1991-03-11

Mr. Jim Peterson (Willowdale) moved:: That this House condemn the government for:
(1)	maintaining a high interest/high dollar policy that gives foreigners a continuing competitive advantage over Canadian producers;
(2)	cutting support for export promotion, science and technology and research and development, thereby accelerating Canada's slide into non-competitiveness; and
(3)	its economic mismanagement that has caused record bankruptcies, put 1.4 million Canadians out of work and brought about the deindustrialization of Canada, especially Ontario.
He said: Several days ago in my riding of Willowdale I had an experience which I know members from all sides of this House have had. It is not a unique experience for me in terms of my experience in my riding of Willowdale. A gentleman who is 51 years of age, has a university education and has worked every day of his life, is an expert on computers, came into my office and said: "Mr. Peterson, I have been out of work now for six months. I cannot find a job. No one is hiring. Everyone is laying off people. What can you do to help me?"
Mr. Speaker, all of us have experienced this tragic event, tragic in terms of the human questions involved. This individual had a house, three children who are going to school-two of them in university-he had a mortgage to pay, he had a car loan to pay. He had to give up the payments on his car; he did not know how much
longer he was going to be able to continue carrying his mortgage.
This is one of the great tragedies which occurs when we have a downturn in our economy. This is why we, as members of this House, realize that we have a beholden duty to our constituents to try to do everything possible to maintain jobs and the strength of our economy in Canada.
We have seen first-hand, all of us, the devastation that can be wreaked on individuals, on families, on municipalities, caused by unemployment and the present downturn in our economy.
This gentleman said to me: "Mr. Peterson, what can we do, what are the answers?" Our economic circumstances are extremely complicated, but I believe this government has made choices since it has come into office. We on this side of the House want to hold the government accountable to every Canadian for the choices it has made.
Let us look at the facts of what the Tories have accomplished in their seven years of running this economy. In 1984 our current account balance had a $2.7 billion surplus. Last year this had fallen to a $16 billion deficit. In terms of our trade with other countries, and Canada is a trading nation, in 1984 we had a surplus of $19.8 billion. Last year it had fallen to $10.8 billion.
What has happened? Why have we degenerated in terms of our ability to compete on the world markets? I give the Minister of Finance credit for recognizing our declining world competitiveness, having mentioned it in his last budget.
In February 1986, about the time that this government was entering into free trade discussions with the United States, the Canadian dollar was at a low of 69.13 cents vis-a-vis the American dollar. In August of last year the dollar reached 88.58 cents. That is more than a 28 per cent increase in five short years in the value of our dollar. Every one of our Canadian producers, especially our exporters, will confirm that the most devastating

March 11, 1991
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difficulty they have had in competing in export markets is the fact that our dollar has given a 28 per cent advantage to the Americans over the last five years.
In addition to that, we have had a high interest rate policy whereby our interest rates have climbed more than 5 percentage points higher than those paid by our American competitors. This has meant that Canadian business has been very hard pressed to modernize and to pay for the cost of money in order to carry on their ordinary business affairs. When you put the interest rate differential and the increase in our dollar on the backs of Canadians producers, is it any wonder that we are into a made-in-Canada recession, that our people have not been able to compete and that we have had a record number of business bankruptcies. Along with those business bankruptcies come the personal tragedies of which I spoke earlier, the personal bankruptcies as people cannot pay their bills.
This has been accomplished for us by the Minister of Finance on the basis that he was going to control the deficit. Over that period of time, our national debt has more than doubled. If interest rates had been kept lower, it would have saved us a monumental amount of money. For every percentage point the minister could have lowered the interest rates, it would have saved us $1.6 billion in the first year alone on our national debt. For every percentage point that he drove up the interest rates and thereby brought the dollar up, for every cent our dollar went up against the Americans it cost us $1.3 billion in lost exports.
We have seen the devastation that Canada is suffering today: 1.4 million Canadians are without work. That is
10.2	per cent of our workforce. The minister has predicted that this number is going to go up at least to 1.5 million Canadians without jobs.
Let us look at what has happened in Ontario, Canada's industrial heartland. In just 12 months, unemployment has increased fully 83 per cent. There are 215,000 more people in Ontario today who do not have jobs than there was a year ago.
When we look at this devastation in terms of the broader issue of how Canada is going to be able to compete, let us look at what has happened to the manufacturing sector.
In the short 26 months since free trade came into effect, 277,000 or fully 13 per cent of Canada's manufacturing jobs have been lost. In Ontario, 145,000 key manufacturing jobs have been lost. Why do I stress manufacturing? Because that is where we take our raw resources. We give them the value added. We sell them abroad. Manufacturing jobs pay about 30 per cent more than comparable jobs in the service industries.
Given those devastating facts, what did the Minister of Finance give us in his budget? Any recognition that by acting in a contracyclical manner he might be able to alleviate some of the hardships and reduce the duration of this made-in-Canada recession? Did he make any attempt to deal with the issue that he raised of international competitiveness? Absolutely not, on both counts.
What did he do to help our businesses? He cut funding for export promotion. He cut support for businesses on all fronts. He cut the Canadian Jobs Strategy program by $100 million. He cut transfers for education and training. He cut science and technology expenditures and he increased by $2 billion the costs that business and employees must pay for unemployment insurance.
I said we were going to hold this government accountable for the choices it made. I believe it is critical and it is only responsible that we should present to this House and to Canadians the alternatives that we believe we have to look at in order to deal with this recession, our declining competitiveness and the enormous job losses which have amounted to the deindustrialization of Ontario.
We have a very different philosophy from the government. If someone was to ask me if I would have increased the deficit in order to make some of the expenditures which are critical to our economic future, I would have said that unless we make some of these investments in our economic future, we will not have an economic future. This is the simple reality.
As we continue to lose more and more jobs, as those jobs go south of the border, as they fold up their plants, never to come back even at the end of a recession, how can we deal with creating the income levels and the tax levels in Canada which we have used in the past to develop a humane society? You just cannot do it, and as this government has shown, we are not going to be able to cut our way out of the deficit, we are not going to be able to tax our way out of the deficit. The Minister of Justice has been trying this. There have been 33 tax

