1990-01-29

Ms. Dawn Black (New Westminster-Burnaby):: Mr. Speaker, yesterday was the second anniversary of the Supreme Court striking down the abortion law. The Supreme Court ruled that Canada's abortion law was unconstitutional.
Today we find ourselves with another unjust abortion law before us. I urge members to vote down this unfair law. Let us not wait for the Supreme Court to do it later, after much pain and publicity to the women who will be dragged before the courts. Let us not deal with unwanted pregnancy by threatening doctors with jail.
Over the past two years women and doctors have shown themselves responsible for making moral and medical decisions. We are entering the third year without an abortion law, showing clearly that we do not need one. What we need instead is family planning education and progressive social programs to support pregnant women and families. On this second anniversary let us all make a commitment to uphold women's right to decide for ourselves what we will do with our own bodies and our lives.


Mr. Don Blenkarn (Mississauga South):: Mr. Speaker, I rise today on behalf of all of Canada to indicate our support for our athletes in Auckland.
I particularly want to congratulate Curtis Hibbert of Mississauga of our gymnastics team who has won five gold medals, a silver medal and a bronze medal. We have a tremendous team in New Zealand. These young men and women qualified after rigorous hours of training and dedication. Our athletes are participating in virtually every sport. We have won medals, and the winners are to be congratulated. As of yesterday, we had 58 medals and were running second in the games.
For those who have not yet won a medal, we hope they will win some. For those who do not make to the podium, they are still winners as far as we are concerned, and they are to be congratulated.


Some hon. members:: Hear, hear!


EMPLOYMENT EQUITY
Mr. Eugene Bellemare (Carleton-Gloucester):: Mr. Speaker, it is with great interest that I listened to the President of the Treasury Board in the House last Friday make his surprising announcement of equal pay adjustments. I welcomed the news that discrimination in the federal public service would soon come to an end. I have always fought against such discrimination which has been aimed primarily against women. The government is finally moving toward the principle of equal pay for work of equal value after five years of study.

I am proud to say that many of my constituents in Carleton-Gloucester are federal public servants, and I intend to make sure that the adjustment is carried out expeditiously.

The Treasury Board decision is just one small step toward a complete end to discrimination in the workplace. I urge the government to demonstrate leadership by acting quickly to ensure that all Canadians work in an environment of fairness and equity.

January 29, 1990


COMMONWEALTH GAMES ASSOCIATION OF CANADA
Mr. Jean-Marc Robitaille (Terrebonne):: Mr. Speaker, last week the Quebec Superior Court ruled in favour of coach Daniel St-Hilaire, ordering him to be reinstated as coach.
As ordered, the Canadian Track and Field Association submitted St-Hilaire's name to the Commonwealth Games Association of Canada.
Nevertheless, Mr. Speaker, the latter association decided, on the basis of a time technicality, to ignore St-Hilaire and deny him accreditation to the Commonwealth Games in New Zealand, leaving this national coach to sleep in a car across from the stadium and denying him access to the stadium where the games are held.
Mr. Speaker, I deplore the lack of courtesy shown by the executive of the Commonwealth Games Association of Canada, and I see this situation as humiliating for all Canadians. In the circumstances, I hope that the Association will soon take steps to remedy this intolerable state of affairs, which would be in the best interests of amateur sport in this country.


IMMIGRATION
Mr. David Berger (Saint-Henri-Westmount):: Mr. Speaker, I appeal to the Minister of Employment and Immigration to help the refugee claimants who are in the so-called backlog, who came to Canada because of its good reputation, yet find themselves caught up in an inhumane Kafakaesque system.
I have met with many of these people. Their situation is desperate. Their lives are on hold. They wait, and they wait and they wait.
A Canadian citizen who befriended a young Iranian family put it this way: "They are treated by our society as less than second-class citizens; they work at underpaid, unstimulating jobs; they cannot study or take training programs; they do not qualify for family allowances; they have absolutely no control over their own lives; and they have virtually no hope of improving their future prospects. I anguish for them and must ask whether Canada cannot do better.
Canada owes it to these human beings and to herself to hasten the refugee claimant process".
That is what I ask the Minister of Immigration to do-


Mr. Speaker:: I regret that the hon. member's time has expired.


GOODS AND SERVICES TAX
Mr. Bill Casey (Cumberland-Colchester):: Mr. Speaker, I would like to congratulate the hon. Minister of Finance on devising what must be the most popular tax in Canadian history.


Some hon. members:: Hear, hear!


William D. (Bill) Casey: The media is saying that according to a recent poll, 19 per cent of Canadians are in favour of the GST. I find that incredible.
If Canadians were polled on whether or not they wanted to pay income tax I think 100 per cent would be against it. If Canadians were asked if they wanted to pay property tax or provincial sales tax I think 100 per cent would be against it, but 19 per cent of Canadians are in favour of GST. This is a compliment to the Minister of Finance but also an indication that people are beginning to see that the FST must go and that the GST is necessary to ensure that Canadian business is competitive in a global market that is becoming even more competitive every day.
The GST is not the ogre it is being made out to be. Neither will it perform miracles. But it is just one piece of a puzzle that will help us maintain our economy and, perhaps, recapture some of the manufacturing we have lost over many years.


THE HOMELESS
Hon.   Chas. L. Caccia@Davenport: Mr. Speaker, this winter we have seen pictures of Canadians sleeping on a bench, on the ground, over grates, in cities from coast to coast. The sight of the homeless is shocking. It makes us realize that something is wrong with our priorities. There are people in our midst who are not able to look after themselves. Society as a whole must look after them.
January 29, 1990

They need a roof. They need care. They need support and not just food.
So long as there are homeless Canadians sleeping in the streets we cannot consider ourselves a civilized society. Some people are doing something about it. In my city of Toronto, a hostel called Street City is just about to be opened by the Home First Society.
By contrast, the federal minister has no money, no projects, no programs. When will this government awake to the fact that there could be more than 10,000 Canadians homeless this winter? When will Ottawa help to house the homeless?


THE ENVIRONMENT
Mr. Simon de Jong (Regina-Qu'Appelle):: Mr. Speaker, I would like to congratulate all those concerned Canadians who have worked so hard for our environment.
The federal government, the federal environment minister and the government of Saskatchewan have finally halted construction on the Rafferty dam. Over the last two years I and my colleagues on this side of the House, especially the member for Winnipeg Transcona, have worked closely with the people who are sincerely concerned about the environment of Saskatchewan and Manitoba.
All we wanted was an independent panel to study the impact of this project, but what a mess the minister has created. An independent panel inquiry should have been conducted when we first called for it. It should have been conducted before the projects began, before the Federal Court spent time and money ruling on two challenges, before 60 per cent of the dam was complete, before the Minister of the Environment had to commit $10 million to the Government of Saskatchewan.
I wish we knew how the $10 million is going to be spent. I commend the Minister of the Environment for his decision. I just hope it is not too little too late.


TRIBUTE TO ANDRE BOUCHER
Mr. Guy Saint-Julien (Abitibi):: Mr. Speaker, the Voyageur bus accident on January 11 in the Annonci-ation
area in Quebec might have been a disaster, but for the heroic behaviour of one of the passengers, Andre Boucher of Val d'Or.
Witnesses stated they would never forget what this young man was able to do during the initial moments after this terrible collision. With great calm and courage, he took charge of the situation and kept people from panicking. He used an extinguisher to put out a small fire and gave first aid to the driver who was seriously hurt.
Unassumingly, Andre Boucher said: "I didn't do anything special."
Mr. Speaker, I for one think Andre behaved like a hero and that he deserves all our admiration and respect.


NATIONAL DEFENCE
Mr. Joe Fontana (London East):: Mr. Speaker, on September 26 the Minister of National Defence told this House that the moving of the 414th Squadron from North Bay would be cancelled because: "There was an additional cost for infrastructure which was not identified at the time of the budget." We concurred with that decision.
The government originally said the cost of moving the Royal Canadian Regiments to CFB Petawawa was $30 million. Now it looks like the real cost might be closer to $110 million.
In light of these additional costs, will the minister now acknowledge that the closure of CFB London will not save the taxpayer any money? Will he submit all the costs to the committee on defence?
The Minister of Defence has tried to persuade the city of London that rough estimates exist that demonstrate there are sufficient cost benefits to closing CFB London. Where are these mythical figures? If saving the taxpayer money is the main justification for the base closure, why will the minister not release this key information?

January 29, 1990
Oral Questions
Although no one expects initial estimates to be perfect, yours is simply incompetent. Since when did the government give you a blank cheque to spend whatever you want to close CFB London and expand CFB Petawawa? Will the Minister rescind this action and put it on hold-


Mr. Speaker:: The hon. member's time has expired.
 * *


GOVERNOR GENERAL OF CANADA
Mr. Geoff Wilson (Swift Current-Maple Creek-As-siniboia):: Mr. Speaker, it was with an enormous sense of pride that Saskatchewan people this morning viewed the swearing in of one of their own as Canada's twenty-fourth Governor General.


Some hon. members:: Hear, hear!
Mr. Wilson (Swift Current-Maple Creek-Assini-boia) Canada's new Governor General is a son of Saskatchewan. He is a graduate of the University of Saskatchewan who distinguished himself as a lawyer, as a member of Parliament and as a minister of the Crown. Indeed, this Governor General and his wife have dedicated the better part of their lives to distinguished public service.
Mr. Speaker, I am sure I join all of Saskatchewan and, indeed, all Canadians in extending sincere congratulations and best wishes to Their Excellencies, the Hon. Ray Hnatyshyn and Mrs. Gerda Hnatyshyn.



ORAL QUESTION PERIOD


Mr. Douglas Young (Gloucester):: Mr. Speaker, my question is for the Minister of Finance.
We are entering into a new phase of the goods and services tax. One of the criteria that he put forward for the goods and services tax was that it be simple. This is just part of the simplicity that he is going to perpetrate on Canadians, over 300 pages. I quote from page 112, just one of the simple calculations the Minister is going to inflict on Canadian business:
(A + B) + (C x(100 percent) -B)
This is the kind of thing that the Minister is putting forward. Is the the minister convinced that small business in this country believes that his proposal is going to be simple? Is he still adamant about putting forward the GST regardless of what it is going to do to small business in Canada?


Geoff Wilson: Mr. Speaker, as the hon. member is well aware we have put a number of features into the GST system so that it will help small business comply with the tax and help them in their business practices. One of these is the simplified accounting procedures we have provided for, but we have indicated that if there are any other proposals as to ways that the accounting systems can be simplified we are quite willing to look at that.
We have provided for a less frequent payment period for small businesses. Small businesses can pay either four times a year every three months or, if they are quite small businesses, they only have to do their tax calculation once a year.
There are ways in which we are reaching out. There are ways that we are listening to small business. Finally, we have embarked on discussions with the provinces to find ways whereby we can co-ordinate our activities with the provinces, with the prime objective of reducing the compliance burden for small businesses.


M. Douglas Young: The Minister insists on continuing his attack on small business in this country. Instead of letting small businesses get on with their work and create jobs in Canada, the Minister of Finance is raising a small army to collect his GST. Mr. Speaker, my question to the Minister of Finance is this: Does the government still intend to raise an administrative army of about 4 000 new employees, with an average annual salary of between $37,000 and $40,000, to collect the proceeds of the GST that will come out of the pockets of Canada's taxpayers?


Geoff Wilson: Mr. Speaker, I believe that my friend is very much aware that one of the outcomes that we hope will happen as a result of our discussions with the provinces is some combined effort so that we can reduce the number of public servants needed.


An hon. member:: You don't know?

January 29, 1990


Mr. Wilson (Etobicoke Centre):: The hon. member says "don't I know". We just started the discussions with the provinces within the past couple of weeks. That arose out of a decision taken at the finance ministers' meeting in December, so we have been moving fairly quickly in order to try and identify ways that we can work together and minimize this compliance burden. As we minimize the compliance burden we will be saving costs both for the business community as well as for governments in general.


M. Douglas Young: Mr. Speaker, as we discussed in this House, the minister and other members of the government have indicated that Canadians do not understand the goods and services tax. I think that is becoming obvious because opposition continues to increase to the goods and services tax, although the rate has been lowered in the latest proposal of the government.
Does he not understand that after all of the effort that has been made by the government to try to convince Canadians to accept the goods and services taxes, he has failed and that a basic tenet of the parliamentary system is that you need to have acceptance on the part of the people for these kinds of onerous tax measures?
I want to ask the finance minister if he is prepared to undertake again today, as he did on Friday, that he is personally prepared to travel-I understand he cannot go to every nook and cranny of the country-at least to four or five major centres in this country where he can explain to Canadians what the goods and services tax is all about and to allow for conflicting views to be heard? Is the minister prepared to sell what the chairman of the finance committee has not been able to sell, and that no one sitting next to him or behind him is prepared to even discuss in public?


Geoff Wilson: Mr. Speaker, the hon. member mentioned a number of things during the course of that lengthy preamble to his question. First of all, I have made a number of trips to different parts of the country and I intend to do this on an ongoing basis. This, I believe, is part of my responsibility as Minister of Finance. Other colleagues on this side of the House will be doing exactly that as well.
Oral Questions
The hon. member could assist the effort to improve the understanding of Canadians by not distorting what the GST does. He has just called it an onerous tax. It is a very simple tax in relation to the existing federal sales tax which was brought in some 65 years ago.
We will have a one-page tax return so that businesses will be able to pay their tax based on calculations put on one page. That demonstrates the ongoing commitment that we have to the small business community, a commitment that is clearly characterized by specific actions, including the $500,000 capital gains exemption, and the refundability of research and development credits for those small businesses which are not in a profitable position at the point that they undertake that research and development effort.
We have reduced the tax rate on corporate income tax for small businesses, and in a number of ways over the course of the last five years we have clearly demonstrated a commitment to and understanding of the position that small business is in. We have done things in order to try to assist their ability to work to create jobs to generate wealth for this country.


MINE CLOSINGS
Mr. Maurice Foster (Algoma):: Mr. Speaker, my question is directed to the Minister of Employment and Immigration. Last Friday Rio Algom Mines in Elliot Lake announced it will be shutting down two of its mines, laying off some 1,600 workers. This represents some 70 per cent of the workforce of this company and is a devastating blow for the community. I wonder if the minister can tell the House, those families and the community of Elliot Lake what action the government is specifically prepared to take to assist them in this devastating news. We are not only talking about the 1,600 miners here but we are talking about thousands of people in the community, their livelihoods, their families and their homes. They are all involved in this devastating news. I wonder if the minister could tell us what specific action the government is prepared to take.


Hon. Barbara McDougall (Minister of Employment and Immigration):: Mr. Speaker, I realize that the closure of this mine, which has been a primary source of income and employment in that area, one which I have visited, is quite a blow to the community. Our Industrial Adjustment Services are already working with the company, with the United Steelworkers and with the province to try to determine what programs will work the best. This

January 29, 1990
Oral Questions
is a Community Futures area so we will be putting our resources to work behind the workers. I understand also the indirect impact on some of the local businesses and I think the Community Futures Program and the council that they have in place there will be able to help with some of that.


Maurice Brydon Foster: Mr. Speaker, a supplementary question. While I am encouraged by the minister's response, I wonder if the minister could be more specific and say that she will give us a specific allocation for the industrial adjustments program, not only to help the workers but to diversify the economy and to assist the community at large.
In some cases, in communities facing extreme hardship and layoff, the government has been willing to allocate a specific amount of funding under the community initiatives fund, such as Sault Ste. Marie a couple of years ago. I wonder if the government would be willing to give a commitment to a specific amount of funding under the community initiatives fund for economic diversification and job adjustment as well.


Barbara Jean McDougall: Mr. Speaker, I think until the Industrial Adjustment Service has been in there and been able to assess the extent of what the community is facing, it would be early to do that. I would advise the hon. member to speak to his colleagues in the other place, because in the Labour Force Development Strategy there is more funding for both the Community Futures and for the IAS. The sooner we get that bill, the sooner I can help communities like his.


NATIONAL DEFENCE
Ms. Audrey McLaughlin (Yukon):: Mr. Speaker, my question is for the Minister of National Defence. I understand that today a Canadian Forces CF-18 plane crashed. Can the Minister tell us anything about the status of the personnel, whether indeed that crash did take place and whether that plane was taking part in the cruise missile testing?


Hon. Bill McKnight (Minister of National Defence):: Mr. Speaker, I regret to inform the House that there was a crash of a CF-18 operating from a forward operating location in Inuvik. It crashed some 2.5 miles from take-off. It was taking part, along with other aircraft, in an intercept exercise. They were controlled from the regional operations control centre at CFB North Bay. It is believed that the pilot was able to eject. There has been a civilian plane with military personnel at the scene and at this time we can only pray that the pilot has survived. I cannot inform the House as to the accuracy of that.


Audrey Marlene McLaughlin: Mr. Speaker, I would like to thank the Minister of National Defence. I would appreciate it if perhaps the minister could make a statement later in the day as more facts become available. I am sure all Canadians are concerned about this tragedy.


GOODS AND SERVICES TAX
Audrey Marlene McLaughlin: I would like to turn to another matter. In the absence of the Prime Minister, I would like to ask a question of the Deputy Prime Minister.
Last week the Prime Minister said in this House: "Both I and the country will remain transfixed as we await the presentation of the options for taxation from the New Democratic Party". Well, for the information of the Prime Minister and the Deputy Prime Minister and for all members across, I have sent a copy of the New Democratic Party's "Alternatives to the GST", in both official languages, to the Prime Minister. I should be happy to do so to all of those Liberal members who are looking for an alternative to the goods and services tax as well as to the government.


Some hon. members:: Hear, hear!


Audrey Marlene McLaughlin: Let me also say that I am sure the country will remain transfixed as we await the truth from the Prime Minister about where our tax dollars are really being spent.
Will the Deputy Prime Minister confirm that with just one tax break, that is the 80 per cent deduction for business meals and entertainment, the government is losing revenue of approximately $1 billion per year and will he agree that this deduction should be eliminated
January 29, 1990

before children, seniors and other Canadians are asked to pay 7 per cent on every cookie and muffin they eat and movie that they see?


Geoff Wilson: Mr. Speaker, both the Prime Minister and I are aware of the proposals that the New Democratic Party have put up. They are not realistic proposals, though. They-


Mr. Riis:: Explain yourself.


Simon Leendert de Jong: You think yours is?


Michael Holcombe Wilson: If the hon. members at that end of the House would like me to explain why I do not think they are realistic proposals, I would be happy to do so.


Nelson Andrew Riis: Where is the minimum corporate tax, Mike?


Michael Holcombe Wilson: Well, the hon. member does not want to learn about the nature of the proposals and why they do not work.-
The essence of the proposal is to tax the corporations in a major way. This can be done, but I think if the hon. member is realistic and reasonable in her assessment she will see that by doing the things the New Democratic Party would have us do in taxation of corporations, we would drive a good deal of corporate investment out of Canada, creating jobs-


Mr. Speaker:: I think the hon. minister is getting well into debate.
[Translation}


Audrey Marlene McLaughlin: I have a supplementary, Mr. Speaker. When the Minister of Finance introduced his tax reform proposal in 1987, he promised that all corporations would pay their fair share of income tax. Is the government prepared to introduce a minimum 20 per cent tax, on corporations like the United States, so that all profitable businesses will pay their fair share of income tax?


Geoff Wilson: Mr. Speaker, the hon. member and her colleagues have raised the question of a minimum tax for corporations on a number of occasions in the past.
Oral Questions
The point the hon. member misses when she makes this proposal-and it is a veiy important point-is that those corporations which are profitable today and are not paying tax are corporations that have lost money in previous years. They may also be corporations that are a conduit for dividend payments, so that a minimum tax of the kind she is proposing would result in double or triple taxation of corporations. I do not believe this is a fair way of dealing with it.
The effect of what she would propose is that a number of small companies in communities right across the country would be hit with tax, would not survive and we would see jobs lost.
The other point which I should also make is that there are about 3,500 companies that pay the large corporations tax. She and her colleagues talk about 90,000 corporations that are not paying tax. Therefore, there are a very large number of those corporations that she would hit that are small businesses. This is not the way we believe the corporate tax system should be structured.


MINE CLOSINGS
Mrs. Diane Marleau (Sudbury):: Mr. Speaker, in northern Ontario first we had the 15 per cent surtax on softwood lumber. Second, we had the cut-back in VIA Rail and Air Canada service. Third, we have had mines closing one after the other. We have had Virginia Town. We have had Kirkland Lake. We have had Cobalt. We have had Temagami, and now we have Elliot Lake. These shutdowns are nothing short of disastrous.
Are these places going to become the Scheffervilles of northern Ontario? What is the government doing right now? What is it prepared to do right now to create jobs, not retrain but to create jobs? The people of northern Ontario want to work.


Mr. Speaker:: The hon. member has put her question.


Mr. Hockin:: Mr. Speaker-


Mr. MacDougall:: Mr. Speaker-


Some hon. members:: Oh, oh!


