefore to have in excess of 4,050 inmates complete at least a grade eight education during this three-year period. I think my hon. friend will have to admit that that is a very worth-while objective.
This ambitious initiative was intended to demonstrate the firm commitment of CSC to combating illiteracy among inmates. It is vital that people understand that the vast majority of inmates incarcerated in our penitentiaries will be released some day. They will be released on parole, under mandatory supervision, or simply because they have completed their sentence. To be a capable member of society they must have an improved education.
The National Parole Board takes the inmate's participation in the basic education program into account before making a decision on parole. My hon. friend talks about incentives. I think that would be incentive enough to get people to take this program. Perhaps more than anything else this makes inmates understand how important the ability to read and write is in being able to function properly in the outside world.
In 1988 the average inmate, or 57 per cent of the prison population, was serving a sentence of less than six years. During the first year of this initiative, that is during the 1987-88 fiscal year, 1,042 inmates or 139 per cent of the objective completed grade eight. In 1988-89,

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1,446 more inmates completed grade eight, with the objective being 1,200.
During the first two years of this initiative the CSC has achieved 118 per cent of its objective. The third year appears to have started well since roughly 80 per cent of the over-all objective had been obtained by the end of the second quarter. The CSC certainly hopes to be able to meet its over-all objective.
To achieve this end, the CSC budgeted 100 per cent more in 1987-88 than in 1986-87 for basic adult education, an increase from $2.5 million to $5 million. In 1988-89 the over-all budget for adult basic education was roughly $6.4 million. I should stress that the CSC maintained all the other educational programs it offers to federal inmates including secondary, post-secondary and college education programs. Vocational training also continues to be a crucial component of the program offered since it allows inmates to learn a craft or skill directly.
The service has also established standard mandatory testing to identify functionally illiterate offenders and thus be better able to integrate them into the adult basic education program. Since commencement of the initiative close to 8,000 inmates entering the correctional system have undergone testing. To date, about 65 per cent have scored at lower than the completed grade eight level. The rate of refusal-and I think it is important to say "refusal" because my hon. friend said that this program was mandatory-to undergo testing has decreased from 16 per cent to 8 per cent in two years. The tests used are currently under revision in order to improve further the service's effectiveness at identifying illiterate inmates.
During the course of 1988-89 the correctional service set up a new system to manage data on inmate education, thus enabling the service to monitor the fulfilment of its objectives even more closely. For example, it was noted, with the help of this new system, that the average national success rate in relation to the number of inmates registered dropped from 2.99 in March of 1988 to 2.59 in April of 1989, a significant drop.
This demonstrates better case management and more careful follow-up of students who withdraw or fail. In fact the service has set in motion an entire process aimed
at assisting these students with problems and encouraging them to return to the program by modifying for them the traditional approach to teaching. The cost per successful case has decreased from $4,650 in 1987-88 to $4,189 in 1988-89. This accomplishment greatly surpasses the initial objective of $5,000 per case.
Correctional Service Canada now uses innovative teaching methods to help inmates surmount perceptual problems and identified learning disabilities. The service has expanded the adult basic education program and will continue to make improvements to increase participation and effectiveness. Also, inmate involvement in this program must henceforth be taken into account when considering the inmate for certain jobs in the institution. In some cases the inmate's participation is a condition for obtaining special privileges within the institution.
Training sessions on learning disabilities have been offered to teaching staff in order to improve their ability to assist inmates with these problems. All staff have been made aware of the importance of basic education in order that a concerted movement be established throughout the correctional service to combat the problem of illiteracy.
In addition to ensuring that adult basic education programs are accredited, the service has adopted a multitude of techniques and methods aimed at facilitating adult learning. These include small group or individual instruction if necessary, computer assisted teaching, the use of tutors from within the prison population, as well as more effective use of community volunteers. My hon. friend spoke about the use of peers and community volunteers, integration with other life skills programs and follow-up. I want to point out to my hon. friend that these are all things that are being done. In fact training programs have been given to these volunteers in some regions.
Adult basic education does much more than teach people the three r's. It provides offenders with the opportunity to feel better about themselves and experience personal growth, which will assist them when they are released. As with the general public, however, education of offenders does not end with grade eight completion. On the contrary, offenders who successfully complete the adult education program are encouraged to
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continue with their studies in secondary, college level and post-secondary education.
To emphasize the importance that education plays in everyone's life, a communications strategy will be developed that explains to all offenders the importance of education to their successful reintegration into society.
Literacy programs already in place in our federal penitentiaries have turned out to be very successful. CSC is working to co-operate with the provinces to maintain course quality and to obtain provincial accreditation. It must be understood that inmate literacy should lead to job training or a pursuit of higher levels of education.
In this regard the CSC also plans, in coming years, to emphasize inmate participation in obtaining a grade ten education while continuing to promote the achievement of grade eight as a priority. In addition, the service will establish a global strategy of surmounting the learning disabilities of inmates.
In conclusion, I therefore believe that the federal government, through the intervention of CSC, is promoting the social reintegration of inmates through adult basic education. The results are a clear indication of the efforts that have been made in this area. I can assure you that the correctional service will continue its work in this regard.


Mr. Ronald J. Duhamel (St. Boniface):: Mr. Speaker, I rise today to support the motion proposed by my hon. colleague. I would initially like to review the problem of literacy quickly.
Many will recall that literacy has been noted by Southam and a number of other researchers to affect roughly 25 per cent of Canadians. We are told that there are approximately five million functionally illiterate Canadians today. It is important to spend a few seconds on what is meant by functional illiteracy. It means that a person is unable to read, write or compute at a level satisfactory to be able to give all himself or herself to society or to take away from society, from his or her community, as much as he or she would if the literacy rate were higher than it is now.
As I indicated we have roughly five million functionally illiterate people in Canada. They come from a variety of groups. For example, there are older Canadians who are involved in a disproportionate number because they
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did not have the same kinds of opportunities that we had. They were needed to go to work earlier than we were.
There are also aboriginal people who have not had the same opportunities as other Canadians, and of course that situation is being corrected rather rapidly.
There are new Canadians, some of them already literate in a language other than English or French and some of them who need special assistance in this area.
There are people with learning difficulties and learning handicaps. There are also Canadians who at one time in their lives were functionally literate, but because society has changed so rapidly and there are more demands being made in the field of reading, writing and computing, they are no longer considered functionally literate. However, today we are talking specifically about our inmate population.
I want to say a few words about this particular population. According to certain media reports there are roughly 12,000 people in our federal penitentiaries, and the rates of illiteracy vary according to the source. I have read that it is from 40 per cent up to 75 per cent. I have heard today 65 per cent. In other documentation I have seen 50 per cent. I think we could agree that it is a high rate, higher than the national average, and clearly we need to do something special about it.
I have also been told by these same sources that only 500 people a year were participating in literacy programs a few years ago and perhaps 150 of those 500 had completed the programs. Those numbers have improved during the last few years, but there is still a lot of room to move.
Let me quote from a special report about literacy entitled "Breaking Down Invisible Walls":
In a society where non-readers are on the fringes, unable to
participate fully, literacy training can go a long way in keeping
ex-inmates out of prison.
We have to realize that literacy is one thing that can contribute to rehabilitation. It cannot do it all, but clearly it can contribute.
Literacy is not only reading, writing and computing. Those are important by themselves obviously in a society such as ours, one which is changing remarkably quickly and where those demands are in fact increasing on a daily basis, but we are also talking about life skills:

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learning how to live out of the penitentiary environment, learning how to live within the whole of society.
We are also talking about restoration of self-respect. Without that restoration of self-respect there can be little gain made in this area. There can be little hope to reintegrate successfully in society. We have to remember as well that literacy for people who are incarcerated is a toe-hold for further education and training. It is absolutely critical to have a certain degree of literacy in order to be able to profit fully from it.
Some will know that the correctional service is organized into seven major categories. I want to quote one section because I think it is particularly relevant. It is the section entitled "Education, Training and Employment of Inmates". It reads as follows:
To maximize employment, training and educational opportunities for all offenders in preparation for their reintegration into society as productive citizens. This is achieved by increasing the Correctional Service's capacity to provide meaningful work and training opportunities; by increasing, where appropriate, the emphasis on work programs that will generate revenue to help offset the operating cost of their Service; and by effectively supporting the efforts of released inmates to find gainful employment.
We have here one particular sector devoted almost entirely to ensuring that our inmates are given those kinds of opportunities educationally and in related fields to ensuring that they can integrate fully into Canadian society. The emphasis placed on literacy is one of critical importance.

I will give a brief summary in French. As I said earlier, there are roughly 12,000 inmates in our federal penitentiaries. A few years ago, only 500 inmates were involved and perhaps 1'50 actually completed literacy programs. Those figures are much higher today, but we still have a long way to go. We have to realize that literacy is not only reading, writing, and arithmetic. We are also talking about developing self-respect and learning how to live outside the penitentiaiy.

I believe that we need to do everything as a society to ensure that inmates do not return to prison. Thousands of dollars-there are large figures which indicate in excess of $50,000 per year to keep someone incarcerated-are in fact being spent with increasing frequency. I
would suggest that we need to invest in literacy and other related programs.
My colleague has documented rather well some of the inadequacies of the program. Let me briefly repeat those that I support. It is compulsory, and this is causing certain difficulty. Surely there are ways to bring about greater participation rates without mandating it. We need to have programs that are brought forward in consultation with particular individuals involved in a significant kind of way. We need to ensure that the learning materials are the most appropriate. We need to make certain that the test programs are the most adequate possible.
The targets may in fact be inappropriate. We need to review that as well. It is important to recognize that one of the effective ways is through tutoring. We recognize as well that tutoring has not always been as successful as it might have been. Perhaps the greatest inadequacy has been in the follow-up, what happens after the individual leaves the penitentiary.
We must first respond to the criticisms that have been made. We just cannot take them lightly. They are valid criticisms and there are ways of counteracting them.
There are incentives that could be brought forward, monetary and other. We need to explore that and see what might be done in order to get larger participation rates. We need to improve our methods of instruction, and we need to look very closely at tutoring and how it can be improved to make a greater contribution. As I indicated before we definitely need to ensure that the follow-ups are adequate.

Mr. Speaker, in concluding, I want to ask the government to ensure that the necessary funding is provided so that our inmates can take full advantage of these literacy and education programs and be intergrated into Canadian society.


Ms. Joy Langan (Mission-Coquitlam):: Mr. Speaker, I rise in support of the motion of the hon. member for Victoria. The Secretary of State has stated that the Government of Canada has two goals for this year, which is International Literacy Year. The first is to prevent
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illiteracy; the second is to help those who have fallen through the cracks.
Today I want to talk about one group that has fallen through those cracks, and those are people who are currently residing in federal penitentiaries. In 1981 nearly 40 per cent of inmates of federal penitentiaries had less than a grade nine education, nearly 10 per cent higher than the general population of Canada. Only 2 per cent of those who need to improve their literacy skills are currently enrolled in programs.
We need to reach out to those people and find ways to make them want to enrol in literacy programs. The inmates of our federal penitentiaries should receive no less than what we wish for others in our society, especially where literacy programs are concerned.
There needs to be provision of literacy services which are flexible enough to fit the individual's need. They should also have policies to take into account the diversity of the background of the individual and his or her learning experiences prior to being incarcerated.
However I agree with previous speakers that they must be voluntary programs. No one should be forced to participate in a literacy program because they happen to be behind bars. It must be the individual's choice, but it must be available and not only while the inmate is in prison. If the course is not completed when the inmate leaves prison, he or she must be able to continue it.
The causes of literacy are many, but the majority of learners had negative experience with formal education and require a comfortable learning environment. Literacy programs must be creative, must be interesting, and must meet the needs of those who in fact dropped out of school because the programs failed them.
All human beings, according to the UNESCO international conference on adult education in 1985, have the right to learn and read and write in their native language. It is an objective to which Canada should be aspiring.
In September 1988 the Prime Minister said: "We are placing literacy high on the national agenda. We want one Canada united, prosperous, with equal opportunities for all of our citizens."
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Those in federal penitentiaries already have barriers they need to overcome. We must make certain that in this International Literacy Year the lack of literacy skills is not one of these barriers. We must do this because the costs are enormous not only in business terms but in human terms as well and, most important, because of the cost to the functionally illiterate individual in a literate world.
One learner said: "No one knows the anger that people who can't read go through. We're living in a different world."


Hon. David MacDonald (Rosedale):: Mr. Speaker, I am delighted to take part in this debate. Clearly members on all sides of the House veiy much support its intent. As my colleague, the member for Mississauga West mentioned earlier, the federal government, the Correctional Service of Canada and the Solicitor General very much support this motion.
Correctional Service Canada has already taken the necessary measures. The adult basic education program this department offers has been a priority since 1987, and the program has had considerable success. Since this initiative was begun, 3,200 inmates have completed grade eight courses in language and mathematics.
Before making one or two other comments I want to say that I had an opportunity many years ago while working as a chaplain in several prisons to realize the direct relationship between illiteracy and crime. It perhaps is stating something that is obvious to those who have had anything to do with our criminal justice system, but there is a very high correlation between people who have had an inadequate or non-existent education and those who get in trouble with the law. It seems to me to be abundantly obvious. I am sorry it has taken us so long to begin the sensible programs that are very much needed while people are incarcerated to ensure that they have the opportunity to make a different life for themselves when they are finally released.
This year, 1990, has been declared International Literacy Year by the United Nations General Assembly. To celebrate International Literacy Year, Correctional Service Canada will launch a book voyage in conjunction with the project of the International Task Force on Literacy. The idea is to get learners involved in International Literacy Year.

February 19, 1990
A committee will travel from institution to institution collecting stories, poems and other forms of written expression which adult basic education students have written. Other similar books are being prepared around the world. At the end of the year, a giant book with selections from all those submitted will be translated into other major languages and will be presented by the International Committee of Learners to the Secretary General of the United Nations at a ceremony at the UN headquarters on December 10, this year.
Another way in which Correctional Service Canada will celebrate this year is to co-host an international conference, entitled "Freedom to Read", an international conference on literacy and corrections with the United States Department of the Attorney General. Delegates representing nations from around the world will be invited to participate in the conference scheduled for October 15 to October 17, 1990, providing an opportunity for correctional educational professionals and administrators to share ideas and experience regarding methods, standards and services related to literacy and offenders.
I believe this kind of initiative speaks well not only for the Government of Canada but certainly for this Parliament which has clearly demonstrated in these past few minutes, with the initiative of the member for Victoria, how important it is to get at the underlying causes of criminal activity and continuing criminal activity in Canada. I welcome and support it veiy much.


Mr. Deputy Speaker:: Is the House ready for the question?


Some hon. members:: Question.


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


Some hon. members:: Agreed.


[Stage Direction]
Motion agreed to.
['Agreed.']
Mr. Deputy Speaker:: It being two o'clock, the House will now proceed to Statements by Members.



Hon.   Chas. L. Caccia@Davenport: Mr. Speaker, the chairman of Noranda and MacMillan Bloedel is quoted as saying that dioxins are an inevitable by-product of the pulp and paper industry and that nothing can be done to prevent such pollution. Fortunately not everyone in the pulp and paper industry shares his opinion.
An Edmonton based company, Millar Western Industries, is planning to build a pollution-free pulp mill in Saskatchewan. Mr. Mac Millar, president of the company, is quoted as saying: "It's the first of its kind in the world, and the first zero-effluent pulp mill in North America". Mr. Millar says it will recycle waste, water and chemicals so as not to discharge pollution material.
Canadians are wondering when MacMillan Bloedel and other pulp and paper companies will follow Millar's lead and become a clean and environmentally responsible industry.


AGRICULTURE
Mr. Ross Stevenson (Durham):: Mr. Speaker, all too frequently we hear opposition members stating that Canadian agriculture cannot compete with producers in the United States. Fortunately the facts indicate differently.
In evaluating our degree of competitiveness it is important to be aware of comments made by representatives of our competitors. Recently, an official of the North Dakota Wheat Growers was speaking about exports and was quoted in an agricultural news-letter as having said: "We are going to have a problem with the Canadians. They are now in the Philippines where they have never been before. Also, they have made inroads into Venezuela".
With markets for grain and grain products expanding and the likelihood of world trade in red meat to double
February 19, 1990

in the next decade, the question is not: "Can we compete?" The question is: "Will we be ready with the wide range of quality products necessary to exploit the new markets?"


NUCLEAR WEAPONS
Mr. Svend J. Robinson (Burnaby-Kingsway):: Mr. Speaker, on April 19, 1983, Vancouver City Council representing the citizens of the city of Vancouver, declared the city to be a nuclear weapons free zone. Despite that fact, the Government of Canada continues to invite nuclear-armed U.S. ships into the harbour of Vancouver.
Recently, a group of courageous Greenpeace protesters were acquitted on mischief charges for having spray painted peace symbols and radio activity warnings on visiting U.S. warships in August of last year.
The learned trial judge, Wallace Craig, said he found it "remarkable that the government sees fit to invite this type of equipment into Vancouver in view of the serious concerns people have about it. It almost invites protest".
In June of last year the Secretary of State for External Affairs said in this House: "When there are nuclear weapons there are going to be accidents".
I call upon the Conservative government to respect the wishes of the people of Vancouver and to refuse to allow any more nuclear weapons equipped ships in our harbour, to take a strong stand for peace and a clean environment.


SCIENTIFIC RESEARCH
Mr. Guy Saint-Julien (Abitibi):: Mr. Speaker, the worst tax fraud of the century was mentioned again in an article in the Globe and Mail on February 7, 1990, reminding Canadians that the Liberals made them lose billions of dollars in 1983-84.
Under the Scientific Research Tax Credits Program introduced by Marc Lalonde, in 1983-84, a Mr. Kenneth Ford managed to swindle the government out of several million dollars which he was then able to invest, without penalty, in Costa Rica.
The former Liberal government had calculated that the program would cost the government only $200 million. However, fellow Canadians, if you want to hear the truth again, this program cost us $3.5 billion, of which up to $1.9 billion has disappeared as a result of fraud.
Mr. Speaker, the opposition recently demanded an investigation in connection with a loan of $2 million. Does it now have the guts to demand a royal inquiry into the theft of the century in this country?


MEMBER FOR CHAMBLY
Mr. Gilles Rocheleau (Hull-Aylmer):: Mr. Speaker, the day after his election victory, the new member for Chambly already reneged on the promise he gave his constituents when he declared he now supported his party's resolution requesting immediate changes in the Meech Lake Accord.
Betrayal and disloyalty to the people of Chambly, those are the words that come to mind when I think of the gentleman who, in the middle of the election campaign, declared that he supported the Meech Lake Accord and, as recently as the evening of his victory, declared that he was leaving for Ottawa with a clear message from the people of Chambly supporting the Meech Lake Accord. And now this about-face!
Considering that during the election campaign, the credibility of the hon. member for Chambly raised serious doubts and that as a result of his recent change of heart, his credibility has plunged even further, I would like to remind him that people who play this kind of game often end up losing their credibility altogether, and that we do not forget easily in Quebec!


MILITARY EXPOSITION
Mr. Simon de Jong (Regina-Qu'Appelle):: Mr. Speaker, the merchants of death who have brought us ARMX in past years are planning another military arms show in Ottawa in May.
This year they will exhibit their wares on private property. These are the folks often financed by federal government grants and subsidies who continue to invent 101 new ways to kill people. Often the weapons they manufacture are sold to countries that abuse human rights.

February 19, 1990
Is it not about time that the new global realities become recognized by these arms manufacturers? Is it not about time that this government scrap its Defence Industry Productivity Program?
The challenge is for the arms industry to convert to manufacturing goods that will help to preserve our planet and not destroy it, to use advanced technologies to prolong life, not kill it.
The government should boycott this year's ARMX show and should instead immediately advance a strategy that will assist in the conversion of the arms industry from war to peace.
Failure to convert soon will mean that these industries will also go the way of the dinosaur.