increases since he took office, and still he has doubled our national debt.
There is only one way we will get out of this terrible situation we are in and that is by earning our way out of it. In order to earn our way out of it, we have to make the critical investments. We have to make the investments which our competitors are making. No business can compete unless it has world class machinery, unless it has world class talent and employees. And this involves an investment. You do not become more competitive when you are in business by cutting your highly qualified employees, your well-trained employees and throwing them out the door just because they are paid more than the others; or shutting down your machinery. You have to compete, and business understands this. You borrow because you are going to get a higher return on the dollars that you are putting out.
When I say that we do not just want to be critical of the government, that we want to propose to the government some new approaches, I would like to put forward, for your consideration, some of the general areas where we have to consider changes.
The first is the role of government itself. Part of our economic dilemma in Canada today is a paradox. The paradox is a government which does not believe in government. In no other country in the world that is successful economically is the government giving up its essential role in the wealth creation process.
The government is critical to developing a new spirit of co-operation, which is the first thing we are going to have to do to get Canada moving again. This is the spirit of co-operation among all of the key players who are critical to building a strong economy: our entrepreneurs and business persons, our labour groups, our educators, our financiers and, yes, government.
Government has the critical role of bringing these players together to develop, on a concerted basis, the plans that are necessary for our long-term economic future. That is going to require some co-ordination and planning, after all businesses set five and ten year plans.
Japan set long-term goals for its economy and develops strategies and the government played a strong role through low interest rates, through protecting a domes-
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tic market and through keeping the Yen low so that Japanese products could take over foreign markets.
Canada is good in certain areas and we are going to have to concentrate on the areas where we have a demonstrated success and where we have a strong chance for success in the future. We must recognize that we are not going to be able to be the best at everything. The key to our future growth is going to be our human resources.
In the 1930s, Argentina had the fourth highest standard of living in the world and, today, it is in the mid-30's. Argentina was then a resource-based economy. It is now going downhill.
Canada has been, for too many years, largely a resource-based economy. We have squandered that heritage given to us by shipping it wholesale out of Canada and not adding a value in our own nation. We are going to have to emphasize the human content and this is why we have to invest in our young people in terms of training, in terms of education and in terms of retraining. There is no better investment we can make to ensure our economic future than Canada's workers and Canada's young people. They are going to have to have the latest technologies to work with; research and development.
In 1984, the Prime Minister recognized the need to double Canada's research and development efforts. He made that his election commitment. He has since preached actively on that issue for many, many years. He has given up lately. Why? When his Conservative government took over, research and development in Canada was at 1.42 per cent of our GDP. It has steadily fallen to the abysmal level of 1.28 per cent. Without a monumental national will and commitment to doubling that research and development level so we are approaching even the levels of our foreign competitors, we are doomed to becoming more and more hewers of wood and drawers of water.
Another area where it is critical that we exercise some leadership is in terms of the high degree of foreign control over our economy. This government has always said that we need foreign investment. Well, maybe we need foreign investment to buy some of our debt instruments, but even that decreases our ability to control our own economic future.