Mr. Speaker:: I guess I am going to have to make up their minds. The hon. minister.


Thomas Hockin: Mr. Speaker, let me answer the question

January 29, 1990
Oral Questions
although the hon. member for Temiscaming knows these facts as well. The question is very pertinent.
First of all let me tell the hon. member about Elliot Lake. The FEDNOR program under the federal government in the last year has put 10 different projects into Elliot Lake. We are redoubling our efforts there.
There are 40 other projects for the Algoma region. Kirkland Lake, the whole Temiscaming area which the hon. member represents, has had over 34 different projects announced there in the last year and a half. Just last week we announced the third biggest project under FEDNOR. We are redoubling our efforts under FEDNOR to target those two regions, and we are very proud of what we have been able to accomplish so far.


Diane Marleau: Mr. Speaker, I have a feeling that maybe we should send government members some press releases. They are not aware of what is going on in our country.
Would the minister get real? FEDNOR just is not enough. CEIP is not working. Most of the grants in northern Ontario are going to tourism, and we know what the GST is going to do to tourism in northern Ontario. It will be gone.
What is the minister going to do today? What statement is he going to make at three o'clock, right now? Tell the people of northern Ontario what you are going to do.
You are going to say to them: "Retrain them". Retrain them to do what?


Mr. Speaker:: The hon. member has put her question.


Thomas Hockin: Mr. Speaker, the hon. member wants a mega-answer to a specific region in northern Ontario. What is developing is a whole series of initiatives that the government is taking in concert with the province of Ontario in a number of areas.
In addition to FEDNOR, we have the Native Economic Development Program, now the Canadian Aboriginal Economic Development Program, which is putting projects into northern Ontario at the rate of about 20 or 30 a year in those particular regions, plus tourism.
As we know the GST is going to lower the cost of operating a tourist establishment by 3 per cent to 4 per cent. That is a new dividend for them. Plus we have a series of joint agreements on tourism that have already helped them.


FISHERIES
Hon. Roger C. Simmons (Burin-St. George's):: Mr. Speaker, in the absence of the Prime Minister, I would like to direct a question to my good friend, the Deputy Prime Minister, who I am sure will agree that the Prime Minister last week put on a fairly shameful display when he tried to blame fishermen for the current fisheries problems.
The Deputy Prime Minister may know that there is only one-


Some hon. members:: Oh, oh!


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


Roger Simmons: They cannot take the truth. My question is for the Deputy Prime Minister who knows that the only villain in this, domestically speaking, is the Prime Minister for trying to blame the fishermen in the first place.
My question is this: Can he tell us-


Some hon. members:: Oh, oh!


Mr. Speaker:: This House can of course take a lot of latitude in questions, but pejorative questions are going to invite that kind of response. The hon. member will put his question directly.


Roger Simmons: Can the Deputy Prime Minister tell us whether he sees foreign overfishing as a problem?
If so, what is the government doing about it? Are we making any progress, or has he thrown up his hands like his friend, the Secretary of State for External Affairs, did last week who said: "There is nothing we can do. We have got to let the Spanish and Portuguese take all our fish"?
Right Hon. Joe Clark (Secretary of State for External
Affairs): Mr. Speaker, the hon. member has put on the record so many-I cannot say falsehoods because the rules do not allow me-inaccurate statements that I do not know where to begin.

The Prime Minister did not blame fishermen, and the government certainly has not suggested there is nothing we can do about foreign overfishing. Obviously foreign overfishing is a contributing factor to a very serious problem facing the fishing industry and also, as importantly, facing the many individuals and businesses which depend upon the fishing industry in Atlantic Canada to survive.
What can we do about it? We have already had some movement from the European community; not enough but some. We are pressing for more. The Prime Minister has been in touch with President Delors. Delors has written a response that is more forthcoming than we had expected before. The Prime Minister has indicated that he is prepared to meet with Delors.
The Community Minister of Fisheries, Mr. Marin, has agreed to come to Canada in the next several weeks to talk to Canadians about what we can do to have a more effective regime with respect to foreign overfishing. We are going to follow that up. We are going to follow up every reasonable lead we can to ensure that we solve that part of the problem and others that are creating so much distress in Atlantic Canada.


Roger Simmons: Now the minister talks about falsehoods. I ask him, when he gets up the second time-


Mr. Speaker:: Just a moment. The hon. member has taken some time in his first question. There are other hon. members who are waiting to be heard. I ask the hon. member to direct his question and to do it quickly.


Roger Simmons: Mr. Speaker, I want to ask the Deputy Prime Minister or the Secretary of State for External Affairs if he can tell the House what specific progress there has been. He keeps talking about some movement. I ask him: Does he suggest to the House that the Europeans plan to catch four times as much fish as the quota allows? Is that what he is calling progress?
Would he also indicate while he is on his feet if he is going to increase the monitoring? There is one boat out there trying to chase down all those foreigners. Is he going to do something about that?
Oral Questions


Right Hon. Joe Clark (Secretary of State for External Affairs):: Mr. Speaker, as a representative of an Atlantic constituency which involves the fishing industry and industries affected by it, I assume the hon. member has been following the announcements that have been made by the European Community.
He will know that there were recommendations made to the community with regard to the amount of fish they would take in waters in the high seas where there is a dispute about the applicability of the NAFO quotas. He will know that they have come closer to our view with respect to some stocks than they had before. He will know that they have not come-


Some hon. members:: Oh, oh!


Charles Joseph Clark: Hon. members opposite who were part of a government that gave away quotas to foreign fishermen that showed the basis of the problems that our industry now faces are-


Some hon. members:: Oh, oh!


Roger Simmons: You're lying now. That's a falsehood.


JUSTICE
Mr. Robert E. Skelly (Comox-Alberni):: Mr. Speaker, the Donald Marshall inquiry has found out what this government has been told for years, that the Canadian justice system is racially biased against native Indians and that there is an urgent and pressing need for change.
The inquiry recommends a native court system for Nova Scotia, a native justice institute, a tripartite forum to resolve outstanding issues between the Micmacs and the governments and a system of native court workers.
Will the Minister of Justice start consultations now, not only with the government officials he has consulted in the past but also with native groups that are suffering these injustices, in order to implement the recommendations of the Marshall inquiry?


Hon. Doug Lewis (Minister of Justice and Attorney General of Canada):: Mr. Speaker, the federal government welcomed the results of the Marshall inquiry as a very legitimate effort to review a problem in this country.
The provincial government has asked for I believe a week to 10 days to review the findings of the commission. We intend to take a relative amount of time in order to apprise ourselves of all the recommendations in an effort

January 29, 1990
Oral Questions
to review the matter and come up with the best solutions that we can as a government to integrate our solutions with theirs and find whatever answers we can to this problem.


ROYAL CANADIAN MOUNTED POLICE
Robert Evans Skelly: Mr. Speaker, given the increasing manifestations of racism that we are beginning to see with increasing rapidity around the country, and given the concern about the delay that has been taking place in the Solicitor General's office with respect to changing uniforms in order to accommodate visible minorities in the police force, will the Solicitor General implement recommendation No. 28 of the Marshall inquiry report which calls for immediate recruitment and immediate hiring of native RCMP officers?


Hon. Pierre Blais (Solicitor General of Canada and Minister of State (Agriculture)):: Mr. Speaker, we have had a committee for some time now in the RCMP which is busy speeding up the recruitment process for minority groups across Canada. The system is working well. We have been able to attract an increasing number of people from various ethnic groups, including Canadian native groups. I think it all takes time. The important thing is that we have a system that works, and so far, we have every reason to be satisfied about the increasing number of people from various ethnic groups who have joined the RCMP. This should be a source of great satisfaction for everyone.


JUSTICE
Hon. Bob Kaplan (York Centre):: Mr. Speaker, my question is also directed to the Minister of Justice and it is also about the Marshall inquiry.
In the answer the minister just gave he made it clear that as far as the federal government was concerned they were going to wait for the province to react to the Marshall report before doing anything. I would like to ask him to reconsider that.
The federal government has a Minister of Justice and this minister is the Minister of Justice. I would like to ask him what steps we can look to the Government of Canada to take in the light of the findings of the Marshall inquiry about the extent to which racism underlies the system of criminal justice in Canada for which he has the major responsibility as Minister of Justice.


Douglas Grinslade Lewis: Mr. Speaker, I want to make it very clear that I am going to correct the incorrect impression that my hon. friend left. I made it very clear that this government and this minister is going to read the report before we react. We will read it. We will consider it. We will react.


Robert Phillip Kaplan: Mr. Speaker, I am looking forward, then, to the minister reading the report. I would like to ask him about federal government policies.
Is the minister prepared to recognize the extent to which racism denies fair treatment to members of minority groups? Is he prepared to promote and achieve a workable native justice system? Will he undertake today to review the procedures of the federal agencies which have been criticized by the report? Also, will he in general use the occasion of this sad report to provide some leadership in moving the system of criminal justice of Canada forward?


Douglas Grinslade Lewis: Mr. Speaker, perhaps we could start with a little history and remind my friend that these problems took place while his party was in power. Let us just start with that.
I would hope that now he will join with this government which has appointed native people and increased our efforts in this area. I would hope that now the Liberal Party will join with us in eliminating this kind of discrimination.


Mr. Guy H. Arseneault (Restigouche-Chaleur):: Mr. Speaker, after turning its back on Canada's elderly, unemployed and low-income families, as well as Atlantic fishermen, the government is now turning its back on our country's students.

January 29, 1990

The government intends to reduce by nearly $52 million the assistance it had promised to provide to create summer jobs for students.
My question is for the minister responsible for youth. With a recession that seems imminent, how can the minister justify this kind of drastic cut?


Barbara Jean McDougall: Mr. Speaker, as the hon. member well knows, there has been no announcement as yet on what the program will be in the summer. I will be making an announcement on that fairly shortly, and I would suggest that he wait to see what it contains.


Guy H. Arseneault: Mr. Speaker, I see that the minister is not denying those cuts at all. In fact she is prolonging the agony and sowing mistruths out there. As far as I am concerned, when we look at the policy of this government it is intentionally leaking information.
How can the minister stand in her place and claim that her programs are helping students, while on the other hand her government is slashing $7 billion on transfer payments to post-secondary education, is imposing a 3 per cent administration fee on student loan applications and wants to apply a GST on books and all learning materials?


Barbara Jean McDougall: Mr. Speaker, I would remind the hon. member that the youth unemployment has fallen by 6.6 per cent since this government was in office, so we must be doing something right.


Some hon. members:: Hear, hear!


Barbara Jean McDougall: In terms of the Challenge program and the other things for which I have assumed responsibility, the hon. member will just have to wait for the policy to see what it is going to entail.
I would remind him of the very fine work that this government has done with regard to the pilot project with students staying in school. It is a very important part of the thrust of what we must do for our young people.
Oral Questions


PRESENCE IN THE GALLERY
Mr. Speaker:: I wish to draw to the attention of hon. members the presence in the gallery of Mr. Richard Nerysoo, Speaker of the Northwest Territories Legislative Assembly.


Some hon. members:: Hear, hear!


AGRICULTURE
Mr. Stan J. Hovdebo (Saskatoon-Humboldt):: Mr. Speaker, my question is for the Minister of Agriculture. I do not know why democracy comes with such a high price tag for some people.
The minister has established seven action groups to discuss and establish agricultural policy for the future. He is to be commended for inviting the farm groups to be part of this discussion.
However, although the farm groups have been invited, they have been invited to participate only if they pay their own way. These costs could range from $5,000 up to $30,000, depending on what the groups are going to discuss. Did the minister make the cost so high to eliminate some of the farm groups? How can he justify this cost of devising policy?


Hon. Don Mazankowski (Deputy Prime Minister, President of the Privy Council and Minister of Agriculture):: Mr. Speaker, of course we are interested in the views of all farmers and farm organizations. Generally, the farmers' views are heard through the auspices of their respective organizations. They have been involved in the process up until now. They have been involved in the national conference that took place. They will be involved in the various task forces and action groups that we have established.
We have no intention of eliminating anyone. I would suspect that there will be the opportunity for these groups to meet in the various regions of the country. We will do everything that we can to facilitate their being involved at the lowest possible cost to them.


Stanley J. Hovdebo: Mr. Speaker, the Canadian Federation of Agriculture, the National Farmers Union, and other groups of that calibre feel that they will not be able to take part and be

January 29, 1990
Oral Questions
at the table in these groups if they are not given some assistance.
Could the minister give the criteria by which he eliminates some groups and pays for the expenses of other groups if they appear or are part of the discussion?


Donald Frank Mazankowski: Mr. Speaker, we are not eliminating any group. We want to hear from every group and every individual farmer, either through telephone or through letter.
The fact of the matter is that the Canadian Federation of Agriculture is a national organization. The National Farmers Union is a national farm organization. I meet with them on a regular basis. My deputies and other officials meet with them on a regular basis. I will be speaking at the Canadian Federation of Agriculture annual meeting in Halifax next month.


Stanley J. Hovdebo: Can I be at the table?


Donald Frank Mazankowski: The door is wide open.
The hon. member asks: Can he be at the table? Our door is always open. As the hon. member knows, even if the hon. member has something constructive to offer he can come into my office and see me any time.


AIR SAFETY
Mr. Don Boudria (Glengarry-Prescott-Russell):: Mr. Speaker, my question is directed to the Acting Minister of Transport. It concerns the Gander air crash of December 12, 1985.
Yesterday new information came to light concerning this tragedy, as the minister will know. This information says, and I quote: "that the plan was carrying a member of a clandestine Delta team force that had been bloodied in a failed attempt to free U.S. hostages".
Would the minister explain to this House why two U.S. private investigators came up with this vital information when the minister's own government officials and the Canadian Aviation Safety Board failed to do so after four years of investigating? What is the reason we did not get that information before?


Hon. Shirley Martin (Minister of State (Transport)):: Mr. Speaker, as the hon. member knows, the investigation is being conducted in the United States at this point in time.
Mr. Justice Estey, a well known and well respected former judge of the Supreme Court, has reviewed the Gander crash here and all the documents that went it. We have followed his representation to us that no further investigation was necessary.


Don Boudria: Mr. Speaker, the minister should know a little better than that. She should know that the judge in question only reviewed the existing information and was not permitted to review any additional information. I was not even permitted to provide him with the information that I had.

I would now like to ask the minister a supplementary question. With these new developments, in light of these new facts, is the Conservative government opposite now prepared to set up a royal commission of inquiry as we have been asking for four years? Yes or no? If not, why not?


Shirley Martin: No, Mr. Speaker, we will not.


NATIONAL DEFENCE
Mr. Jack Iyerak Anawak (Nunatsiaq):: Mr. Speaker, my question is for the Minister of National Defence. In light of the report on CBC News World today that the plane which crashed earlier near Inuvik had exploded in mid-air, and in light of the fact that National Defence had not confirmed whether the pilot was dead, would the minister inform the House as to the fate of the pilot, as reported by CBC News World?


William Hunter (Bill) McKnight: Mr. Speaker, in reply to an earlier question, I informed the House that there had been the loss of a CF-18 operating from an FOL in Inuvik. I cannot confirm the outcome of that crash or the fate of the pilot at this time.
January 29, 1990

As the hon. member knows the area is very difficult. It is very difficult to search because of lack of light. We cannot inform the House, unfortunately, as to the outcome. We can only hope it has been successful.


Jack Iyerak Anawak: Mr. Speaker, in light of this accident, in light of the gradual easing of the global cold war and in light of the very strong northern opposition to cruise missile testing, will the minister reconsider and cancel cruise missile testing?


William Hunter (Bill) McKnight: Mr. Speaker, the agreement under which Canada allows for the testing of the ACM-86B is an agreement that was signed and supported by the previous administration- and he is a member of that party at this time-and supported by this administration.
I believe it is an important part of the defence of North America. We are part of an alliance.


Mr. Benjamin:: The defence of missiles.


William Hunter (Bill) McKnight: The Leader of the New Democratic Party asked a very important question about the concern for a pilot and about concern for an aircraft. I am sure her colleagues would like me to be able to answer the hon. member.
No, at this time, the testing will take place. The testing is part of the contribution that Canada can make to security for North America. I would suggest to the hon. member that what we see taking place now in Europe is part of the reason for NATO to exist. NATO will continue to exist and Canada will exist as a part of NATO.


EMPLOYMENT EQUITY
Dawn Black: Mr. Speaker, my question is for the President of the Treasury Board. On Friday, the minister made a first tentative step toward pay equity in the Public Service.
Ever since the Public Service was established women have been unfairly paid. If the government really proposes to rectify this injustice, why then is it paying these women back only about one-quarter of what is actually owed to them?
If this government were really committed to the concept of pay equity, it would do better than two bits on the dollar.
Oral Questions


Hon. Robert de Cotret (President of the TVeasury Board):: Mr. Speaker, the announcement I made on Friday was based on the results of a joint union-management study that has been ongoing now for five years. The methodology that was retained for use in this study is methodology that is defensible and recommended by outside experts, reviewed by consultants retained by the joint union-management committee and reviewed by the Canadian Human Rights Commission.
All I can to my hon. colleague is that we stand by the numbers we have put out. We believe this is a very important step in achieving equal pay for work of equal value and that people who have been discriminated against unfairly are now finally getting recognition from this government.


Dawn Black: Mr. Speaker, the Human Rights Commissioner has already indicated that this proposal certainly in no way really addresses the issue of pay equity in the Public Service.
Studies have shown that women in female-dominated occupations are due about $1.2 billion in retroactive payments, not $317 million as proposed by the government. Women are owed $200 million in equalization payments, not $76 million. This is money which these women have earned over the past five years, money that has not been paid to them by this federal government. This is money that men have been getting for the same work over the same period of time.
When is the government going to pay these women the money that they have already earned and the money that they deserve? When will this government truly implement fair pay equity for women in the Public Service?


Robert René de Cotret: Mr. Speaker, to answer the question, I would like to quote an editorial published in Le Droit. It says: "The Public Service Alliance of Canada can keep on shouting murder, the retroactive salary adjustments of $317 million for 75,000 federal public servants announced on Friday by the President of the Treasury Board are an important victory for the principle of pay equity for federal employees." The editorial continues: "They are a model and a basis for negotiation not only at the federal level but also at the provincial level and even in the private sector, where in most cases pay equity

January 29, 1990
Point of Order
remains only a fine principle which is still not honoured in practice."
I think, Mr. Speaker, that the editorial very well expresses this government's commitment to pay equity, not only in the federal public service but throughout the country.


Mr. Speaker:: In view of matters that are taking place a little later on this afternoon I want to announce that there will be shuttle buses provided for members from the west door of the Centre Block commencing at 1745 hours and continuing through to 2100 hours. If there is need for any further information I ask that hon. members phone my office.


POINT OF ORDER
Mr. Speaker:: There is agreement in the House, I understand, that I render a judgment now on a point of order raised by the hon. member for Kamloops a few days ago rather than wait until the completion of Routine Proceedings. I am prepared to do that.
On January 24, 1990, the hon. member for Kamloops rose on a point of order to contest the procedural acceptability of a Ways and Means motion in which there had been concurrence the previous day. While the Chair allowed the bill, which was based on this motion, to be introduced and read a first time, I indicated to members at the time that I would not allow second reading debate on the bill to begin until the procedural arguments raised by the hon. member for Kamloops had been considered and a decision rendered. I am now ready to rule on this matter.
Before entering into the case itself, I would like to address a technicality on the timing of the member's point of order. The member for Kamloops explained that he did not raise his point of order on January 23 because Standing Order 83(3) states, "a motion to concur in" a ways and means motion "shall be forthwith decided without debate or amendment".
The Chair would like to point out that the practice and rules of the House would not preclude a member from raising a procedural objection to the admissibility of a Ways and Means motion when it is called.
Beauchesne's Fifth Edition, citation 235, states:
Any Member is entitled, even bound, to bring to the Speaker's immediate notice any instance of what he considers a breach of order-He should do so as soon as he perceives an irregularity in the proceedings which are engaging the attention of the House.
The Chair simply wants to point out the difference between the restriction against debate on the motion of concurrence and the raising of a point of order. I am quick to point out that while I have made these remarks in the interests of clarification, it makes no difference to the ruling I will make and in no way was the hon. member for Kamloops prejudiced against putting his point of order and arguing the matter. In short, the member could have raised his procedural arguments on January 23 but could not have debated the subject matter of the motion.

Let me now proceed to render my decision. On January 24, the hon. member for Kamloops pointed out that a phrase in the motion of ways and means moved by the Minister of Finance referred to a document which had not been tabled in the House of Commons. Specifically, the importnt passage read:

That a tax-be imposed after 1990 under the Excise Tax Act at the rate of 7 per cent-as set out in the document entitled "The Goods and Services Tax" tabled in the House of Commons by the Minister of Finance on December 19, 1989 and "The Goods and Services Thx Technical Paper" issued by the Minister of Finance on August 8, 1989.

It is the second document referred to in the motion which at that time had not been tabled in the House.