TRIBUTE TO GEORGES FOREST
Ron J. Duhamel: Mr. Speaker, as my colleague from Ottawa-Vanier (Mr. Gauthier) told the Flouse on February 15, one of the great defenders of language rights for Franco-Manitobans, Georges Forest, died on February 14 in St. Boniface. The funeral will be held today.
Monique Hebert, a journalist for CKSB in Winnipeg, described Mr. Forest well in her reports. Here is some of what she said.
Mr. Forest aroused much controversy in 1975 when he refused to pay a ticket that was in English only. It was the beginning of a long fight for the recognition of Franco-Manitobans' rights, a battle which is still going on today. Mr. Forest believed that people must be interested in the survival of the language not for purely folkloric reasons but rather for the role it must play in the evolution of so-called French Canadian culture towards the Canadian culture of the future. The role Mr. Forest played in the history of Manitoba will not soon be forgotten. The Franco-Manitoban community has just lost one of its great defenders. What I appreciated the most about him was his dynamism, energy and creativity. He was a good friend and I will miss him greatly.


COPYRIGHT
Ms. Barbara Greene (Don Valley North):: Mr. Speaker, I am increasingly disturbed by our predicament as members of parliament and, indeed, that of teachers, business people, owners of VCRs and all persons affected by Canadian law.
Newspapers, publishers, broadcasters and others throughout the country think that they, under copyright legislation, have the right to approve, refuse or charge whatever fee they like for photos, speeches-any material, even material given in a public forum.
Recently, The Toronto Star denied me use of a photo of myself, my daughter and my constituents even though I was prepared to pay a reasonable fee.
In addition, having made a deputation at a public hearing of the CRTC, I was told that a private company had the copyright to the transcripts of the public hearing and that I was required to pay whatever fee it wanted for a copy.
Law professor Yves Boucher of the Association of Universities and Colleges of Canada advises me that under this legislation an accused person could prevent evidence he or she has created from being presented in a court of law.
In a free and democratic society there are reasonable limitations to protect our system of justice and our rights to freedom of speech and communication. Members of parliament and members of the public must have the right to access information and communicate.
Who is in charge here, the media and other copyright holders, or Parliament?


HERITAGE AWARDS
David Samuel Horne MacDonald: Mr. Speaker, since 1978, the Canadian Parks Service Heritage Awards have been presented by the Minister of the Environment to individuals and groups in recognition of their outstanding contribution to the preservation of our heritage. The awards recognize and publicly honour people whose

mt

** SUSs II
February 19, 1990

efforts help Canadians to appreciate, enjoy and protect our heritage.
Today, 10 awards will be presented by the minister to those who have made noteworthy contributions through achievements in policy development, research and education, resources management, public awareness, understanding and appreciation, responsible action and stewardship.
I am pleased to draw to your attention the presence of the recipients in the gallery, Mr. Speaker, and to remind all members here that they are welcome to attend the awards ceremony today at four o'clock in Room 200 of the West Block, at which time the names of the laureates will be announced.
* *


THE BUDGET
Mr. George Proud (Hillsborough):: Mr. Speaker, tomorrow will be another dark day for Canadians when this government announces its new economic forecast.
All of Canada will feel the effects of the new budget, and I would suggest none more so than Atlantic Canadians. This region of Canada has already been devastated as a result of the government's cut-back agenda and tomorrow it is highly likely that Atlantic Canadians will be hammered even further.
The budget of April, 1989, resulted in cuts to Established Programs Financing, that is, transfer payments. In Atlantic Canada these cuts amounted to over $17 million, resulting in reduced funding for medicare, universities and hospitals for the fiscal year 1990-91. To Prince Edward Island, the net loss is some $2 million.
Reductions in transfer payments for health care and post-secondary education squeezes provincial budgets that are already tight.
Given the economic disparity already existing in Atlantic Canada, provinces can ill afford to increase provincial taxes to offset federal cut-backs. Atlantic Canadians need increased economic development policies from this government.
Our region of Canada cannot give any more. We need to hear positive initiatives from this government if that is possible.


FRIENDS OF MUSEUMS
Mr. Jim Edwards (Parliamentary Secretary to Minister of Communications):: Mr. Speaker, many Canadians mark today as Heritage Day, a day when we take stock of our collective history.

More than 2,000 organizations and institutions are now working to preserve Canada's cultural heritage and to help us understand it. About 30,000 volunteers represent our museums to the public, by acting as teachers or guides, by providing or obtaining financial assitance or by offering for the enjoyment and edification of all Canadians valuable objects and works of art that they have collected over many years.

These thousands, each contributing in his or her own way, are known as "friends" of museums. The president of the Canadian Federation of Friends of Museums is Mrs. Carol Sprachman.
Her efforts and those of her organization enrich all our lives, whether it is the activist petitioning city hall to prevent demolition of an interesting old store, a scholar researching collections of sacred works, a committee collecting decorative quilts, painted Easter eggs and household artefacts or the senior executive twisting arms to save a French impressionist painting for a public gallery. Mrs. Sprachman and all who work in support of museums and of heritage organizations are the faithful stewards of our Canadian inheritance.


AGRICULTURE
Mr. Vic Althouse (Mackenzie):: Mr. Speaker, in spite of having had plant breeders' rights legislation since 1970, U.S. industry has not succeeded in serving the breeding needs of some of its more northern farmers.
According to a study by North Dakota State University, Canadian commercial varieties of wheat, oats, Durum, fall rye, barley and flax tended to outperform most American varieties in trials across this state. It was our specialty crops, lentils and faba beans, which were the big stars, far outranking other U.S. varieties.

February 19, 1990
Farmers in North Dakota find our publicly-bred varieties more suitable to their climatic and soil conditions than anything developed by U.S. agribusiness.
Bill C-15 introduced by the Tory government and now supported by the Liberals has finished the legislative committee stage. Its passage will mean that Canadian farmers who farm under unique soil and climatic conditions will lose the advantage they now enjoy with public plant breeding and will be forced to depend on the same so-called world scale profit oriented research that has proven so inadequate in the Dakotas.


ATLANTIC CANADA
Mr. Peter L. McCreath (South Shore):: Mr. Speaker, this past week has seen considerable media focus on the plight of the town of Canso.
Government bashing by the CLC, the CBC and the NDP have provided considerable entertainment, but little by way of constructive solutions to the difficulties faced not only in the town of Canso but in places like Port Mouton, Lockeport, Shag Harbour and Woods Harbour.
In 1983, when Atlantic Canada faced its last major crisis in the fishery the Liberal government of the day chose not to face the growing capacity problem if it meant some plants might close. Instead, it threw money at the problem-$138 million to be exact-and bought the people's silence, though not as it turned out the election of 1984.
We need a responsible response to the current crisis. This means proper resource-recovery measures, rationalization where there is over-capacity, development and further value-added processing where there is underutilization and assistance and incentive for economic diversification.
Let's leave the rhetoric to Bob White and Shirley Carr. I look to this government for a responsible program of response measures developed in consultation with those who are affected. I call upon the government to bring forth these measures soon.


Mr. Rey Pagtakhan (Winnipeg North):: Mr. Speaker, about a year ago this government commissioned a study to address public concern respecting the foam-coated breast implant called the Meme which was earlier marketed in Canada without the required compliance notice from the Health Protection Branch.
The Real Laperriere Company of Montreal, which has marketed the device in Canada since 1984, has used the government-funded report as part of its marketing promotion since June 1989.
In June, 1989, Dr. C. Kerrigan reported that the said implant is not unsafe. Yet, public doubt remains.
Apparently, Dr. Kerrigan received a total of $45,000 for her report, but only $15,000 came from the department of health.
Moreover, Dr. Kerrigan's report made apparent use of another report, that of a plastic surgeon who was under contract with the company that produced the implant to begin with.
I urge the minister of health to inquire into and reveal who aided Dr. Kerrigan in the preparation of her report to assure the Canadian public that no one had a prior or a continuing business relationship with the Real Lapier-riere Company of Montreal and to explain where the other $30,000 which helped pay for the Kerrigan report came from.


GOODS AND SERVICES TAX
Mr. Ken Monteith (Elgin):: Mr. Speaker, I would like to bring to the attention of the House the statement made by the President of Ford Canada, Mr. Ken Harrigan, with reference to the automotive industry and the GST.
The statement was published in the St. Thomas Times Journal last week and quoted Mr. Harrigan as saying: "What a lot of people have overlooked is that many consumer goods, including cars, will be lower priced under the GST than they are with the existing manufacturers' sales tax. So the GST is not all bad-in fact, in the long run, it will improve Canada's competitiveness in world markets."
February 19, 1990

I believe this reaffirms the decision of this government to implement the goods and services tax. With an industry that is temporarily suffering, the statement by Mr. Harrigan is encouraging.
Furthermore, despite the condition of the industry Mr. Harrigan goes as far as to forecast recovery for the automotive industry as early as next year, assisted in part by the implementation of the GST.
Despite the doom and gloom predicted by those opposite, it is reassuring to have someone of Mr. Harrigan's stature reaffirm that this government is, indeed, on the right road to economic-


Mr. Speaker:: I regret to interrupt the hon. member, but his time has expired.



ORAL QUESTION PERIOD


Hon. Herb Gray (Leader of the Opposition):: Mr. Speaker, my question is for the Deputy Prime Minister.
On Saturday, 5,000 people came to Canso, Nova Scotia, to say that this government was doing nothing for Canso and communities like it. Today, a task force from Canso, Nova Scotia is in Ottawa to plead for real help for that community.
A few weeks ago the Prime Minister said that there is no crisis in Atlantic Canada, that there is only a crisis in the Atlantic fishery, as if the two were not really intertwined.
I ask the Deputy Prime Minister this: What real help will the government announce for Canso today? Or is it sticking to its fatuous answer that there is no crisis in Atlantic Canada? The people of Atlantic Canada deserve better than that.


Right Hon. Joe Clark (Secretary of State for External Affairs):: Mr. Speaker, there is, of course, a crisis in the fishing industry in Atlantic Canada, as the Prime Minister said in this House some days ago.
The Government of Canada is working with the industry and with communities involved to try to find the best way to respond to that crisis in terms that will provide some kind of durable, long-term solution to that
Oral Questions
problem, that will not simply involve demonstrations expressing the outrage of the moment, such as was taken advantage of by the New Democratic Party members and their shadow in Canso on the weekend.
There is a task force here. That task force will be meeting with representatives of the Government of Canada.
We are continuing work on the long-term response to serious problems that face the fishery of Atlantic Canada. We intend to follow actions that will lead to a situation where the fishery too is healthy in Atlantic Canada as we have been able to contribute to the health of other sectors of the economy of that important part of the country.


Herbert Eser (Herb) Gray: Mr. Speaker, why does the minister not realize that the 5,000 people who gathered in Canso last Saturday were not simply expressing the outrage of the moment, as he put it, but their deep despair over the lack of action by this government?
The Prime Minister told this House last month, and I quote: "We have and will continue to bring forward the same kinds of generous programs that we brought forward for western farmers." The government still has not done this. I ask the minister again: When is the government going to deliver the same kind of program it brought forward for western farmers for the fishermen of Atlantic Canada?
Is the government going to give the same kind of fatuous answer with respect to outrage that the minister just gave, or is it going to do something meaningful to produce for Atlantic Canada the same kind of program it produced for the farmers of western Canada? If so, why will it not announce that today when the Canso task force is here in Ottawa?


Charles Joseph Clark: Mr. Speaker, the hon. Leader of the Opposition will know, if he is seriously concerned about this issue, that the result of consultations between the company and the federal and provincial governments is that an arrangement has been reached to provide for the establishment of 300 time-shared jobs in Canso.


Some hon. members:: Oh, oh!

February 19, 1990
Oral Questions


Charles Joseph Clark: We recognize that that is short of what the people of Canso would like to have achieved. We are working seriously on a series of programs designed to deal with long-term problems in the Atlantic fishery, not designed to give answers and to announce policies simply because a concerned group is in the gallery of the House of Commons today.
Surely the Leader of the Opposition understands that these are important problems that have to be considered seriously and that have to take account of the international factors, of manpower programs and other programs that we are putting in place in the Government of Canada. We hope that with the co-operation of people in the industry, communities affected and provincial governments that we will be able to provide some long-term relief to an industry that is now in crisis.


Herbert Eser (Herb) Gray: Mr. Speaker, the minister has shown today that his government deals only in illusions.
Mr. Speaker, I therefore ask the minister: When will the government offer the people of the Atlantic provinces a real program to revive the Atlantic fishing industry, not a retraining program, but a program that will really provide dignity and employment for the people of the Atlantic region? When will the government offer a real recovery program for the people of the Atlantic provinces?


Charles Joseph Clark: Mr. Speaker, I think that the hon. Leader of the Opposition knows that there have already been talks between the Government of Canada, the Government of Nova Scotia and the industry concerned. The result was a program that can give 300 jobs to the people of Canso. That is not all that Nova Scotians want and the government is now examining all aspects of the problem to try to find a long-term solution, not like the solutions in the past which overlooked or aggravated the problem.

Mr. Francis G. LeBlanc (Cape Breton Highlands -
Canso): Mr. Speaker, my question is directed to the Deputy Prime Minister.
The more than 5,000 people who gathered in Canso on Saturday condemned this government's cynical rescue plan with National Sea Products, a plan which offers destitution to more than half of the workforce and a grant-pogey cycle for the rest.
The mayor and the members of the Canso Community Survival Task Force have travelled to Ottawa to seek a solution that will save their town. The whole country is watching.
Will the Deputy Prime Minister assure them that they have not travelled here in vain? Will he commit his government today to working out a plan for them that will see their trawler port maintained and a viable fish plant in Canso secure?
Right Hon. Joe Clark (Secretary of State for External
Affairs): Mr. Speaker, what we can commit to the task force and the people of Canso is that ministers of the government will meet with them as they have requested and that we will consider seriously the proposals that they put forward. We understand their grave concern at the situation in Canso. We are looking for a response that may solve that problem.
They will be having meetings with at least two of my colleagues tomorrow, and will have the opportunity to put forward proposals that they think may be realistic and may in fact help to resolve the problem.
We will assess those recommendations with the utmost seriousness because we share with the people of Canso a determination to try to find a long-term, durable solution to this difficulty that will allow as much as possible the community and the industries involved in that community to survive and to thrive.
Mr. Francis G. LeBlanc (Cape Breton Highlands -
Canso): Mr. Speaker, my supplementary question is for the Minister of Fisheries and Oceans.
What the people of Canso want is simple. They want their jobs and dignity.
If National Sea Products will not land a reasonable share of their allocation to their plant in Canso and keep their trawler port open, will the minister exercise his responsibility under the Fisheries Act and reserve an allocation for the community of Canso that will keep that plant and that trawler port open?
Hon. Thomas Siddon (Minister of Fisheries and
Oceans): Mr. Speaker, as my colleague the Secretary of State for External Affairs has indicated in this House on repeated occasions, we are deeply concerned about the
February 19, 1990

troubles that people in communities such as Canso are facing. For reasons relating to the lack of abundance of the northern cod resource we have had to reduce the northern cod quota by about 70,000 metric tonnes in the last 12-month period.
It has never been the policy of the government to force fishermen, trawlermen or fishing companies to land catch at specific communities for a number of very good reasons relating to the viability of the fishery and which would ensure that all communities in Atlantic Canada would be faced with misery rather than just those about which we are deeply concerned and which we are trying to help.
We will be happy to listen to the representatives from Canso and hear any good ideas they may wish to propose.


Ms. Audrey McLaughlin (Yukon):: Mr. Speaker, my question is for the Deputy Prime Minister.
The acting Prime Minister and the Minister of Fisheries have talked about solutions, but they have known about the problem for a number of years. Solutions should have come forward long before today.
We are here today to join that united voice of those 5,000 supporters of Canso and residents of Canso. Canso has become the symbol for people across this country who are saying that they will not quietly lay down and die; they want this government to do something.


Some hon. members:: Hear, hear!


Audrey Marlene McLaughlin: I ask the Deputy Prime Minister this: Will he pledge today the programs and the additional funds committed by the Prime Minister which are absolutely necessary to see Canso and other fishing communities remain productive?


Charles Joseph Clark: Mr. Speaker, I understand that Mr. Bob White was in Canso and had the Leader of the New Democratic Party in tow with him for a public demonstration indicating the attention of the CLC and the New Democratic Party to a problem that has been of deep concern to this government since it arose.
Oral Questions
The hon. member will understand that a demonstration is not going to solve this problem and that we have very serious problems in the Atlantic fishery.
It is not simply Canso that is affected. It is Lockeport and a number of other communities in Newfoundland and in Nova Scotia that are very directly affected by this problem. We are seeking to find solutions that will be durable solutions.
Some of these issues, as the hon. leader will learn if she stays longer in her job, require more than a demonstration to resolve them.


Audrey Marlene McLaughlin: Mr. Speaker, my supplementary question is directed to the Minister of Fisheries and Oceans.
If this government and its members cared about the people of Atlantic Canada, if they cared about the community of Canso, they would have been standing at that meeting in Canso telling the people of Canso their solutions.


Some hon. members:: Hear, hear!


Audrey Marlene McLaughlin: Mr. Speaker, on February 11 a fisheries official indicated that community-based quotas are being considered by the federal government.
Principle three of the 1990 Atlantic Groundfish Management Plan states that allocation of fishery resources will be on the basis of equity, taking into account closeness to the resource, and the relative dependence of coastal communities upon a given resource.
Will the minister listen to the supporters of Canso and the Atlantic communities? Will he commit himself today to bring forward community-based quotas?
Hon. Thomas Siddon (Minister of Fisheries and
Oceans): Mr. Speaker, the official quoted was responding, I think, at a special seminar organized by the Maritime Fishermen's Union, to a question about community quotas among a variety of options for dealing with this problem.
I believe it was the ADM for the Atlantic region who indicated that if this option were to be considered, a number of factors should be taken into account. He explained why community quotas lead to a less econom-

February 19, 1990
Oral Questions
ic, less competitive fishery and more hardship and suffering for all those who rely on this industry because, in fact, plants are operated at very low levels of their optimal capacity.
We have to look at such proposals in the context of our historical policy which is not to allocate specific quantities of fish to specific communities.


Audrey Marlene McLaughlin: Mr. Speaker, I have a supplementary question for the minister.
It is this government's responsibility to represent the people and not National Sea.
Shameless waste of perfectly edible fish has gone on for years. It is thrown back in the sea. Our resources and our environment must be treated with respect.
Mr. Speaker, this scandalous waste must stop. Can the minister guarantee that starting today every fish caught will be used?
Hon. Thomas Siddon (Minister of Fisheries and
Oceans): Mr. Speaker, the federal government represents all the people in the Atlantic region and not only those who have interests-

On the question of fish that are wasted at sea, this is a despicable practice. In some cases in the fishery there is an unavoidable by-catch of undersized fish because fish are caught with nets and fish tend to gather up in nets.


Some hon. members:: Oh, oh.


Mr. Siddon:: I think all members of the House recognize that fact, Mr. Speaker.
We take every measure management-wise to minimize the waste of fish by all sectors of the industry. In regard to the offshore sector, it is recognized that this practice does occur and that is why we have observers on these vessels to minimize and prevent these kinds of wasteful practices.