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There are over $350 billion in Canada in tax-helped savings. This is an area that we could tap much more creatively to deal with Canadian debt and the need for venture capital. Foreign control over our economy is the highest of any developed country in the world, and it continues to mount. Since the government replaced FIRA with Investment Canada, it has looked at over 850 applications for foreign takeovers.
How many have they turned down, Mr. Speaker? Zero.
With more and more foreign control, more and more of the good jobs, more and more of the research and development, more and more of the tax planning, more and more of the dividend flows, more and more of the inter-company purchases go back to the foreign head office. This is the reality of the multinational corporation. Unless we have our fair share of Canadian-based multinationals, Canadians do not have a hope of competing in the global economy. This is an area where we can improve so much.
I have already talked about monetary policy. There are many other roles that government has to assume in our economy-the infrastructure, a telecommunications system, transportation-all of these areas where government has a key role and where our leading competitors have taken the edge off us and are causing us to de-industrialize, particularly in Ontario. The present situation is bleak indeed, and if the government persists on the course it is adopting, more and more jobs will go south and with them the hopes of a generation of young Canadians. There is another way, but in order to achieve this other way we will need a government that is prepared to assume its true responsibility, to act as only a government can, and to fight for the future of Canada.


Mr. Steven W. Langdon (Essex-Windsor):: Mr. Speaker, I would first like to say to my colleague from Toronto that I thought that was an extremely well put and clearly heartfelt message of concern about the reality which those of us as members of Parliament for Ontario, particularly, see around us in our communities.
However, I do want to raise a question. As my constituents see it and indeed as many constituents that we have talked to throughout Ontario as part of our NDP economic recovery tour see it, they have seen many of these plant closings, they have seen many of the shifts
to the United States and many of the shifts to Mexico as a direct consequence of the free trade deal with the United States. They have seen it as a precursor of what is likely to happen with any sort of three-way trade agreement with the United States and with Mexico.
I suspect that the the member from Willowdale probably shares with me some of the concerns about both the existing free trade deal with the United States and the devastation which it is causing across our province and probably shares with me some of the concerns about what will happen if a trade deal with Mexico is added to that mix. I have not heard from the leadership of the Liberal Party a commitment to get us out of the free trade deal, if the Liberal party is in a position to implement such a commitment after the next election.
I want to ask my colleague, whose views I share on many of these concerns about industrial policy for the future, if he is prepared to make a very clear commitment on behalf of his party that the Liberal Party, if it is in the position to do so after the next election, will implement the six-month clause in the free trade agreement and get us out of that agreement which has hurt so many hundreds of thousands of people across our province?
I recognize that these are hypothetical questions I enter into now. But if we have moved into an arrangement with Mexico, could I also get a commitment from him that that arrangement with Mexico would not be part of his party's policy, but instead we would go about building a position for ourselves in the world as a country which gives us independence, which gives us trade relations with other countries in the world through GATT and which gives us a counter to this destructive set of dependent trade ties which the United States has entered into with this government.


James Scott (Jim) Peterson: Mr. Speaker, we have seen the reality that even without a free trade agreement with Mexico, Canadian jobs have moved to Mexico. We are going to continue to see many of our jobs from the industrial north go to the low-wage areas of the southern United States and moving right to Mexico, whether we have free trade or not.

This is one of the realities we have to deal with. This is why you cannot take a dogmatic approach. We in the Liberal Party believe much of the damage done to Canada's industrial heartland, much of the de-industrialization is part of the free trade deal with the United States, but only part of it. They gave us free trade with the promise of more exports and greater access to the American market. Well, we did not get the secure access.
As I indicated in my opening remarks, at the same time this government increased the value of our dollar by 28 per cent. It gave the Americans a 28 per cent advantage in selling into our market and not buying from us. Then it put our interest rates up to a record, more than 5 percentage points higher than the Americans. Well, how can we compete under free trade with that? The whole problem is not just the free trade. Some of it is going to take place anyway.
We, in our party, have committed ourselves to undoing some of the harm of the Canada-U.S. Free Trade Agreement. In particular, we do not believe that the Americans should have a pre-emptive right to buy all Canadian resources at world prices, even if there is a shortage in Canada. We believe that Canada should have the right, in certain cases, to help its suppliers by giving Canadians less than world prices in order to create jobs here. We want to be able to further manufacture our primary resources in Canada and create the high paying jobs here. I am not prepared to accept the provisions in the free trade agreement that deal with the unlimited right of Americans to further take over Canada's economy.
These are areas which I want to see renegotiated. I am not sure that exercising the six-month clause is the best way to do it. The reality is our government, like it or not, is taking us to the table of the Canada-U.S.-Mexico free trade deal. We as a party do not have our head in the sand like the NDP. We believe we have to be there in order to protect our interests. What we do not think is that this government that gave us the same deal with the United States is competent to give us a good deal with Mexico.
While we recognize the global realities, the globalization of our world marketplaces and our world economies,
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we are not naive, as the NDP often is, about the solutions to some of these things. The answers are very complex. It is not just free trade or no free trade, it is a question of being there to work out the best deal for Canada over the longer term.
This is our commitment and this is how we would approach any of the trade deals.
I want to thank the member from Windsor who has given many thoughtful comments to this House, who has presented many good ideas in terms of how to bolster the strength of Canada's economy, and we look forward to hearing in detail his remarks at a later moment.