The member for Kamloops claimed that a tax bill had been founded in part on a document released through the press and not tabled in the House. And this, he contends, challenges the age-old practice that money bills must originate in the House. Furthermore, he asks whether amendments can now be proposed to the bill
January 29, 1990

increasing the tax to 9 per cent since the technical paper referred to in the motion outlined a plan for a 9 per cent tax.

The Chair acknowledges that these are serious questions worthy of careful consideration and a full explanation.

Before proceeding, it might be appropriate to explain briefly the significance of the Ways and Means motion, especially to our listening audience, but I suspect sometimes it might be of great help also to hon. members.
Our parliamentary procedures are based on the premise that before a government imposes any new tax, or before it seeks to continue any expiring tax, or before it increases the rate or scope of an existing tax, the government must table a notice of a Ways and Means motion in the House.
"Ways and Means" is the expression used to describe the process by which the government obtains the resources necessary to meet its expenses. In other words, how it raises taxes. Therefore, our practice requires that a notice of a motion outlining the proposed changes in taxation law be tabled in the House and that this motion be adopted in priority to first reading of a tax bill.
This motion of Ways and Means does not have to be identical to the subsequent taxation bill. In some cases, this motion is almost a word-for-word version of the subsequent bill, but in other cases it may be simply a one-paragraph statement generally explaining the proposed changes.
Hon. Members can be forgiven if sometimes they are in a state of perplexity as to just what exactly is appropriate to include or to leave out of a Ways and Means motion because there has been a very great variety of forms, wording and structure of Ways and Means motions over the many years of the history of our Parliament.
In some cases this motion is almost a word-for-word version of the subsequent bill, as I have said, but in other cases it may be simply a one-paragraph statement generally explaining the proposed changes. Our Standing Orders specify that the bill must be, and I quote, "based
Point of Order
on the provisions" of the Ways and Means motion. Many of my predecessors have explained in rulings that the words "based on" do not mean "identical to".

I would now like to return to the case presently before us.
When the member for Kamloops argued that the ways and means motion contains reference to a document not tabled in the House, he raised a number of important issues. First, the Chair has been asked to pronounce on whether it is proper for a ways and means motion to refer to a document not tabled in the House.

In considering whether a Ways and Means motion should only refer to documents tabled in the House, the argument appears to hinge on whether the House and members had access to the documents and that these documents were public in nature. The need for such access is obvious. However, I hasten to add that there is nothing in our Standing Orders or in our practice to restrict all references in Ways and Means motions solely to documents tabled in the House.
The particular document in question, the technical paper issued on August 8, 1989, has an interesting history. As the Minister of Finance himself pointed out on January 25, 1990, the technical paper was the subject of a self-initiated committee study which resulted in the presentation of a report to the House on November 27, 1989. This technical paper was also the subject of a supply motion moved by the member for Yorkton-Melville on October 12, 1989, and I quote from page 4578 of Hansard where the member, when he commenced debate on the part of the New Democratic Party, said:
I rise today to ask the House to reject this proposal in the
technical paper on the goods and services tax.
He was there referring to the technical paper which I have just mentioned.
There is ample evidence that this particular document was well known in parliamentary circles and that copies were readily available to members from the distribution office. Therefore, in terms of members' access to this paper, the Chair must conclude that there is no problem. Furthermore, in making his argument on Thursday,

January 29, 1990
Point of Order
January 25, the minister offered to table the August 8 technical paper and, indeed, did so on Friday, January 26.
On strictly procedural grounds, I wish to repeat again there is no requirement that motions only refer to documents tabled in the House. Unless required by statute or our own Standing Orders, documents are tabled in the House as a courtesy for information purposes.
Far more problematic to the Chair is the ancillary question raised by the hon. member for Kamloops concerning the possibility of amendments to the bill based on the Ways and Means motion. This turns, of course, on the relationship between the motion and the taxation bill. The member argues that the motion imposes an uncertain scope around the goods and services tax bill. Specifically, he points to the contradiction between the 9 per cent tax as outlined in the technical paper and the 7 per cent tax as set down in the December, 1989 document and the motion.
In the event that hon. members or the public are wondering how this contradiction could be there, it is clearly there because the technical paper was written and made public some time ago and, of course, mentioned 9 per cent and the December document reflected changes in government policy. That is why the document refers to a 7 per cent tax.
On the strict matter of the rate itself, I should immediately say that the specific terms of the motion refer to a 7 per cent tax. When I say "the specific terms of the motion", I am talking about the the specific terms of the Ways and Means motion which refer only to a 7 per cent tax and the bill and any proposed amendments would therefore have to be limited to that rate as an upper limit.
On January 25, 1990, the hon. Minister of Finance also spoke to this point of order. He stated that the reference in the Ways and Means motion to the August 1989 technical paper-that is the one that spoke about 9 per cent, the first one-and the December 1989 document tabled in the House had been made to be, in his words, "helpful". As he explained on page 7470 of Hansard, and I quote the minister:
In short, we made reference to the August technical paper as an historical milestone of the GST policy development process in an effort to be helpful to members of this House -In closing, I would again submit that the Ways and Means motion tabled on Monday of
this week stands on its own in providing the scope and the legal
authority for the GST legislation, with or without the reference to
the August technical paper that my hon. colleague has referred to.

The Chair will accept the explanation given by the Hon. Minister that the reference to the documents in the ways and means motion is peripheral to the expression of the financial initiative of the governement.

There would be very real difficulties in basing a tax bill on documents which were part of a consultative process, not least of all because those documents are not congruent one with the other. Each of the documents details different areas of concern on the general issue of the goods and services tax.
I must say in passing that I and others have examined both of these documents. They have been reviewed very carefully by the Chair in the preparation of this judgment.
In terms of proposing future amendments based on these documents, the Chair could be left in the unenviable position of reconciling the contradictions in these documents, trying to determine what constitutes the four corners of the bill and the scope of the intended tax.
I think hon. members, and I am sure the minister, would agree that this would have been an intolerable procedural situation and one causing the Chair and the House some considerable difficulty.

In this regard, the Chair is reminded of a statement made by one of his predecessors, Speaker Jerome, when he had to decide on the relationship between a ways and means motion and the subsequent bill. On December 18, 1974, Speaker Jerome said:

- the terms of the Ways and Means motion are a carefully prepared expression of the financial initiative of the Crown and frequent departures from them can only invite deterioration of that most important power.
As presently worded and distanced from the August and December technical documents, the Ways and Means motion declares simply that a goods and services tax will be implemented after 1990, calculated at a rate of 7 per cent:
January 29, 1990

a)	of the value of the consideration in respect of taxable supplies, on recipients of such supplies made in Canada;
b)	of the aggregate of the duty paid value of the goods and any excise tax imposed under the Excise Tax Act in respect of imported goods, on every person who imports goods into Canada; and
c)	of the value of the consideration in respect of taxable supplies, other than goods, imported into Canada, on recipients resident in Canada.
I think it should be noted that, in short, this particular Ways and Means motion presents a very broad statement of the financial initiative of the government vis-a-vis the goods and services tax and so would appear to permit considerable scope for amendments to the bill within, of course, the 7 per cent rate ceiling.
The terms of the motion itself which I have just outlined must serve as a beacon to guide members in drafting any amendments. Consequently, in view of the minister's explanation to the House that the motion stands on its own and does not derive any authority from documents previously issued by the government, the Chair concludes that Bill C-62, which is based on the Ways and Means motion concurred in on January 23, may now proceed for second reading.
I want to say in addition that the argument put forward by the hon. member for Kamloops was obviously extremely well researched and was very succinctly presented. I hope that hon. members will be satisfied that in this judgment we have dealt adequately with the matters raised.
I thank the hon. minister for assisting the Chair in the clarifications contained in his statements.



[Stage Direction]
Right Hon. Joe Clark (Secretary of State for External
Affairs): Mr. Speaker, during the heat of Question Period I and several of my colleagues heard my friend from Burin-St. George's say that I was lying. That is both untrue and unparliamentary and I wonder if he would take the opportunity to withdraw.
Mr. Speaker:: Before the hon. member responds, I want to assure the right hon. gentleman and other members that I did not hear that, but the matter is now between the two members. I am guided by their responses.
Routine Proceedings


Roger Simmons: Mr. Speaker, certainly if I said anything which was unparliamentary I would withdraw it without any equivocation. I indicated to the right hon. gentleman that, as he had indicated that I uttered some falsehoods, I thought that in the same vein he might have done the same thing. I used the word "falsehoods" and proceeded to say that if I could call it something else I would. But if something was heard that was deemed to be unparliamentary, I withdraw without any qualification.


Mr. Speaker:: I thank the hon. member. Hon members will, of course, keep in mind that the enthusiasm which is sometimes engendered at Question Period can create problems for the Chair and, of course, problems for other members who are waiting to raise important matters and ministers who, no doubt, would want to respond to those matters. I do want to stress the importance of hon. members in these exchanges keeping in mind that their colleagues are also waiting to be heard. I thank hon. members.



ROUTINE PROCEEDINGS


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.


PETITIONS
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 responses to 18 petitions.
[Editor's Note: See today's Votes and Proceedings.]

January 29, 1990
Routine Proceedings BUSINESS OF THE HOUSE


Douglas Grinslade Lewis: Mr. Speaker, there have been discussions among the parties and I think you would find that there would be unanimous consent for the following motion to be put and voted upon without debate. I move:
That, immediately after the completion of Routine Proceedings, the House will proceed to Orders of the Day for debate on the motion for second reading of Bill C-62; and
That, following the speech on the said motion by the Minister of Finance, further proceedings this day on the said motion and any amendment thereto be as follows and in this sequence:
-a speech (without time limit) by both of the Leader or designated spokesperson of each of the Official Opposition and the New Democratic Party;
-a period of one hour for questions and comment, directed to the Minister of Finance, along the format used in Question Period;
-a deemed adjournment of debate, without further debate or question put, on the said motion and any amendment thereto;
-a deemed adjournment of the House until eleven o'clock a.m., Thesday, January 30, 1990, without further debate or question put on such motion for adjournment;
- Provided that, for the remainder of this day, no dilatory motion shall be receivable by the Chair.


Mr. Speaker:: Does the hon. government House Leader have the unanimous consent of the House to move the motion?


Some hon. members:: Agreed.


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


Some hon. members:: Agreed.


[Stage Direction]
Motion agreed to.

Mr. Jean-Robert Gauthier (Ottawa-Vanier):: Mr. Speaker, I would not want to miss this occasion to do my duty and present to this House a petition which strongly opposes the government's intentions to impose upon Canadians this very unjust and unfair GST at 7 per cent.
These people believe strongly that the imposition of the 7 per cent tax will be unfair to Canadians, that it will impose hardship on low and middle-income Canadians and that the imposition of this tax will create an onerous burden on small business. They therefore strongly oppose the GST which is an unprecedented tax grab from the pockets of Canadians and will hit all of us not only with higher taxes but higher inflation, higher interest rates and higher unemployment.
These people humbly pray and call upon parliament to reject the proposed goods and services tax.


Mr. Jesse Flis (Parkdale-High Park):: Mr. Speaker, pursuant to Standing Order 361, too, have the honour of tabling petitions on behalf of the people of Parkdale- High Park. The petitioners are not fooled by the government's proposed reduction of the GST to 7 per cent from 9 per cent. It is still an increase from 0 per cent to 7 per cent on many items which are not taxed now. The petitioners call upon this House and the government to scrap the proposed goods and services tax at whatever rate.


Mr. Lyle Vanclief (Prince Edward-Hastings):: Mr. Speaker, I, too, have additional petitions from Prince Edward-Hastings to add more names to the thousands I have already tabled in the House of constituents in my riding who are violently opposed to the goods and services tax that the government seems bent on legislating.


Mr. Reginald Belair (Cochrane-Superior):: Mr. Speaker, I have the honour of presenting to the House two petitions addressed to the Minister of Finance which concern the Report of the Task Force on Tax Benefits for Northern and Isolated Areas.
The petitions are from Mattice and Valrita, and your petitioners ask the Minister of Finance to unconditionally reject the report's recommendation that this program be abolished.


Guy St-Julien: Mr. Speaker, pursuant to Standing Order 36, I wish to table today a petition rejecting the recommendation made by the Task Force on Tax Benefits for Northern and Isolated Areas.
January 29, 1990

Your petitioners, representing the isolated community of Lebel-sur-Quevillon in Abitibi, are concerned about the report's recommendations that will cause a number of workers to be laid off. They believe the federal government refuses to consider the fact that life in the North is harsh, isolated and expensive.
Mr. Speaker, according to the disparity index for the 84 isolated communities designated by the Government of Quebec in October 1989, Lebel-sur-Quevillon ranks seventieth in Quebec.


Ms. Catherine Callbeck (Malpeque):: Mr. Speaker, I am pleased today to rise under Standing Order 36 and present petitions signed by many people who are strongly opposed to the government's goods and services tax. They feel that this new tax will cause serious and unfair hardship to low and middle-income Canadians, that it will create an onerous burden on small business and that not only will it create higher taxes but higher inflation, higher interest and higher unemployment. The petitioners humbly pray and call upon Parliament to reject the proposed goods and services tax.


Mr. Fred J. Mifflin (Bonavista-Trinity-Conception):: Mr. Speaker, I, too, rise under Standing Order 36.1 have signatures here that add up to 30 but all in all I have close to 9,000 petitioners who are against the goods and services tax. These people note that in the last five years personal income tax collection has gone from $39 billion to $59 billion practically and that represents a very large increase in personal income tax, close to 90 per cent.
The petitioners are concerned about the 31 new tax increases. They are concerned that the government in power has taken the manufacturers' sales tax up to 13.5 per cent over stages from 9 per cent. They are concerned about the effect this will have on low and middle-income families. They are concerned about the effect it is going to have on small business and the extra administration that will be involved and, indeed, the wherewithal for some of the businesses, in fact most of the businesses in my riding to cope with this. Those who are so close to the margin are scared out of their minds.
These people humbly pray and call upon Parliament to reject this proposed goods and services tax.
Routine Proceedings


Don Boudria: Mr. Speaker, I also have a petition which I would like to table pursuant to Standing Order 36 of the House of Commons. This petition is signed by a number of Canadians who are opposed to the government's plan to impose a goods and services tax, or a GST, which should properly be called a grief and suffering tax, at any per cent. These people are humbly praying-they really mean it-and calling upon Parliament and the Government of Canada to reject the goods and services tax at any per cent.


Mr. Fernand Robichaud (Beausejour):: Mr. Speaker, it is also my duty to present in the House a number of petitions from residents in my riding of Beausejour. Your petitioners wish to express their opposition to the government's tax proposal and they humbly pray Parliament to reject said proposal.


QUESTIONS ON THE ORDER PAPER
[Stage Direction]
(Questions answered orally are indicated by an asterisk.)
Albert Glen Cooper: Mr. Speaker, the following questions will be answered today: Nos. 171 revised, 186, 191, 192, 193, 194, 199 and 200.


Mr. Milliken: For (a) 1985 (b) 1986 (c) 1987 (d) 1988 (e) 1989 to date, what is the volume of water per month removed from Lake Michigan through the Chicago Ship Canal?


Hon. Lucien Bouchard (Minister of the Environment):: The Chicago Diversion, initiated in 1848, removes water from Lake Michigan at Chicago for the purposes of domestic, sanitary, navigation and hydro-electric power in the Illinois Waterway. The waterway connects with the upper Mississippi River. Diversion prior to 1900 averaged about 500 cubic feet per second (cfs). Upon completion of the Sanitary and Ship Canal, diversions progressively increased to a maximum of about 10,000 cfs

January 29, 1990
Routine Proceedings
in 1928. Due to challenges from other states (mainly Wisconsin), there have been several U.S. Supreme Court decrees issued (1922, 1925, 1930 and 1967). The 1967 decree limited the diversion to an average of 3,200 cfs effective March 1, 1970. A 1980 court amendment allows the use of a 40-year period in calculating longterm average diversion for compliance. Lake Michigan is located entirely within the United States territory and is not considered as "boundary water" according to the Boundary Waters Treaty of 1909. However, it is connected to, and flows into Lake Huron and downstream, thus affecting the rest of the Great Lakes-St. Lawrence River System. The present diversion rate of 3,200 cfs causes reductions in the flows in the Niagara River by 1.5 percent, and in the St. Lawrence River by 1.3 percent.
The 3,200 cfs is equivalent to 7.8 billion litres per day, or 1.7 billion imperial gallons per day.
With regard to the specific amounts of water diverted through the Chicago Diversion in each of the years and months requested, please see the attached tables.


[Stage Direction]
1985	1986	1987	1988	1989January/ janvier	206.8	155.8	165.9	207.8	161.6February/ fevrier	311.8	196.1	154.1	173.8	122.1March/ mars	394.8	205.6	187.7	183.2	178.7April/ avril	221.2	175.9	200.1	201.3	142.2May/ mai	196.4	233.3	254.2	166.9	169.5June/ juin	228.5	279.2	253.8	201.0	530.1July/ juillet	272.9	347.4	290.1	251.9	311.9August/ aout	278.0	283.0	550.4	275.5	361.3September/ septembre	262.6	345.1	299.8	284.5	361.3October/ octobre	275.8	376.6	205.8	205.2	n/aNovember/ novembre	346.1	196.3	162.2	238.5	n/aDecember/ decembre	199.5	183.5	243.4	165.9	n/aTotal	3194.4	2977.8	2967.5	2555.5	n/a
[Stage Direction]
1985	1986	1987	1988	1989January/ janvier	45.5	34.3	36.5	45.7	35.5February/ fevrier	68.6	43.1	33.9	38.2	26.9March/ mars	86.8	45.2	41.3	40.3	39.3April/ avril	48.7	38.7	44.0	44.3	31.3May/ mai	43.2	51.3	55.9	36.7	37.3June/ juin	50.3	61.4	55.8	44.2	116.6July/ juillet	60.0	76.4	63.8	55.4	68.6August/ aout	61.2	62.3	121.1	60.6	79.5September/ septembre	57.8	75.9	65.9	62.6	79.5October/ octobre	60.7	82.8	45.3	45.1	n/aNovember/ novembre	76.1	43.2	35.7	52.5	n/aDecember/ decembre	43.9	40.4	53.5	36.5	n/aTotal	702.8	655.0	652.7	562.1	n/a
Mr. MacDonald (Dartmouth): From June 31,1987 to October 31,1989, did the Atlantic Canada Opportunities Agency engage the services of outside consultants and, if so (a) what is the total amount of spending per year (b) what are the names of those firms (c) what amount did each firm receive from ACOA?


Hon. Elmer Macintosh MacKay (Minister of Public Works and Minister for the purposes of the Atlantic Canada Opportunities Agency Act):: From June 30, 1987 to October 31, 1989, the Atlantic Canada Opportunities Agency did engage the services of outside consultants.
(a)	The total amount of spending per year is as follows: FY87/88-$342,927.
FY88/89-$3,321,948.
FY89/90-$1,949,274.