Mr. George S. Baker (Gander-Grand Falls):: Mr. Speaker, the long awaited Harris report on the northern cod stock was delivered to the Minister of Fisheries today. According to the scientific evidence and the testimony given by experienced fishermen before the Harris panel, today the northern cod stock is involved in
that very delicate pre-spawning activity that is so vital for the actual spawning itself.
Will the Government of Canada now take the advice of these experienced fishermen and cancel the licences of every foreign trawler licensed by this government inside of our 200-mile zone for 1990, foreign trawlers that outnumber the Canadian offshore fleet two to one, trawlers that are three and four times the size of our Canadian boats?
Can the minister assure us that he will put an end to this foreign disruption of the pre-spawning process of the northern cod stock and cancel every licence?
Hon. Thomas Siddon (Minister of Fisheries and
Oceans): Mr. Speaker, the hon. member knows that when foreign vessels fish inside the 200-mile economic zone, it is because Canada is obliged to make surplus stocks available to the vessels of other countries that belong to the Northwest Atlantic Fisheries Organization outside the 12-mile limit.
Those stocks do not belong to Canada, although we are given first opportunity to use them for the benefit of our fishermen and communities such as Canso. That is why we have made 100,000 tonnes of those surplus stocks available to our own fishermen on a priority basis.
Scientists advise me there is no recorded evidence in the scientific literature or our own research which states that fishing on the spawning grounds does measurable damage to the cod stocks. I have had private confirmation of that from Dr. Harris. We will be doing additional research on this question, but I should point out that where fisheries have been conducted in the North Sea and in Canadian waters in the 1960s, on the spawning stocks, we have seen abundant production from those resources in subsequent years.
So this question can in no way be answered in a simplistic fashion as this member is often wont to do.


George Baker: Mr. Speaker, two weeks ago in the House the minister told us that the food of the cod fish that is being given to the foreigners is under-utilized species, that food has nothing to do with the weight of the codfish.
Today he is telling us that according to his advice the disruption of the spawning ground has nothing to do with the spawning process. He must be getting his advice from a ouija board.
February 19, 1990

How can the government ignore the fact that the deepest nets and the largest nets used in the Atlantic Ocean are the nets of the over 100 foreign trawlers licensed by this government, not the 60 Canadian trawlers in our offshore fleet, and that if the spawning grounds are disrupted, a codfish will not spawn.
How would the minister like it if he had a Soviet trawler barging through his bedroom? Cancel the licences.


Some hon. members:: Oh, oh!


Thomas Edward Siddon: Mr. Speaker, the hon. member is obviously a great expert on spawning, although I do not know how much he knows about bedrooms.
The hon. member is well known to spawn a great deal of subterfuge in these matters, but I should point out again that foreign vessels fishing for under-utilized or surplus stocks, which Canadian fishermen are not interested in harvesting, do not fish where cod are spawning. That is why their incidental catch of cod is minuscule, small enough to be barely measurable.
Once again the hon. member is floating a red herring in this House.


THE ENVIRONMENT
Mr. Bob Speller (Haldimand-Norfolk):: Mr. Speaker, my question is for the Minister of the Environment. The minister knows that around 14 million tires are now on fire in my riding, and I, along with close to 1,000 of my neighbours, have been evacuated from our homes.
Unless something is done, experts say that the fire could bum for some time releasing toxins into the air and water. People in my riding want to know what resources this government has available to extinguish the fire and monitor the health and safety effects. When will this government appoint a minister responsible for this?


Hon. Lucien Bouchard (Minister of the Environment):: Mr. Speaker, although this fire is a provincial responsibility, this government has provided the Ontario government with information to help with the monitoring of the smoke fumes and to assist local firefighting on the Hagersville scene.
Oral Questions
I informed the House on Friday morning that we had received a request that same morning from the Ontario government to help in the analysis of air quality. A few hours later that same day, at about 3.30 in the afternoon, the Ontario environment on-scene commander called back to advise that Environment Canada assistance was not immediately required. So we did not dispatch the team and the equipment.
This morning, I phoned Minister Jim Bradley to inquire about this. He told me that we could send our team and equipment. I also extended to him, on behalf of the Government of Canada, an offer of assistance in terms of all the resources we have, such as equipment. The army is standing ready to go there, if necessary, and we are waiting for an indication of any specific requests that Ontario might have.


Robert (Bob) Speller: I would say to the minister that he is about a week late in doing this.


Mr. Mazankowski:: Didn't you hear the answer?


Mr. Epp:: Try Jim Bradley.


Mr. Della  Noce@: You are not a good member asking a question a week later.


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


Robert (Bob) Speller: I will tell the member that I have been on the scene since day one of this disaster. I have been monitoring it from there. Where has the Government of Canada been?
My supplementary question is for the Minister of National Defence, the minister responsible for Emergency Preparedness Canada. He is aware that one of the functions of Emergency Preparedness Canada, and I quote from the act, is: "To monitor any potential, imminent or actual civil emergency and to report to the minister on the emergency and any measures necessary for dealing with that emergency".
I contacted Emergency Preparedness Canada today. They told me that, yes, they were monitoring the situation through the media, and that Emergency Preparedness Canada is not on site.
Is the minister prepared to fulfil his mandate and the government's mandate to get Emergency Preparedness Canada down there to monitor the situation and to

Oral Questions
determine what steps, if necessary, the federal government can take in that area.


Hon. Bill McKnight (Minister of National Defence):: My colleague, the Minister of the Environment, provided the hon. member with a short lesson in the Constitution of Canada. The Government of Ontario, through Emergency Measures Ontario, must request assistance. We have been standing by waiting for that request.
I would like the hon. member to understand that not only was there some confusion by the Government of Ontario in requesting assistance last Friday and then withdrawing the request, but to this point there has not been a request for assistance from the Government of Ontario, either to Emergency Preparedness Canada or the Department of National Defence. Both of the departments under my responsibility and the full resources of the Government of Canada are available. We wish to help, and when requested we will respond as rapidly and as efficiently as possible.


Mr. Steven W. Langdon (Essex-Windsor):: Mr. Speaker, my question is for the Minister of the Environment. Over 1,000 people in Hagersville met yesterday to voice their need for answers, their need for urgent action. The water table is being destroyed. We have a situation where cancer causing fumes are going into the air.
Why has it taken until today for that minister to offer the use of the armed forces of this country, despite the fact that minister was asked twice last week to take immediate, urgent, fast action to deal with that situation?


Lucien Bouchard: Mr. Speaker, we sympathize with the people of Hagersville, and we understand their concern in the circumstances.
That is why last week, people from my department offered their services to those who are fighting the fire. We provided information, expertise on predicting air currents.
On Friday, when we received a request from the Government of Ontario, we immediately gave an affirmative response and took steps to send staff from my department, including experts and equipment.
However, late Friday afternoon, we heard the request was cancelled. This morning, I wanted to check the situation with the Ontario Minister of the Environment. He told me-and I saw there had been some confusion about the messages sent by the Government of Ontario-that we could now send the team of technicians and the team of experts.
I also said, Mr. Speaker, that the Government of Canada was offering the Government of Ontario all its resources to fight this fire. I added that the Minister of National Defence had authorized me to offer sending in the Canadian military to fight this fir, with all the necessary equipment.
\ English]


Steven W. Langdon: Mr. Speaker, I think it is shameful that this government should attempt to put its responsibilities off on the Province of Ontario. It has responsibilities to this country as a national government. The minister can sit there and laugh but the people in Hagersville are not laughing.
I ask this minister who has ignored these questions so fully up to this point-


Mr. Speaker:: It is a serious matter. I would ask the hon. member to put his question.


Steven W. Langdon: Where else across this country are there similar dumps? How many hundreds of large dumps of tires like this, that threaten people, exist across this country which this minister has done nothing about?


Lucien Bouchard: Mr. Speaker, I would like to start by answering the first part of the question. This government respects the Constitution and the jurisdictions of the provinces, and we cannot intervene in this case if the province of Ontario does not ask us to do so. We have done everything we could do so far, and we are now waiting for specific requests. We said that we were ready to help. National Defence would like to help. We have the army. We have the equipment. We have what is necessary. We want to go, Mr. Speaker, but we are not going to invade Ontario with Canadian troops.
Second, we have made an inventory of federal dump sites, and we know that as far as federal sites are concerned, there are no dangerous stockpiles. Tomorrow, in Toronto, we will have a meeting of Deputy
February 19, 1990

Environment Ministers from across Canada, and we will establish a set of conditions for stockpiling this kind of material.


SCIENTIFIC RESEARCH
Guy St-Julien: Mr. Speaker, my question is for the Solicitor General of Canada. Since 1987, L'Actualite, La Presse and the Globe & Mail have reported many times that individuals cheated the Liberal government of $1.9 billion in 1983-84 through scientific research tax credits. My question is: Can the minister tell us today whether the RCMP is now investigating a certain Kenneth Ford of Costa Rica who cheated the Canadian Government of $6 million and whether it is investigating other individuals and/or groups who defrauded the Canadian Government through this tax program the Liberals had in 1983?


Hon. Pierre Blais (Solicitor General of Canada and Minister of State (Agriculture)):: Mr. Speaker, this situation does go back several years and we must all deplore it. Obviously, when other departments ask us for RCMP assistance, we provide it. However, in the specific case mentioned by the hon. member, he knows very well that legal proceedings are now under way and that it would be difficult for me to comment in this House, under the circumstances.


THE ENVIRONMENT
Mr. Rex Crawford (Kent):: Mr. Speaker, my question is for the Minister of the Environment. All week Canadians have watched the burning of 15 acres of tires. These 14 million burning tires will produce 42 million litres of toxic oil run-off. What has been collected to date represents only one-half of 1 per cent of the potential oil run-off. If the oil toxins enter the groundwater it will contaminate the drinking water for both people and livestock. This is a major environmental catastrophe.
When will the federal government act and not wait on the province. I have felt for years that this law should be changed.


Charles Joseph Clark: It's the law. It's your law.
Oral Questions


Rex Crawford: Well then we should change it, sir. Are there any federal plans to aid this area?


Lucien Bouchard: Mr. Speaker, the Minister of Environment does not have the power to change the Constitution of the country. We must respect the Constitution. This is the truth, it must be said.
Although this is a provincial responsibility, we have been very active monitoring the situation, sending people down there, and providing the Ontario Minister of the Environment with information on weather forecasts. We have also said that we would like to be invited to step in with resources, with the army.
On Friday morning we received a request. We immediately took measures to dispatch people and equipment, but a few hours later we received a cancellation of that request. This morning I checked with the minister himself as to why this was happening and he told me that we could send in our specialists. I also added that the Government of Canada would be very happy to be there. I offered him the full assistance of the federal government in terms of equipment, troops, people and everything. We stand ready to help.


Rex Crawford: Mr. Speaker, my supplementary question is directed to the same Minister. A renowned chemical engineer at Laval University has called the tire fire a more serious environmental threat than the 1988 PCB warehouse fire in Saint-Basile-le-Grand, Quebec, because of its potential to bum for months.
What are the federal plans to deal with the long-term effects after the fire is over while we have not acted with the province?


Lucien Bouchard: Mr. Speaker, this is a most relevant question. We have not waited for a disaster to act. We have implemented research projects across Canada to develop new recycling processes for used tires. These research projects have resulted in the construction of about six new recycling facilities either being built or in operation.
However, it is not enough. We must do more than that. At the level of the federal and provincial Departments of Environment, there will be a meeting tomorrow of deputy ministers concerning this question. We are

February 19, 1990
Oral Questions
considering new requirements for the proper and safe storage of used tires in Canada.
In this case in Hagersville, the provincial government knew that this was dangerous and it issued instructions to ask the owner to change the storage and distribute the tires into smaller piles. The owner decided to challenge this direction in court and this case is pending now. That is the reason for this huge pile of tires. The hon. member is right, we must make sure it does not happen again in Canada.


Mr. Eugene Bellemare (Carleton - Gloucester):: Mr. Speaker, my question is for the Minister of National Health and Welfare. We learned this morning that the Department of National Health and Welfare waited nine days before notifying the Canadian public that carcinogenic substances had been found in a dozen brands of fruit juice, including Bright's, Martins, A&P, Dominion, IGA, Food City, Cavalier, Timothy's, Calbeck's, Pantry Shelf, Sunshine and Libby's Pineapple Juice.
Canadians of all ages drink these juices. These juices are part of the basic diet of young infants.
Mr. Speaker, why did the minister risk the lives of Canadians by waiting for nine days before notifying consumers?


Hon. Monique Vezina (Minister of State (Employment and Immigration) and Minister of State (Seniors)):: Mr. Speaker, precisely because we care about the health of Canadians, we conducted a serious investigation and waited for the results. The company removed its product and a press release was issued to that effect.


Eugène Bellemare: Mr. Speaker, I see several Conservative members smiling, but this is an extremely serious subject and I wonder if they gave this juice to their children.

Does the minister realize, and is he conscious that these reconstituted juices contain 40 times the acceptable level of cancer-causing chemicals?
This morning an article in The Ottawa Sun states: "Health and Welfare Canada and Sun D'Or both knew about the contamination when production was halted on February 7 but it was not announced to the public until last February 16".
Furthermore, the Health Protection Branch did not believe that the risk was great enough for a public announcement, said a Health and Welfare spokesman. "We reserve the public announcement for when a situation is life-threatening."
I would like to ask the minister, is this how the ministry addresses food consumption? Is this their response to consumers, senior citizens, young children and babies? Is this a sense of responsibility, waiting nine days, knowing that a product contained cancer-causing agents?


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


Monique Vézina: Mr. Speaker, again, we are concerned about the quality of life of Canadians and about consumers having a quality product, and that is why we shall continue to monitor the quality of this product. We intend to ensure that existing measures can remedy the situation and that this will never happen again. Before a press release could be issued, a serious study was necessary to prove the product could have serious consequences. The company has acted responsibly, the product has been withdrawn, and we shall continue to monitor the quality of this product very carefully.



Mr. Ray Funk (Prince Albert-Churchill River):: Mr. Speaker, my question is also for the Minister of the Environment on another issue where he seems to be completely out of touch with his provincial colleagues.
On December 21, Cameco Limited pleaded guilty to two charges under the Atomic Energy Control Act for dumping 440,000 gallons of contaminated mine water into Wollaston Lake. They were given the maximum penalty under that act, $5,000 each, which is half of what you get for smoking on Parliament Hill.
February 19, 1990

On February 8 the Government of Saskatchewan brought charges for which the maximum fine is $1 million. Now Cameco is challenging the Saskatchewan charges in court saying they do not have jurisdiction over the uranium mining industry.
Will the minister support the charges being brought by the Saskatchewan government, will he bring in his own charges, or will he finally agree to an inquiry to straighten out the mess that the uranium mining industry in this country is in?


Arthur Jacob (Jake) Epp: Mr. Speaker, the hon. member knows that the AECB examined the situation of Cameco. He also knows the AECB laid charges. He also knows that there were fines levied.
In respect to his specific question relating to a challenge in the courts, it is before the courts and that is where it will stay.


Raymond John Funk: Mr. Speaker, my supplementary is for the Minister of the Environment. The Minister of the Environment has not shown that he even knows that an issue exists at Wollaston Lake. We have not heard at all whether he supports an inquiry into that situation where there are issues pertaining not only to the environment but to benefits to the local community and to the whole future of the uranium mining industry and how it relates to local communities.
Is the minister going to take action? Is he going to take a close look at what is happening, or is he going to be caught out to lunch on a Saskatchewan environment issue again like he was on Rafferty-Alameda?


Arthur Jacob (Jake) Epp: Mr. Speaker, I do not think the hon. member adds anything to a case which is serious when he gets personal.


Simon Leendert de Jong: Why don't you sit down and let the Minister of the Environment answer. You have a conflict of interest.


Arthur Jacob (Jake) Epp: Simon, get wired, and when you have the answer you can answer it.


Some hon. members:: Oh, oh!
Oral Questions


Mr. Speaker:: Perhaps the hon. minister could answer the question.


Arthur Jacob (Jake) Epp: Mr. Speaker, with respect to the AECB situation and Cameco at Wollaston Lake, I think the hon. member should recognize, as I thought he had earlier in earlier questions and conversations I have had with him, that this falls under the jurisdiction of the AECB for which responsibility is invested in this minister. The Minister of the Environment, his officials and officials of AECB have been in contact on this issue.
The hon. member and all viewers should understand that there is a regulatory process and it was that regulatoiy process which investigated and laid charges for which fines were paid. If there is a legal challenge in the courts, I think hon. members and you, Mr. Speaker, know that there is a right to follow the judicial course of action. The case is there and I do not think I can make any comments about it.


ETHIOPIA
David Samuel Horne MacDonald: Mr. Speaker, my question is for the Secretary of State for External Affairs. On Friday of last week I was asking about the worsening crisis situation in Ethiopia. The minister responded by mentioning that at least one ship had been diverted to Port Sudan. The minister will know that last week his colleague, the Minister for External Relations, referred to the threatened famine situation because of the deterioration in Ethiopia to at least two million people.
In view of the fact that the government of Ethiopia had agreed to some safe corridors that could be manned by the churches for the distribution of relief, and those safe corridors are now totally unusable because of increased rebel activity, can the minister assure us of two things? First of all, since we do provide assistance to all sides, that we can use our efforts to try to open up those international relief corridors again. They are essential to saving the lives of at least two million people.
Second, since former Presidents Jimmy Carter and Julius Nyerere have been chairing some peace negotiations, will the minister contact in particular former

February 19, 1990
Point of Order
President Carter to see if we can have some acceleration of those peace talks? Without peace there can never be a hope of overcoming the famine situation in Ethiopia.


Charles Joseph Clark: Mr. Speaker, this is a tragedy that is getting worse for reasons to which the hon. member has referred. We are working with the United Nations, with other countries that are involved and with NGOs to try to open corridors that can stay open to try to bring relief to trapped people. We are also seeking to identify alternative routes. I think the realistic conclusion is that unless there is a ceasefire or some agreements to suspend hostilities, all of this will be in vain. We are nonetheless working vigorously with others who are concerned to try to achieve some means of getting food to entrapped people.
I have signed a letter today to former President Carter offering Canada's full and continuing support and, indeed, suggesting some actions that might be helpful for us to take if the peace negotiation succeeds in the hope that perhaps the prospect of that action may strengthen the hand of former President Carter and President Nyerere.


GOODS AND SERVICES TAX
Mr. Jack Iyerak Anawak (Nunatsiaq):: Mr. Speaker, my question is for the Minister of Finance. I have just returned from Clyde River in my constituency where I bought some groceries. A dozen apples cost over $8, a dozen eggs cost $5, a five-pound bag of potatoes cost over $9 and the average income is $10,000.
The Minister of Finance wants to limit that northern purchasing power by putting a 7 per cent goods and services tax on almost everything my constituents need for good nutritional value. How can the minister-


An hon. member:: Not eggs.


Jack Iyerak Anawak: The hon. member says "not eggs".


Mr. Speaker:: If the hon. member and others would allow the hon. member who has been given the floor the right to ask the question, keeping in mind the time, the minister could respond.


Jack Iyerak Anawak: Thank you, Mr. Speaker. I must advise members that when you limit the purchasing power for
other goods, people will not be able to buy as many groceries. I should inform the hon. member.
I would like to ask the Minister of Finance to justify his claim that the north will be better off with the goods and services tax. Where are the studies he said in October he had to back up his claim? Will the minister reassure northern parents and families by recognizing the higher cost of living and exempting northerners who are already paying $4.29 for one litre of milk from this unfair tax?


Hon. Michael Wilson (Minister of Finance):: Mr. Speaker, I am sure the hon. member would like to acknowledge to the House that apples, eggs and potatoes are not subject to the GST.


An hon. member:: Transportation is.


Mr. Wilson (Etobicoke Centre):: The hon. member over here said that transportation is subject to the GST. That is wrong. Any tax on transportation is credited out so that there is no tax on transportation as part of the cost of food.
I think it is very important for the hon. member to understand that. I think that all in this House understand the level of the price of food and other commodities in the north but that looks at only one part of the impact of the GST. The GST is very positive for the industries of the north, particularly the mining and the oil and gas industries. Those industries will receive credits on all the taxes they pay. It will make them more competitive. It will allow for mines that might otherwise be closed to stay open for a longer period of time and that will provide employment. That will provide the wherewithal for northerners to pay for the goods that my colleague has referred to. So I caution him not to be too narrow in his analysis of the impact of the GST.