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Hon. Audrey McLaughlin (Yukon):: Mr. Speaker, I rise on a point of order to address an issue that was raised last Thursday when I was not in the House by the deputy leader of the Liberal Party concerning remarks I had made on the previous Wednesday about an amendment to the amending formula on the Constitution.
I welcome this opportunity to clarify very briefly my remarks.
I accept the correction made by the deputy leader of the Liberal Party that I was incorrect in saying that the-


Mr. Marchi:: Point of order, Mr. Speaker. I know that the hon. member, the leader of the New Democratic Party would like to respond as we hope she will to the question she raised. I would ask her if she would be indulgent enough perhaps to do it following Question Period and allow us to complete the debate at least until two o'clock on this opposition day motion.


The Acting Speaker (Mr. DeBlois):: I have to remind the hon. member for Yukon that the question and comment period was over and that it was on that understanding that I recognized her.


Audrey Marlene McLaughlin: Mr. Speaker, I appreciate-


The Acting Speaker (Mr. DeBlois):: The hon. member for Ottawa-Vanier.

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Mr. Jean-Robert Gauthier (Ottawa-Vanier):: Mr. Speaker, I was here last Friday when the Liberal House leader rose on this issue. At that time, it was agreed that questions of privilege should be discussed in the presence of the members concerned. In this case, the hon. member who was not there on Friday is here today, but I notice that my House leader is not right now. He will be this afternoon.
Let me ask you this: Is it not fair to rule that the members involved should be present when the question is discussed in the House?


Steven W. Langdon: Mr. Speaker, a veiy brief point of order to suggest that since in fact this question was first raised by the Liberal Party at a time when our leader was not in the House, surely it is now inappropriate for the Liberals to suggest that a response should not be permitted at the earliest possible opportunity, which is what we are availing ourselves of in this case.


Jean-Robert Gauthier: Mr. Speaker, the logic made sense Friday. The logic makes sense today, the logic being that a member who is alleged to have infringed the principles of equity and may have caused harm to another person in this House should be in the House when he or she is being questioned.
I just put it that the House leader of the NDP on Friday, here in this House-I was here-said: "Let's put this off to another time when all members of the House who are being affected by this point of privilege are here".
I put it to the NDP: Let's be fair. The House leader of the Liberals who raised the question accepted on Friday, on the recommendation of the House leader of the NDP, that the whole question be put off until later this week.
For the sake of argument, for logic and for fairness we should maintain that position and wait for the House leader of the Liberal Party to be here to discuss this matter with the leader of the NDP.


The Acting Speaker (Mr. DeBlois):: I am no procedure expert, but the point made by the hon. member for Ottawa-Vanier seems logical and reasonnable to me. Besides, I would have liked to hear the full clarification the hon. member for Yukon had to offer. Under these
circumstances, I am ready to recognize the hon. member for Yukon.


Audrey Marlene McLaughlin: Mr. Speaker, certainly it is not a good use of the time of this House to infringe on the time of the Opposition Day of the Liberals who are discussing a very important subject that really does concern Canadians.
Let me simply say, in completing my point of order, that I accept the correction of the deputy leader of the Liberal Party. When I made reference to the fact that the Liberal Party did not accept an amendment we put forward, I was incorrect. In fact that amendment had been ruled out of order by the Speaker.
My point was simply to clarify that, as I said I would do at the earliest possible convenience. That is what I have come to do today.