[Stage Direction]
(b)	and (c) as per attached listing.
January 29, 1990____________________________COMMONS DEBATES__________________________________________________7553
Routine Proceedings
ACOA EXPENDITURES FOR	OUTSIDE	CONSULTANTS	JUNE 30,	1987	APRIL 1, 1988	APRIL 1, 1989	NAME OF FIRM To March	31,1988	to March 31, 1989	To Oct. 31, 1989	TOTALA.W. Armstrong & Associates	$2,000	$10,650	$12,650Aird Associates	$5,250	$5,250Ash Craig & Thorton	$3,139	$3,139Atlantic Provinces Economic Council	$7,500	$25,000	$32,500Barracore Management Ltd	$32,861	$32,861Baseline Market Research Ltd	$1,300	$1,300Business Resources (*)	$12,200	$12,200Canmac Economics Ltd	$42,377	$11,934	$54,311Clarkson Gordon	$32,886	$143,501	$68,395	$244,782Collins Barrow Management	$48,894	$48,894Conference Board of Canada	$20,237	$2,325	$9,644	$32,206Conseil Economique du N.-B.	$1,000	$1,000Coopers & Lybrand (*)	$5,000	$150,539	$145,793	$301,332Corporate Research Associates	$2,700	$6,650	$9,350Corporate Communications	$165,765	$77,302	$243,067Courtfax +	$3,862	$3,862Cyberforce Systems Ltd	$20,315	$20,315Dearborn Group	$11,038	$11,038Deloitte, Haskins & Sells	$47,683	$42,323	$90,006Design Associates	$9,398	$9,398DML Communications	$42,240	$42,240DMR Group Inc.	$10,059	$59,486	$69,545Doane Raymond	$206,704	$181,727	$388,431Don Cummer & Associates	$700	$700Douglas House Consultants	$7,350	$7,350DPA Group Inc.	$2,330	$65,029	$67,359Dupree & Burden	$22,400	$22,400Earle & Squire Chartered Accountants	$13,500	$10,000	$23,500East Coast Editorial	$21,249	$23,829	$45,078Economic Council of Nfld	$988	$988Executive Secretarial Consultants	$11,363	$11,363EB.D.B.	$3,695	$3,695
Routine Proceedings
Fiander-Good
Frank Gibson Associates
G.L. Office Management Service
Gardner Pinfold Consulting
Glen Elg Associates
FI.P Consultants
Harris Pitcher Kennedy & Ryan Consultants Hay Management Informatique Landry Computing Institut Canadien de Recherche (*)
John Kettle Incorporated Kirby & Company LeBlanc, Nadeau, Bujold, Maheux Laventhol & Horworth Leslie Communications
M.	O. Consultants MacDonald Consultants Ltd Maclsaac & Younker Mair Public Relations Memorial University Meridian Systems Group MIS Consultant Inc.
Moncton Consulting Services Multiscript
Newfoundland & Labrador Development Corporation Nordco Limited
N.	S. Research Foundation O'Driscoll Raymond Inc.
O'Malley Communications Omnifacts Research Ltd
Overseas Canadian Prospect Management & Planning Inc.
P.I.R. Communications
Paper Tiger Enterprises
Parnell Kerr Foster
Pat Binns & Associates (*)
Pathways Incorporated Peat Marwick PPD Technologies Price Waterhouse
		$24,731	$24,731
	$3,842		$3,842
		$14,231	$14,231
$24,362	$136,360	$19,938	$1800,660
$26,085			$26,085
$7,417			$7,417
	$21,151		$21,151
$9,749			$9,749
	$6,453		$6,453
	$6,500	$3,500	$10,000
	$3,000		$3,000
	$49,023	$71,383	$120,406
		$18,750	$18,750
	$24,925		$24,925
		$23,118	$23,118
$34,000	$18,843	$52,843$35,954	$25,285	$61,239$20,520	$20,520$1,200	$7,800	$2,500	$11,500$175,733	$156,025	$331,758$23,625	$23,625$25,000	$29,860	$54,860$25,000	$13,741	$38,741$3,905	$5,115	$9,020$450,000	$450,000$15,936	$15,936$13,983	$13,983$16,103	$16,103$21,892	$21,892$15,000	$15,000$2,367	$2,367$65,629	$22,200	$87,829$9,812	$9,812$28,592	$28,592$4,700	$4,700$7,000	$46,642	$33,756	$87,398$50,197	$43,500	$93,697$15,840	$15,840$69,678	$69,678
January 29, 1990
[Stage Direction]
Routine Proceedings
Promotional Resources Ltd	$34,939	$35,907	$70,846Pye Refunds	$4,250	$4,250R. Flaman Management	$8,578	$19,947	$28,525R. Harrop Enterprises	$18,891	$33,858	$4,347	$57,096Robertson Daye	$254,147	$125,353	$379,500S.B. Shaw & Assoc.	$2,700	$2,700S.H.L. Systemhouse Inc.	$4,267	$4,267Saga Communications	$38,923	$38,923Seaconsult Marine Research Ltd	$45,910	$42,700	$88,610Siskin Management	$423,939	$274,605	$698,544St. F.X. University Extension Department	$1,170	$1,170Stevenson, Kellog, Ernst & Whinney	$25,000	$25,000Susanatek Consulting & Investments	$13,198	$13,198The Newlantic Group	$21,625	$6,500	$28,125The Sanctuary Woods Group	$5,800	$25,300	$31,100Thome Ernst & Whinney Chartered Accountants	$13,680	$53,292	$66,972Ti-Bo Consultant Services	$14,065	$14,065Touche Ross & Co.	$87,152	$87,152TSI Associates Inc.	$875	$875UMA Group	$19,962	$19,962Unified System Ltd	$29,155	$29,155Venture Economics Canada Ltd (*)	$4,000	$4,000Venture Communications Inc.	$18,800	$18,800Walter P. Miller	$7,700	$7,700William A. Mercer Ltd	$10,053	$10,053GRAND TOTAL	$342,927	$3,321,948	$1,949,274	$5,614,149
(*) CONTRACTS OR PARTS OF CONTRACTS APPROVED AFTER SEPTEMBER 5, 1989.
Mr. Harvard: 1.	Have the Department of National Defence's projections of a cost saving of $529 million over 15 years as a result of the closure of Canadian Forces Base Portage la Prairie accounted for inflation or the time value of money and, if not, for what reason?
2.	What is the net cost to the Treasury of closing CFB Portage, taking into account costs which will not be borne by DND but by other departments, such as the Department of Transport?
3.	Has the government estimated the cost for the continued operation of CFB Portage and, if so, what is it?


Albert Glen Cooper: I am
informed by the Department of National Defence and the Department of Employment and Immigration as follows:
1. The time value of money has two components, changes in price levels or inflation, and opportunity cost or cost of capital. The total net savings for the CFB Portage la Prairie closure are a fifteen year total for the period 1989/90 through 2003/04 taking into account the impact of inflation. The figures have not been adjusted for the opportunity cost component, nor is such adjust-

January 29, 1990
Routine Proceedings
ment appropriate in the context of this internal reallocation of DND and federal government expenditure.
2. The total cost for the closing of Canadian Forces Base Portage la Prairie is $93,140, distributed as follows:
Industrial Adjustment Service	$30,000
($25,000 used for an Economic opportunities Study	
Community Futures-Impact Study	$25,000
Project Coordination	
Salaries	$22,000
Operations and Maintenance	$ 7,500
Office Rental	$ 8,640
These funds are part of Manitoba's normal regional allocation under the Canadian Jobs Strategy.
3. It is not clear under what scenario the question of the cost of continued operation of CFB Portage la Prairie is being posed. If none of the current activities are ceased or moved, then the cost of continued operation remains as it is now, and all forecast savings are lost. If the pilot training activities are removed as envisioned, then there is no longer a requirement for a base of any size, and any attempt to retain the facility would entail a waste of funds.


Mr. Harvard: 1.	What is the actual cost of (a) relocating personnel from CFB Portage to other military bases (b) the physical closing of CFB Portage (c) relocation, retraining and severance pay for civilians now employed at CFB Portage?
2.	Does the government foresee a reduction in air force personnel equivalent to all positions being transferred from the closed base and, if not, will the expenses associated with some of the personnel be transferred elsewhere?
Hon. William Hunter McKnight (Minister of National
Defence): 1. (a) The Regular Force manpower ceiling at CFB Portage is 499. The current manning level is 480 military personnel and is likely to remain at that level due to military personnel shortfalls. The average cost of relocating a military member is estimated to be $10,400. The total cost of relocating all personnel is $4,992,000. However, approximately 30 percent of military personnel would be moved to new assignments annually for service reasons. Thus, the relocation costs attributable directly to the closure of CFB Portage is $3,494,400.
(b) The costs of closing CFB Portage la Prairie are unknown at this time as it will depend upon the re-use of
the facilities. Costs could range from a minimum if the entire site is taken over by another agency to a maximum should the site have to be totally demolished. It is anticipated that the costs will be near the lower end of the scale.
(c)	The following costs are anticipated for civilian employees at CFB Portage:
relocation-$781,000;
retraining-$148,000 (includes tuition and travel); and severance pay-$434,000.
2. Of the 499 established positions at CFB Portage, 95 positions associated with the Flying Instructors School and the Basic Helicopter School will be transferred elsewhere. The remaining 404 positions will be eliminated, resulting in an equivalent reduction in air force personnel.


Mr. Harvard: 1.	Does the government support the contracting out of its basic flight training for the military and, if so, for what reasons?
2.	Does the government consider private training more viable now than when it was tried in 1964-65 and, if so, for what reasons?
3.	Did the government state that only 142 pilots are trained per year at CFB Portage and, if so, was this statement correct and, if not (a) what is the correct number (b) what number of the figures on which the decision was based were calculated using the incorrect number?
Hon. William Hunter McKnight (Minister of National
Defence): 1. The government supports in principle the contracting out of some elements of military flight training as a measure which has the potential to contribute to the govememnt-wide effort to reduce the deficit. In this respect, the Department of National Defence is currently investigating the feasibility of contracting out its Primary Flying Training to coincide with the scheduled closure of Canadian Forces Base Portage la Prairie in 1992. Responses to the Department's Solicitation of Interest have reflected a satisfactory level of interest and potential and DND officials are now addressing how best to structure such a contractual arrangement. The results of these deliberations will be reflected in the Request for Proposal scheduled for release early in the summer of 1990.
2. The Department of National Defence has sponsored certain civilian-based flying activities by military aviators in the past as continuation flying programs. The Department is not aware of any such programs which constituted or substituted for basic flight training. The viability of contracting out elements of military flight
January 29, 1990

ttraining at this time will be confirmed during the evaluation of the Request for Proposal.
3(a) No, the government has not stated that only 142 pilots are trained per year at CFB Portage la Prairie. A study conducted in 1988 reflects that 145 pilots graduated from the Primary Flying School. In addition to this, some 44 helicopter pilots graduate each year, and a further number (which varies annually) undertake training at the Flight Instructor School at CFB Portage la Prairie. The total number of candidates entering pilot training could be nearly double these figures.
(b) Calculations for the contracting out of Primary Flying Training were based on a range from 145 to 280. These figures were not used directly in the calculation of savings to accrue from the closing of CFB Portage la Prairie.


Mr. Harvard: 1.	Has the government changed the reasons it used in locating flight training establishments and, if so (a) what are the new reasons (b) is CFB Portage judged unsuitable according to the new criteria and, if so, in what ways?
2.	Has the government decided on the sites to which the remaining flight training schools will be relocated when CFB Portage is closed and, if so, to which locations and, if not, to what extent can it accurately project costs or personnel requirements?


William Hunter (Bill) McKnight: 1. The criteria used to select locations for flight training establishments have not changed. DND continues to look for geographical and meteorological characteristics which will ensure that such training is conducted in the most cost-effective manner possible. Canadian Forces Base Portage la Prairie remains quite suitable in this respect. In fact, please note that several respondents to the Solicitation of Interest have proposed locating their contracted facility on that site, in the context of an industrial park of which primariy flying training would be one of several activities. Nevertheless, there are other factors which might render other locales more cost-effective; a possibility which will be addressed during the Request for Proposal evaluation.
2. The Department is evaluating other Canadian Forces Bases, including those at Edmonton, Moose Jaw and Winnipeg, as possible relocation sites for the re-
Routine Proceedings
maining flight training schools. Detailed cost and personnel data are not expected to be available until the first quarter of 1990.


Mr. Gardiner: Has the government taken any action to follow up on the recommendation of the 1988 1st Annual Progress Report on the National Forest Sector Strategy that legislation should be enacted committing federal and provincial governments to reinvesting a significant percentage of stumpage and tax revenue in the forest resource and, if so, what action has it taken?


Hon. Frank Oberle (Minister of State (Forestry)):: No
legislation has been enacted to commit federal and provincial governments to reinvest a significant percentage of stumpage and tax revenue in the forest resource. No such legislation is envisaged to be enacted by any government.
However, it should be noted that on a national basis, provincial forestry expenditures exceeded the provincial forestry revenues collected during the last two fiscal years of 1987-88 and 1988-89, as identified in the table below:
PROVINCIAL BUDGET	FISCAL YEARS


[Stage Direction]
1987-88	1988-89
Forestry Expenditures for all		
provinces ($,000)	1,216,690	1,398,570Forestry Revenues for all provinces ($,000)	1,120,700	1,009,100
Mr. Gardiner: Has the government provided funding to the Northern Interior Vegetation Management Association and, if so (a) what amount (b) is a departmental official responsible for receiving funding requests from the Association and, if so, which one (c) has the Association applied for funds for the fiscal year 1990-91 and, if so, in what amount (d) have any progress reports been filed with the government with respect to any spending?


Frank Oberle: The
federal government has provided funding to the Northern Interior Vegetation Management Association.

January 29, 1990


Some hon. members:: Agreed.	H
[Text]	I
Government Orders
(a)	The federal government has provided a total of $20,000 to the Northern Interior Vegetation Management Association through the federal component of the Canada-British Columbia Forest Resource Development Agreement (FRDA); $10,000 were provided in the
1988-	89 fiscal year and $10,000 were provided in the
1989-	90. In addition, the cost-shared research program of the FRDA funded a $7,500 project to support the association in collecting and collating information on vegetation management trials in the northern interior.
(b)	The responsibility for funding requests rests with Dr. T. John Drew, Regional Director General, Forestry Canada, Pacific and Yukon Region. Funds provided to the Northern Interior Vegetation Management Association to date have been approved under the auspices of the Research and Demonstration component of the FRDA, and are associated with an aggressive program of forest research in the northern interior of British Columbia.
(c)	The association has not applied for funding in the
1990-	91 fiscal year.
(d)	Funds provided to the association by the federal component of the FRDA were used for the formation and operation of the association, which distributes a quarterly newsletter to its members and to Forestry Canada. This newsletter lists the association's current and planned activities and usually includes a summary of expenditures. In addition, a detailed summary of expenditures and accomplishments/projections is provided at the regular meeting of the association's Advisory Council for comments and approval.


Mr. Speaker:: The questions as enumerated by the parliamentary secretary have been answered.


Albert Glen Cooper: Mr. Speaker, if questions Nos. 178 and 198 could be made Orders for Returns, those returns will be tabled immediately.


Mr. Speaker:: Is it the pleasure of the House that questions Nos. 178 and 198 be deemed to have been made Orders for Returns?


Ms. Mitchell: For 1987, 1988 and for each month in 1989 to date, in the Department of Multiculturalism and Citizenship, what were (a) the titles and pay grades of the (i) clerical and manual (ii) lower, middle and upper management occupational categories (b) the number and percentage of jobs held by visible ethnic minorities in clerical and manual positions in (i) permanent, temporary and acting capacities (ii) full-time and part-time capacities (c) the number and percentage of jobs held by visible ethnic minorities in lower, middle and upper management positions in (i) permanent, temporary and acting capacities (ii) full-time and part-time capacities (d) the turnover rate for each position covered by parts (b) and (c)?
Return tabled.


Mr. St-Julien: As of December 1, 1989, are there areas in Canada designated "isolated areas" under the tax benefits plan by which taxpayers are eligible to receive the tax deductions provided for in section 110.7 of the Income Tax Act and sections 7302 and 7304 of the Income Tax Regulations and, if so (a) which areas (b) since what time have they been designated "isolated areas" (c) in each case, what is the total amount of tax money refunded per year?


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


Mr. Speaker:: Shall the remaining questions be allowed
to stand?


Maurice Brydon Foster: Mr. Speaker, pursuant to Standing Order 52, I wish to ask leave to move the adjournment of the House for the purpose of giving urgent consideration to a pressing matter, namely, the announced closing last Friday of the Quirke mine and the Panel mine owned by Rio Algom Mines in Elliot Lake, Ontario, which will result in the loss of some 1,600 jobs, or 70 per cent of the workforce of the company in that community. It will have a devastating impact on the community.
Return tabled.


Some hon. members:: Agreed.
^HU
January 29, 1990

I would hope, Mr. Speaker, that you will give permission for an emergency debate on this matter.


Mr. Speaker:: The hon. member for Algoma has raised a matter of serious concern, especially to part of the country, and I think also to hon. members of this House.
However, I think perhaps the hon. member may be able to make representations in the coming days. In the meantime I do not think it is appropriate to accept the motion.
I thank the hon. member for raising the matter. It is an important matter.


Roger Simmons: Mr. Speaker, I also rise pursuant to Standing Order 52 to request permission to put down a motion to adjourn the House to discuss the matter of the deepening crisis in the Atlantic fishery. I am aware-


Mr. Speaker:: My concern is that, for whatever reason, and the fault may lie with me, I do not seem to have any notice of the hon. member's application.
Can the hon. member help me with respect to the question of notice?


Roger Simmons: Mr. Speaker, I wrote on January 25. I would be happy to furnish the Chair with a copy of the letter.


Mr. Speaker:: If I understand, notice was given a day or so ago. I wonder if I could ask the hon. member under the circumstances if he could consider his position tonight and if he is so disposed perhaps give me notice in the morning when I can deal with the matter.



GOVERNMENT ORDERS


Geoff Wilson: that Bill C-62, an Act to Amend the Excise Tax Act, the Criminal Code, the Customs Act, the Customs Tariff, the Excise Act, the Income Tax Act, the Statistics Act and the Tax Court of Canada Act, be read the second
Government Orders
time and referred to the Standing Committee on Finance.
He said: Mr. Speaker, it is with a strong sense of accomplishment that I stand today to open this debate on the goods and services tax, accomplishment because with this bill we have succeeded where no previous government has in putting together a comprehensive, balanced and fair reform of the federal sales tax system. This is indeed a milestone for Canada. With this bill we have finally moved from rhetoric to action in reforming our antiquated and seriously-flawed federal sales tax.
We are proposing to establish a federal sales tax system which will strengthen the economy and improve the fairness of the tax system. Canadians have been discussing, analysing and proposing alternatives to the existing federal sales tax for half a centuiy. Royal commissions and committees have all documented the flaws and glaring inequities of our existing system.
The Rowell-Sirois commission in 1940, the Carter commission in 1966 and the Goodman committee in 1983 all concluded that our federal sales tax fails to serve the interests of our economy and of our people.
For half a century our industrialists, our entrepreneurs, our exporters and the workers they employ have had to compete with one hand tied behind their back. For half a century Canadians in every province, city and town have paid billions of dollars worth of federal sales tax without knowing it.
The tax system we have endured for the past 66 years has been hidden, fundamentally unfair and damaging to Canada's economic interests at home and abroad. It has cost Canadians many, many jobs.
Now, more than ever, it is time that we listen to the lessons of history. Now, more than ever, it is time for a federal tax system driven by a bold vision of the future and not by one mired in the inertia of the past.
When you look at what we have been doing in a broad way, our vision of Canada is a challenge to the bold. It is a vision of opportunity, fairness and compassion for Canadians and their families. It is a vision of strength, moderation and peace for Canadians through the international councils of the world. It is a vision of conservatism at its best, which is to preserve what is good and to leave a better quality of life to those who follow us in terms of both a higher standard of living and a healthier environment. Perhaps most important, it is a vision deeply rooted in reality and expressed through decisive action, not empty rhetoric. The key to achieving this