POINT OF ORDER
Hon. Doug Lewis (Minister of Justice and Attorney General of Canada):: Mr. Speaker, on a point of order. There have been discussions among the parties and I seek your indulgence to put the following motion, which I hope will be adopted without debate. Therefore, I move:
That, notwithstanding any Standing Order or special order of this
House, at 4.30 o'clock p.m. on TUesday, February 20, 1990, the
Speaker shall interrupt any proceedings then before the House, and
such proceedings shall be deemed forthwith adjourned, and the House
shall proceed forthwith to the consideration of Ways and Means
February 19, 1990

Proceedings No. 13, for the purpose of the budget statement of the Minister of Finance.
That, immediately following such budget statement, the Speaker shall recognize a member of the Official Opposition in debate on Ways and Means Proceedings No. 13; and
That the House shall not adjourn until the adjournment of the debate by the above-cited member of the Official Opposition on Ways and Means Proceedings No. 13, following which the Speaker shall adjourn the House until the usual time of meeting the next sitting day.


Mr. Nelson A. Riis (Kamloops):: Mr. Speaker, just to seek clarification, is the hon. House Leader for the Government seeking unanimous consent at this time to present this motion?
As members are well aware, we have been very concerned about what is happening in the finance committee regarding the goods and services tax and the fact that the government is not even entertaining a motion to travel. At this time I am afraid I have to say to my hon. friend, the House Leader for the government that I am unable to give unanimous consent.


Steven W. Langdon: Mr. Speaker, on a point of order. I understand there have been some discussions among the parties. I presented you with a letter to give notice that I wish to raise-


Mr. Speaker:: Perhaps I can save the hon. member some time. The hon. member is absolutely correct. He has filed an application, as he is explaining, for an emergency debate. I think under the circumstances the Speaker is required to proceed with Routine Proceedings.
It may well be that I will have a chance in a few minutes to hear the hon. member further.



ROUTINE PROCEEDINGS


Geoff Wilson: Mr. Speaker, pursuant to Standing Order 32(2), I have the honour today to table, in both official languages, the explanatory notes to Bill C-62, the goods and services tax act.
Routine Proceedings PETITIONS


GOVERNMENT RESPONSE
Mr. Albert Cooper (Parliamentary Secretary to Government House Leader):: Mr. Speaker, pursuant to Standing Order 36(8), I have the honour to table, in both official languages, the government's responses to 18 petitions.
[.Editor's Note: See today's Votes and Proceedings.]


ORDER IN COUNCIL
Douglas Grinslade Lewis: Mr. Speaker, I am pleased to table, in both official languages, a number of order in council appointments which were made by the government pursuant to the provisions of Standing Order 110(1).
These are deemed referred to the appropriate standing committees, a list of which is attached.


NATIONAL HERITAGE DAY
Mr. Brian L. Gardiner (Prince George-Bulkley Valley) moved: for leave to introduce Bill C-288, an act respecting National Heritage Day.


Mr. Speaker:: Shall the hon. member have leave to introduce the said bill?


Some hon. members:: Agreed.


Brian L. Gardiner: Mr. Speaker, I rise today on this third Monday of February, which is National Heritage Day in this country today, to present a private members, bill which would, if passed, have the support of our colleagues in the Liberal party and the governing party to pass this bill which would make the third Monday of every February National Heritage Day.
This day, known to members in our caucus as Stanley Knowles day, is known by many others as a day to develop and encourage the cultural heritage of this country. While we are a young country, it is important

February 19, 1990
Routine Proceedings
that we start early in understanding what makes up our country.
I hope in the debate we will have the support of all parties and have this bill passed.


[Stage Direction]
Motion agreed to, bill read the first time and ordered to be printed.

Mr. Lome Nystrom (Yorkton -Melville) moved: that the first report of the Standing Committee on Finance presented to the House on Thursday, June 22, 1989, be concurred in.
He said: Mr. Speaker, I want to spend a few moments this afternoon moving concurrence in the finance committee report. You will recall that last June 19 the finance committee issued a unanimous report chastising the Governor of the Bank of Canada for its high interest rate policy and for its tight money policy. The bank rate at that time was lower than the rate today.
I say that the time has surely come when this House must speak in a firm, solid and unified way by saying enough is enough. Interest rates in this country are now much too high. Interest rates are hurting the ordinary Canadian citizen and it is about time we brought them down and brought them down now.
I appeal to the government back-benchers. I appeal to the government ministers across the way that they take the lead from the finance committee and say to the Minister of Finance, with a budget coming down tomorrow, that the bank rate in this country is much too high and it is hurting ordinary Canadian citizens.
In the last three weeks we have seen a jump in the bank rate in this country of one full per centage point. I suggest that the interest rates in this country now are out of control. The Bank of Canada has lost any meaningful control it had on monetary policy in the country. Instead, monetary policy is now being controlled by the international investors and exchange markets around the world.
Going back a few weeks to January 18, the Bank of Canada dropped the interest rate by 29 basis points. It
went down to 12.14 per cent. A lot of people were optimistic, saying that the bank rate in this country would be going down. Perhaps it was a signal of positive things to come in the economy and perhaps we were getting back to a more sane monetary policy once again.
That optimism was short-lived. One week later on January 25, the bank rate jumped by some 15 basis points. Another week later on February 1, it took another jump of 30 basis points to 12.59 per cent. On February 8, it jumped again to 12.79, an increase of some 20 basis points. Then last week, in a skyrocketing of the bank rate, it went up by 53 basis points, a full one half per cent.
I think that is shameful coming from a government that pretends to be responsible when it comes to the economic and monetary affairs of Canada. Now the bank rate is sitting at 13.32 per cent, the highest level it has been since the early 1980s when this country was in the depth of a great recession that was, in many ways, a depression to many parts of the country and many, many Canadians.
I appeal to the government and to colleagues across the way to concur in the finance committee report that calls upon the Governor of the Bank of Canada to stop intervening in the market-place to push up the bank rate and, indeed, do whatever he can to bring down bank rates immediately so it helps each and every Canadian from coast to coast.
I wonder if the Minister of Finance realizes what high interest rates are doing to ordinary Canadians. I ask the Minister of Finance: When is enough going to be enough? How much higher do those interest rates have to go in terms of the farmers, fishermen, homeowners and small business people before he is finally going to come to his senses and bring down interest rates?
I remember the budget almost a year ago on April 26 when the minister stood in his place and predicted that by 1990 the bank rate would be 10 per cent. Mr. Speaker, do you believe that? He was predicting a 10 per cent bank rate last year for the spring of 1990. Instead of 10 per cent, it is over 13 per cent.
What does it mean to the ordinary citizen? I will give a couple of examples. If a person has an $80,000 mortgage and the mortgage rates go up by 3 per cent, 3 per cent on $80,000 is $2,400 a year or $200 a month for a person with
February 19, 1990

an $80,000 mortgage. A high interest rate policy to ordinary Canadians is a tax increase. It is a tax increase for ordinary people who have to renew their mortgages.
Just today I talked to a couple of people who have to renew their mortgages in the next few months. An $80,000 mortgage with a 3 per cent increase will mean an extra $200 a month for someone in that position, or $2,400 a year or almost $10,000 over four years, if they sign a four year term. I say that is shameful. I say that enough is enough. It is about time the government came to its senses and rolled back interest rates in this country.


An hon. member:: Right on.


An hon. member:: Hear, hear!


Lorne Edmund Nystrom: I wonder why government back-benchers across the way are quiet and why they are not getting up and saying to the Minister of Finance in Question Period, in statements and speeches in this House that they were elected to run a fiscally responsible government back in 1984.

Mr. Speaker, I wonder how the hon. member for Abitibi (Mr. Saint-Julien) can sit calmly on the government backbenches and watch the Minister of Finance who, just like Mr. MacEachen, is stuck with his policy of interest rates that are too high. Why does he keep silent? Why does he let himself be manipulated by the Minister of Finance and Mr. John Crow, the Governor of the Bank of Canada? Why is he keeping quiet?
Mr. Speaker, it is time to act, and enough is enough! It is time to act now!
Interest rates are at about the same level now-


Guy St-Julien: You never came to Abitibi! We never saw you in Abitibi!


Lorne Edmund Nystrom: Mr. Speaker, I have not been to Abitibi, but I have travelled a great deal in the province of Quebec. I know that Quebecers are hit just as hard by interest rates as people in western Canada, and I am sure that his constituents will agree.
Mr. Speaker, why do we have these sheep on the government side, from the province of Quebec, from Alberta, from all over Canada, who support and who are
Routine Proceedings
afraid to say anything in public against this government's monetary policy, and the monetary policy of John Crow, Governor of the Bank of Canada, although that policy is hitting average Canadians very hard?
Take, for instance, a farmer in Quebec or a producer in my own province, in Saskatchewan, who are now facing a bank rate of 13.32 per cent! Mr. Speaker, it is going to be very hard for farmers in my area and yours.
Mr. Speaker, this is the Parliament of Canada. Why are Conservative members keeping quiet? Why are they afraid to speak publicly, openly and strongly against this monetary policy that is dangerous to the country and dangerous for Canadian voters? Why, Mr. Speaker?
I hope that in a few minutes, the hon. member for Abitibi and perhaps others with him, will speak to this matter. I hope the answer is yes, Mr. Speaker.

It affects ordinary Canadians in a very negative way. Someone might buy a car and borrow about $12,000. When the bank rate goes up by 3 points, the cost of borrowing that money goes up by 3 per cent. That is an extra $360 a year or $30 a month. I think of farmers in Saskatchewan or anywhere else in the country as Farm Credit Corporation loan rates will surely be going up very' shortly or other money they must borrow to keep their farm operations going. Once again, where is the Conservative party when it comes to farmers in terms of protecting them from the vagaries of the international market-place?
I cannot understand why the Minister of Finance is sitting by idly, watching the interest rates go up and up to a level where they are now 5 per cent higher in our country than they are in the United States. Their inflation rate is around the same level as ours. In fact, there are seven or eight industrialized countries that have an inflation rate as high or higher than ours and have a bank rate that is lower than ours. Explain to me why our inflation rate can be about the same level as the American inflation rate and yet our bank rate now is over 500 basis points, or 5 per cent, higher than the bank rate in the United States. I believe the historical high was about 6 per cent in terms of the GATT. We are almost at that historical high today.

February 19, 1990
Routine Proceedings
We have a government elected back in 1984 that criticized the previous government for high interest rate policies and yet we have histoiy repeating itself with Mr. Wilson compared to Mr. MacEachen back in early 1981.1 say that is not good enough from the Government of Canada.
What does he do to the country? A high interest rate policy in this country will drive the country into a recession. Already we have friends of the government such as Mr. Peters from the Toronto-Dominion Bank, for example, saying that the possibility of a recession is very great. The Canadian Manufacturers' Association's chief economist said last Thursday that the possibility of a recession now is very real. These are friends of the government. They are all warning the Minister of Finance and the government that the chance of a recession in this country is very real and that if we do not change monetary policy then it becomes even more likely that we will have a recession in 1990.
What does it do to debt? I remember over the years the Conservative party used to say: "Look, elect us and we will bring down the deficit. Elect us and we will bring down the debt in this country because the deficit and the debt are too high." Yet, what has happened since 1984? Exactly the opposite has happened. Back in 1984 the national debt was $170 billion. Now in 1990, we will see in the budget papers tomorrow night that the national debt is around $354 billion. In five and a half short years the Conservative Party of Canada has more than doubled the national debt of Canada. With one Minister of Finance, it has run up the national debt by some $180 billion extra. In the first 117 years of Confederation our national debt was $170 billion and in five and a half short years an extra $180 billion has been added so that the national debt is now about $350 billion.


An hon. member:: Oh, oh!


Lorne Edmund Nystrom: Across the way, one of the ministers is saying it is all in interest. That is what this debate is about, that interest rates are too high, that the cost of servicing the debt is too high and that every time the Bank of Canada increases the bank rate by one per centage point, the government has to spend a few billion dollars paying off the services on the debt of $350 billion. In fact, in the Minister of Finance's budget tomorrow night, we can expect an item of around $40 billion to pay
the service charge or interest on the national debt, $40 billion.
The people of Canada now spend more money paying interest on the national debt than they do on old age pensions, family allowances and hospitalization and medical care. Why is the Conservative party doing it? It has done more in five and a half years to increase the national debt than all the other governments before them in the past 117 years.
Those are the facts and there is no denying those facts. They will be stated very clearly in the budget that comes down tomorrow.


Some hon. members:: Oh, oh!


Lorne Edmund Nystrom: They are laughing across the way but in 117 years of history the national debt was about $170 billion. In the last five and a half years it went up by about $180 billion. That means that it costs about 30 cents on the dollar when someone is paying taxes to pay off the interest of the national debt.
We care about the deficit, Mr. Speaker. What we are saying today to the government is that if it cares about the deficit it will concur in the finance committee's report and ask John Crow to do what he can to bring down interest rates in Canada.
If the minister across the way from Toronto cares about the deficit, he would be up on his feet saying the same thing that I am saying, that the interest rates in the country are too high and let us bring down the bank rate so we can bring down the debt service charges to the Government of Canada and to the provincial and municipal governments.


Mr. Andre:: You want us to spend more and more. [Translation]


An hon. member:: What is the inflation rate?


Lorne Edmund Nystrom: Mr. Speaker, the minister is talking about the rate of inflation. This year, inflation is now at 5.5 per cent, more or less the same level as in the United States. There is a 5 per cent spread between our bank rate and the U.S. bank rate, however, although we have the same rate of inflation. How come, Mr. Speaker? We have practically the same rate of inflation, but the spread between our bank rate and that in the United States is 5 per cent. The problem is not inflation, because the rate in Canada is about the same as the inflation rate in other industrialized countries. The problem is the bank rate.
February 19, 1990



I do not believe that the government really knows or understands that a high interest rate policy is going to throw people out of work. It increases the cost of housing. In fact, I have a clipping here from Ottawa's The Sun quoting the former president of the Canadian Homebuilders' Association, Mr. Tom Cochren as saying: "Each 1 per cent rise in interest rates knocks 100,000 potential first-time home buyers off the market".
Every time the bank rate goes up by 1 per cent and mortgage rates follow by going up 1 per cent, about 100,000 potential first-time home buyers are knocked out of the market.
How many will be thrown out of work if 100,000 people who were going to buy homes are no longer in a position to afford to buy them?
Construction workers are thrown out of business. We have furniture makers thrown out of business. We have metal workers thrown out of business. We have all kinds of people thrown out of business. Maybe even the odd lawyer here and there is thrown out of business. That is what happens when the economy slows right down. It slows right down to a halt.
What we have is a government induced recession. The Minister of Finance and the Prime Minister have intentionally increased interest rates in this country, have intentionally cut back on corporate taxes and have intentionally cut back on taxes for their wealthy friends because they wanted more investment. The price of desire for more investment now is a high bank rate, high interest rate, higher unemployment, a greater national debt, and a deficit that is basically out of control.
It is time to tell the Minister of Finance and the Governor of the Bank of Canada to let us concur in the report of the finance committee and say the time has come to lower interest rates. Let us do it now. Let us do it in a solid united way.


Mr. Hovdebo:: Mr. Speaker, I am very interested in the approach taken here. I know that farmers, house builders, consumers, workers, and even the cost of living all suffer under high interest rates. I just wonder if the member would give us any indication of who really
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profits from high interest rates. Who are the people or the groups that really profit from high interest rates? If it is not the government, the country, and a very few citizens, who does?


Lorne Edmund Nystrom: Mr. Speaker, a few wealthy Canadians with a lot of savings would profit from high interest rates, but the overwhelming majority of the citizens of the country do not. Those who benefit from high interest rates are some of the big financial institutions which can make all kinds of money on foreign exchange markets. Big corporations often do not suffer from high interest rates because they reinvest, retain earnings, or can go offshore and borrow money at a lower rate than can than the ordinary citizen. Only some of the wealthy people in this country can benefit.
The people who do not benefit are the farmers, the ordinary citizens of this country, people trying to build a house, raise a family, or buy a car. Those are the people who suffer because of the high interest rate policy in Canada.
About a week ago the Prime Minister made a prediction that interest rates would be lower by the end of 1990. We should be telling the Prime Minister today, the day before presentation of the budget, to ensure that we take action to bring down interest rates quickly because the only people who benefit from high interest rates are the extremely wealthy: the Conrad Blacks, the Bronfmans and people like them who are friends of the Minister of Finance.


Guy St-Julien: Mr. Speaker, I would like to put a question to the hon. member for the NDP. We all know that in 1984, we received a legacy from the Liberal party. The deplorable state of affairs we see today is mainly due to the previous Liberal government's administration. We in the Progressive Conservative party have been in power for five years and have tried all possible means to correct the situation in Canada. I may remind the hon. member that the Minister of Finance has worked very hard to reduce the debt. In 1981-82, under the Hon. Allan MacEachen, the budget deficit accounted for 21.7 per cent of federal expenditures; in 1984-85, under the Hon. Marc Lalonde, the proportion was 35.1 per cent. In

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other words, when the Minister of Finance was appointed in 1984, the 1985-86 budget deficit took up 30.9 per cent of federal expenditures, and since then, it has amounted to 26.3, 22.4, 21.6, and 21.3 per cent this year. So much for the budget deficit. That was my first question.
My second question is this: I would like to know what the New Democratic Party did in 1983-84 to stop the hemorrhaging from the $1.9 billion hole in the budget as a result of the scandal, the theft of the century that the Liberals "programmed" for scientific research, a problem you are familiar with. I would like to know your position what the NDP did. Did you ask for a royal inquiry on the theft of the century, on this scandal?


Lorne Edmund Nystrom: First of all, Mr. Speaker, to answer the second question, we asked questions in the House. We talked about the situation and we helped the Conservative party beat the Liberal party across Canada.
As for the first question, the hon. member for Abitibi referred to a situation we had five and a half years ago when the Liberal party was in power. For the past five and a half years, his party has formed the government, and it has had a lot of time to do something positive. History repeats itself. We had a Conservative government in the 30s, when we had the Great Depression here in Canada. Five and a half years ago, the national debt was $170 billion, and it has now more than doubled.
I remember clearly when Mr. MacEachen brought down his budget in 1981; his policy was very similar to that followed by the Minister of Finance today. He said we had a problem with inflation, that we had a problem with the deficit, that we had to raise the bank rate, and after he did that, we had a big recession here in Canada. The Conservative Minister of Finance is taking exactly the same position as Mr. MacEachen, eight years later. Exactly the same!
Mr. Speaker, the figures do not lie. Five years ago, the national debt was $170 billion. Today, five and a half years later, the national debt has more than doubled, rising to $350 billion. It took only five and a half years for the Conservative party to add $180 billion to the national debt. It took the governments that preceded this one 117 years to accumulate a national debt of $170 billion. And now we have a Minister of Finance and a Prime Minister who have given us a debt more than twice that in just five and a half years. A record and a disaster! I am sure the hon. member for Abitibi is not proud at all of this record.


Mr. John Manley (Ottawa South):: Mr. Speaker, I am very pleased to take part in this debate today on the subject of interest rates here in Canada, especially on the report to the House by the Finance Committee on April 14, 1989.