ALLOTTED DAY, S. O. 81-THE ECONOMY
[Stage Direction]
The House resumed consideration of the motion of Mr. Peterson (p. 18259).
Mr. John McDermid (Minister of State (Finance and Privatization)):: Mr. Speaker, the opposition motion to which I am speaking today combines a credible concern with improving the long-term economic health of Canada with a wrong-headed approach to getting the job done.
I sat and listened with great interest to my hon. friend for Willowdale who has been known from time to time to speak out on these issues. He made some pretty blatant statements this morning that everybody was laying off and industries and so on were going to hell in a hand basket, which really is not factually correct. There are industries that are hiring. There are very positive results from the free trade agreement.
One of the things that the opposition failed to recognize was that the free trade agreement is a long-term agreement which goes over a 10-year period. We are well into our third year now of the free trade agreement. We have completed two years of the free trade agreement, and some of the results are very good. We are very pleased with them.
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For example, Canada increased high-tech exports by $4 billion since the deal, while such imports from the United States fell by $600 million. Obviously in the high-tech area, the area that the hon. member talks about or the value added area, we are doing much better. Resource exports declined during that period of time.
It says here: "During the first 22 months of free trade Canada not only posted slightly better numbers than the United States, but made its gains in high-tech and capital intensive industries rather than selling off resources." That was a research study done by the Canada West Foundation, a non-partisan and federalist organization.
Ever time a report comes out that does not agree with the opposition, obviously it is suspect. If it agrees with with opposition, it is wonderful. I see my hon. friend from Willowdale over there chuckling to himself, but he knows that is very true.
I am very optimistic about the free trade agreement. I think back to when the auto pact was signed by a Liberal government of the day.
I can remember the New Democratic Party at that time flailing away at it, together with the auto unions, saying that it was one of the worst pieces of negotiation that had ever gone on, that we had sold out the Canadian auto industry, and so on and so forth.
Two and a half years into it and we are calling for it to be completely amended or wiped out. Today the same group protects the auto pact most vehemently. That is fair ball.
I am sure that when the free trade agreement is fully implemented, when the second round of acceleration of tanffs is announced in the not too distant future, it will be very obvious that we will have some great advantages in the free trade agreement. Restructuring is going on, and that is exactly what we expect to go on in this country. It is a very positive thing. It is going to assure Canada that it will have its rightful place in world trade; not just trade with the United States and down into South American but world trade. The restructuring that is going on is very important.
I think my hon. friend from Willowdale would agree with that. He has not totally annihilated the free trade agreement like the New Democratic Party would. He
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said that there were some areas they would like to look at perhaps to renegotiate, and that is fair ball. I can understand that. In any negotiations you win some and you lose some. That is the way negotiations go on.
The New Democratic Party however would wipe out the free trade agreement. It would go back to the old protectionist days of putting up tariff barriers-


Mr. Brewin:: Sir John A. Macdonald.


John Horton McDermid: Sir John A. was back 125 years ago. Are you telling me that the New Democratic Party is going back 125 years? I say: "Yes, it is". That is the problem with the New Democratic Party. It cannot get in step with what is going on in the modem world. That is exactly why it is behind the eight ball. That is exactly why it will never form a federal government. It wants to go back to the old ways, put up the tariff barriers, put up high tariffs on everything, and protect this little island called Canada. Never mind that we trade 35 per cent of what we produce, never mind that; the hon. member wants to go back to the old ways, the old high tariffs. That is what he wants.
That is what New Democrats are talking about over there. I am not sure that his friend from Windsor would agree with that. The hon. member should maybe get together with him. Maybe he wants to wipe out the free trade agreement and go back to the old tariff walls and so on, but I do not think he does. I really do not think he does. I sat with him throughout the free trade debate, and I think he found a lot of positive things within that as well. Am I not correct?


Steven W. Langdon: Is that a question?


John Horton McDermid: Certainly. He is smiling and nodding his head.


Steven W. Langdon: The answer is no.


An hon. member:: He said no.


John Horton McDermid: Certainly he found some very positive things in the free trade agreement. I am sure he will find more as time goes on.
The February 28 budget lays down the-


Steven W. Langdon: Mr. Speaker, I hesitate to interrupt the minister's flights of fancy here, but it should be made very clear that this party continues to oppose the free trade deal and that I said so from my seat when he threw this ridiculous question at me.

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The Acting Speaker (Mr. DeBlois):: I will recognize again the Minister of State for Privatization and Regulatory Affairs.