January 29, 1990
Government Orders
vision is a strong, prosperous and dynamic economy. That is what our agenda for economic renewal is about.
It is a comprehensive plan, a plan that we have been following assiduously since November, 1984. Our initiatives in areas such as investment, international trade, privatization, competition policy, patents and copyright, deregulation, pension and income tax reform and the labour market development strategy are all designed to lay solid foundations for long-term sustainable growth and productive jobs-jobs for Canadians in a world where competition is unforgiving and change is fast becoming the only constant.
The goods and services tax is a vital component of our agenda to reform the economic structure of our economy. At a time when a new highly-competitive Europe is emerging and when Japan and several other nations of the Asia Pacific are occupying an increasingly large place in the landscape of trade and investment in the world, we cannot afford a tax system that punishes our domestic producers and our exporters and gives a cost advantage to their foreign competitors.
Helping our exporters to compete internationally was a major reason why we negotiated the Canada-United States Free Trade Agreement. Removing the federal sales tax will make our exporters even more competitive, not only in the United States but in all the markets of the world.
Competitiveness is not just a matter of economic policy. It is also crucial to social policy objectives. There is a good reason for that. For a trading nation like Canada, we must be able to sell our goods and services around the world so that we can generate the wealth and resources required to pay for our social programs and services.
The problems with our existing sales tax have been well documented, progressively since 1940. Under the current system, the existing tax applies to sales of manufactured goods. As a result of that, a significant amount of tax is paid on the materials, plant production costs and equipment used in the production of all goods
and services originating in this country, goods and services that every Canadian buys every day.
In fact, about one-half of the $18 billion in federal sales tax revenues currently comes from the taxation of business inputs, materials and supplies used in the production process. This also raises the cost of capital to our own producers, discouraging investment for modernization and expansion.
Because these taxes on business inputs do not apply to foreign producers, the ability of Canadian exporters to compete in global markets is hampered. Our analysis shows that the tax on business inputs often exceeds 10 per cent of the profit margin of our exporters.
Furthermore, the existing system taxes our own products more heavily than imported products-on average about one-third more. We are the only country in the world which has a tax system which favours imported products over domestic producers.
While Canadians have dithered over 50 years about how to change our self-destructive federal sales tax, 48 other countries have already opted for tax systems along the lines that we propose in the goods and services tax.
In today's highly integrated world economy, countries which rely on trade for their prosperity cannot allow their tax systems to get out of line with those of their trading partners. Canada is no exception. We must understand once and for all that Canada must compete on the world's terms because the world is not going to compete on Canada's terms.
Meeting successfully the challenges of the world economy means that we must, from time to time, make major structural improvements to our economy in areas such as taxation. To do that most effectively requires detailed and extensive consultation with Canadians. That is exactly what we have done in the process leading up to the presentation of the goods and services tax bill.
In November, 1984 we indicated that we had begun to study the possibility of replacing the current sales tax with a value-added sales tax system.
In October, 1986 the government set out basic guidelines for its approach to comprehensive tax reform; and
January 29, 1990

in June of the following year we announced plans to replace the existing tax in a white paper on tax reform.
I announced plans to introduce the GST in last year's April budget, and provided detailed information on most aspects of the new system in the technical paper released last August. The technical paper that I tabled in August was followed up with the draft legislation which I presented to this House in October.
After releasing the technical paper in August, the government canvassed a wide range of views on virtually every aspect of the GST. We discussed our proposal with groups and individuals represented in every province and region of the country and virtually every sector of the economy.
Literally hundreds of groups and individuals have given us their views, shared their insights and explained their positions in detail on this issue.
I have travelled across the country meeting groups and individuals, participating in open-line shows, addressing gatherings of business people and other meetings in communities, large and small. What I have discovered time after time was that when the time was taken to explain the problems that we face, Canadians understood the issues. In fact, not only did they understand but they made valuable and constructive suggestions which have helped us to improve the package that is now before the House.
From the summer of 1987 until the spring of 1989 we undertook detailed discussions with the provinces about the feasibility of an integrated national sales tax. While it did not prove possible to reach agreement on such a national sales tax, these discussions contributed substantially to the federal government's elaboration and design of the goods and services tax.
As I indicated in December, I find the tone of the recent discussions we were having with the provinces most encouraging in helping us find ways that we can eliminate or minimize the compliance burden of the new tax on Canadian businesses, both large and small.
The House of Commons Standing Committee on Finance examined the technical paper proposals in detail and held extensive public hearings on the proposal. Under the very able leadership of its chairman, the committee gave individuals and representatives of a wide range or interest groups the opportunity to air their views in a formal and detailed way. The committee's report made a substantial contribution through its analy-
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sis and recommendations to the ultimate framing of the proposal contained in the goods and services tax bill.
Canadians spoke loud and clear, and we listened. Better still, we used the many constructive and useful suggestions that we received from Canadians to improve the proposal.
Canadians told us that the rate was too high and that they were concerned about the impact on inflation. We listened, and after some tough choices, we reduced the rate from 9 per cent to 7 per cent, and thus reduced the potential one-time inflationary impact to just a little over 1 per cent. At the same time we succeeded in maintaining the fundamental balance in equity among the various measures within the package, especially the protection that it provides to low and modest income Canadians.
Canadians told us to use greater spending restraint. The measures which the President of the Treasury Board announced in December were important steps in that direction. But, as he and I both indicated, we still have further work to do in that regard.
We have also acted to meet concerns expressed about the burden of complying with the GST. For example, we will provide a one-time transitional credit of up to $1,000 for small businesses.
In addition, we have exempted electronic point of sale and related inventory control equipment from the existing sales tax. This complements the 100 per cent capital cost allowance for this equipment which we announced in August. Together, these two measures will reduce the effective after-tax cost of this equipment by about 20 per cent.
Furthermore, we have also made a number of technical improvements designed to simplify the operation of the tax, to establish greater equity among competing businesses and to improve the operation of the tax in a number of sectors.
I know that nobody likes taxes. I understand that. Neither do I. But I know that most people feel uncomfortable when they must face significant change, and I understand that too. So, combining the two, major change and taxes, is bound to upset a lot of people, at least in the short term.
We know that changing the tax system, especially when it involves making previously hidden taxes visible, is not what most people would consider a fast track to popularity. Politically, the expedient thing would have been not

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to proceed with the GST-the expedient thing for the government, but the wrong thing for the country.
The goods and services tax will help our deficit reduction efforts and ensure that we can continue to afford the programs and services which Canadians value. It will strengthen our industries in a significant and direct way, because a central feature of the GST, the input tax credit, will allow them to compete free of tax in markets abroad and put them on an equal footing with imports in our own market.
Eliminating the existing tax will remove tax-induced distortions in the price of goods and services, and will lower the cost of capital to produce long-term economic benefits. The GST output will increase by close to 1.5 per cent, or about $9 billion a year. There will be gains throughout the economy, in all regions of the country.
We also expect the new system to lead to the creation of some 60,000 new jobs by as early as 1992. How quickly the economic benefits of sales tax reform are realized depends to a large extent on prices and wages. It is essential that savings from input tax credits and the elimination of the existing federal sales tax be passed on to consumers.
Competition will provide the most important incentive for firms to reduce prices. In addition to that, to help consumers, the government will establish an office to provide consumers with information prior to the implementation of the GST. In this way consumers will be able to find out what impact the GST is likely to have on the price of key goods and services.
I also want to take this opportunity today to encourage companies and unions to follow responsible and moderate approaches to price and wage decisions. Because if they do, the transition will be smooth and jobs will be gained as early as 1991.
As I said earlier, a major reason for introducing the GST is to improve the fairness of the tax system. We have achieved this through the refundable GST credit, a unique feature of this tax.
The credit reflects this government's firm commitment to maintaining a caring and compassionate society. The credit will be paid by cheque four times a year to some 8.7 million Canadian families and individuals. In fact, the first payment will be made at the end of December of this year so that Canadians with lower modest incomes will have the money in their pockets before the GST is implemented in January of 1991.
With the GST credit, three-quarters of families headed by seniors or single parents will have more after tax income than they do under the existing system.
Another benefit which few people have considered is that the GST will end the error of the hidden federal sales tax. Under the existing system any government can raise the rate of the federal sales tax without many Canadians noticing, but under the GST Canadians will not only know they are paying a federal sales tax, they will be very, very much aware of any change that any future government might want to make.
This greater visibility of the tax will make governments much more accountable to Canadians than ever before. In fact, the GST will be a more visible tax than the provincial sales taxes. The provincial sales tax today applies to many business inputs, such as building supplies, computers and telephones. The result is that about a third of provincial sales tax revenues are from these sources. As a result, the tax that you see is applied on a price which already includes a hidden provincial sales tax, but if that hidden tax were removed, the provincial tax rates would have to increase by about a third to a half. Those hidden taxes are removed in the GST system so that the 7 per cent that you see is all that you are paying.
The goods and services tax bill is more than a question of balance sheets and bottom lines. It is more than a simple matter of dollars and cents. Thanks to the refundable sales tax credit and the visibility of the tax, the GST will also make a substantial contribution to social justice and ongoing political accountability.
I believe that in the months following January 1, 1991 when the cut and thrust of partisan debate on this issue has calmed down, when the controversy has subsided, when Canadians can see our economy even more vibrant
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and growing, they will conclude, as I have, that this is the right policy for the right reasons at the right time.


Right Hon. John N. Turner (Leader of the Opposition):: Mr. Speaker, today we have not only the introduction of legislation for a new massive regressive federal sales tax, we also have the introduction of a new national guessing game.
The questions Canadians will put to themselves will be these. How long will it be that this new tax will stay at the rate of 7 per cent? How long will it be before the minister raises it to the 9 per cent he originally wanted, or to 10 per cent, 11 per cent, 12 per cent, 15 per cent?
My guess is that he will do that sooner rather than later. After all, this is the same minister who never ceased to call the existing manufacturers' sales tax a hidden killer of jobs. Yet this was the minister who, in five short years, silently raised that silent killer of jobs from a rate of 9 per cent to 10 per cent, 10 per cent to 11 per cent, 11 per cent to 12 per cent, and 12 per cent to 13.5 per cent.
So the guessing game begins. Even if we Canadians guess right, we lose, because we will all pay more. This is a no win situation for the Canadian people.
One of the finance minister's main arguments today- he makes it when he is attempting to respond to questions in the House-is that without this tax Canada just will not measure up. It will not measure up to dozens of other countries that have a similar tax. It is a case of "Me too! We have to go along. Since over 40 other countries have this tax, we Canadians should have one too".
The minister is deeply concerned that he will not be able to hold his head up at international conferences. Now that he is the chairman of the interim committee of the International Monetary Fund he wants to be one of the boys. He wants to have a similar tax. Never mind that our largest trading partner, the United States of America, does not have that tax. Never mind that the Japanese will be fighting an election, and are fighting an election, over the attempted imposition of a 3 per cent tax. He completely overlooks that.
The minister says that he wants to be one of the boys in Washington as he travels around now as the chairman of the interim committee of the International Monetary Fund. He wants his tax in his pocket. He wants a tax like
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the progressive economies he has cited. Let us take a look at some of these countries.
Uruguay has a tax like this. They brought it in at 14 per cent; it is now 21 per cent. The Ivory Coast brought it in at 8 per cent; it is now 25 per cent. He points to Sweden. Sweden brought it in at 11 per cent; now that tax is 23 per cent. Nigeria brought it in at 12 per cent; now it is 25 per cent.
I wish the Prime Minister were here. Ireland brought it in at 16 per cent; and now it is 22 per cent. Austria brought it in at 8 per cent; and now it is 20 per cent. This minister can hardly wait. He has two thin lines of drool down his chin. He can hardly wait to get this tax in and then raise it notch by notch at the expense of the Canadian people.


Some hon. members:: Hear, hear!


John Napier Turner: Madam Speaker, does the minister really think Canadians will have the impression they are out front with this new tax? The minister may think he has shown all these countries what he can do. However, they have only one sales tax, while Canada will be the only country in the world with two: a federal tax and a provincial tax, except in Alberta. Does the minister think he will be able to strut and swagger in international financial circles? I can tell him right now he will be laughed out of town. He will look silly because he will be the only minister with two taxes. How will he explain that to his colleagues around the table in Washington? This total anarchy, this administrative nightmare for Canadian business! With this double tax, some provinces will have a tax situtation similar to Uruguay's. Adding the federal tax to the provincial tax, Newfoundland will pay 19 per cent; New Brunswick, 18 per cent; and Nova Scotia, 17 per cent. Does the minister really think Canadians don't know he will do what all other countries have done with this tax, namely, raise it at the first opportunity? Canadians are not fools. The Minister's sales pitch is hollow, because every time the subject is mentioned, he absolutely and categorically refuses to exclude the possibility of an increase.
When you hear some of the arguments that he and his cabinet colleagues are making in order to sell this tax, you have to wonder what goes on at those long, protracted meetings in luxurious surroundings, those luxuri-

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ous government retreats where ministers put on their cardigans and try to adopt the guise of thinkers.
I cannot resist the suggestion put to us by the Secretary of State for External Affairs in Edmonton a couple of weeks ago. We offered to adjourn the debate the other day to hear him make his resignation speech. He is having some trouble with the Minister of Finance. At any rate, the Secretary of State for External Affairs was in Edmonton on January 10. We all know he is not good with numbers. We all know that a crucial moment in Canadian history he could not count. However, his contribution to this debate will be remembered for its creativity, if nothing else. He told his audience in Edmonton that Canadians should accept this new tax not for anything it will do for or against the country, but to set an example for the reform movement in eastern Europe.


Mr. Edwards:: Read the speech, you might learn something.


John Napier Turner: I think the parliamentary secretary probably had the honour of introducing him. I did read the speech and I want to quote from the speech.


James (Jim) Stewart Edwards: Read it again.


John Napier Turner: Reading it once is about all I can stomach, but I am going to read it for the House of Commons. I will quote the Secretary of State for External Affairs. He rented the suit for the day so he is going to wear it for the day. He said: "For decades we have been telling the peoples of eastern Europe that our way is better, that democracy and capitalism work. What does this say to the people who have risked their lives in Romania and in Poland and in Czechoslovakia and people who are trying to bring through fundamental changes if we can't find the courage in this most remarkable of countries to move to a reform that everybody agrees needs to be accomplished?"
Those were the minister's words. I really do not think that the Romanians are watching our every move on this particular tax. I would not think that the people of Romania who have suffered under dictatorship for almost 50 years and who are wrestling with the worst oppressive dictatorship that this world has seen since the
last war are really wondering whether or not we are going to pass this sales tax.
My friend, the member for Parkdale-High Park, and I had the great honour of meeting Lech Walesa the other day. I wonder if Lech is staying up nights wondering what is going to happen to this sales tax, or if we pass it here whether or not it is going to abort the movement for reform and democracy in Poland. I do not think so. I have got more faith in the Polish people.
What about the Czechs? Do you think every member of the Czechoslovakian Federation is beaming on shortwave every night, wondering whether or not the Minister of Finance is getting this tax through? At any rate, I think if they were watching, they would be watching the kind of example that this government is providing for the reform movement of eastern Europe. This is a reform movement that kicked out a whole series of repressive, dictatorial, non-responsive governments, one after the other. Do you know why those governments were kicked out? Those governments refused to listen to the people. Do you know why this government is going to get kicked out on this tax? Because it is refusing to listen to the people.
What would they see? They would see a government imposing a devastating new tax on everything, a tax on everything that moves, in spite of the fact that Canadians from Vancouver to St. John's are telling this government not to do it. They would see a government that has refused to listen to the people. They would see a government that now refuses to consult with the people in preparation for the next budget.
Canadians are against this tax. Canadians are fighting this tax. They have written letters against this tax. They have asked members from all sides to present petitions against this tax. They have said no to this tax in a thousand different ways. If we had a democracy this government would be listening to the people of Canada.

Madam Speaker, the government is as cold and unfeeling as a block of marble. It won't listen to Canadians. The minister is insensitive to the concerns of Canadians. All he wants to do is sell his proposal, no matter what it takes. If the government was at all concerned about our fellow citizens, it would have approached this concept in
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a straightforward manner and it would have invited Canadians to consult.
However, the government hid the truth from the very beginning.
The minister started off by saying that the tax would be revenue neutral, that it would not be a bigger burden that the existing federal sales tax. He said this time and time again, so there would be no impact on election results. However, by constantly raising the federal sales tax, he turned revenue neutrality into a budgetary offensive.
After the election, however, the minister said the tax would be used to reduce the deficit. He took the offensive. He became more honest, which means Canadians had been sold a bill of goods.
The new tax will take several billion dollars more out the pockets of Canadians than the tax that was in place when the government was sworn in.

The minister said that he would never bring in such a tax without provincial co-operation. He told the House, the country and the Canadian people that without such co-operation such a tax was impossible. Such a tax was, and I use his words, "unworkable". However, the provincial governments have unanimously said no, they will not co-operate because they think this new massive tax is unfair.
I remember when the minister responded to me, as well as on television, constantly we heard in the House of Commons that behind the whole thing the provinces were really for it. Two days later every provincial leader was meeting with the Prime Minister of Canada and we couldn't find one who would admit supporting this tax because they all know it is an unfair tax. The minister is going to impose the tax anyway, even though he said it would not work without provincial co-operation.
The minister said that the tax was going to be simple. He said it would not be complicated. Now we learn that the Minister of Revenue is going to hire 3,900 new tax collectors, a veritable army of tax police, a whole new army of snoopers just to administer this new tax. Over 1 million small-business people in this country are now
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going to have to collect this tax for the government under the supervision of this new tax army. They are going to have to keep two sets of books, one for the provincial tax and one for the federal tax. They are going to have to fill out endless forms and do endless calculations to satisfy the minister's new tax police.
Simple, Madam Speaker? Have you taken the time to read this document? Take my advice and don't bother. This is a simple document 323 pages long. My colleague from New Brunswick, the county of Gloucester, the associate critic, and I have had to go through this document. That is what we get paid for. It is not a joke.
I want to draw to the House's attention one small piece of simplicity. I hope that the taxpayer who has to line up to buy a new house does not have to tiy to fill this out with his bank manager. I am referring to page 116 of this bill where tax is being calculated. Then we came to an exemption. I am looking at proposed section 207.(1), paragraph (c). Here is just one of the simple calculations that the minister is asking of the average business person and average person who is entitled and responsible for collecting the tax:
(c) except where the supply is an exempt supply, to have collected, at that time, tax in respect of the supply equal to the amount determined by the formula
(A x B) + [C x (lOOpercent-B]-D
where
A is the tax calculated on the fair market value of the property at that time,
B is the percentage that, immediately before that supply, the use of the property in commercial activities of the individual is of the total use of the property,
C is the lesser of
(i)	the tax calculated on the fair market value of the property at that time, and
(ii)	the total of the tax that was or would, but for section 167, have been payable by the individual in respect of the acquisition of the property and the tax that was payable by the individual in respect of improvements to the property or, where the individual was deemed under subsection 208(2) to have received a supply of the property at an earlier time, the total of the tax deemed under that subsection to have been paid by the individual at that earlier time and the tax that was payable by the individual after that earlier time in respect of improvements to the property, and
D is the tax, if any, that the individual is deemed under section 190 to have collected at that time in respect of the property.

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I would say to the prospective homeowners in this country: Holy mackerel! Not even first year algebra is going to help you through this one.
The minister offered to give me a briefing. I am going to take him up on it. I want a blackboard. I want the minister to bring the blackboard into the House of Commons. I want him to explain this formula to the members of Parliament and to the people of Canada.
I once had the honour of representing one of the ridings in this area. Some former colleagues and new colleagues are here. I am going to take the minister to a remedial class in mathematics at one of our high schools and see whether they can put some sense back into his head and return some simplicity to his mind so that he can go back to the drawing board and redraw this complicated nightmare of a tax.
After promising small businesses in this country that at least they would be entitled to a small yearly payment for doing all this work for the federal government, the minister has now reneged on that commitment. He is now going to provide a one time only payment that will not nearly cover the increased costs faced by small businesses in collecting this new tax.
It is no small wonder that, in these circumstances, the Minister of Finance refuses to meet John Bulloch of the Canadian Federation of Independent Business.


Michael Holcombe Wilson: I have never refused him.


John Napier Turner: He refuses to meet anybody in consulting his new budget.


Michael Holcombe Wilson: I have never refused them.


John Napier Turner: Do we now hear from the minister that he is willing to meet with Mr. Bulloch and other representatives who want to meet him before he draws his new budget? Do I hear that from him?


Michael Holcombe Wilson: Mr. Bulloch has never called me.


John Napier Turner: I want to suggest to Mr. Bulloch and anybody else who wants to make a representation before the minister before he brings
down his next budget that the minister may have relented. Mr. Bulloch, get on the phone, talk to the minister, if you can. I say this on national television and I say it within the House of Commons.

The minister had said that the tax would be visible. He had said that the exact amount of the tax would appear on every bill. He changed his position. Today he says that it might be visible. We will wait and see. We are not at all sure. Will it have to appear on the bill? We will wait to find out. The minister had said that in implementing the new tax, he would reduce the taxation rate on middle incomes. He also went back on this promise. The minister had said that in implementing the new sales tax, he would eliminate the 3 per cent surtax on middle-income Canadians. Instead of eliminating it, Madam Speaker, he raised it to 5 per cent.
The minister had said that the new tax would not be inflationary. Today he admits that the new tax will drive up the rate of inflation. Furthermore, Madam Speaker, the new tax will be an engine of inflation. Is the minister naive enough to have us believe today that businesses, business people, entrepreneurs will not try to recover the tax by passing it on to consumers, by transferring the tax to consumers? That is naive! This is not a minister who understands the collective psychology of Canadians and consumers. Is the minister naive enough to pretend as well that unions and workers will not seek to protect themselves by demanding pay raises throughout the country?
Shirley Carr and other labour leaders have already warned the minister. Mr. Minister, they are unanimous in saying that workers in Canada will bear the brunt of this tax.
It shows monumental naivete on the part of this minister. Everything will cost more, much more! The minister had said that the new tax would be fair. Madam Speaker, it is totally unfair. His new tax will be regressive and will hit the poorest very hard. The minister thinks that he has sweetened the pill by proposing a 7 per cent tax instead of 9 per cent, but Canadians will not swallow it. The minister has engaged in a little mathematical game, which is really a big fraud. He reduced the tax rate, but to make up for it, he raised the taxes on individuals.
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It is an unfair tax. The credit will not come near to covering it. It hits the lower and middle-income groups most severely. I heard the minister in an unprecedented moment of frankness, and I caught his words and could not believe them, say: "This is a vision of Conservatism at its best". It surely is. It is conservative, regressive, unjust, and hits the lower-income groups at the expense of the average consumer. That is Tory vision all right. That is the myopic type of vision that is tearing this country apart and Canadians cannot wait to get at this minister, this Prime Minister, and this government.
What about food? Originally the government said the tax would apply to food. We protested on this side of the House. Canadians protested across the country. Canadians everywhere said: "We don't want a tax on food". Then on September 2, 1987, the Minister of Finance stated in this House, as reported at page 8700 of Hansard:
Let me make it absolutely clear. There is no proposal in this document or any other document in Canada to tax food. That is a fact.
Those were the minister's words. That turned out not to be a fact. That was pure fiction, pure deception, another example of not coming clean with Canadians. The minister was not misunderstood because that afternoon and the next morning every headline in the country stated "no sales tax on food".
What is the situation now, as we find it in the bill? All food in restaurants will be taxed. All food in cafeterias, snack bars and a large percentage of grocery store purchases will be taxed. In other words, over 50 per cent of the food consumed by Canadians, of all food in this country, will now be taxed under this bill. That is the fact. That is not what the Minister of Finance told us a year and a half or two years ago.
To add insult to injury, the Prime Minister is trying to sell this as a tax cut. He is going across the country and he is saying: "You know, it is very simple. We got this manufacturers' sales tax of 13.5 per cent. We are coming in with a new sales tax which is going to be 7 per cent. From 13.5 per cent down to 7 per cent, you have never had it so good, you have never had it so lucky. We are reducing taxes for you". That is a dandy. That is the most
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unbelievably fraudulent way to treat Canadians that I have heard for some time.
I brought this to the minister's attention the last time we stood in the House on a similar occasion. I have not yet heard him play this particular game, but I wish he would take the same blackboard and explain it to the Prime Minister. It does not take a mathematical genius to figure out that with a new 7 per cent retail sales tax on any retail item, for instance furnishing for your home, an armchair at $300, a 7 per cent tax on that $300 for the armchair is $21. Right? If you go down to the wholesale price of that armchair, it is $100, because markup works that way. The wholesale price is about $100 while the retail price is about $300, and 13.5 per cent on $100 is $13.50, and 7 per cent on $300 is $21. Anybody who understands the market at all knows that a smaller tax at the retail level is bound to be a heavier tax than a larger tax at the wholesale level.
Last week the minister offered me a briefing. I suggest that I can arrange with one of the local high schools, perhaps Rideau or Laurentian or perhaps I can work it out with one of my colleagues here who had the honour of representing 19 high schools in his riding at one time, to give the minister a remedial course in basic mathematics. We may have to get into second or third-year algebra and maybe a little trigonometry to help take us through this particular document.
This tax does not meet any of the criteria that the Prime Minister and the Minister of Finance set out for the country during the election campaign and during the discussions when they set forth their original documents.
The tax is not yet visible. It is not simple. It is not fair. It does not have the co-operation of the provinces, and it is certainly not revenue neutral. I say to the minister, who keeps asking us for alternatives, that we set forth our alternative posture in the minority report. I am saying to the minister that this tax cannot be rescued. It cannot be salvaged. It does not meet any of the principles that he set forth as the basis for a fair tax of this style at the consumption level. It does not meet any of the criteria that the Prime Minister promised the country. This tax is nothing but a licence to print money for the Government of Canada and it is a licence that Canadians want revoked.