The important point to make first is that the report we are discussing is not an opposition report. It is not a report of the Liberal Party or the New Democratic Party. It is a report of the finance committee of the House of Commons. Not only that, it is an unanimous report.
With all due respect to some members opposite who have made some very critical remarks about the recommendation that this report be adopted, I suggest to them that what they have first and foremost on their hands is a problem to be resolved within their own caucus. I suggest to them that if they are unwilling to support this recommendation, if the Minister of Finance is content to toss it aside, why do they not remove all their members from the finance committee?
Why not see if they can find within their caucus as honest a man as the current chairman and replace him with somebody who will follow their line on interest rates? This is an all-party, unanimous report of the finance committee of the House of Commons, recommending that monetary policy in Canada be relaxed and that the rate of interest be reduced.
It is very interesting. I was refreshing my memory by looking at the report a few moments ago. It comments in the introduction that at the time of writing the bank rate was nearly 400 basis points above rates prevailing in early 1988 and at its highest level in five years. In the introductory paragraph it also observes: "The surge in interest rates was particularly sharp in the four-month period between end of November 1988 to the end of March, 1989, when rates jumped nearly two full per centage points".
If I am not mistaken we had a general election in this country on November 21, 1988. Does it not strike one as being somewhat odd that starting the end of November 1988, just after the general election, until the end of March, 1989, rates jumped that high, that sharply? I suppose it could be argued that right after the election Canadians went on a spending binge and a credit binge and that all of a sudden the Governor of the Bank of Canada discovered there was rampaging inflation and
February 19, 1990

that "we had better wrestle it to the ground and we had better do it right now".
It strikes me as being just a little odd that none of this was foreseeable during those weeks of campaigning across the country when the Minister of Finance was happy to tell everyone that things were just great. Then, as soon as the election had been won, interest rates surged upward. That was not the end of the surge. They have continued to surge from 8.63 per cent in January, 1988, to a little over 12.5 per cent when this report of the finance committee was issued. On February 15 they were at 13.32 per cent.
Another aspect that is very concerning to all of us is the difference between the Canadian rate and the U.S. rate. In April when the finance committee issued its report and was concerned we had a spread of 2.75 per cent. It expressed its concern that it was historically very high. As I stand here today, we are looking at a spread of over 5 per cent between Canadian and U.S. rates.


Mr. McDermid:: Short term.


John Paul Manley: Over 5 per cent on short-term rates, as the Minister of Privatization is anxious to point out, which of course is where the Canadian government has been borrowing most of its money.
What is the economic policy of the government? That is what my constituents wonder when they call and ask about what is happening. They ask why the government is not doing something about high interest rates. It does affect them. It does affect ordinary Canadians who are buying houses or cars or renewing their mortgages. It does affect Canadians who have farms and those who have small businesses. They are concerned about these rates. They wonder why the government is not doing something about high interest rates.
Imagine the difficulty I have explaining to them that the government does not consider high interest rates to be a problem. The government considers high interest rates to be the medicine to solve the problem. This is very hard to convey to people who are having trouble figuring out how to meet their payments on their houses or how to stay in business.
The economic policy of the government is not to enhance the possibility of Canadians creating wealth and creating jobs. The economic policies of this government are not directed to encourage entrepreneuism or to
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encourage people to go out and invest and do new things. The policies of this government are not intended to help small business. The policies of this government are not intended to encourage research and development.
This government has two policy objectives in the economic sphere: first, it is fixated on the deficit and thinks it wants to reduce it or says it wants to reduce it. Second, its monetary policy demonstrates that it has a fixation on inflation and it wants to eliminate it.
I do not think anyone would quarrel with the idea that we should have lower deficits. We do not want inflation, but I think it is legitimate to ask whether or not there are some other policy objectives the Government of Canada ought to make priority in dealing with the important economic problems facing us.
Why is it that the government has decided inflation should eliminate concerns about employment from the economic agenda? Why is it that the deficit has taken control of all aspects of government policy? At a time when we need economic growth in Canada, when we need to address the problems that we have in regions like the Atlantic, the prairies, the north, and at times when we have to deal with high unemployment, sometimes we have to readjust the economic priorities as we see them.
We have had some seven years of sustained economic growth which began in 1982. We have a government that was twice elected to reduce the deficit. By the time of the next election, three-quarters of the national debt will have been accumulated by government elected on a mandate of reducing the deficit.
When we look at the financial statements the government will present to us tomorrow, we know roughly what the figures are going to be. We see the problem in the annual deficit is not so much the level of the debt. Although it is huge and it is a problem, the difficulty is in the level of interest rates.
The biggest borrower in Canada, the entity that is absorbing so much of the debt, is the Government of Canada. As we raise these interest rates a point here and a point there, from 8.63 per cent in January, 1988, to more than 13.25 per cent now, we see the deficit gets out of control. Not only that, these monetary policies are going to cause a major recession in Canada with the result being higher unemployment, greater demand on

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our social benefits, lower tax revenue, and higher deficits.
Each 1 per cent increase in interest rates increases the annual deficit in Canada by $1.6 billion and therefore adds, year after year as that amount is added to the total debt, to the burden that all Canadians are going to bear in the future.
The result of this monetary policy that is being pursued by the government at the present time is first of all recession. It is higher unemployment. It is a higher deficit, and it is a higher Canadian dollar in terms of international currencies. This in itself has a negative impact on our exporters and makes it more difficult for them to sell into foreign markets.
When we look at the strange coincidence of interest rates rising immediately after the election campaign, we also have to think back to those days of October, 1987, when the government opposite was signing the free trade agreement with the United States. At that time the Canadian dollar was trading at about 76 cents U.S. They entered into an agreement to eliminate tariffs between Canada and the United States. Last spring when the agreement was being implemented, the Canadian dollar was trading about 10 cents higher or at 86 cents. It is now down around 83 cents.
The entire benefit to Canadian exporters of trading into that larger United States market without tariffs was eliminated and frustrated by an exchange rate that had totally eclipsed the value of the tariffs that were being eliminated. What a strange coincidence that these things happened all at the same time.
It has to be of concern to all Canadians that this government seems to continue along with a policy of bankruptcy. Other than its fixation on inflation and deficits, what else is it thinking about? How else is it addressing the problems of inflation? Where is the inflation? Down in Toronto? Is it in the highly charged economy of southern Ontario as the finance committee was told?
Why can this government not get its mind on policy initiatives that would address inflation where it exists, regionally and sectorally? Why is it that in its unwillingness to act it has cast the entire burden of fighting
inflation on to the Bank of Canada which has to use the one tool at its disposal, the interest rate policy and the monetary policy, to fight a problem that is at best regional and sectoral? It is a policy of bankruptcy on the part of the government.
Then of course there is the ineptitude that has been demonstrated in recent weeks in the area of monetary policy. First, we had a sudden reduction in interest rates by the Bank of Canada. The bank is known to have many fine technical economists, but their reduction of interest rates was rapidly reversed a week later after the Canadian dollar took a fall.
Where, I ask, was the Bank of Canada when it should have been indicating clearly, signalling to the market that its reduction was intended to be a technical adjustment? Where are the market economists within the bank, the Governor of the Bank of Canada and the Minister of Finance, to calm the concerns of the markets when adjustments occur?
I suggest that whether we agree or disagree with the policy of the Governor of the Bank of Canada, he has until this recent move always demonstrated competence in administering the policy option he had chosen. I think the mistake that was made was very damaging to Canada and to the flexibility of the country in exercising further monetary policy.
That damage was only made worse by the Prime Minister of Canada who was willing to say in an interview that after the federal budget on February 20 interest rates were to come down. Now we really wonder who is making up the monetary policy of Canada. Is it the Governor of the Bank of Canada? Is it the Minister of Finance? Is it the Prime Minister? Do they talk to each other? We know that by statute the Governor and the Minister of Finance have to meet regularly. What about the Prime Minister? When is he to learn that glib promises like that have an effect on our currency?
What does the bank have to do? First, it had to compensate for its own failure to signal to the market what a reduction in rates meant. Then it had to turn around and compensate for the Prime Minister's own incompetence in making a statement in public. The Minister of Finance then had to stand in this House and correct it by covering up for a Prime Minister who should learn how the markets function.
February 19, 1990

In addition to his ineptitude in making comments on what interest rates are likely to do, one is forced to wonder where the Prime Minister gets the idea that even if the Minister of Finance could reduce the deficit that interest rates would come down. The Governor of the Bank of Canada was asked that specific question when he appeared before the finance committee. He said that there was no guarantee the deficit being reduced would lower interest rates. That has nothing to do with it.
The United Kingdom has a surplus budget and it has interest rates that are higher than those of Canada. The problem is not one of deficits per se. The problem is the Tory philosophy: "We don't care about recessions and unemployment. We care only about one thing. Our blinders are fixated and we are going to wrestle inflation to the ground. That is the problem that we want to fight." The fact that that happens to benefit lenders and hurt borrowers is incidental.
The facts speak to themselves. In Canada we are facing a real interest rate significantly higher than those we have known for many years. It is a real rate as opposed to the nominal rate that we must be considering, the difference between that rate and the rate of inflation. We are looking at a spread between Canada and U.S. rates that is driving an artificially high currency exchange rate.
We need a government with some policy initiatives. It has to be willing to take some ideas other than those of the current Minister of Finance which will approach the real and definite problems in Canada.
One suggestion came forward from the House of Commons finance committee. Again I say that it is a committee composed of a majority of members from the other side, chaired by the member for Mississauga South, a man I know all ministers on the opposite side respect and admire greatly. He is one who speaks his mind, yet they sit in intransigence and say that they will not listen. If they tear up this report and are unwilling to apply its simple principles that interest rates need to come down in Canada, let them do what they should and eliminate from that committee all members who signed and agreed to this report and replace them with the kinds of sycophants they need if they want to bring about the policies they seem intent on following.
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['Translation\


Mr. Gauthier:: Mr. Speaker, I would like to congratulate the hon. member for Ottawa South (Mr. Manley) for his comments.
On rereading the first report of the Finance Committee-a unanimous report, as he said, tabled by members on both sides of the House-I wondered whether he could tell us if the government's tight money policy, which has greatly slowed the growth of total demand in our Canadian economy, is not, in his opinion, leading us to a possible recession in the next few weeks or months.
Would he share his opinions on that with the House: Does he agree with me that we are now on a dangerous course and will have a very serious recession in Canada if we continue with this over-all restrictive policy?


John Paul Manley: Mr. Speaker, I agree with the views of the hon. member. The problem of high interest rates is not only related to the demand for credit; we must also ensure that in all regions of Canada, small and mediumsized businesses have enough credit to grow.

In other words, we do not have a highly unified economic situation in Canada. We have five or six major metropolitan areas in very diverse regions of the country facing very different economic circumstances.
We have the problems and concerns of homeowners, not only those attempting to acquire homes but those whose mortgages are due to be renewed. We have the cyclical problems of farmers and businessmen who need to meet the demands for credit that the cycle their farms or businesses go through generates.
The difficulty the Bank of Canada has when it is forced to respond, as the only instrument to fight inflation, is that its monetary policy necessarily applies across Canada. We have one currency and we have one central bank. So the bankruptcy policy that exists in this government that leads the Bank of Canada to use a high interest rate policy thereby restricting the credit available to farmers, to small business, and to people in regions where inflation is not a problem but credit is needed to go through cycles is a crucial one.

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By failing to seek out the root causes of inflation and to develop other policies to address those inflationary pressures, and using the blunt instrument of interest rates, the answer to the question put by the hon. member for Ottawa-Vanier is quite clear. We may be in a recession now. Certainly, business confidence is at an all-time low. However, the need to respond to the crisis that is developing is clear and the government has tied its hands and eliminated its ability to respond in any kind of positive and creative way.


Harvie Andre: Mr. Speaker, I will pose one question to the hon. member. I happen to have The Economist magazine here. He reminded me of an article in The Economist three or four issues ago which looked at expected corporate profits for the leading western industrialized nations and predicted that for 1990 the corporate profits in Canada would rise higher than in any other nation, followed by Australia and so on.
How does he reconcile that prediction by The Economist, which I think the hon. member would agree is a reputable magazine as are the economists who put that prediction together, with the statement he just made- which he pulled out of thin air I am sure-that confidence is at an all-time low, if in fact the outside world is looking at Canada and saying that we are going to do better than anybody else in terms of corporate profits? Admittedly, that is only one measure of economic growth, but a significant one, I am sure the member will agree.


John Paul Manley: Mr. Speaker, I must say that I have not seen the edition of The Economist to which the minister is referring, but I have seen the report of the Conference Board of Canada on the effects that the implementation of the goods and services tax will have on the Canadian economy.
One of the predictions that the Conference Board made is that corporate profits would rise in 1990-91 by $6 billion a year. I have asked the Minister of Finance this question repeatedly and he has refused to answer. He will not answer frankly to the people of Canada on this point.
The move from the manufacturer's sales tax to the goods and services tax means that the entire consumption tax imposed at the corporate level will be passed on to consumers. That is the design of the goods and
services tax. That is why the government likes it. The manufacturers' sales tax is no more passed on to consumers than the corporate income tax.


Harvie Andre: What?


John Paul Manley: It is not passed on any more than the corporate income tax. It may be absorbed in prices, it may also be absorbed in profits.


Harvie Andre: Oh come on.


John Paul Manley: Mr. Speaker, the Tories do not like to hear this. I do not think they understand corporate finance over there. They certainly do not like to tell the people of Canada what it means. The corporate income tax is partly passed on to consumers in prices. It is also absorbed in lower profits. It can also be absorbed in other ways by, for example, lower wages. The manufacturers' sales tax absorbed at the corporate level is no different in its effect than the corporate income tax.
With the goods and services tax the entire tax is absorbed at the consumer level rather than being partly absorbed at the corporate level as is the case with the manufacturers' sales tax. The Minister of Finance, in his speech in introducing Bill C-62 at second reading, said that the manufacturers' sales tax on business inputs amounts to about $9 billion a year. I leave it to the Minister of Finance to stand in this House and deny that that is the case. It is a $9 billion corporate tax reduction and that, Mr. Speaker, is why corporations in Canada are going to be so much more profitable without any increase in economic activity in 1990.


Mr. Deputy Speaker:: Pursuant to Standing Order 38,1 must inform the House that the question to be raised tonight at the time of adjournment is as follows: the hon. member for St. Boniface-Education.

Resuming debate with the hon. Minister for Privatization.


John Horton McDermid: Mr. Speaker, I have listened with great interest to the debate this afternoon, to both my friend from Saskatchewan and my friend from Ottawa South, and I found their comments very interesting and informative.
February 19, 1990

The first comment I would like to make is on the committee system in the House of Commons. When the Liberals were in power the committees could not undertake any study or project at all unless the government gave its blessing.
When the Prime Minister announced that he wanted to change that to allow the committees to be masters of their own house, if you will, and to operate independently to study those subjects which they felt it necessary to study and to make their report, he said that the government probably would end up doing things that committees did not recommend. He also said at the time, I believe, that governments could end up with egg on their face from time to time.
That is fair ball. That has given the back-benchers in this House who actively participate in committee work an opportunity to participate in many studies and make reports that they heretofore have been unable to make.
Having said that, it is not incumbent upon the government to adhere to every recommendation that does come from committees. There are extenuating circumstances when governments have to make decisions that may not be along the lines of thinking of a parliamentary committee.
Such is the case at the present time with the report from the Standing Committee on Finance. The recommendations to relax the stance on monetary policy is one to which the government feels it cannot adhere at the present time. I want to remind those who were in the House between 1980 and 1984, and those who were not here and may not have experienced what we experienced at that time, that the government of the day ignored the inflationary pressures in this country. The government of the day decided to let inflation run, not pay any attention to it and try to keep interest rates down.
At that time inflation got up around 13 per cent, as I recall. The government then all of a sudden had to lay on the Canadian people some very, very heavy medicine, medicine that was bitter to take because interest rates rose to the 23 per cent range.
I listened to my hon. friends talk about mortgages and so on today. I had whole families come into my constituency office in Brampton, father, mother and children who had just walked away from their houses. They had
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walked out the doors and turned them over to the mortgage company, lock, stock and barrel.


Mr. Jordan:: I know some farmers who are doing that.


John Horton McDermid: Farmers too, absolutely. Absolutely they had to do that.


Jim Jordan: They are doing it now.


John Horton McDermid: They had to do that because they had to renew mortgages, which had been at 10 or 11 per cent, at 23 per cent and they just could not handle it.
That was all because a government ignored the inflationary pressures of a country. So when people say that inflation and these interest rates do not help the homeowner, the farmer or the small business person, that is not entirely accurate. The worst enemy that we can have in this country is inflation. For the wage earners, for those on fixed incomes and for those in small businesses high inflation is a killer.
We see today that inflationary pressures in this country are still there, there is no question about it. It is not a central Canada phenomenon as my friend from Ottawa South would have people believe. It is not a metro Toronto phenomenon as my friend from Ottawa South would have you believe. If you take a look at the inflation rates in January, you will see that they range from 4.8 per cent in Quebec to a high in Alberta at 6.5 per cent followed by Ontario and then British Columbia.
The inflationary pressures are there right across this country from coast-to coast: PEI at 5.1 per cent; New Brunswick at 5 per cent. The national average is 5.5 per cent. The pressures are still there. We need only take a look at the wage settlements that are being made to see that. We are very, very concerned because wage pressures have risen to worrying levels. Wage settlements are now averaging almost 6 per cent and have risen in most regions of the country. These are all inflationary pressures and when the dollar goes down, for every four cents it drops inflation rises 1 per cent. That is another inflationary pressure because we import 35 per cent of all we consume in this country. When the dollar goes down imports become expensive and the inflation rate goes up.
As one can see, it is a very fine balancing act that the Governor of the Bank of Canada has to do on a weekly basis. We cannot bring down interest rates artificially. If we did, it would do more damage to the economy and we would then have to do what the Liberal government did back in 1980, 1981, and 1982, and pour that heavy

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medicine on to slow down inflationary pressures. That is very obvious.
Actually, over the last year or year and a half interest rates have been relatively steady as have mortgage rates. I have followed these very closely over that period of time. However, as was alluded to in both speeches, in the last three or four weeks we have seen tremendous volatility in the market-place. When the Bank of Canada lowered interest rates the dollar dropped rather dramatically and there has been an increase in interest rates over the last three weeks. The market is very volatile causing nervousness in the market-place.
Inflation is increasing in Germany and in Japan at present and both countries have increased their interest rates to dampen inflationary pressures. We are not the only country in the G-7 following this path and keeping a very close eye on things. Among our competitors in the G-7 the average inflation is 3.9 per cent. We are still well above our major competitors in the G-7. We must get a hold on inflation and squeeze it out of the economy at all costs. It is most important. The ultimate objective, I believe, of any monetary policy is to have a stable price level. Only in this way can the value of money be preserved and not destroyed by inflation. I do not think anybody wants to see that. Even my friends in the opposition who tend to criticize understand that inflation is a very, very dangerous thing to have in an economy.
With the strong growth in demand in recent years inflation pressures and the inflation rate in Canada have increased. To remain competitive it is necessary to reduce that rate of inflation. We believe that this is accomplished by slowing the growth of demand in the economy to a rate that is consistent with the economy's capacity to produce goods and services. Canada was going at full tilt. We could not produce the goods and services required and because of that heated up demand prices increased. In the longer run this means constraining the growth in bank loans to a rate that is consistent with the growth of the economy's potential to produce. Despite the widespread view that monetary policy has been tight, bank loan demand has been growing at double digit rates. So it has not entirely slowed down, as some would have us believe.
My friend from Ottawa South says business confidence is at an all time low, but none of the reports show that. They do show a slowing down of the economy. However, the confidence of the business community is still very high in this country. As a matter of fact, records will show that there is going to be record investment this year, both by Canadian companies and by offshore.
I believe that we are on the right track. I do not think any of us like high interest rates. We would all like to see them much lower. We would also like to see inflation lower. That is what we are working on with the Governor of the Bank of Canada. That is the policy of the Government of Canada. We believe that we will be successful in wrestling this problem and getting interest rates and inflation down on a permanent basis. That is the goal of the government, with which I think everyone agrees.
This has been a great debate this afternoon. I have enjoyed it and I appreciate it very much. I think now, however, that we should get on with the business of the day so I move:
That the House do now proceed to Orders of the Day.