John Horton McDermid: Mr. Speaker, that was very important and added a great deal to the debate.
My hon. friend, who has now left the House but whose debate this is, was pointing out that the trade surplus had dropped somewhat in Canada. I think he said $10 billion. It is around $13 billion. I had dropped. One of the things he forgot to mention, though, in his speech was the increase in trade. There has been a huge increase in international trade from Canada in that time period.
Of course, trade is two way; we import as well as export. The amount of increase in trade has been very interesting in the free trade period. Seven of ten provinces posted trade increases to the United States since the free trade agreement. He did not mention that. I am not sure why, but I guess it did not really support his argument that he was trying to give. That is probably why he did not do it.
Of the three provinces that are down, British Columbia is one where the export of wood products is down rather dramatically because of the lack of house building in the United States. We know that that is down. We know that the province of Saskatchewan is down about 3 per cent. That has to do with prices for the product that it produces out there. New Brunswick was down somewhat.
In the time left, I want to talk a little bit about our plans to correct some of the economic problems we are experiencing in this country and in fact for economic renewal. In doing so, I believe the budget of February 26 addresses the overriding issue, that is getting Canada out of the current recession and back to renewed growth and job creation.
However, it is a budget also that makes a crucial watershed choice about how renewed prosperity must be achieved and sustained. The plan for economic recovery aims at nothing less than a fundamental change in the political culture of budget making and government spending, and in attitudes and behaviour of Canadians regarding inflation.
Yes, we need to change political culture, political attitudes and expectations. This is because the key to economic recovery now and stable sustained growth in coming years lies in establishing the basic conditions for lower interest rates.
We have heard the message loud and clear during pre-budget consultations with all sectors of society. I met with a number of them, including senior citizens, arts groups, and women's groups in this country. Loud and clear, consistent from every single group that we met in pre-budget consultations, was the message: lower interest rates are the fuel to boost consumer spending, to reignite the construction industry and create affordable housing, to assist farmers in times of uncertainty, and to help business invest in the new equipment research and training that Canadians need to succeed in this fiercely competitive global market that I referred to earlier.
The plan for economic recovery is a clear message for Canadians in turn. Market forces are the real and final arbiters of interest rates, not governments and not the Bank of Canada. The only economically sound foundation for lower interest rates is a substantial reduction in inflation and, I might add, in Canadians' inflationary expectations. That is why the plan for economic recovery takes innovative action through setting realistic public inflation targets to help make this happen.
Just as important, the plan directly supports and reinforces these targets through rigorous new discipline in three key areas: government spending control, deficit and debt reduction, and wage restraint. Better financial management by government is a vital element of the economic framework Canada must put in place to achieve recovery and sustain prosperity.
Such management will restore public confidence that our prospects for lower inflation and interest rates and for real gains in productivity and individual prosperity will not be swallowed up in the quagmire of government deficits and debts and in the higher taxation that these demands cause.
Better government control of its finances will help to motivate people in how they act and think, in setting prices, in making wage demands, and in the ways they want government to use its finite resources.
It is these changed expectations and behaviour that will make possible the most significant reductions in inflation and interest rates. We know this because we have not forgotten our history. In designing our plan for
March 11, 1991

economic recovery we have drawn on important lessons from the past.
For nearly 25 years, from 1950 through 1973, Canadians enjoyed an outstanding record of economic growth and personal prosperity. Our standard of living virtually doubled in that period of time.
This growth was not accidental or automatic. It resulted from sound economic policies. Inflation was less than 3 per cent during that period of time. This kept interest rates down. Annual federal deficits were small or non-existent. Boy, talk about the old days. Business investment grew strongly and we became more productive and wealthier.
Then along came that 1974 to 1984 period. Governments let inflation soar. They forgot about the lessons between 1950 and 1973. They just let inflation take off. They spent much more than they received in taxes. We were living beyond our means. The deficit jumped to $38 billion annually and the national debt surged from $27 billion to more than $200 billion. It was no wonder then that the 1974 to 1984 period saw economic growth and productivity fall as business was battered on two sides, by increasing government intervention, taxation and debt, and by growing global competition from foreign industry. A declining Canadian dollar was not able to counter these problems.
As we heard today, while that may be part of the problem today, it is not entirely the whole story. We still suffer the consequences: interest payments on that 1984 debt, just the interest, not for programs, not for senior citizens, not for health care or for secondary education, 80 per cent of our subsequent deficits, pushing our debt to nearly $400 billion a day. It has all been interest, 80 per cent interest.
Since 1984 we have worked to rebuild the underlying conditions for economic prosperity and we have made some progress, especially considering where we started from. The growth of the debt has been slowed. The deficit is still too high. I am the first one to admit that and we all are. The deficit is a way too high. It has been cut in half since we came to office as a share of our national income. Inflation has been held in check to about half of what it was between 1974 and 1984.
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We have implemented historical, structural reform to boost efficiency and growth potential. Of course I refer to the deregulation of the energy and transportation sectors; tax reforms such as the GST makes Canadian firms more competitive both home and abroad; and the Canada-United States Free Trade Agreement, which I touched on earlier, giving us secure access to the world's largest market.
To help Canada overcome its current problems and to lay deeper foundations for lasting prosperity, more needs to be done. The plan for economic recovery takes these fundamental, decisive steps. They include restraining wage increases for the federal Public Service and members of Parliament over the next four years, extending the expenditure control program to 1994-95, making it a law that all revenues from the goods and services tax are used only to bring the public debt under control and are not spent on other things, and passing legislation that sets absolute limits on government program spending for the next five years.
These actions will produce concrete results. The deficit for 1991-92 during this recession period will be held to $30.5 billion despite the problems we are experiencing. By 1995-96 it will have dropped to just $6.5 billion. That is the lowest deficit in nearly 20 years.
As well, the need for new government borrowing on financial markets will be eliminated even sooner, by 1994-95, and this is the goal that we set out in our 1989 budget. That will represent, for the first time in 25 years, that no such borrowing is needed.
To deliver these results the budget was tough, but it is also sensitive to the real hardships currently facing many Canadians. That is why expenditures will grow substantially more in 1991-92 than in the years following: 6.9 per cent compared to an average of only 3 per cent for the entire five-year period.
Mr. Speaker, may I call it two o'clock and conclude my remarks immediately following Question Period?