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This tax will be coming out of everyone's pocket or purse. It will be coming out of our savings accounts, pension cheques, family allowance cheques, unemployment insurance cheques, budgets for clothes, shoes and food. It is going to come on top of our rental payments, mortgage payments and utility bill payments.
For the first time in the history of Canada, for the first time in the history of most countries, including the European countries that he sets forth as an example for his tax, we are going to have a tax on books, on learning, a tax on literacy. The Prime Minister in a hypocritical fashion talks, as we have talked, about the one million adult Canadians who can neither functionally read nor write in this country. We back him on this. Now there is going to be a tax on the books and material to overcome this scourge in our country.
We were a frontier people. The Governor General was sworn in today, and I am not bringing the Crown into this. He came from frontier stock, homesteading stock. At night under coal and kerosene lamps they attempted to educate themselves with any book they could buy, borrow, and sometimes they had to borrow it for some length of time before returning it. This tax puts a tax on learning, literacy and education for the first time.
It is also a tax on pollution control equipment. We talk about pollution, about our environment being a priority. It is a tax on sickness. It is a tax on housing. It is a tax on raising children. It is a tax on the necessities of life and, this minister is relentless, it is even a tax on death.
Why did we get here? We got here because of the government's own mismanagement. This is a tax to pay for the government's own incompetence. Even the minister's own business supporters confirm that he has not done the job he said he would do. He has had a strong economy in this country for most of his term, in fact for all of his term. Despite that economy with vastly increased government revenues, he has raised taxes on 31 separate occasions against Canadians over the period in which he has held office. They are unprecedented high revenues, 31 increases in taxes from all sources.
This same minister inherited a public debt about which he complained, but he has doubled the public debt of Canada, the whole cumulative debt incurred since Confederation in five short years despite those strong revenues, those tax increases. Canadians are saying: "That is not the custody we asked of this minister or this government. That is not the fiduciary way to handle the moneys of Canadians. We will not take it any more. You have not done the job. If you are trying to bail yourself out with this tax, no, sir, we do not want it. Scrap it." The people are saying scrap this tax and scrap this minister.
This minister and this government have made a complete mess of the fiscal situation. Now that they have botched it, they want Canadians to try to rescue them and pay the price. Apart from anything else, the timing could not be worse. The minister admits to the House of Commons and to the country that we are entering a period of slower growth. Recent analyses by financial institutions, the Bank of Commerce and the Royal Bank, most recently, indicate that we are in a period of slow growth.
The timing could not be worse. The timing of any tax and the timing of any expense is vital. It is crucial. This minister will throw us into a recession if this bill goes through the House of Commons.
Therefore, I say to the minister that we cannot help him rescue it. It cannot be rescued. This tax cannot be tinkered with. It is so fundamentally flawed that it has to be scrapped. The minister has to go back to the drawing board and withdraw the tax. It is a bad tax.
Canadians are fed up with the phoney rhetoric, with the breach of promises, the fact that it is a different style of tax than was promised. Canadians are fed up with a 7 per cent tax and they are fed up with this government.
I am saying to the Prime Minister and his minister that they better listen to what the people of Canada are saying to us and to your members. It is coming in loud and clear whether it is from Whitehorse, Vancouver, Saskatoon, Toronto, Corner Brook or Trois Rivieres. It is coming from the elderly, it is coming from students and single mothers, it is coming from the handicapped, it is coming from the old age pensioners, that's for sure. It is even coming now from the business community, and it is virtually unanimous.
Canadians are saying to this minister: "Scrap this tax. No more double-talk. No more extravagant newspaper ads. No more phoney sales pitches. No more of this tax.
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Scrap it. Get rid of it. Bring us back something that makes sense."
Madam Speaker, to fulfil the force of what I have been trying to put to you in the House and through the House to the country, I move:
That the motion be amended by deleting all of the words after the
word "that" and by substituting the following therefor:
Bill C-62, an Act to amend the Excise Tax Act, the Criminal Code, the Customs Act, the Customs Tariff, the Excise Act, the Income Tax Act, the Statistics Act and the Tax Court of Canada Act, be not now read a second time, but that it be read a second time this day six months hence.


The Acting Speaker (Mrs. Champagne):: Resuming debate on the motion and on the amendment.


Audrey Marlene McLaughlin: Madam Speaker, I appreciate the opportunity to add the voice of the New Democratic Party to those 74 per cent of Canadians who have said that this unjust, unfair tax must go and it must go now.
The minister spoke about the fact that this is tough medicine but he has to do it. In my remarks today, I would like to suggest to the minister some of the real tough medicine that he might take in order to implement a real equitable fair tax system in this country that is not borne on the backs of the middle and lower income Canadians, but is shared fairly and equally in this country.
The goods and services tax is unacceptable because it rejects the fundamental principle upon which tax policy should be based, that those who have the means pay it. The principle should be that people should not be paying more than they are realistically able to pay and those who can afford to pay have a responsibility to do so.
The goods and services tax represents one of the most significant in a long line of Tory tactics which has meant a dramatic shift of the tax burden away from the corporations and the rich of Canada to the low and middle income Canadians, the unemployed, families living in poverty, seniors, working men and women. All these people are already struggling to make ends meet.
The goods and services tax is not only unjust; it is unnecessary. The message that I want to bring to the
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government today is that we in the New Democratic Party have concrete, realistic alternatives to this tax policy.
We cannot talk about the goods and services tax in isolation from the other economic and fiscal policies this government has put into place. It is an intrinsic part of the corporate agenda of this government. We have seen the U.S.-Canada trade deal, high interest rate policy, the clawback on pensions and family allowances, destruction of the unemployment insurance programs, and now the goods and services tax. They have all been part and parcel of that agenda, and Canadians are beginning to realize what this means for their daily lives and for the future of themselves and their families.
The fact is that the government's economic record is a record of economic mismanagement. Let us look at what happened in 1989 alone: There were massive lay-offs- the Canadian Labour Congress estimates some 70,000 jobs lost as a result of the trade deal-interest rates out of control; growing regional disparities; devastation in the Atlantic region; deepening poverty; food banks and homelessness.
Again just last week the Institute on Child Health pointed out that poverty has increased to the extent that there are certain regions, and it names specifically Newfoundland and Saskatchewan, where infant mortality up to one year is far higher in those provinces that have a higher rate of poverty. The link is very clear.
What does the government have to show for its efforts? An increasing gap between the rich and the poor, increasing poverty, and now a 7 per cent goods and services tax. Even in the years when our Gross National Product increased, the question arose as to who benefited from it?
It was not the people of Canada. They faced more tax increases than ever before. Their wages remained the same while their standard of living declined and they saw unprecedented reduction of crucial government programs and services. Now the minister is saying that he wants to see the workers of this country increasingly bear the burden of this tax.
In his remarks he pointed out that he does not want to see the workers asking for increases in their wages to compensate for this tax. Once again, the Conservative

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agenda is to ensure that it is borne on the backs of those who can pay the least.
While this government talks about different statistic trends, the working men and women of Canada have been asking when the government is going to start to improve the well-being of working people in this country.
The fundamental problem remains that this government believes that economic development means creating more wealth for those who already have wealth in this country. That is what it has done and that is what it is continuing to do with this new proposed tax policy.

Let us take a closer look at this goods and services tax. First of all, consider the whole process.
Madam Speaker, during the 1988 election campaign, the Conservative Party told Canadians the economy had never been in better shape. The impression it gave was so optimistic even the brightest experts were fooled.
It promised billions of dollars. The government kept saying these dollars were available thanks to its excellent financial management. Of course, they would introduce a goods and services tax, but not to worry. It would merely replace the manufacturers' sales tax. It would not generate new revenues.
During the election campaign they never talked about rising interest rates. They never talked about cutbacks in social programs. And they never said one word, Madam Speaker, about the deficit.

We all know what happened. About 30 seconds after the vote was counted, the Prime Minister, the Minister of Finance and all of the Tory revisionists started telling us that everything was not so great after all. We were told that Canada was facing a deficit crisis, one that was threatening the very economic foundations of our nation. They did not say, of course, that this deficit was doubled by this government.
Suddenly the government said that it could not afford to fulfil spending promises it had made weeks before. And what followed, all in the name of reducing the deficit, was an unprecedented attack on the social programs of this country. All of a sudden, the goods and
services tax was going to involve a whopping tax increase and GST revenues were to be used to fight the deficit.
At the same time we were told that the goods and services tax was revenue neutral.

The promise that the new tax would be revenue neutral was the first promise they broke, but many more followed.
The government promised that the GST would be visible. It promised that the GST would be easy to administer. It promised that the provinces would be consulted to ensure that the tax would be fair. It promised that the price of housing would not affected. It promised sufficient credits for low-income families. It promised that essential goods would be exempt. Promise after promise was broken, and in the end, Canadians were taken for a ride.

What are the implications of the goods and services tax? What does it mean for Canadian nurses, miners, teachers and taxi cab drivers? What does it mean for families in the Atlantic, seniors in Quebec, youth in the west, women in the north? It means, of course, that Canadians will be handing over more of their earnings to the government. Those who earn less will be paying a bigger portion of their income through the goods and services tax than those who make more.


Michael Holcombe Wilson: Wrong.


Audrey Marlene McLaughlin: The goods and services tax is a regressive tax. What that means in plain and simple terms is that it makes the poor pay a bigger slice of their income in tax than the rich. It does so because those Canadians with lower incomes spend virtually all their income on necessities.
The minister has said I am wrong. Let me illustrate. According to Statistics Canada, Canadian families with incomes between $10,000 and $15,000-and there are many of these-spend 92 per cent of their income on purchases, on current consumption. It is that consumption that is taxed by the goods and services tax. They are paying 92 per cent of their income just on essential purchases and now they are being asked to pay, should this bill pass, another 7 per cent.
Families with incomes over $50,000 spend on average only 56 per cent of their income on current consumption.
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The remainder, any savings or investments, is free of the goods and services tax. That simply is not fair.
We have families who are spending virtually all their income simply to purchase those goods and services they require to live. We have others, and that includes the members of this House, who statistically spend about 56 per cent of their income on consumption and are in a much more advantageous position than those with lower income. This just simply is not fair.
The minister I am sure is saying that he will compensate those low income Canadians through tax credits. The government is not compensating low income Canadians for the inflationary effect of this tax. Indeed, with the reduction of the proposed tax from 9 per cent to 7 per cent those tax credits were reduced as well.
Who are these Canadians who will be paying and suffering from paying this goods and services tax? What about the single mother who has just lost her job at National Sea Products? She will be paying an extra 7 per cent on her children's clothes and on her children's shoes. The line worker recently laid off from Gillette in Quebec will be paying GST on his purchases. Thousands of workers laid off from VIA will be paying the GST on school supplies and on every purchase and service that they make. Seniors hit by the government's clawback will now have the GST to contend with when buying nonprescription drugs and other purchases.
The regional effect cannot be overlooked. The minister will try to counter these effects by his proposals, but we on this side of the House do not buy it. Canadians do not buy it. There is no trust that this government will in any way be able to make this tax fair for the real people across Canada, the people who this government does not want to talk about, the people of Canada who have suffered most because of this government's regressive policies.
Something must be said, as I said earlier, about the tax credit which the finance minister talks about, the tax credit that he says will mean the poor will not be paying more under the goods and services tax. Yes, it will help some Canadians, but I emphasize only some. Millions of Canadians who live below the poverty line will be hurt by
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the goods and services tax. Their taxes will go up and they will simply have less money to meet their needs.
Second, the tax credit is not indexed to inflation. This means of course that each year fewer and fewer low income Canadians will actually qualify for the tax credit.
The Pro-Canada Network has probably described it best:
Like an umbrella that shrinks in the rain, the GST credit will soon
shrink to allow the GST to soak millions of dollars from people who
are too poor to pay.
Let me make one final point on this supposed protection. When this government decided to change the goods and services tax to a rate of 7 per cent, it made several adjustments to meet the difference in revenues it anticipated. But where did those reductions come from? It is not hard to guess. They came, of course, not from corporate Canada, not from high income Canadians. It was small business, and it was poor Canadians.
Nothing illustrates better this government's attitude to the poor. It treats them with contempt and scorn, and this government's record has been disgraceful. It has institutionalized poverty in one of the most generously blessed countries in the world.
We on this side of the House want to see a country where poverty is eliminated, where we can work toward doing that. The former leader of our party spoke eloquently and passionately about this matter on his departure from this House and set for us a goal that all Canadians should embrace. We ask and we plead with this government to embrace the goal that we must reduce poverty in this country. We must not add to it as this government is doing.
I talked earlier about the regional effect of this tax. All regions of this country will suffer under this tax, but nowhere will the suffering be worse than in the Atlantic provinces that have been so hard hit by this government's policies.
First, there is a tax on freight transportation, making it even more expensive for people in the Atlantic region to ship goods to the populous markets of Canada and the United States and making it even more difficult to compete with industry in central Canada.
Second, employment in the Atlantic region is heavily dependent on the service sector. Services account for some 79 per cent of the region's Gross Domestic Product. According to the Conference Board of Canada,

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any region dependent on the service sector "would be relatively more adversely affected by the goods and services tax than a region that is less heavily dependent on services".
I mention also the Nova Scotia Board of Tourism which initially supported the concept of the goods and services tax but has withdrawn its support saying that it will devastate the tourism industry in that area.
We in the New Democratic Party say it is time to stop punishing the people of Atlantic Canada. It is time to introduce reforms that will revive their economy, not tax measures that kick them while they are down.

What does the GST mean for Quebec, Madam Speaker? It means that goods that previously were not taxable, such as furniture, clothing, textiles and shoes, all essential goods, will be taxable under the GST. It means an increase in the price of new homes and in rental costs, as well, since landlords are obviously going to pass on the tax to their tenants. I may add that 75 per cent of Montreal residents are tenants. Like everywhere else in the country, the GST means inflation, a headache for small business and inequity for the poor.
That is why the Confederation of National Trade Unions, the Federation of Co-operative Family Economics Associations of Quebec and the national federation of Quebec consumer associations are against the GST.

I have two final points on the goods and services tax. First, in addition to its direct damage it brings with it many side effects. Items that are not themselves taxed will eventually end up costing people more.
I would like to give just one example. Child care is not going to be taxed, as we know, but child care costs are inevitably going to be higher when the child care providers have to pay taxes on all supplies and services that they buy. Again it will be the parents who will have to pay that additional cost.
In short, the GST introduces a dangerous inflationary effect into the economy. This inflation will affect everyone: farmers, fishers, forestry workers and family physicians. While prices go up, wages will be suppressed and
the real standard of living of millions of Canadians will decline.
If this government thinks that pushing the goods and services tax from 9 per cent down to 7 per cent will be met with shouts of joy from the mountain tops, it can forget it. The polls indicate that and, as we have said before, this party is going to express the voice of Canadians inside this House and outside this House.
The minister mentioned the manufacturers' sales tax, that silent killer of jobs. When I was a member of the finance committee I asked officials how many jobs this silent killer killed. They were not able to say. When it was decided by this government to augment the manufacturers' sales tax, not once, not twice, not three times, but four times, I asked how many jobs it had estimated would be lost by this move. Obviously, the silent killer of jobs was so silent there were absolutely no figures to prove that assertion.
We know that the goods and services tax will not stay at 7 per cent and will be right up there at 9 per cent next year or the year after. It will keep going up in order to pay for this government's wasteful and inefficient economic policies.
This tax is opposed by more Canadians than any other policy in the history of this government. It is opposed by labour unions, women's groups, farmers' associations, senior citizens' groups, and small business people. Never before has such a coalition been formed. Can this government not hear that message? The message is that this tax must go.
Let us put the tax in the context of the government's economic agenda. First, let us look at the goods and services tax and high interest rates. Nothing demonstrates more graphically the consistency and coherence of our finance minister's approach to the economy. The hon. Leader of the Opposition talked about bringing a blackboard in to explain some of the convoluted instructions around the collection of the GST. We would like to see what the government's economic agenda looks like when it is really explained in simple terms.
As all the members of this House know, the government has been deliberately pursuing a policy of high interest rates. Never before has there been such a gap between the Canadian rate and the American rate. The stated goal of the policy is to keep inflation down. What
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better way to keep inflation down than to introduce a tax which is universally recognized as inflationary?
What does the goods and services tax mean, therefore, in terms of interest rates? It means inflation, resulting in the government jacking up interest rates even further, according to that logic if we can call it logic.
Let us look next at the relationship between high interest rates and the deficit. We must recall that this government is "dead serious about reducing the deficit" and that we have often proposed that one of the best ways of reducing the deficit is to bring interest rates down as was proposed by the all-party finance committee.
By the finance minister's own calculations a 2 per cent reduction in interest rates would bring the deficit down by $3.2 billion in the first year alone. Let us make sure that we all fully grasp the logic of all this. The government claims that its No. 1 enemy is the deficit. The government is deliberately implementing an interest policy that pushes the deficit out of control and, to complete the circle, the government is imposing a goods and services tax which will add to inflation according to its own assessment.
We then have a goods and services tax which raises inflation and puts pressure on interest rates. What then is going to happen to the GST rate if interest rate pressures on the deficit grow? Of course it is going to go up.
I think Canadians know the process without being told, but I do not think the government knows this. It has a goods and services tax that leads to inflation. Inflation according to this government leads to high interest rates. High interest rates lead to a huge deficit, which leads to an increased goods and services tax.
There is a simple lesson which Canadians have learned long before, without it being pointed out by me. That is why 74 per cent of Canadians are saying that this tax must go.

Perhaps we should tackle this issue from another angle. How will the GST contribute to spur the economy and create jobs?
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Allow me to give you some of its effects. Basically, the more heavily one is taxed the less money one has left to buy goods and services. Since they already have a limited budget, the workers will have to make fewer purchases.
High interest rates and a lower standard of living will reduce demand for consumer goods and lead to smaller wages and lay-offs. High interest rates mean an inflated Canadian dollar.
As we saw last year that translates into fewer exports and a good many plant closures.
Small and medium-sized businesses are the main source of new jobs in this country and, by forcing them to administer this tax, the government will create serious problems for thousands of such businesses. So much so that they no longer will be able to create new jobs. On the contrary, they will have to eliminate existing jobs.