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


Some hon. members:: Agreed.


Some hon. members:: No.


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


Some hon. members:: Yea.


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


Some hon. members:: Nay.


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


Mr. Deputy Speaker:: Call in the members.


Mr. Deputy Speaker:: I declare the motion carried.


Jean-Robert Gauthier: Mr. Speaker, I rise on a point of order.
Earlier today the hon. member for Haldimand-Norfolk wrote to you asking for an emergency debate tonight. I wonder if you, Sir, could find out if members of the House would give unanimous consent to revert to applications pursuant to Standing Order 52, allowing you to make a decision on the requests you have received, at least the one from the member for Haldimand-Norfolk.


Mr. Deputy Speaker:: I will give the floor to the hon. member for Essex-Windsor on the same point of order. The government house leader will no doubt reply after.


Steven W. Langdon: Mr. Speaker, I would like, if I could, to support the point which has been made, but to make as well the point that we earlier today communicated with the Speaker about the seriousness of this problem. We see the importance of an emergency debate. I hope that it would be possible to see unanimous consent on the part of the House to accept the need for such a debate at this stage.


Douglas Grinslade Lewis: I am pleased on behalf of the government to grant our consent. I can assure the Chair that if Mr. Bradley, the Minister of the Environment for Ontario, were here he would refuse unanimous consent.


Mr. Deputy Speaker:: On the matter of unanimous consent, the Chair recognizes the hon. member for Kamloops.


Nelson Andrew Riis: Mr. Speaker, I heard the intervention by the government house leader, the Minister of Justice. I must say I did not understand the point he was making. I wonder if he could elaborate on his point.


Mr. Deputy Speaker:: Is there unanimous consent to allow the two members to move their motions?


Some hon. members:: Agreed.


Mr. Deputy Speaker:: The first motion received by the Speaker is the motion from the member for Essex- Windsor.

February 19, 1990


MOTIONS TO ADJOURN UNDER S. O. 52 HAGERSVILLE FIRE
Steven W. Langdon: Mr. Speaker, I have communicated with you today to indicate my intention to move under the provisions of Standing Order 52 a motion to adjourn the House for the purpose of discussing a matter of urgent and pressing concern.
I will just note very briefly the key points that we see that justify this as perhaps one of the most legitimate emergency debate requests which has been brought before this House. They are the following:
First, for more than one week 15 million tires have been blazing out of control in the Hagersville area. This fire continues to produce undetermined quantities of highly toxic substances.
We see as well that the implications-


Mr. Deputy Speaker:: The member should read the letter that he sent to the Speaker. In no way should there be any attempt to debate the matter while the request is being made.


Steven W. Langdon: Thank you, Mr. Speaker. I was attempting to summarize it so that it could be somewhat shorter.
Let me continue with the significance of this matter as an emergency.
My second point is that the failure to quench this fire will result in substantial contamination of the land and water in the region, as well as the spread of airborne contaminants to outlying areas.
The long-term effects on plant and animal life are not yet known. Certainly, there are serious and substantiated concerns for the water table, the source of drinking water for a larger population base.
To date, as I indicated in the letter, the government has not responded-


Mr. Deputy Speaker:: The Chair will not entertain comments like that.
I will allow the member to complete his statement. The member is getting into debate, which is not the purpose of his request.


Steven W. Langdon: I simply wish to make the point that the reason for an emergency debate includes the need to discuss the degree of response and the rapidity of response which has come from the government with reference to what is clearly an urgent issue.
For this reason I submit that an emergency debate is required to provide adequate discussion of the hazards posed and the options available to government and the public in the face of such an emergency.


Robert (Bob) Speller: Mr. Speaker, I too communicated a letter to you under Standing Order 52. I will be brief.
As you know, I have been an evacuee. I have been out to the site in the last week to look at the situation. I requested this debate because of the seriousness of the situation there.
As you are aware, Mr. Speaker, there is an impending environmental disaster in my riding.
I strongly feel that there is a need for an emergency debate to determine the role of the federal government in this crisis situation. It is important to determine why the federal government has not acted to date, and what it is going to do about this catastrophe.
This calamity has been full of misinformation, created not just by certain media reports. It is now being known as the worst environmental disaster in North America.
The people of Canada need to know the facts. Is Environment Canada able to handle such disasters? Is everything possible being done to protect the people, livestock, and the environment in the Hagersville area due to these tires which are burning out of control?
I feel that it is imperative that Parliament immediately debate this issue and resolve the uncertainty regarding this disaster.
My remarks have set out the contents of the letter I sent to you, Mr. Speaker. I hope you will rule in our favour.
February 19, 1990

The people of Haldimand-Norfolk and, indeed, the people in all of Canada need to know what this government is prepared to do in this area.


SPEAKER'S RULING
Mr. Deputy Speaker:: The Chair received earlier today notices under Standing Order 52, one from the member for Essex-Windsor and shortly thereafter one from the member for Haldimand-Norfolk.
The Chair has considered what is a most important and serious matter which concerns the Chair and, in particular, the Deputy Speaker since in my constituency we have the same type of problem that could occur.
However, after having considered the matter very carefully I do not believe that at this time it meets the requirements of the Standing Order.
I must thank the members for bringing this matter to the attention of the House. Again, as I have stressed, at this time I do not believe it meets the requirements of the Standing Order.


Nelson Andrew Riis: Mr. Speaker, I rise on a point of order.
I realize the point that the Chair is making and we certainly accept the point that in your estimation this matter does not qualify for an emergency debate.
However, after hearing the views put forward by my hon. friend I wonder if we could ask for unanimous consent to have a special debate later in the day on this emergency. While it does not meet the specifications of the Standing Order, if the members of the House of Commons unanimously agree that it proceed then perhaps we could do it that way.


Douglas Grinslade Lewis: Mr. Speaker, I agree with my hon. friend that this is a very important matter. I do not think we should get into a position of, in effect, not directly but indirectly overruling the Chair when the Chair considers the business before the country and before the House.
I think we should save the Liberal party any further embarrassment by not having this debate at this time.


Jean-Robert Gauthier: Mr. Speaker, I want to say this slowly. We are not embarrassed in any way, shape or form.
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As a matter of fact we, the Liberals, represent an area which is at this time subject to a catastrophe. We asked for the debate and we would be happy to have it at any time.



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[Stage Direction]
The House resumed from Wednesday, February 14, consideration of the motion of Mr. Wilson (Etobicoke Centre) that Bill C-52, an act to amend the Income Tax Act and related acts, be read the second time and referred to the Standing Committee on Finance; and the amendment of Mr. Brewin (p. 8329).
Mr. Deputy Speaker:: When the House last debated the bill there were four minutes left in the question and comment period on the speech of the hon. member for Kamloops. If there are members who wish to ask the House Leader for the New Democratic Party questions on his speech, they are welcome to do so at this time.
Since there are no questions, the Chair recognizes the hon. member for Esquimalt-Juan de Fuca on debate.


Mr. David Barrett (Esquimalt-Juan de Fuca):: Mr. Speaker, I welcome the opportunity to participate in the debate on this bill.
This bill falls into the same category as other legislation that this government has introduced that is of benefit to the rich with very little concern for middle-income earners or low-income earners.
Mr. Speaker, I want to refer you specifically to the opinion of one of the major newspapers in this country. It is an editorial in response to this bill which I think is appropriate.
I refer to an editorial in The Toronto Star of April 16, 1989, relative to the RRSP changes. The title of the editorial is: "RRSP changes benefit the wealthy". It states in part: "The distribution of income in Canada is highly unequal. In 1981 the 20 per cent of Canadian families with the highest incomes ended up with 41.8 per cent of the total income pie. By contrast, the 20 per cent

February 19, 1990
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of families with the lowest incomes got less than 5 per cent".
That puts into perspective what the problem is now and how it has been exacerbated by the Conservative government. The rich are getting richer and the poor are getting poorer and the middle class are paying for both ends of it.
The editorial states: "By and large, the unequal distribution of income is the outcome of the market. But to preserve the advantage of upper-income Canadians in retirement, finance minister Michael Wilson thinks the market needs some help, so Wilson tabled new legislation to increase the allowable tax deduction on registered retirement savings plan to a maximum of $15,500 per year."
I would suggest that 40 per cent or more of the income earners in this country do not even earn $15,500 a year, let alone having the opportunity to eventually put the amount allowed under this bill aside for their retirement.
There are a significant number of single parents struggling to survive on minimum incomes with the absence of day care and other services, and trying to avoid going on welfare. They know very well that at the same time money is being taken out of circulation by way of general revenue to benefit the rich and they, the single parents of this country, have to support not only their children but the rich as well through this kind of legislation and they become cynical about government.
All governments have a mandate to serve the people, but this government thinks it has a mandate to serve the rich and to hell with the rest.


Mr. Boyer:: That's nonsense.


David Barrett: My friend says it is nonsense. I have the Tories interfering again when I point out that only 1 per cent of the population of this country can take full advantage of this legislation. The other 99 per cent are told to look in the window and see the Christmas lights and some tinsel.
My friend says it is nonsense. I do not think 99 per cent of the people of this country being shut out is nonsense.


Patrick Boyer: Your analysis is wrong.


David Barrett: When I point out that in the long run wealthy people will be able to put aside $15,000 of their income to escape tax, let us understand what is happening here. Those people who can afford to put aside the $15,500, if they are paying income tax, are in the 50 per cent bracket. If they put aside the $15,000 eventually allowed, $7,500 of what they were putting aside would have gone into general revenue to pay for services and to pay down the debt.
As of 1988 there existed in registered retirement savings plans in this country $71 billion. Only half of that money is in self-directed programs. The other half is in the banks and trust companies of this country, and that money which has been saving the wealthy a tremendous amount of money is then loaned out as mortgages to working, middle-class and lower-income people. Not only are the wealthy getting the benefit of the tax, but they get the benefit of the earnings in the RRSPs that the banks are getting fat on at the expense of the middle and lower income people.
Never was there a system designed to benefit the wealthy as clearly as this one. Thirty-five hundred dollars is the maximum contribution for somebody who is on a wage or a payroll deduction. My good friend says what a crock that is, and I agree with him that it is a crock. Why should the wage earner be confined to $3,500 maximum, but the independent wealthy person allowed ultimately to deduct $15,500? Why indeed, you could ask. It is a crock. The crock is broken by this government along with its broken promises and not providing equality to ordinary people in this country.
If you are in a registered retirement plan and you are on a payroll deduction, that limit is $3,500.


John Horton McDermid: You are allowed up to 18 per cent.


David Barrett: If he wants to change that, get up and make an amendment to this bill. But the fact is while you are working for wages you are confined to a $3,500 deduction. If you are a professional or if you are a super wealthy coupon clipper, you can ultimately deduct $15,500.


John Horton McDermid: They have no pension plan.


David Barrett: My good friend says that they have no pension plan. Let us take his logic further because it is important to debate this.
February 19, 1990

Let us assume that they have a generous employer who matches the $3,500. Their maximum contribution under a pension plan is $7,000 per year.


John Horton McDermid: You got it wrong.


David Barrett: I have it wrong. Name one employer who puts in more money than the employee does.
My good friend, you can say those things but the Canadian taxpayer is beginning to understand that this government is by the rich, of the rich and for the rich. There is no other piece of legislation that clearly points this out.
The editorial in The Toronto Star further states: "Under Wilson's new proposals Ottawa would provide tax assistance to all employed Canadians to create a nest egg that would allow them to maintain their incomes in retirement to a pension limit of $60,000 a year. To do so, he would provide the greatest assistance to those at the upper end of the income scale. Someone earning $20,000 a year would get an annual tax break worth about $1,200 compared to a break of about $7,500 for those who earn more than $86,000 a year."
Think about it. It is the point that I have been making. If you earn more than $86,000 a year you are in the 50 per cent tax bracket. But if you reduce your income by buying $15,500 worth of RRSPs that you will ultimately be able to, you save $7,500 in taxes. You are not just putting in $15,500 in the bank. You are putting $23,000 in the bank because the impact is the $7,500 that you are saving as well.
In a time of high interest rates, who is getting wealthy as a consequence of this type of plan? You lock in your RRSP into which you put $15,000 a year at a minimum of 11 per cent at today's market and you are looking at doubling your money within five years. If you are rich, you are laughing. If you are poor, and have a job that pays you $10, $15 or $20 an hour, you end up subsidizing this because the tax collected off the rich is not there, it is going into the $71 billion that we already have in RRSPs.
Why not use the money in RRSPs? If the government is going to shelter it for the wealthy, why not use it for good social and economic purposes? Why do we not
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establish municipal bonds that would permit municipalities under the aegis of both the provincial and federal government to loan money out up to a maximum of $50,000 from an RRSP, pay a 5 per cent return for a 10 year guarantee on the use of that bond, and allow the bond holder at the end of his or her RRSP to take it out with 50 per cent value of the capital they put in plus the total amount of tax they earn and use those bonds for municipal renewal right across this country? It could be used for affordable housing, restructuring roads, bridges, sewers, and sidewalks across this country. If we are going to allow the wealthy to have these huge tax benefits, the other side of morality suggests that at least we have a right to put that money to work for social and economic purposes right across this country.
Five years ago, the Canadian Association of Municipalities suggested that at that time there was 15 years work in the renewal of roads, sewers and sidewalks in this country. For rural and small town Canada suffering the ravages of a centralized economy under a mindless, uncaring, unthinking, monetarist, right-wing government, one of the things that could be done is use this RRSP money for social purposes that would be paid back in terms of good structures in already existing towns.
Why should we not make some of this money available for low-cost mortgages? We could loan the money out. Before anybody gets carried away with the idea that this suggestion is too radical, in the United States both the Republican and Democratic administrations have endorsed government secured bonds at 5 per cent for municipal purposes. Even the Reagan administration that succumbed to the myth of monetarist theories never touched what was a democratic administration's proposal for the use of this kind of municipal bond.
What I am suggesting is a special aspect of it that would permit people to make a decision on their own to redirect their RRSP funds. What I am suggesting also would not make the wealthy wealthier in their RRSPs. I am suggesting a $50,000 maximum of purchase in a RRSP fund of those municipal bonds. Not that I approve of these changes, not that I think they should pass the House, but I know that the unthinking majority of the Conservatives who are mindlessly going to pursue this have no sense of the damage that it is doing psychologically and fiscally to the economy with all of that money

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sitting there in retirement funds that we have to borrow back at 13 per cent and 14 per cent.
The Minister of Finance asks about our alternatives. We hear that plea all the time. There are two aspects of that plea that I find distasteful. First, the government was not elected to stand up and defend itself by demanding other members tell it what to do. If it is that weak then the best the minister can offer is to resign. If he has no plans of his own and asks the opposition "what are you going to do" then he has given it up. Pack it up, call it quits and leave.
One of the things we can do in this country is to use indigenous funding, our own country's money to supply that part of the capital pool that is necessary for long-term jobs; not welfare and the waste of welfare, not handouts, not megaprojects, but useful long term jobs that keep men and women in their own communities.
When I talk about restructuring our urban communities, I would moderate my criticism of this method of fund-raising if I could see this money being seriously and thoughtfully used for a social and economic purpose.
The government members stand up and lament what is happening in Atlantic Canada. I lament it, too. However, if we were to turn $35 billion of that $71 billion of RRSPs that is non-directed into municipal bonds, there would be $5 billion available tomorrow for Newfoundland and $5 billion available for the other Atlantic provinces. That would create a heck of a lot of jobs in a huriy, with pride, with self-respect, and with decency.
Is there a community in this country that is looking for low-cost bonding to keep their tax base down but cannot find it? There are plenty of them. The impact of high interest rates and lack of indigenous capital in this country is forcing municipalities and school boards to raise taxes right across the board.
The minister wants a way to avoid it. If he is going to benefit the rich by this kind of amendment let him have the moral courage to also direct the money into the economy because the money is there.
How many times do we hear the argument of keeping interest rates high to attract off-shore investment, or we do not have enough indigenous capital of our own? What a falsehood that is, when you examine the fact that the RRSP funds that this bill will allow the rich to benefit
even more from are there and could be used, if this government had the will and the wit to do it.
I know that I am speaking to an entranced Chamber and that I have the attention of all the members in the House of Commons. Every one of the cabinet ministers is listening intently and closely to my suggestion about the use of indigenous capital.
Do you think, Mr. Speaker, that the government would say to those people who are allowed to store vast sums of money in protected and sheltered pension funds that it can guarantee 5 per cent, plus half their capital invested when they draw out the plan, if they put the money into municipal bonds? Is there anyone in this chamber who finds ideologically that the use of indigenous capital somehow is a betrayal of Conservative positions, Liberal positions or New Democratic party positions? No one. I will ask any member to say nay to the idea of using indigenous capital at a low cost bonding level, as is done in the United States, to start paying for long-term debt investment on roads, sewers and sidewalks. We can do it as the Americans do it at 5 per cent bonding. Is there anyone over there against it?


Ms. Mitchell:: Is there anybody over there?


David Barrett: Is there anybody over there? There are a few there and for those few I have this message: let me point out that this is a great potential vote-getter. This is an idea that transcends all political parties. This is an opportunity for the government to provide indigenous capital at low cost to those municipalities that wish to build homes for the homeless and subsidize low cost mortgage rates. I am not talking about massive public housing that has been socially destructive. I am talking about individual choices for ordinary citizens, particularly single parents who are struggling to meet high rental costs in urban areas right across the country.
Where will the money come from? I repeat, $71 billion exists as of 1986 in RRSPs and half of it is undirected. That half, $35 billion, goes into the private banks. The banks are using that vast pool of wealthy taxpayers' savings for private investment of their own.
The more I repeat this idea, the more converts I get. What will happen sooner or later is that they will start attacking me, but not the idea. I recall that this same
February 19, 1990

proposal was made for socialized medicine. When my party suggested socialized medicine every single Liberal and Conservative at that time attacked the idea. As more and more people began to understand that the idea made sense, they began to see that they could get elected on the idea so they stole it.
I want to make clear that there are very few members in this Chamber who are able to steal my idea, but those of you who put your mind to it are welcome to the happy theft. Think what we could do with $35 billion at 5 per cent on municipal bonding out of RRSPs in the same way the Americans finance major reconstruction in their country with low-cost, solidly safe, Moody's rated AAA, 5 per cent municipal bonds.


An hon. member:: Oh, oh!


David Barrett: I expect the member who wants to interrupt me to be the first on his feet to say: "I think you have a germ of an idea here. We might change it a little bit here, tinker a little bit there, call it a Tory idea and sell it". That is all right with me.
It has been a masterful plan for the Americans and it has made good use of social capital out of those indigenous savings. I do not agree that the wealthy should be given a $15,000 write-off. I do not agree that they should get a $7,500 a year tax saving. I repeat, if they are going to get this kind of benefit then the Canadian people have a right to expect an alternative.
Municipal 5 per cent bonding to provide long-term jobs in Atlantic Canada, on the prairies, and in British Columbia would be a useful device. We do not need outside capital. It is indigenous capital created by wealthy people who get a tax benefit according to the belief of this Tory government that the rich should not suffer because they were born rich and the poor should suffer because they were born poor. One of the ways I suggested to mitigate this makes a bit more sense than just giving massive tax write-offs.
Some people by their abilities, talents and skills are in the professions. They earn a vast amount of money and want a tax shelter. I am not one of them. If they were told they had access to this kind of tax write-off they would reject the idea of directing $50,000 of their RRSP funds into a municipal bond earning 5 per cent.
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I would make the formula very clear. They would be allowed to take their $50,000, plus half of that capital, plus all interest earned out of their RRSP after a minimum of 10 years of allowing that money to be used as a municipal bond. The more I explain this to the members over there, the more I get their attention, although for some of the members I have become a substitute for Sominex. For those members all the logic in the world and all the reasonable arguments about social responsibility has no effect whatsoever.
I do not believe the government will move into that municipal bonding. I want to make it perfectly clear that my colleagues do not approve of this idea of further tax shelters for the wealthy. Allow anyone to deduct the amount they are paying into their pension plan, plus a maximum amount open to them in the same way that is available to the wealthy. Why should a woman, or a man, who has a permanent lifetime job be allowed to deduct only $3,500 when they may have put aside another $1,000, $1,500 or 2,000? Out of love for their children and for a secure future, why should they not be allowed to take advantage of this tax dodge as well? Why do the rich get all the benefits? My question is: Why should the rich get all the benefits? Let the middle income earners have some too.