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


STATEMENTS PURSUANT TO S. O. 31
[Stage Direction]
[Translation}

Mr. Guy Saint-Julien (Abitibi):: Mr. Speaker, Donohue intends to rebuild, at a cost of $8.7 million, its crosscutting and debarking plant in Comtois, in the Abitibi, which was damaged as a result of a fire last December. Work will start on the plant this April and is expected to be completed by the end of August. It will be one of the most modem plants in Eastern Canada. Rebuilding the plant will help stabilize 400 jobs, including forestry workers.
Donohue wants its plant to be ready for the economic recovery anticipated in the second half of this year. This is very good news for forestry workers in Comtois, Lebel-sur-Quevillon, Senneterre, Barraute and the Abitibi. Mr. Speaker, I personally would like to thank Donohue management for this excellent decision.


CITIZENS' FORUM ON CANADA'S FUTURE
Jean-Robert Gauthier: Mr. Speaker, on February 28, the government tabled a budget estimate of $17.9 million to pay for the expenses for this fiscal year of the Citizen's Forum on Canada's Future. This House immediately referred the matter for scrutiny to the Standing Committee on Consumer and Corporate Affairs and Government Operations.
Our rules impose a deadline for the study, and by March 21, the committee must report or Parliament will have failed in its duty to examine how public funds are spent.
This committee has not met since last September when its chairman resigned. The government has repeatedly refused to reconvene the committee. It is high time the members of Parliament examine carefully this expenditure of taxpayers' money. The government must make sure that this committee meets within the next few days.
Mr. Speaker, there are ten days left before the deadline. I, for one, believe that the Spicer commission can make an important contribution to the ongoing
debate on this country's future, but the atmosphere has to be improved. Parliament must be involved. This House must make a thorough and serious examination of the commission's budget. To fail to do so would be a serious breach of the trust placed in Parliament by Canadians. This commission must be given a chance.


ROYAL CANADIAN MOUNTED POLICE
Mr. Lyle Dean MacWilliam (Okanagan-Shuswap):: Mr. Speaker, tonight it will be safe to walk the streets in rural communities across Canada, but how safe will it be after March 31 if they lose their visible police force?
Funding for the RCMP had already been hacked by $19.4 million last year by this government. For the division that polices communities in British Columbia, that has meant a $4.1 million reduction in funds. Services like detachments in rural communities, training, and patrols have been slashed in order to cope with these budget cuts. Rural communities across this country like those in my riding, communities like Enderby, Falkland and Lumby, risk losing their visible police force presence as services are rationalized and reduced.
The choice for the provinces and the municipalities is clear: either pick up the tab or close detachments and leave communities without an effective and visible police force.
I urge the Solicitor General to reconsider his actions. Our embattled country cannot afford to lose yet another national symbol. Our small communities merit the level of protection that they have enjoyed.


NATIONAL SOCIAL WORK WEEK
Mrs. Barbara Sparrow (Calgary Southwest):: Mr. Speaker, from March 11 to 16, the Canadian Association of Social Workers will be celebrating the first annual National Social Work Week in Canada.
Social work is a profession with a long history of commitment to improving the well-being of people in society, particularly those people with special needs. Today's social workers are employed in family agencies, hospitals, seniors' programs, and child protection services. They may work directly with individuals, groups,

and communities, or on their behalf through research, social policy, or planning groups.
The 11,000 members of the Canadian Association of Social Workers should be recognized for their valuable contribution to the betterment of society. We wish them every success in the celebration of National Social Work Week.


REGIONAL AIR SERVICE
Mr. David Dingwall (Cape Breton-East Richmond):: Mr. Speaker, Transport Canada's cost recovery proposals threaten the economic and social well-being of regional air service.
In Atlantic Canada, Air Nova and Air Atlantic, under these new proposals, would face as much as $1 million in extra costs for this year alone. Traffic losses as a result of the fare increases that would follow these operating cost increases could be as high as 30 per cent on prop-jet services.
The cost recovery proposals of Transport Canada will most likely mean that services to smaller communities will be reduced and employment in the commercial aviation industry will decline. Thus, these proposals will alienate our smaller communities even more.
We cannot afford any more job losses and we cannot afford to isolate regions of the country, especially at a time when the future of our country is at stake. We need policies that bind our country together. The smaller regions of this country have just as much of a right to quality air service as the larger centres of Toronto, Montreal and Vancouver.