All this compounds an already intolerable situation caused by this government's trade deal with the United States. I along with millions of Canadians heard the Minister for International Trade say last week that it is really too early to tell about the effects of the trade deal. I say that it is too late for those workers at Inglis, at Outboard Marine, at Dominion Glass Plant in Redcliffe, Alberta, the Campbell Soup company workers in Portage la Prairie or thousands of Canadians working in the fisheries.
I want to say a few words about alternatives. While the hon. Leader of the Opposition spoke eloquently against the goods and services tax he did not in reality offer real alternatives. I want to say that we have presented to this government alternatives, alternatives which I am happy to debate with the minister. There have been dozens of alternatives proposed in hearings across this country on the goods and services tax.
First, most people understand that we do not have a fair tax system. It is not that people do not want to pay their fair share; it is that we do not have a fair system. It is that increasingly individuals have paid the largest tax burden where in the past it was corporations. This government has done nothing to redress this imbalance. It has only increased it by reducing the general federal corporate tax rate from 36 per cent to 28 per cent in

January 29, 1990
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1988. The corporate share of the tax burden has declined consistently and substantially under this government.
We know that it was Liberal governments which started the trend. It was they who began shifting taxes from the business community on to working Canadians.
The New Democratic Party's corporate tax proposals are reasonable and prudent. I am going to outline these briefly. First, as I mentioned earlier today, we are calling for the introduction of a minimum corporate tax. Thousands of profitable corporations are not paying their fair share. This is not a radical idea; it is not even a new idea. The United States has a minimum corporate tax as do many other countries.
Let us think of this. While families living below the poverty level are paying taxes, some profitable corporations are paying none. This is not acceptable to Canadians. What we are saying is that a corporate minimum tax at a rate of 20 per cent should be introduced.
Our second phase of corporate tax policy is related to deferred taxes. Each year corporations in Canada defer roughly $2 billion in taxes. These deferred taxes act as a permanent source of funding without interest. We are saying that there should be interest charged on these deferred taxes.
Certainly, if Canadians across the country borrow money, they have to pay interest on that money. We are simply asking that that be done for corporations.
Another suggestion is that the government should clamp down on corporate cheaters. Revenue Canada's auditing of corporations has declined dramatically over the last decade. Yet for every dollar Revenue Canada spends collecting corporate tax returns it recovers $17. Surely, more funding should be put into that area so that we can recover the taxes that are rightly owing.
Finally, I would like to say something about modifying the system of taxation. The government said at one point that all of its policies would have an environmental review. What about the effect of this tax on environmental matters?
First, there is no incentive for people to buy more environmentally friendly products under this kind of system. Surely, this should be fundamental to the kind of tax reform that this government undertakes, if it cares
about the environment and if it cares about making a truly fair tax system.
Therefore, the final tax policy proposal I will put forward is that a royal commission on taxation be established. There has not been one, Madam Speaker, as you know, for about a quarter of a century and we are sorely in need of genuine tax reform.
I am suggesting that the commission's mandate should be manyfold. It should determine how the government can best attain stable revenues through the tax system, determine how the tax system can be used to promote full employment, and determine how the tax system can be used to promote a more equitable society.
Finally, the royal commission must be charged with creating a tax system that takes into account the environmental aspects of our purchases and, indeed, of our system, a system that recognizes that the protection of our natural environment is the most fundamental issue facing Canadians and all humanity today.
I would conclude by saying that this goods and services tax must go. This is an unfair tax and an unjust tax. What this country needs more than ever is a tax system that is progressive, equitable and just. What this country needs is a reduction in interest rates, a full employment policy, an enhanced trading relationship with Europe and Asia, a strong system of social programs to serve the needs of Canadians.
As Leader of the New Democratic Party, and on behalf of millions of Canadians from all walks of life and from every region of this land, I urge this government to scrap the goods and services tax and to introduce genuine, sound and equitable tax reforms so that we can meet the needs of the people and the challenges which lie ahead.


Some hon. members:: Hear, hear!


The Acting Speaker (Mrs. Champagne):: According to the order made earlier this day, the House will now proceed to a one-hour question and answer period.
I am told, and I realize that there are quite a few members who are prepared to ask questions of the minister. I think if preambles were kept as short as
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possible, it may allow a greater number of members to ask questions of the minister.
I will recognize first the hon. member for Gloucester.


M. Douglas Young: Madam Speaker, after that impassioned and resolute attack on the GST, it is difficult to have a very long preamble. Certainly the NDP has taken over the issue with a great amount of gusto and verve.
My question for the Minister of Finance arises from his speech to the House today, particularly his comment with respect to the monitoring that is going to take place on the information that will be available to Canadians.
The Minister of Finance will know that many, many Canadians, 74 per cent, still oppose this tax. Although it is alleged that it is because Canadians do not understand it, can the Minister of Finance tell us how Canadians can depend on this monitoring system that he well knows will not have any teeth, or any enforcement function? Can he tell us how he sees this monitoring agency defending the interests of Canadians and ensuring that the 13.5 per cent alleged saving by the dropping of the manufacturers' sales tax is, in fact, passed on to the consumer? How exactly does he see his monitoring system work?


Michael Holcombe Wilson: Madam Speaker, I am curious when I hear the hon. member saying that he wants an agency with teeth. What he means when he says that is he wants to set up an anti-inflation board type of bureaucracy so that on the one hand he is saying, set up this great big bureaucracy, but on the other hand, do not go ahead and hire 3,500 new people to administer the system. He cannot have it both ways, but this is symptomatic of the way the Liberals are dealing with this issue. They are sucking and blowing. Canadians are not going to fall for that.
In response to the specific question, how will the monitoring agency operate? First, it will be in the Department of Consumer and Corporate Affairs. It will provide information to individual Canadians so that they will know how much existing manufacturers' federal sales tax is in the price of various products and what they can expect will happen as a result of the introduction of the GST to the price after tax of various products.
This information will be made available subsequent to the introduction of the GST, then they will help compan-
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ies ensure that they do pass through to the maximum extent possible.
We have started this process. I indicated in the paper that went out earlier this year that the price of a car will go down about 3 per cent or 4 per cent.


Leslie Gordon Benjamin: You want to bet?


Michael Holcombe Wilson: The hon. member says, "You want to bet?" The car companies have said that they are going to pass this savings on to their retailers and if the hon. member had any sense as to what is going on in the car market today, he will know that there is tremendous competition. There is cutting of interest rates. There is cutting of price. There are $1,000 rebates that are promised for the full year by some of the companies.
Surely, the member understands that there is a great deal of competition to maintain market share. On that basis, I am confident that the market system will work. That, I think, is probably the best answer that I can give to my friend from the county of Gloucester.


M. Douglas Young: How interesting it is to see that our socialist NDP friends have now recovered their energy, for they had precious little to rave about when their leader had the floor of the House.
I want to direct a supplementary to the Minister of Finance. Should companies fail to make sure that the 13.5 per cent is no longer tacked on to production costs, and when your agency responsible for monitoring the implementation of the GST sees what is going on, in other words the money supposedly saved by consumers is not readily apparent in lower retail prices, just what will happen then? Will the agency to which you referred in your remarks be empowered to force these producers to roll back their prices, or is that simply something which will provide you with an opportunity to draw the consumer's attention to the situation?


Michael Holcombe Wilson: Mr. Speaker, I think that the English translation of what the hon. member said was would the monitoring agency oblige. In other words, I take from that that he is asking whether the monitoring agency would force a rollback. No, they will not be able to force a rollback. Constitutionally, there has to be a national emergency before there would be

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that sort of power. That is why the previous Liberal government with the six and five program did not have the full force that could have come from that type of program.
I want to underscore the point that I made just a minute ago. I get this question a lot from Canadians. How can we be assured? It is not possible for the government to give an absolutely precise guarantee.
What people who ask that question are saying, if they want to have a rollback, is that they want to set up the establishment of a large bureaucracy for basically what will be a six-month to a one-year problem, which is something that we would not be prepared to do.
We believe that the market will resolve the problem as was indicated through the experience of other countries, particularly New Zealand. We heard in the finance committee hearings that companies which tried to get too much by way of price in the implementation were forced to roll back their prices not by government decree but by the power of the marketplace because someone down the street kept their prices down, started to get market share and, as they started to get market share, the competition worked and prices were rolled back.


Diane Marleau: Mr. Speaker, in his remarks, the hon. Minister of Finance stated that this tax and I quote his words, "is deeply rooted in reality." I would like to ask the Minister of Finance whether he really understands the reality of low income.
Does he really understand the reality of a single mother trying to house, clothe and feed herself and her family? Does he understand the reality of a 7 per cent increase on the cost of heating their homes, especially for people who live up north where cold is very much an every day fact of life?
Does the minister understand the reality of adding a 7 per cent tax to the cost of transportation? What does the minister plan to do about these realities?


Michael Holcombe Wilson: Mr. Speaker, the simple answer to the question is yes, I do. I do understand the reality of people who are on low incomes. That is precisely why we introduced a refundable sales tax
credit in 1986 and have increased it on two occasions since then. That is precisely why we have placed such a level of importance on the goods and services tax credit, precisely so that we can put Canadians who are in low-income brackets in a better position than they are after sales tax reform than is the case today.
Some 84 per cent of senior citizens and single-parent families will be better off as a result of sales tax reform. Surely that tells the hon. member that we do believe in this and that we do understand its significance. We want to move ahead with sales tax reform so we can make that major change in the position of people who are on low incomes.
I have listened very carefully to the Leader of the New Democratic Party who said that Canadians in low-income brackets would be paying more tax after sales tax reform. That is simply not true. She does not understand the impact of the goods and services tax credit.
I listened to my colleague on the other side of the House, also from the New Democratic Party. She said that 92 per cent of their income is paid on the necessities. What are two of those necessities? Rent and food. Those are not taxed. She gave the clear implication that they were taxed, and I would expect that she would withdraw that implication once she gets on her feet.


An hon. member:: Order!


Mr. Speaker:: There is a very great temptation under the arrangement to enter into lengthy debate. But I would ask the minister to try to confine his answers to the question that is put.


Diane Marleau: Mr. Speaker, if the Minister of Finance is so understanding of the realities of his tax on poor and low-income Canadians, then why has he only partially indexed his tax credit? Why has he not regionalized his tax?
The reality of his partially indexing this credit is that within five years, half a million Canadians will no longer qualify for his refundable tax credit. What does he plan to do about that?
The minister certainly understood about indexing when it came to RRSPs. In his latest proposal he will fully index the range of amounts of moneys that rich people can invest in RRSPs.
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Will the minister understand the realities and scrap this tax? There is nothing good about it.


Michael Holcombe Wilson: Mr. Speaker, we get the same old rhetoric from the Liberal Party. I have listened to the leader's speech, and not once was there any suggestion, any hint that there was one idea of what alternatives would be.
I have listened to two questioners now, the junior finance critic and the hon. member who spoke most recently, but I heard not one suggestion as to an alternative. I listened to the six would-be leaders of the party last Sunday afternoon and again heard not a whisper of an alternative. They simply do not have the alternatives.
On the question of partial indexation, yes, the tax system is partially indexed. Let me go back to the refundable sales tax credit because that is a very good example of how we have adjusted upwards the thresholds to reflect changing circumstances. We started at $15,000, we moved that up to $16,000, then up to $18,000, and now with the goods and services tax credit, it is $25,000. Surely that is an indication of our good faith here in responding as things change.
We have done the same with other parts of the tax system, for example, in 1988 when we had personal income tax reform. So, therein two very clear examples is an indication that we are sensitive to the concern that the hon. member has expressed.


Audrey Marlene McLaughlin: Mr. Speaker, the Minister of Finance claimed earlier that to introduce a corporate minimum tax would be to send business investment fleeing from this country. If this is the case, I would ask the minister how he can explain the fact that in the United States, which introduced a minimum corporate tax in 1986, the rate of business investment since the introduction of that tax has grown at an annual rate of 6 per cent, almost triple the rate of the previous five years.
I ask the minister, given this evidence, would he not consider the imposition of a 20 per cent corporate minimum tax so that corporations are paying their fair share?


Michael Holcombe Wilson: Mr. Speaker, let me ask the hon. member a question. The corporate income tax rate for small business is 12 per cent. She is saying
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that she wants a corporate minimum tax of 20 per cent. Is she proposing the increase of the-


Mr. Barrett:: Graduated. Don't twist it, graduated.


Michael Holcombe Wilson: Well now, we have some adjustments here that the hon. member from Victoria would have us use.
Is the hon. member suggesting a minimum tax of 20 per cent on small business? Is she suggesting companies that are basically conduits for dividends, holding companies, where the dividend income is paid with respect of income where taxes have already been paid should be taxed twice or three times?


David Barrett: Well, come on.


Michael Holcombe Wilson: The hon. member says, "Well, come on". Let us have some explanations as to what the New Democratic policy is going to be.
There are 3,500 or 3,600 companies which are paying the large corporations' tax. Those companies are paying about $1.25 billion in large corporations' tax. That is levied on companies which have capital of over $10 million.
She is saying that there are thousands of companies which are not paying tax. I think the NDP has put a number on that of some 90,000 companies or thereabouts. That, by definition, means that 85,000 small businesses would be paying this minimum tax. Is that what the hon. member is saying that her party supports?


Audrey Marlene McLaughlin: Mr. Speaker, of course that is not what I am suggesting. It is this government which is penalizing small business, not the New Democratic Party.
I point out to the minister that of the $27 billion in profits which went untaxed in 1987, 84 per cent of that $27 billion in untaxed profits was held by companies with profits over $1 million. That is not small business. The biggest winners were the top 145 untaxed corporations which have average profits of over $106 million each. They did not pay one cent in tax.
If the finance minister is concerned with small business, as he suggests and as this party is, will he then reconsider and assist small business to reinstate the administrative assistance that he took away on reducing the GST from 9 per cent to 7 per cent, reinstate those administrative funds for small businesses so that they can survive this tax?

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Michael Holcombe Wilson: Mr. Speaker, what the hon. member is pointing to is what was one of the quite difficult decisions of moving the tax rate down from 9 per cent to 7 per cent. How were we going to treat the assistance that we were providing small business?
We looked at different options here but we felt, as a trade off, in getting the rate down from 9 per cent to 7 per cent that we could afford to pay an up-front transitional payment to small businesses to help them get through those one-time costs but that we could not do on an ongoing basis because then we would not have been able to get the rate down to 7 per cent. I think that the small business community was quite anxious to see us come in with a lower rate.
The hon. member keeps talking about a corporate minimum tax. One of the things that we have done is cut back on the loopholes that were in the tax system that corporations were taking advantage of as well as some of the tax benefits that were there over a number of years.


Nelson Andrew Riis: Who put those loopholes in there?


Michael Holcombe Wilson: The Liberals. I think the hon. member knows that. The scientific research tax credit, limited partnerships, carve-outs, capital trusts, collateralized preferred shares, a preferred share dividend tax, a general anti-avoidance rule, new rules on leasing, on dividends, on rentals. We eliminated the investment tax credit, the inventory allowance, earned depletion. We capitalized real estate interest expense. We reduced a number of reserves for banks, trust companies and insurance companies.
In many ways, we have broadened the tax base for corporations so that they are paying considerably more tax. Banks, as an example, are paying over $500 million this year in tax. Two or three years ago, they were paying nothing.


Mr. Manley:: Mr. Speaker, in his remarks today, the minister made a great deal of the fact that the move from the MST to the GST meant the elimination of tax on business inputs, as he called them. I think he agrees that the design of the system is to move the tax from the manufacturers' or the business level to the consumer level.
Given that that is the plan of this tax, will the minister admit to Canadians that the move from the MST to the GST represents the single largest reduction in tax payable at the corporate level in the history of Canada?


Michael Holcombe Wilson: Mr. Speaker, I think the hon. member is quite aware that any consumption tax is ultimately paid by the consumers. It is there in black and white. What we are doing is making sure that consumers see the tax they are paying so that it is not a hidden tax.


Some hon. members:: How, how?


Michael Holcombe Wilson: The hon. members ask, "how". It will be very clear on the cash register chit so that people will see how much tax they are paying. As I said in my speech, the GST will be a far more visible tax today for the consumer than are the provincial retail sales taxes.


Joseph Frank (Joe) Fontana: Big deal, you see it.


Michael Holcombe Wilson: It is a big deal. On the one hand, we have the Leader of the Opposition saying: "Make it more visible". On the other hand, we have the member from London East saying: "Big deal". Again we have the Liberal Party talking out of both sides of their mouths.


John Paul Manley: Mr. Speaker, I would be glad if the minister answered the question out of either side of his mouth.
One of the things he said just now, and he said it in his speech earlier today, was that the move to the GST was going to make it more difficult for governments to kind of sneak in tax increases. He said it is all going to be visible. He is nodding his head. He agrees with that.
Well, he also said some pretty extreme things about the manufacturers' sales tax, describing how bad it was. We all know that in the five years he has been in office he has raised that tax from 9, to 10, to 11, to 12, to 13.5 per cent.
Will the minister not admit that the reason he raised this terrible tax so many times was precisely the reason he gave in his speech, so that he could sneak it past Canadians? Will he not admit that this change is the biggest reduction in tax payable at the corporate level in the history of Canada?
i:
January 29, 1990


Michael Holcombe Wilson: Mr. Speaker, I will answer the question exactly the same way as I did before. Any tax on consumption, which is what a sales tax is, whether it is a federal sales tax at the manufacturing level or a provincial sales tax at the retail level or the goods and services tax, any tax on consumption is paid by consumers. Consumers are individuals.


An hon. member:: Is it regressive?


Michael Holcombe Wilson: The hon. member asks another question: Is it regressive? I say to the hon. member that the existing sales tax is a regressive tax. I think we would both agree on that.
With the introduction of the goods and services tax credit so that Canadians in low-income brackets, after sales tax reform, will be paying less as a percentage of their income than people in upper-income brackets makes it a progressive tax system. That is not the case today. It was not the case when we came into office in 1984.
We did this principally because we wanted to improve the fairness of the tax system, particularly for those in the low and middle-income brackets. As I said, 84 per cent of seniors and single-parent families will be paying less sales tax, including the effects of the GST, than was the case before.


Joseph Frank (Joe) Fontana: Mr. Speaker, across Canada the average price of a new home is expected to reach $151,900 in 1990. That means the average family would need an annual income of some $65,000 or more to reach for the Canadian dream of owning a home. But in 1988, the average family income was only $46,185. That means family incomes and salaries must increase by 41 per cent by the end of this year before the average Canadian family can own the average Canadian home.
My question to the minister is this: These figures are a clear indication of Canada's growing housing crisis and rather than addressing the problem, why is the federal government adding to the problem with the 7 per cent GST and inadequate rebates for housing?


Michael Holcombe Wilson: Mr. Speaker, let me explain for the hon. member how the rebate works and speak about the tax on new housing. I should just make it very, very clear because both the Leader of the Opposition and the Leader of the New Democratic Party left
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the impression that there would be a 7 per cent tax on the whole price of the house without the rebate.
There will be a rebate so it is 7 per cent less the 2.5 per cent rebate for a net of 4.5 per cent. We agree on that. I think the hon. member is nodding his head.
Today there is a tax at either 13.5 per cent or 9 per cent on building materials, plumbing supplies, windows, rugs, wallpaper, a large number of things that go into a new house. The effective tax rate of all that, in relation to the total price of the house, is somewhere in the 3 per cent to 4.5 per cent range depending on the place in the country. I think in his community of London it is in the order of 3.5 per cent or 3.75 per cent.
So the impact on the price of a house may be zero or it may be as much as 1.5 per cent, which is the case in Metropolitan Toronto. I think by bringing in the rebate of 2.5 per cent, we have been able to address the problem that he and I are both concerned about and the impact it can have on the housing market. I believe we have done this in an effective way.


Joseph Frank (Joe) Fontana: Mr. Speaker, the minister will know and understand that there is no tax on land and there is no tax on housing under the current MST. He has now admitted that even after his complicated formula-the rebates and what have you-that the net increase is still going to be as much as 2 per cent across this country on prices of housing which are already too high.
Now that he has admitted to the fact that there is going to be at least a 2 per cent increase on new houses, the industry says that is going to affect existing housing to the tune of about 2 per cent to 3 per cent. How has the minister answered the question of affordability by adding even after the rebates another 2 per cent to housing for Canadians?


Michael Holcombe Wilson: Mr. Speaker, the hon. member, like his leader, is distorting things again. He just said 2 per cent is what I said. I did not say that. I said it could be up to 1.5 per cent, but it could be zero. In some communities it will be zero. We have some examples where there will be an actual small reduction in the over-all cost of a house.
I have heard this distortion today from the Liberal Party and what the tax is applied to. The Leader of the Opposition said it was applied to education. Wrong. It is

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not applied to education. It is applied to rental housing. That is wrong. It is not applied on rental housing. The member quite distorted what I have said on food. I have indicated all along that take-out food, restaurant food from his favourite restaurant, Winston's and places like that, will be subject to tax.
I think it would help the understanding of this particular proposal if we dealt with the facts and not with the distorted imaginings of hon. members opposite. It is those distortions which are a great frustration to Canadians who are trying to understand what it is all about, what the tax will do, how it will improve the economy and how it will affect them in their day-to-day lives.