Patrick Boyer: Mr. Speaker, the member of parliament who just spoke wondered if any of us would rise to our feet to pick up the idea that he was preaching here, and I am on my feet for that express purpose.
I heard him mention the example of using these funds for municipal bonds at 5 per cent interest seven times, four of which included references to the way they are doing it in the United States. This was an idea he was preaching and getting converts every time he advocated it. He is a powerful and persuasive speaker.


David Barrett: Thanks very much.


Patrick Boyer: I wish he had been a little more powerful and persuasive recently in Winnipeg because then the message might have gone even further.
The idea of the member advocating the use of funds for municipal projects is borrowed from the United States. That is advocated by a party very concerned that we not imitate anything American, which talks about the evils of adopting anything from south of the border and states that no good could ever come from there, especially in the period after the implementation of the free trade agreement where we were to see all kinds of harmonization and change in Canada making Canada

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more like the United States. Has he been so successful in persuading members of his own caucus as he has been in persuading some of us across here about the efficacy of this American idea?
Second, if he has been so successful, could he then go on and give us some examples of how this program is working, not just in redirecting funds in the United States but actually achieving results in municipal restructuring, for example, in cities like New York, Chicago, and other cities that find their municipal infrastructure broken down beyond the point of repair?


David Barrett: I am pleased to have this opportunity, however brief, to disabuse the hon. member of some concepts about my attitudes to the United States and my party's attitude to the United States.
I had the privilege of taking seven years of post-secondary education in the United States. In the last two years I had the privilege of teaching at Harvard University as a socialist. I found that a great experience.
In the United States during the 1936 election campaign when capitalism ran to a dead end and the country went into a massive depression, the idea of a mixed economy was spawned, a mixed economy which by the way both Liberals and Conservatives subscribed to in one way or another in Canada until the free trade agreement. All the Liberal administrations and the administration of the Right Hon. John Diefenbaker adopted the concept of a mixed economy.
It was under either Liberal governments or Conservative governments that Crown corporations had their inspiration and their role, love them or hate them. There was a consensus in this country that the Crown corporation played a part in the economy.
The first lesson we learned in Canada about the role of government intervention in a mixed economy was during the Roosevelt administration which I admired. The Roosevelt administration saved capitalism in the United States by bringing pluralism into the economy. If the Roosevelt administration had not moved to using public sector funding at that time, capitalism and free enterprise would be dead and Canada would have been in
another form of authoritarian extreme right or extreme left wing government.
I would advise my friend to counsel himself by reading casual history of the growth of extreme right wing movements in the United States from 1935 to 1939. Some of these movements even sucked in major religious figures such as Father Coughlin and major public heroes as Charles Lindbergh. Many of them moved to what was known as the German bunde. They were attracted to the Nazi idea that a single effort economy at the private sector with no public enterprise would be the way to go.
If we examine the Nazi response it was a monetarism of its kind. It went into the private investment sector, into monopoly, Krupp Enterprises and I.G. Farben Enterprises. In both instances it was the private sector that benefited from privately directed public money. I am not espousing that nor do I suggest that my group or I have the Holy Grail on ideas.
It is true that the Roosevelt administration brought in North American economic pluralism. It has been a consensus regardless of what party is in power at any given time to use the public sector for some common good. In the United States they have public highways and public bridges. They even have the state telling one what side of the road to drive on. If that is not interference with private decisions I do not know what is. In the United States the government not only tells one what side of the road to drive on, but it builds automobiles to accompany that legislation.
If one wants to raise a shibboleth of the private sector being free and roaming in the United States, forget it. There has to be some order. There is order on highways and there is order in financing.
The municipal bonding program in the United States has been successful for over 50 years. If my good friend would address himself to Moody's or to Standard and Poor's, he would discover that the highest rating bonds consistently in the United States are the Fannie Maes, the euphemism for the American municipal bond. They range at 5 per cent and 6 per cent. They are not directed out of pension funds. They are shelters of capital that already exist.
What I and my colleagues are suggesting is a new idea. They find it interesting. It is an idea I have put to the Liberals and to you. If we have an indigenous pool of
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capital that presently amounts to $71 billion as of 1988, half of which is freely and legally self-directed investments, the other half sits there as revolving deposits in the bank.
What I am suggesting will help capitalism. I confess, if you are madcap to save the wealthy more money, one of the consequences that allows you to sell that madcapness is a moral responsibility to redirect that $35 billion sitting there in the bank. It is not offshore money. It is not debate with the Minister of Finance suggesting that we do not have any money. It is there. I am saying: direct it into the economy for social and economic purposes, rebuild our cities and towns, and maybe the rich can sleep a little more comfortably as they rip off the system.


Mr. Douglas Young (Gloucester):: Mr. Speaker, in speaking briefly to this question of reform of the RRSP, I think it is important that we recognize that many people in the country have invested in registered retirement savings plans and are very much aware of the benefits that can accrue to those who can afford them.
We want to go on record this evening as stating unequivocally that there are some problems with the proposal put forward by the government. We recognize that. There are also some points in the legislation that are very beneficial. As is often the case in matters such as these, the avenue that is most appropriate is to allow a committee to review the legislation, to listen to the interested parties that have a good and thorough knowledge of what is proposed, and to make certain that we listen to both the pros and cons.
I have listened with a great deal of interest over some time now to the debate that has taken place with respect to the government's proposed legislation. What strikes me is that although there has been a great deal of rhetoric from my friends to the left about RRSPs, they do not seem to grasp that for most Canadians the notion of being able to provide for their retirement is a very interesting one. They want to make sure that the proposal made available to them by the government is fair and equitable to everyone.
There are some inequities for low income people and the threshold has been changed. We want to address that
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in committee and see to it that when we come back to this House appropriate amendments have been made.
I am very concerned about the approach taken by the NDP on some of these matters. It applies to Bill C-52 as well as to other matters that have come before this House and will continue to be considered by Parliament. It is the approach by the New Democratic Party to stifle debate rather than encourage it.
The Liberal Party is as concerned as anyone else with these measures. As we went through the debate on the goods and services tax everyone on the Liberal side of the House wanted to participate in that debate and put forward concerns as to why they believed the goods and services tax was not good for the country. They were not given that opportunity because the New Democratic Party insisted, through procedural matters, in not allowing the debate to go forward. Of course as often happens the government imposed closure. That meant that no one was heard. As opposed to elected members who are paid to express themselves having the opportunity to do so, practically no one was heard. It was very frustrating for a number of members in the Liberal Party.
We are looking at the registered retirement savings plan. No doubt there will be amendments brought when this bill is referred to committee. We want to state as clearly as we can that we believe this bill should move to committee, and all members of Parliament who want may join in unfettered discussion, be able to present their views and call witnesses. Those who oppose the bill will be more than welcome. Those who support it will be welcome, particularly those who have constructive suggestions as to how the bill could be amended to better serve Canadians who want to provide for their retirement.
I always hesitate to pre-judge what is taking place, but I have to look at the tactics used in recent weeks and what we see happening in committee at this stage. Although I want to give the benefit of the doubt that the motives are correct and that my friends in the New Democratic Party are opposed to the goods and services tax, they have serious reservations about RRSP legislation. That I recognize and respect.
Surely at some point parliamentarians have to debate these issues and oppose them as strenuously as they can. I am concerned about what will happen with the GST legislation. Rather than being able to oppose it in

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committee, question witnesses who come to seek better ways to avoid the impact of GST and ask them why they do not oppose it as they should, we will have a situation where debate will be ended. The bill will be reported back to the House, and people who have been elected to represent their constituents will not have been heard as thoroughly as they should.
I totally sympathize with those people who want to use every means possible to try to block legislation, but in this place the majority eventually will gets its way. I am one of those who believes that before the majority gets its way the minority must have its say. That is not happening at this point.
In closing, I hope that when these matters of dealing with changes in the RRSPs, how they are administered, how the thresholds are set, how people can take advantage of them and whether they favour some people more than others come before committee we will have input from Canadians generally. I hope parliamentarians who are interested will come forward and provide constructive amendments as to how best we can serve the people we are elected to represent.
In the context of the goods and services tax which is still very much on everyone's mind, let us consider the impact of this change on Canadians who are able to provide for retirement, how we should be helping those who cannot use this mechanism, where this mechanism is unfair, how it can be improved, how tomorrow's budget will affect Canadians, and how we must oppose any propositions in that budget that are contrary to the best interest of Canadians.
Although it is cumbersome and sometimes minorities feel terribly oppressed by majorities, I hope we will have an opportunity for full and open debate, at least in this place. We have very little control over what goes on in the country. That is becoming more and more evident as the reaction to the goods and services tax continues to grow. Surely we have a responsibility as well to speak out on these issues and go on record as to what we disagree with, what we agree with, and how we think we can improve proposals put forward by the government. If those constructive suggestions are not accepted by the government, it would obviously be our duty and our responsibility to vote against the government proposals. We have no reservations about doing that unless the
problems with the proposed legislation by the government are resolved by amendment.
I look forward to this matter being dealt with in committee. I am hopeful that all members of the House will allow for open debate, come forward with suggestions, and make sure that all of us work together to try to make this legislation as effective and as useful as possible to all Canadians.


Ms. Hunter:: Mr. Speaker, that was rather curious debate on this particular bill. It sounded like a rationalization for a failure to have real alternatives to the GST. It seems rather curious that the member focused the majority of his comments against the New Democratic Party, which is not the party that has put forward this bill. It is a rather strange way of proceeding.
I can understand the kind of motivation that has propelled this member to make his speech in this manner, because we in the New Democratic Party do have alternatives to the GST. The kind of alternatives that we have and the kind of opposition that we have exercised in the finance committee have been veiy strenuous. That is because we are absolutely opposed to the GST, unlike the Liberal Party. The Liberal Party thinks that in the next election it will win by default and that by not proposing real alternatives it is going to sneak in because of the unpopularity of the Progressive Conservative government.
We should make it clear that we are firm in our opposition to the GST and to this RRSP legislation, that we have the courage of our convictions, that we are not prepared to debate these things, and that we are opposing them. That is the route of real democracy. Our constituents right across Canada are telling us that they want this bill stalled by whatever means. Even this afternoon in the finance committee witnesses told our members that they appreciated the role they were playing in stalling this legislation and to continue it with all their energy.
I would like to ask a question of the member who has just spoken. Why has the Liberal Party not posed real alternatives to the GST?


M. Douglas Young: Mr. Speaker, the question of proposing an alternative to the GST is falling right into the trap of the government. My friends to the left never really get too interested in what they would do as a government, because as the hon. member for Esqui-
February 19, 1990

malt-Juan de Fuca knows it is only a fleeting fancy. It is not the kind of thing the NDP enjoys for very long.


Brian L. Gardiner: It did well in Chambly.


M. Douglas Young: I just heard someone say that it did well in Chambly. I cannot wait for the new member of the New Democratic Party to come into the House. What is going to happen-and most people are speculating on it now-is that we will have another leadership campaign in the NDP in 18 months. That is something to look forward to. It will be a lot more entertaining than the last one.


Lynn Hunter: We are very pleased with the leader we have, just like the Liberal Party.


M. Douglas Young: Going back to the question put by the hon. member, one of the reasons we are not prepared to stall the legislation on the registered retirement savings plan is that Liberals support registered retirement savings plans. I want to make that very clear. I am very proud to support registered retirement savings plans.


Lynn Hunter: Especially if they benefit the rich.


M. Douglas Young: We are suggesting that there are some problems with this legislation, and we want to deal with it in committee where we can move amendments and make suggestions. The NDP obviously does not like registered retirement savings plans.
That is its their problem. If they are against people being able to save for their old age, that is up to them.


Lynn Hunter: We didn't say that.


M. Douglas Young: If they are opposed to RRSPs, they should say that. What we are saying is that we support registered retirement savings plans.


Lynn Hunter: I rise on a point of order, Mr. Speaker. I think the hon. member should speak for his own party rather than our party. I think we can speak very well for ourselves.


M. Douglas Young: With respect to the RRSPs we want to go on record as supporting RRSPs. We want to make sure they are fair and equitable, and we want to make sure we bring forward constructive amendments in committee.
With respect to the GST I want to say that one of the things we will never do in committee or in this House is
Government Orders
send surrogates to do the dirty work. That is what has been happening in the finance committee. The member of the finance committee who is the supposed finance critic for the New Democratic Party has not been part of it. The members for Esquimalt-Juan de Fuca and Nickel Belt have shown up in the finance committee to play their silly games, which they are very good at.
I respect my hon. colleague from Saskatchewan who is the finance critic and my hon. colleague who was a very strong contender in the leadership campaign for the NDP. They appear on a regular basis when we are doing business in the finance committee. They are two gentlemen who know how to present their party's point of view and do it appropriately, but what we have been exposed to is the absolute stupidity of a spectacle of two members, one of whom had never been to the finance committee before, coming in and playing silly games.
If members of the NDP are interested in playing silly games with registered retirement savings plans, that is up to them. If they do not want people to speak in the finance committee and be able to present testimony, that is up to them.
One thing for sure is that we will oppose the goods and services tax as we have since last August while the NDP was going back and forth across the country trying to find a leader. The alternative, and I will close on this, is to make sure that we do not fall into the government's trap. What Canadians are saying is no to the GST, not yes to something else still unheard of. Better the devil you know, which is the existing federal sales tax.


Some hon. members:: Oh, oh!


M. Douglas Young: Oh, yes, Mr. Speaker, because if the New Democrats want to scrap both the federal sales tax and the GST, they would put another $18 billion onto the deficit. They probably do not know that that is what would be the result, but that is what they would be suggesting.
What over 600,000 Canadians who signed petitions that we have presented to the Clerk of this House have said, is,"no", to the GST. They have not said that they would like to take up the NDP's alternative because the NDP'S alternative is unthinkable.

February 19, 1990
Government Orders


Brian L. Gardiner: Mr. Speaker, it is a pleasure to rise today to speak on Bill C-52. Canadians probably shudder every time the government and the minister bring in a bill that is usually entitled, "an act to amend the Income Tax Act and related acts".
We know they shudder because we either get legislation that is going to ensure that middle class Canadians are taxed more or, as in this particular case, legislation to amend the Income Tax Act that is going to continue to protect their wealthy friends.
I think in the debate we have had on the grief and suffering tax, and now this debate on RRSP legislation, that it is very interesting to note the role of the Liberal party, as we just heard in the exchange with the Liberal member, in changing our Canadian tax structure. It is interesting to see the Liberals' role and compliance and their unholy alliance with the Conservatives. It is passing strange to see that kind of co-operation from the Liberal Party.
The Liberals have some honourable history. But this alliance that they now have with their friends in the Conservative party, protecting the rich and the wealthy, as they are doing with RRSP legislation, will make Canadians question what the Liberal party is trying to present in this House. When we ask the Liberals about their alternatives, they say they are not sure.
The Liberals then arrogantly preach to us about how we have to debate in committee and in the House and pay attention to all of the debating rules. Canadians are starting to see through that charade. It is a Liberal charade that is really evident in the debate on the goods and services tax.
Sometimes people get a little overconfident when their standing in the they polls go up. They tend to think it will be a nice, easy walk into office. I wonder if the Liberals are beginning to think that. My hon. friend, one of the Cabinet ministers is nodding. He thinks that way. I think the Liberals would probably be dumb enough to do that.
I think the point was well made at a convention I attended in British Columbia. We are going to fight the Conservatives all the way on the goods and services tax. That is our job. The Queen asks us to do that. She wants to be here to fight that unfair tax and to present
alternatives like we have done, unlike, as I mentioned, the Liberal party. We are going to continue doing that.


Robert Nesbitt Horner: What are your alternatives?


Brian L. Gardiner: The member opposite wants to know what our alternatives are. We will send some extra copies over so he can circulate them to the seven or so Conservatives that are here. If we called a vote now, we would probably win it. Let us see if they have the courage to adopt those alternatives and replace the goods and services tax.
Let me say what will happen to them if they are successful in bringing in the tax. The deal is, if you do get to bring in the goods and services tax in about 10 months time, you lose the next election. I hate talking about politics in the House, as I have said, but when we are out knocking on doors and our supporters are out canvassing undoubtedly we will be talking about the GST-


Mr. Kristiansen:: Not politics.


Brian L. Gardiner: Not politics. This is not politics. We are talking about the GST. When the Conservatives come calling I think Canadians should ask for their money back. When you have a lousy product you get your money back. Even the president of The Bay goes on TV now to say he will give your money back, no questions asked. So when the Tory canvassers and telephoners come by in the next election campaign, ask for your money back. That is what Canadians should do.
What is the purpose of the legislation? It is an attempt by the Conservatives to really restructure our tax system in this country and to protect their friends. Bill C-52 is such legislation.
Of course, we are all getting calls now from members of the pubic and the media asking what is going to be in the budget tomorrow. What is the speculation about what is going to happen. The Minister of Finance has been on the road talking about how tough times are. He says that we are going to have to cut back and it will really hurt. The minister says the Conservatives do not like being unpopular but it is their mandate and they must take these steps.
I think it was about this time during the last budget when word started to get out that the budget was out all over the place. But assuming that the budget is not out all over the news while we are speaking here, the government is bringing in legislation that is going to
February 19, 1990

Government Orders
expand the amount wealthy Canadians can contribute to RRSPs.
The Liberals are hurting dramatically over their lack of opposition to the GST and are beginning to realize that Canadians now recognize that they are playing a shell game with their opposition. The Liberals try to play a few games by saying the NDP are against RRSPs and who knows what else they are going to do. That is not our position.


Mr. Mills:: On a point of order, Mr. Speaker. You will have to bear with me for a second because this is the first time that I have ever stood in this House on a point of order and you may rule me out of order. But I have been listening to the NDP for the last three hours in here and at a finance committee meeting.
They keep mentioning that we do not have alternatives on this side of the House. I want to be on the record that that is not the case and the New Democrats know it because I personally sent all the NDP members in the last two weeks a copy of one proposal in this party called the single tax. So I think that the record should stand corrected. It is one of many that are being worked on.


The Acting Speaker (Mr. TVemblay (Quebec Est)):: The
hon. member from Prince George has the floor.


Mr. Hockin:: On a point of order. I do not believe that it was a point of order but I would like to know whether or not the single tax is party policy.


Dennis Joseph Mills: Mr. Speaker, I started off by saying that this is not party policy but we are working on many ideas. Members should not say that we as Liberals are not working on ideas and that we are not proposing alternatives. This is one of many that are being worked on which I presented to the Department of Finance. We have worked on it for nine months and we have yet to have a single response from the Government of Canada on this one idea. I know many of my colleagues have many other ideas, but there has been no response.


Robert Nesbitt Horner: Was that the Pocklington proposal?


Dennis Joseph Mills: Was that a question? Is it the Pocklington proposal? I should tell you absolutely not.


Some hon. members:: Order.


The Acting Speaker (Mr. TVemblay (Quebec-Est)):: Everything that I have heard is, as I see it, matter for debate and I give the floor again to the hon. member for Prince George-Bulkley Valley (Mr. Gardiner).


Brian L. Gardiner: Mr. Speaker, I know that from our knowledge of the rules it would be a good guess that interventions were probably not points of orders, but that is okay. I will accept that because I know from time to time the Conservatives probably do the same thing.
New Democrats would never rise on a point of order and try to make debating points. I appreciate my hon. friend from the Liberal Party and his nice, fancy tax proposal that I have received. It is in the pile to read at some point.
The Conservative member is correct. As far as we know it is not Liberal party policy. I think the hon. member who rose in his place was considered at one point to perhaps run for the leadership of his party.
I guess the fact that he could not raise the money, the $1.7 million that the Liberal party says you need to become the leader of that party, prevented him from doing so. He cannot afford it. He had to step down. That shows how much support his idea has in his own party. He could not sell enough books. It is a real comment on the sins of the Liberal party and on how the party treats some of the members of its own caucus who are trying, I think, to make a serious effort with some honourable proposals. But I wonder if the associate finance critic of the Liberal party is aware of this proposal, and what does he think about it.
I wonder if he is prepared to take it to the convention. With the shell game that we are seeing by the Liberals and Conservatives on the GST, we are never sure what to expect.


Dennis Joseph Mills: Alberta endorsed it.


Brian L. Gardiner: A member said Premier Getty. That is really something. That is a real plus. Premier Getty has endorsed it. This is the premier of Alberta who is being ridiculed for Family Day today by the Liberal Party.


Dennis Joseph Mills: The Liberal Party.

February 19, 1990
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Brian L. Gardiner: That is even more serious than Premier Getty. Do you want to add to the list? Pretty soon Premier Vander Zalm will declare the Liberal flat tax policy as a distinct tax policy for Canada.
It is probably in the dinosaur museum already. After hearing the hon. member from the Liberal party who has clearly indicated such a responsible group of people who have endorsed his tax proposal, I suppose we will see where it will go in the future.
What is the purpose of Bill C-52? An article in the Toronto Star deals the distribution of income in Canada. It is a very important issue for us to deal with because when we talk about RRSPs we are dealing with the distribution of income. We are talking about what measures a government implements to either raise funds or not raise funds.
Some years ago the Liberal government at the time was taking anything that was not currently being taxed that should be taxed and considering it as a loss to the government. One would either be taxed for parking a car, or the government considered it lost tax revenue. That is the kind of thinking you get from the Liberal party.
Let me refer to this important editorial. The distribution of income in Canada is highly unequal. In 1981, the 20 per cent of Canadian families with the highest incomes ended up with 41.8 per cent of the total income pie. By contrast, the 20 per cent of families with the lowest incomes got less than 5 per cent. What does the Conservative finance minister try to do? He takes a look at this problem. He takes a look at poor people in this country. I think it is an obligation and a duty that members of Parliament become aware of the concerns and the needs of people who are less fortunate, probably than most of us in this House. What does he do? He brings in Bill C-52, an amendment to the Income Tax Act.
This editorial in not NDP propaganda. It is an editorial commenting on the minister's proposals.
Under the finance minister's new proposals, Ottawa would provide tax assistance to all employed Canadians to create a nest egg that would allow them to maintain their incomes in retirement up to a pension limit of $60,000 a year. To do so, he would provide the greatest assistance to those at the upper end of the income scale. That is very important.
Someone earning $20,000 a year would get an annual tax break worth about $1,200, compared to a break of about $7,500 for those earning more than $86,000 a year.
We do not know yet whether the Liberals support this bill. They want to go into committee. Knowing the Liberals, they will make it even better for the wealthy, knowing their style.
The finance minister says the change is necessary to restore equity to the way in which our tax system treats retirement savings. A high income earner working for a corporation with a pension plan of its own, for example, currently gets more tax assistance than a self-employed person with the same income or a person who works for a company with no pension plan.
This is the point I was mentioning about the lost revenue to government. The finance minister's proposal, when fully implemented, would drain an estimated $300 million a year from the federal treasury, which the finance minister has said on numerous occasions, as we have all heard in this House and in the news across the country, is stretched to the limit.


Lyle Stuart Kristiansen: I thought they had to cut back.


Brian L. Gardiner: The hon. member says he thought they had to cut back. Let us refer to the comments made by the member from Esquimalt-Juan de Fuca, about the kind of revenue and capital that is available in the country.
What would $300 million do? I can give you an example from my own province. It is something I have spoken about a lot and something we hope to hear about in the budget tomorrow night. That $300 million would nearly fund the federal-provincial forest agreement in British Columbia. I have talked about this before. This is an example of the different ways funds can be used. In this particular case, the funding of that forest agreement with that $300 million, one should consider this investment for the long term benefit of this country.
The points we are making about Bill C-52 are not that we are against RRSPs. It would be good to have an RFSP, a registered forest saving plan. My friend from Esquimalt-Juan de Fuca talked about municipal loans infrastructure in Canada. We have examples in the United States where municipal infrastructure is falling apart. In Canada, municipalities put together infrastruc-
February 19, 1990

ture programs. But they were rejected out of hand by the government.
The government should put the effort it is giving to the goods and services tax into a fair tax system, into helping those sectors of our economy that are in need, whether it is cleaning up pulp mills, planting more trees or helping diversify some of the economies.
Just think about that. If it had put that year-long effort into helping poor people and giving young people jobs and education, planting trees and cleaning up the environment, think how much better this countiy would be, rather than the havoc it is going to wreak on the economy in the early part of next year. Bill C-52 simply offers ongoing protection to the wealthy.
With the alternatives our party has talked about and the message we use in this Parliament to get it across, people will start to see through the shilly-shallying of the Liberals and Conservatives on the GST and Bill C-52. They are going to see a clear message coming from our party. I know they will support that.


Mr. Gustafson:: Mr. Speaker, the hon. member from the NDP seems to say that he is supporting RRSPs but he does not want to increase the level and he wants to use the socialist ideal of socializing everyone into the poverty level. These ideals have been rejected around the world. They have been rejected in eastern Europe and they are being rejected again and again. It is obvious that the NDP does not understand the importance of investing in your own country.
Why is the member opposed to Canadians investing in their own country, for the good of Canadians? I think he should rethink the whole idea of the NDP policy. There has been a love affair going on here between the NDP and the Liberals. They get to spatting over who is the opposition but they really have not explained what direction they would take in regard to creating some investment capital in this country.


Brian L. Gardiner: Mr. Speaker, an hon. member suggested that the question was not worth an answer. It is not fair to treat the Conservatives that way. Even Conservatives deserve an answer.
Government Orders
The hon. member touched on a couple of points in his question to me. He referred to the rejection of the ideals of the NDP in Europe and so on. The fact of the matter is that it is quite the reverse. People in Europe are rejecting the extremes of the right and the left and the strategy of social democracy and a mixed economy is becoming more accepted all over the world than ever before. I think it is ridiculous for members on the opposite side to suggest that people are jumping on the capitalist train. Whether that exists nowadays or not, I do not know. We all know about the efficacy of social democracy, about the mixed economy, something for which this party has stood for years.
The member also made comments about the poverty level as though under the New Democrats we are all going to wear grey jackets and what have you. Well maybe the hon. member was right, maybe the question was not worth answering, but I can refer the hon. member to some good background reading. On this particular point there is one particular group of people who have got together in this countiy and other countries, including some European countries the hon member has talked about, who have helped people struggle out of poverty.
I speak of the trade union movement in this countiy. We make no apologies for working closely with people in the trade union movement. The trade union movement has fought to ensure that people have had fairness and equality, good wages and good working conditions, not like the party opposite that uses every opportunity to drive down and beat up unions whenever it has a chance. Those members will take all the benefits of working in an organized work site, just as they will take all the benefits of socialized medicine.
As my colleague from Esquimalt-Juan de Fuca always says so clearly, if they don't like it they can rip up their medicare card anytime. You know they are not going to do that, Mr. Speaker.
We have said clearly that this legislation helps the wealthy. We are going to slow down this legislation coming from this government just as we are fighting the GST because it is the Conservatives and Liberals protecting their wealthy friends once again.


Lyle Stuart Kristiansen: I would like to ask my colleague to elucidate a little further on some of his comments.

February 19, 1990
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Is it not true that the members opposite in the Conservative Party have continuously been saying that we have to change all our spending priorities because we are short of money and that we should eliminate those programs that help people who are better off in order to help those people who are really in need?
That seems to be totally in conflict with what the government is doing in this case, which is turning $300 million to $350 million a year over to the people who need it least when tomorrow in all likelihood it will take away money from the people who need it most. It seems to me that that is a bit of a conflict.


Brian L. Gardiner: Mr. Speaker, yes.


Mr. Deputy Speaker:: Is the House ready for the question?


Some hon. members:: Question.


Mr. Deputy Speaker:: The question is on the amendment. Is it the pleasure of the House to adopt the amendment?


Some hon. members:: Agreed.


Some hon. members:: No.


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


Some hon. members:: Yea.


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


Some hon. members:: Nay.


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


Mr. Deputy Speaker:: Call in the members.


Mr. Deputy Speaker:: I declare the amendment lost.


Jean-Robert Gauthier: Mr. Speaker, in the interest of saving time, I think you would find there would be a disposition to apply this vote to the main motion, but in reverse.
Althouse Benjamin Blackburn (Brant)
Funk
Harvey (Edmonton East) Hunter
Langan (Mission-Coquitlam)
McLaughlin
Murphy
Rodriguez
Stupich
Waddell
February 19, 1990


Mr. Deputy Speaker:: I notice that the House leader for the New Democratic Party agrees with that. On a point of order, the Secretary of State.


Mr. Weiner:: Mr. Speaker, I was unavoidably detained and would have voted, of course, with the government on the last vote. I would like to be recorded as doing so on this vote.


George Albert Proud: Mr. Speaker, I accept the hon. minister telling us what he would have done if he had been here, but I think that he wants to have his name and the names of all the others who were absent added for the second vote we are now taking and not for the first vote.


Mr. Darling:: Like the minister, I also would have voted with the government on the previous vote, and would like to be recorded as doing so on this one.


Geoff Wilson: Mr. Speaker, I was absent for the first vote, but ask that my name be added to the government side for the second vote.


Mr. Cadieux:: Mr. Speaker, to save time, I go along with what my colleague said.


Mr. Deputy Speaker:: Pursuant to the proposal made by the hon. house leader for the Official Opposition and the agreement of the House, I declare the main motion carried.
Bill read the second time and referred to the Standing Committee on Finance.

February 19, 1990
Adjournment Debate POINT OF ORDER


BUDGET STATEMENT OF THE MINISTER OF FINANCE
Douglas Grinslade Lewis: Mr. Speaker, I rise on a point of order. There have been discussions among the parties and I think you would find consent to approve the motion with respect to the budget which was read into the record immediately prior to Routine Proceedings today.
I understand that my hon. friend for Kamloops has a point of order with respect to questions and answers vis-a-vis the minister's budget address which he wishes to raise at 11 o'clock tomorrow morning.
In the event that Mr. Speaker agrees with my hon. friend for Kamloops, we would agree to the order being amended to take into account any such ruling.


Audrey Marlene McLaughlin: Mr. Speaker, I rise on a point of order with respect to the government's request earlier today to present the budget tomorrow at 4.30 p.m.
Given that this budget will be predicated on the revenues expected from the goods and services tax, given that 80 per cent of Canadians have expressed their concern about this tax and rejected this tax, and given that the government has decided to ignore the voice of Canadians, my party had to seriously consider the legitimacy of introducing such a budget.


Some hon. members:: Oh, oh!


Mr. Deputy Speaker:: Order. The hon. leader of the New Democratic Party has the floor.


Audrey Marlene McLaughlin: Mr. Speaker, I understand that my comments could give the government some anxiety but I would say to the government that people of Canso, Nova Scotia, know about anxiety and what is happening to them. People on fixed incomes and the farmers of this country know about anxiety.
Given the high inflation, the increasing unemployment and the high interest rates, we are prepared to give the Minister of Finance the opportunity to show some economic leadership in the country. Should the government introduce a motion to introduce the budget at 4.30 p.m. tomorrow, we are willing to give our consent.


Mr. Deputy Speaker:: The House has heard the terms of the motion proposed by the Minister of Justice and government house leader. Is there unanimous consent?


Some hon. members:: Agreed.


[Stage Direction]
Motion agreed to.

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

Ron J. Duhamel: Mr. Speaker, members will recall that on November 9, 1989, the Canadian Federation of Students visited Ottawa to protest against the government's handling of post-secondary education in this country.
They had identified the massive slash in transfer payments to the provinces, roughly $24 billion fewer dollars for health and education over an eight or nine fiscal year period. They understood, as well, that there would be less funding for training and retraining. They knew that the government had removed almost $700 million and then had added another $800 million without making any adjustments for student growth, without making any adjustments for inflation, and without making any adjustments whatsoever either for new programs that were needed.
They were alarmed at the government reneging on its commitment to double its investments in research and development. We had been at roughly 1.4 per cent of gross domestic product, that is in terms of investments, which is roughly one half of what is expended in the United States, Japan, Sweden, France and West Germany, and that has slipped. In fact the Prime Minister had asked the provinces and the private sector to contribute more. The provinces have contributed 21 per cent more during the last five years. The private sector has contributed 19 per cent more, while the federal government has contributed 9 per cent more. Its contribution has not even kept up with inflation.
February 19, 1990

They were concerned as well about the weak commitment to literacy. I refer to the $110 million that has been announced so often that people are starting to think, as the government would want them to think, that it is new money. But $110 million over five years is $22 million a year for the roughly five million functionally illiterate Canadians. That works out to $4.50 per student per year.
They were angiy at the fact that student aid criteria have not changed since 1984, that they are now paying much more for their education. Their parents are paying more, and so are their guardians. In fact, tuition fees are going out of sight. There is massive student debt. Students are really quite concerned as to whether or not they will be able to continue their studies.
Of course, most recently, there was the addition of the 3 per cent administrative fee, which is a cruel blow because it is added on to those individuals who need funding most. Now, not only does one have to borrow if one is poor, but one also has to pay an additional penalty of 3 per cent.
These students are well aware of the hidden taxes that have been brought forward by the government. A couple of examples would include the goods and services tax which will impact negatively upon the education of students in this country-post-secondary, elementary and secondary. They were angry as well about the cancellation of the postal subsidies for scholarly and academic journals.
You will recall, Mr. Speaker, that on November 91 had asked the minister responsible these questions. What is the government going to do to counter these problems? What is the government going to do to protect our quality of life? What is the government going to do to enhance our competitiveness with the United States, Japan, Europe-our major competitors? What is the government going to do to make this nation become a nation of leaders and not followers?
The cuts that the government has undertaken in transfer payments and the reductions in other sectors of the educational pie will have a negative impact on the small and poorer provinces. Let me just briefly state why this is so. They are, in fact, a grant that is transferred to the provinces. When the province is poor and small, it
Adjournment Debate
has less ability to maintain the infrastructure that it has had in place for health, education and other services.
In fact, I have almost completed a cross-Canada tour on which I have been talking to people in universities, colleges, school systems, and to parents and students. One of the factors that has been identified for me recently as being particularly critical is in Prince Edward Island and Newfoundland. In those provinces the elementary and secondary school programs are starting to suffer because there has been a massive drain on the resources of those small, poorer provinces to try to maintain what they have in place.
When we think of Canada as a country that is committed to the sharing of resources so that every man, woman and child will have access to those basic necessities of life-health, education and other related services-we shudder. We are concerned and many people are frightened.
As well, during this tour I have talked to people who were responsible for minority language education, French outside of Quebec and English in Quebec. They are concerned that the reductions and the cuts will have a negative impact upon them.
I talked to people in the native education sector, our aboriginal people. They are angry at the capping of education, particularly when at this particular point in their evolution there are more and more of their peoples who want to benefit from post-secondary educational opportunities.
I talked to new Canadians who were annoyed. Frankly, some of them were terribly angry that certain programs for the learning of English and French had been removed.
The government will counter by saying that it spent $240 million on the Centres of Excellence. But you have to look at that in terms of the total massive retreat of the federal government. We are talking about billions of dollars-not millions but billions of dollars-of retreat from post-secondary education in which $240 million is a lot of money. At the same time if you look at it in juxtaposition to what has been removed it is not a great deal, of course.
With respect to the Centres of Excellence, what is alarming is that not one single study was undertaken in the area of social sciences and the humanities. One would think that in an era such as ours, in a country such

February 19, 1990
Adjournment Debate
as ours, where increasingly society is making greater demands upon us and when we are accelerating into a highly technological society, that someone would have thought to ask some basic fundamental questions.
Where is this technological society taking us? What impact will it have on me, on you, and on Canadians generally? One would have thought that that would have been something which the government would have wanted to fund.
The questions that are being raised today are these. Are there any other massive cuts coming? Will there be other reductions? Will the pain be even worse than it has been? Will our young Canadians suffer? Will they be unable to be competitive with young people from other countries?

Mr. Speaker, I just said very briefly that when I raised the question in the Elouse on November 9,1 received a reply that I thought was incomplete and I therefore gave a summary of the massive government cuts and tried to show the negative impact on every region and all the people of this country.
I therefore ask the minister now to try to elaborate, to tell me exactly how they will proceed to offset these cuts.


Mr. Jean-Guy Hudon (Parliamentary Secretary to Minister of National Defence):: Mr. Speaker, on behalf of the Secretary of State, I would like to take the opportunity to provide further information in answer to a question raised by the hon. member for St. Boniface on November 9 concerning the funding of post-secondary education.
As the Secretary of State-who is right next to me-said recently, education is a national priority for our government. We have an explicit commitment to co-operate with the provinces and territories in funding a post-secondary education system based on excellence and equal opportunity.
At the First Ministers' Conference last November, the Prime Minister proposed setting up a national task force on developing human resources for the year 2000. This task force would be particularly concerned with identifying the problems of human resources, examining the results obtained by the present education and training
systems and formulating recommendations on the desired changes.

The Prime Minister's representative, Dr. Douglas Wright, President of the University of Waterloo, is working closely with the Council of Ministers of Education to develop the proposal. The Prime Minister confirmed that the federal government will "carry its fair share of the burden to ensure that all young Canadians receive a first class education as they confront a world-class challenge".
Currently, the largest single element of federal support is the Established Programs Financing, EPF, arrangements. Under this program the federal government transfers cash payments and tax points to provincial governments for post-secondary education.
In 1989, the program demonstrated strong growth despite financial constraint. That does affect the level of increase in EPF. The program provided $5.4 billion last year. It is providing $5.7 billion this year. This is a 6 per cent increase, not a cutback.
Combined with other forms of more direct support, total federal support to higher education is around $7 billion of the total $12.5 billion to be spent this year.

Access to post-secondary education for all Canadians is a priority for both federal and provincial governments. The Canada Student Loans Program, together with provincial programs, has helped over 1.5 million Canadians continue their studies. This year, more than $400 million will be spent on financing loans to a quarter of a million students, twice the amount spent five years ago. The loans program is now being reviewed in order to balance present and future needs of both students and governments.
With the implementation of the new Canada Scholarship Program, the best students will be able to earn degrees in natural science, engineering and related disciplines. The Centres of Excellence Program will give some of the best researchers of this country a unique opportunity to work together on projects that are vital to our future. Good news for our future engineers, scientists and researchers.
Mr. Speaker, these are some of the achievements that testify to our serious commitment to post-secondary education in Canada. Our future economic and social development depends on our ability to co-operate with
February 19, 1990

provinces and territories, universities and colleges, teachers and students.

We need to take another look at the education systems of Canada to find ways to use existing education and training resources more effectively and efficiently. It is not enough simply to demand more resources. Canada's spending on education per capita is second only to
Adjournment Debate
Sweden. We must work together and demand excellence and high quality results from the investment we already make in our education and training systems.


Mr. Deputy Speaker:: The motion to adjourn the House is now deemed to have been adopted. Accordingly, this House stands adjourned until tomorrow at 11 a.m., pursuant to Standing Order 24(1).
The house adjourned at 7.17 p.m.

Tuesday, February 20,1990