Mr. Nystrom:: Mr. Speaker, the Minister of Finance has been talking about distortions. I want to ask him about one of his favourite distortions which is telling the Canadian people that the existing MST, or the existing FST, which in 1991 will total about $18 billion, according to the Department of Finance, will be passed on in its entirety to the consumers of this country.
Will the minister tell us today what kind of evidence or proof he has that the existing manufacturers' sales tax will be passed on to the consumer; that the existing FST will be passed on to the farmer, the worker and the old age pensioner? What study does he have that says that that will be the case? I have not talked to any business people in this country or any manufacturer in this country who believe for a minute that the entire existing $18 billion will be passed on. Instead, there will be a further price increase for the consumers of this country.
Will the minister tell us what study and what empirical evidence he has that the existing federal sales tax will be passed on? Is it not the truth that we are going to keep the major part of the existing tax and add a 7 per cent tax on top of that, and the whole thing will be inflationary and hurt Canadians from coast to coast?


Michael Holcombe Wilson: Mr. Speaker, the hon. member was doing just fine until he threw in that last one. He knows perfectly well that what he just said was a gross exaggeration, a gross distortion of what will happen. I answered that same question from the member for Gloucester. He can check Hansard, I guess he was out of the House. But in the interest of saving time for other
people who want to ask questions, I will not repeat what I said in that previous answer.
It is that distortion, the things that the hon. member just said at the end of his question, which cause people in this country to lose confidence in their political representatives.


Lorne Edmund Nystrom: Talk about losing confidence, Mr. Speaker, I want the minister to answer the question. What guarantee can he give the people of Canada that the existing manufacturers' sales tax will be passed on to consumers of this country? What guarantee is there? What study does he have to back up the fact that he keeps repeating and repeating in this House that the existing tax will disappear?
I need some evidence of what he is basing that statement on because nobody believes him. Even his own back-benchers do not believe him. Answer that question and cut out all the rhetoric.


Michael Holcombe Wilson: Mr. Speaker, I was trying to save House time so that other people could ask questions. I have responded to that precise question from the hon. member for Gloucester.
What I have said continually through this whole debate on sales tax reform is that it is very important for businesses and labour to conduct themselves in a way that will allow the maximum amount of savings of that $18 billion. No guarantees can be given, unless the hon. member wants to have an anti-inflation type of board, a bureaucracy and machinery established. That is the only way that that guarantee can be given.
But it is quite clear from what has happened in other countries that the power of the marketplace, the power of one company, one retailer down the street trying to get some market share out of someone up the street will result in the vast majority of those savings being passed on to consumers.
What I am hearing from both the Liberal Party and the New Democratic Party is quite the opposite of what they should be saying. They should be encouraging business and labour to ensure that the right actions are taken so that we do not have that inflationary impact.
By taking the line that both parties have taken in this debate this afternoon, it is encouraging people to try to get a little bit of savings.
January 29, 1990


Mrs. Maheu:: Mr. Speaker, since the Minister could not come to an agreement with the provinces, small businesses will have to deal with complex administrative problems because Canada would be the only country in the world with two different taxes on goods and services. How can the Minister claim to have come up with a simple tax system when small businesses will have to deal with multiple rates and exemptions, as well as different audit systems and penalty structures?


Michael Holcombe Wilson: Mr. Speaker, it has always been my first choice to have a national sales tax, a joint tax with the provinces. I understand the desire and the need of the small-business community to have only one tax system. Unfortunately that was not possible at this time. Possibly and hopefully, some time down the road we will achieve that but it will have to be, at this point, a two-step process.
However, in order to eliminate or minimize the complexity and the compliance problems of having the two systems in place, we are having extensive discussions with the provinces now. We are doing it province by province on a bilateral basis. We had a full meeting with the representatives of all the provinces about a week and a half ago and we are having another meeting, I believe, some time next week.
The objective of this is to try to harmonize systems, to try to see where we can do things together in such a way as to reduce, and hopefully in some cases, eliminate, the problems we are facing. That is the best that we can do at this point. We are very sympathetic to the point of view that the hon. member expresses and that is why we are approaching these meetings in a very positive way.


Shirley Maheu: I have a supplementary question, Mr. Speaker. Why won't the Minister make a commitment today to make good on his promise of a simple tax and to withdraw the GST so that he can start talking seriously to the provinces about a real tax reform?


Michael Holcombe Wilson: Mr. Speaker, I think it is very important that we get on with the job of sales tax reform. As I have indicated in the House on a number of
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occasions, including today, there have been five different studies since 1940 stating that the existing manufacturers' sales tax is a bad tax, it is holding back our economy and putting Canadian producers at a disadvantage relative to their international competitors. So we feel it is important that we get on with this tax.
The provincial governments do not have the same problems. They have some problems with their existing taxes but not to the same extent that we have at the federal level. That is why we feel we must move ahead with it. We are trying to do this in a way that we can deal with the problems the hon. member has raised in as effective a way as we can.


Don Boudria: Mr. Speaker, last fall the department of the Minister of Finance paid a sum of roughly $1 million for a one page ad, and in some cases a two page ad, in Canadian newspapers to inform Canadians to save the notice in regards to the 9 per cent goods and services tax that he was proposing at that time.
Can the minister assure the House today that not one red cent, not one golden loonie, will be spent to advertise Bill C-62? Can he make that commitment to the people of Canada now?


Michael Holcombe Wilson: I will tell the hon. member that we are proposing to have an extensive information campaign of brochures, booklets and other things Canadians can read so they can understand the GST. There will be a brochure going out to all small businesses in Canada some time next month. We will have other pamphlets for people who are in the retail business, for senior citizens, and for low-income earners so that they can understand what the tax is and how it will affect them.
I will recall for the hon. member the conclusion that the finance committee came to in the last Parliament after their trip to New Zealand. They felt it was very important that the government exercise responsibility in getting information out to Canadians so that they would have a broad understanding of this tax and therefore be able to draw their own conclusions as to the impact that it would have on them but also to understand that there are benefits.
With the opposition that is present in the House and from other Canadians, people must think that if there is all this opposition there has to be a good reason for the government to proceed with it. And that certainly is

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going to be made clear when they see how the tax will affect them.


Don Boudria: Mr. Speaker, I want to make something clear. Did the minister just confess to the House that his campaign is propaganda to counteract the opposition of members of this House? If that is the case, will the minister now commit himself not to spend one red cent until such time as the bill is passed? After it is passed- heaven forbid that it would ever pass-at that time I suggest that the minister could spread whatever information he needs to spread.
Meanwhile, will he admit to us that he has just told us this is a propaganda exercise destined to counteract what opposition members are doing in this House, nothing more?


Michael Holcombe Wilson: I didn't say that at all. I said that it is important for people to get the information. Let me quote to you from the fifteenth report of the finance committee to the House in March, 1988. It said that if the government proceeds with the tax it should establish a private sector advisory committee to develop practical rules for the new tax and to publicize the details of the new tax.
Now this was a unanimous report of the finance committee, an all-party report. I think it is very clear.
My colleague, the Minister of National Revenue, has important information to give to senior citizens and people in low-income brackets to advise them how they should apply for the GST credit. It is very important that they put themselves in a position so they can receive the GST credit in December of this year, and clearly we have to make those arrangements at this time so that people can put themselves in a position to gain one of the benefits of the tax in December of this year.


Mr. Soetens:: Mr. Speaker, I have been listening to the speeches today in the House by both leaders of the opposition parties and they relate to many of the concerns about which I get calls in my riding. Many questions concern the distribution of information, what is taxable and what isn't, and the sales tax credit. For example, here I have a brochure put out by the One Voice seniors' network listing some of the things that are taxable including water, insurance and some transportation costs. We know, according to the legislation, that that is not the case.
Through you, Mr. Speaker, I would like to ask the minister a question about the credit itself. I have listened to the opposition talk about those low-income Canadians and people across Canada who are losing their jobs and asking whether they will have access to the credit.
How will Canadians get this sales tax credit and when? Can the minister advise us just how many Canadians are going to be eligible for this tax across Canada?


Michael Holcombe Wilson: Mr. Speaker, that is a very pertinent question because at this time people are receiving their income tax forms for taxation year 1989. In it there will be an application form for those people who are eligible for the GST credit. It is important that they complete it with their 1989 tax return because eligibility for the credit will be based on their income in 1989.
That is why we must proceed with getting this information out now so that they can be eligible and receive that first cheque in December of 1990. I believe something like 8.4 million families are involved. Some 84 per cent of seniors and families that are headed by a single parent will receive this particular benefit from the GST system. As colleagues opposite have just reminded me, the GST credit will be paid by cheque in advance four times a year so that people will have that money in pocket before they make their acquisitions.


David Barrett: Mr. Speaker, I listened with great curiosity to the positions given by the Leader of the Opposition and by the Leader of the New Democratic Party in response to this tax. If I may make an observation before my question, the reason the Liberals have not proposed an alternative is that they intend to keep the tax if they are elected to government. That is all there is to it. They will not stand up in this House and pledge that if they are elected they will remove the tax. We have seen this before.
My question to the two governments, both supporting the tax, through you, Mr. Minister, is this: Have you received support for this tax and its implementation from any provincial government and are you now in discus-
January 29, 1990

sions with any provincial government that would allow you to integrate the two taxes?


Mr. Speaker:: I would ask the hon. member to put the question, not through the minister but through the Chair, and I am sure he would like to do that. The question is there and the hon. member will have a supplementary.


Michael Holcombe Wilson: Mr. Speaker, I did not know whether I would get this question because of the lovers' quarrel between the Liberals and the NDP.
The answer to the hon. member is that we are having discussions, as I have indicated, on ways that we can minimize or eliminate some of the compliance problems, some of the complexities of having both the federal and provincial taxes in place. As far as any discussions on total integration of the national sales tax, I think that is quite premature.


David Barrett: Mr. Speaker, I asked the minister specifically whether he has the support of any provincial government at this point for the GST.
I would now like to ask my supplementary. You did not answer that part.


Mr. Speaker:: The hon. member certainly has questions, but I would ask the hon. member not to refer directly to the minister.


David Barrett: I thank you, Mr. Speaker. Mr. Speaker, would you be kind enough to direct the minister to my question? If he is hard of hearing I know your assistance would be welcome.
I ask the minister, through you, Mr. Speaker, whether or not he had the support of one single provincial government. He did not answer that. Second, through you Mr. Speaker, would you ask the minister kindly, through you back to me, whether or not he, the minister, through you, Mr. Speaker, is prepared to forward the correspondence that he has received on this from any provincial government and table it in this House through the Chair?


Mr. Speaker:: Just a minute. I just want to say to the hon. member that that, of course, was a superbly appropriate procedurally put question.


Michael Holcombe Wilson: Mr. Speaker, through you, I will respond to the two questions of the hon. member. To the first, officially we have not had any provincial government which says it supports the tax. They have indicated that they see some problems with it.
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We have addressed a number of those problems in the course of the December 19 decisions that I put before the House at that time. Most particularly they were concerned about the economic impact and therefore, through that, the impact on their fiscal positions. I think that bringing the rate down from 9 per cent to 7 per cent has gone a long way to address those concerns, but I would imagine that they are there to an extent already.
The hon. member has asked whether or not I would be prepared to table all correspondence that provincial ministers have with me. I think that that would be inappropriate. Provincial ministers and the federal minister have a good working relationship where we talk frankly and openly with each other. Some of these positions are put to the Minister of Finance and I respond to them in an open and frank way. If I were in the position of having to table all correspondence, I think that frankness and openness would break down.


Mr. Richardson:: Mr. Speaker, through you I would like to ask the minister to comment on some of the myths that were raised this afternoon by the leaders of the opposition. I do not think they were trying to be helpful to the people of Canada.


Mr. Speaker:: Just a moment. That is pretty close to saying something that might cause a motion later on. I am sure the hon. member would not want to impute the motives of other hon. members. Would the hon. member put his question please.


Lee Richardson: Mr. Speaker, I would like to take this opportunity to ask the Minister of Finance to answer some of the questions that real Canadians have been asking who really want to know about the GST, the kind of questions that I was asked in my constituency this weekend.


Some hon. members:: Oh, oh!


John Paul Manley: The ones that agree with you?


Jean-Robert Gauthier: What are you talking about? I'm a real Canadian.


Lee Richardson: Mr. Speaker, if I could ask questions to benefit the people of Canada rather than for whatever reasons these people have asked questions today. One, what about the complexity for small business and the expense to administer? Two, will the GST, as the NDP leader claims, make life more difficult for the poor or for senior citizens? Finally, through you Mr. Speaker, a question that I could not answer for my constituents this

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weekend, will the minister raise the rate of the tax over the next few years?


Michael Holcombe Wilson: Mr. Speaker, I dwelt a fair bit on the question of complexity during my comments earlier today. We recognize that there is something clearly new about this tax which will cause companies to have some problems in the early stages in developing their understanding of how it is going to affect their accounting, how it is going to affect their pricing, how it will affect their purchases.
One of the things that my colleague, the Minister of National Revenue, will be doing is having the national revenue people working with individual companies on a one-on-one basis to help them understand and answer their questions on how the-


Don Boudria: Tax police.


Michael Holcombe Wilson: Now, the hon. member says "tax police". Elow can he possibly-


Mr. Speaker:: Order. I would ask the hon. minister to direct his answer to the member and I would ask other hon. members to refrain from asking questions until they are recognized. The hon. minister.


Michael Holcombe Wilson: Mr. Speaker, your wisdom is always overwhelming. I appreciate you bringing me back to the question.
This visit will be on a basis where we will do everything we can to help these companies understand the system and in that way minimize the degree of complexity that might be there.
On the second point, the hon. member asked what we are doing to help the poor and the senior citizens, people who are concerned about the possible impact of the GST on their standard of living and their way of life. I would like to point out the range of families in the Atlantic provinces that will be eligible for the GST credit. In Nova Scotia, 74 per cent of families will be eligible for the GST credit and 85 per cent of those in Newfoundland will be eligible. It is lower in other provinces. In Quebec it is 73 per cent; in Ontario, 58 per cent; and in Manitoba and Saskatchewan, 64 per cent. So there are a large number of families who are going to be in receipt of this.
The third question my colleagues has asked is as to what assurance we can give him that the rate will not go up. I think the greatest assurance I can give to him and to all Canadians is that if governments continue to control spending, and we have been controlling spend very tightly in recent years-


Jean-Robert Gauthier: Nonsense. Sit down, Michael.


Michael Holcombe Wilson: Mr. Speaker, this is provocation. There is a 3.6 per cent growth rate in our program spending. To continue that is the best way we can ensure that not only is this tax not raised but that other taxes are reduced.


Ms.   Blondin@: Mr. Speaker, my question is for the Minister of Finance, on behalf of some real Canadians. Be they somewhat frozen today at 48 below, they are real Canadians.
On October 2, 1989, I asked the minister what the effect of the GST would be on the north since that information was absent in any of the documents on regional effects. He said, "It will improve the economic fortunes of the north by 1.5 per cent".
I would like to ask the minister, now that he has received submissions from many northern groups, including the Government of the Northwest Territories, stating that the tax will cripple the north, whether he can tell us today what measures he proposes to compensate the residents of the Arctic for the extremely high prices northerners will have to pay?.


Michael Holcombe Wilson: Mr. Speaker, I simply do not accept the rhetoric that the hon. member has used that it will cripple the north. I simply do not accept that.


Ms.   Blondin@: These are not my words.


Michael Holcombe Wilson: But it is the rhetoric that the hon. member is using.
The point which must be made is that this tax is very good for businesses that are in the north and other regions of the country. It is the businesses that create the jobs. Because the tax will be taken off the exports of the mines, some mines will be kept open that might otherwise close. In addition, because there will be no tax on the capital investment in a new mine or a new forest products project, it will be cheaper to bring these
January 29, 1990

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projects on stream. Again in that way they will create jobs for people in the north and other regions of the country.
The taxes on transportation that add costs to food, as another example, will be removed so that the costs of food provided to people in the north will also be able to be reduced. In a number of ways here-


Mr. Speaker:: I think the minister has answered the question. The hon. member from Western Arctic, a supplementary.


Ms.   Blondin@: Mr. Speaker, my supplementary is to the same minister. I cannot believe my ears. The rhetoric I am accused of using are the words of my constituents who are concerned, gravely concerned.
Mr. Speaker, through you to the Minister of Finance, I say that the goods and services tax is going to have an extremely negative effect on the cost of living in the north, on transportation, on the small businesses he refers to, on the tourism industry, on mining, and all at a time when the federal government has reduced its transfer payments to the Government of the Northwest Territories by $110 million.
What does the Minister of Finance propose to supplement the financial burden now being faced by the territorial government? They are being asked to increase personal and corporate income taxes in the north, which they cannot afford because the cost of living is so high and the cost of operating a business is so abominably high it is unacceptable.


Michael Holcombe Wilson: Mr. Speaker, I understand and appreciate what the hon. member is saying.
We had negotiations with both the government of the Territories and the Yukon government concerning the transfer payments. I think the two governments understand the nature of the fiscal position that the Government of Canada is in. It requires us to take some steps that we are not too happy that we have to take. But we know that we must get this deficit down. We must get the debt under greater control.
If we can get that debt under greater control, then we can get interest rates down. I think that will be helpful to the people and to the businesses which my hon. friend talks about in the north. That is the direction that we are following.


Mr. Rocheleau:: Mr. Speaker, can the Minister tell me if he intends to exempt from this tax agreements between municipalities covering water sales, as well as engineering planning, fire-fighting and police services? Can the Minister tell me whether he intends to exempt municipalities from this tax?


Michael Holcombe Wilson: Mr. Speaker, the principle that we are following in the treatment of the GST as it relates to municipal services is to impose no greater burden on them than is the situation now with the federal sales tax, the manufacturers' sales tax.
There is tax today on a number of things that municipalities purchase. We have said we are not going to increase that burden.
Exactly how we will do this can go one of two ways. We put one proposal in the technical paper, and subsequently in the December 19 statement.
Following that, we have had some discussions with the provinces to discuss a proposal that Mr. Nixon of the province of Ontario has put forward to see whether there is another way of achieving that same objective. Those discussions are proceeding. I am not in a position where I can say anything more than that, except to underscore the basic principle that they will not have greater tax to pay.


Mr. Speaker:: I regret to interrupt, but given the time I can take a single question from the hon. member for Nickel Belt.


Mr. Rodriguez:: Mr. Speaker, under the present tax regime the Minister of Finance's friends from Bay Street can deduct their three-martini lunches. They can deduct their escort services. They can deduct their lunches at Winston's.
Mr. Speaker, last year that cost the Canadian taxpayers $1 billion. Now he is putting on a 7 per cent tax, which means that they will be able to write off even more.
How does the Minister of Finance justify this to all the millions of Canadians who are looking for justice in the tax system while he allows his rich friends to write off more of their luxury and high living? How does he justify
it?

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Michael Holcombe Wilson: Mr. Speaker, if we had not allowed any write off of business and other forms of business development expenses the hon. member would be hearing from the business community.


John R. Rodriguez: Other countries have limited the tax.


Michael Holcombe Wilson: He would also be hearing from the restaurant association, the hotel association and other organizations like that, which gain a significant amount of their business, including in Sudbury-


John R. Rodriguez: You have no control over it, so just do it.


Michael Holcombe Wilson: It is important that we make sure that this is not excessive. That is why we cut back-


John R. Rodriguez: Poor people pay the tax on the basics.


Michael Holcombe Wilson: Mr. Speaker, I am trying to provide an answer to the hon. member but clearly he is not of a mind to listen.
We cut back from a 100 per cent deduction to an 80 per cent deduction to reflect concerns that I think the hon. member and I would share.
To go further than that, it can do some damage to the tourism industry in this country. I believe that that is something the hon. member has ignored.


Mr. Speaker:: I remind hon. members that we are all bound by the special order.


Nelson Andrew Riis: Mr. Speaker, I rise on a point of order.
Just before you end off the afternoon, I want to say on behalf of the New Democratic Party, and I suspect that others will want to say something too, that as a result of the special order we departed from the traditional way
we handle the kick-off of important legislation. I simply want to say how much we have appreciated the chance to raise questions at the end of the three leading speeches from the three political parties.
We appreciate the Minister of Finance making himself available for this hour to enter into this exchange. I think it has been helpful and useful. I think those viewing would agree.


Some hon. members:: Hear, hear!


Albert Glen Cooper: Mr. Speaker, I would like to thank the hon. member for his comments. We on this side of the House very much appreciate this kind of constructive debate, the opportunity to genuinely explore an issue because we are confident that we can win the debate.
I want to say that I hope this is a signal from the opposition parties that they will sit down and seriously debate the issue rather than engaging in the games which wasted so much time last week.


Mr. Speaker:: The Speaker appreciates the complimentary comments back and forth across the chamber.
I should say to the public watching that a great many members have stayed until now to take part in this debate. Not all have been able to be recognized.
I would indicate to House leaders that the Speaker would be prepared to take that into consideration at Question Period tomorrow so that those who did not have a chance to rise might be considered tomorrow.

Pursuant to the order made earlier today, the debate on second reading is adjourned. This House stands adjourned until tomorrow at 11 a.m.


[Stage Direction]
The House adjourned at 6.06 p.m.
[Stage Direction]
Tuesday, January 30, 1990