SALON DE LA FEMME
Mrs. Suzanne Duplessis (Parliamentary Secretary to Minister of State (Science and Technology)):: Mr. Speaker, at the twenty-first Salon de la femme in Quebec City, 14 Quebec women received special honours.
They are: Claire Bonenfant of the Federation des femmes du Quebec; Mary Lamontagne, S.O.S. grossesse;
Francine Roberge, Federation des infirmieres; Elisabeth Laliberte, Viol-Secours; Louise Clement-Tessier, Association des femmes d'affaires du Quebec, Yolande Dumonti-er, Carrefour families monoparentales de Charlesbourg; Agathe Leveille, Alliance professiormelle des infirmiers et infirmieres; Celine Dube, Association des religieuses pour la promotion de la femme; Hughette Labrecque-Marcoux, AFEAS; Therese Legare, Centre femmes d'aujourd'hui; Jacqueline Dumont-Robitaille, Cercle de Tamitie de Saint-Romuald; Noella Huot, Cercle des fermieres du Quebec; Cecilia Gaudet, Reseau national d'action education-femmes; and Denise Perreault, Parents uniques.
Each in their own way, these women have given freely of their time and energy to help other women make better lives for themselves, and I think they deserve our thanks and congratulations.


AIR TRAFFIC CONTROLLERS
Sergio Marchi: Mr. Speaker, the shortage of air traffic controllers in Canada has caused them to take desperate actions in these desperate time. Witness last Wednesday when an air traffic controller had to shut down operations in Halifax due to chronic overwork.
Regrettably, the situation faced by our control tower operators is not an isolated or a regional one, but one of national implications. To make matters worse, the federal budget recently cut the air navigation system by $48 million, further reduced it by 20 person years and also decreased the expansion of air traffic controllers by 43 per cent.
In terms of public safety, these cutbacks are absolutely absurd. I call upon the Minister of Transport to do three things. First, conduct an immediate and open public investigation into the Halifax occurrence; second, ensure that the full complement of air traffic controllers are hired as soon as possible; third, that the Minister of Finance reverse these budget cuts very quickly.
Given the recent developments, it is the Minister of Transport who is asleep on the job, not Canada's air traffic controllers.

March 11, 1991


COMMONWEALTH DAY
Mr. Girve Fretz (Erie):: Mr. Speaker, today is Commonwealth Day. I would like to read two short paragraphs from the message from Her Majesty the Queen, the head of the Commonwealth.
Each year, the Commonwealth Day celebrations draw attention to the multi-nation, multi-race and multi-faith nature of this unique organisation. But we should also be looking at ways to make practical use of these advantages. I therefore welcome the idea that this year the theme of the celebrations should be "Science in the Commonwealth"-
The Commonwealth, with its many well tried channels of communication and consultation, is uniquely placed not only to enable member countries to keep abreast of scientific advances, but also to help them benefit from their practical applications. I believe that the Commonwealth tradition of quiet co-operation and its advantage of common language can make a special contribution to the practical application of science wherever it is most needed for the sake of human welfare as well as for the long-term health of our planet.


NATIONAL SOCIAL WORK WEEK
Mr. Jim KarpofT (Surrey North):: Mr. Speaker, the Canadian Association of Social Workers will be celebrating its National Social Work Week in Canada from March 11 to March 16.
Social work as a profession has always been involved in working with disadvantaged people, in attempting to improve their well-being and their position in society. Social workers work with abused children, frail elderly, families in difficulty, the unemployed, the mentally ill and disadvantaged communities.
Social workers not only attempt to assist individuals and groups who are disadvantaged, but have also been leaders in social action movements aimed at bringing about basic social and economic reforms. Social workers are now in the front line, helping people that have been savaged by this government's economic and social policies.
The Canadian Association of Social Workers represent social workers right across Canada. This House recognizes their contribution to the well-being of Canadians and to the improvement of Canadian society.


PROMOTIONAL FLYERS
Mrs. Marlene Catterall (Ottawa West):: Mr. Speaker, on Saturday, March 9, while women across the country and around the world rallied to mark International Women's Day, in the Byward Market, just a five-minute walk from Parliament Hill, Zap Dance Bar distributed disgusting, sexist promotional flyers on hundreds of cars.
In language and in visuals the message was clear, and I quote: "Buck-a-shot, where a dollar buys you more than you think." The accompanying caricature of a scantily clad woman with a smoking gun and a hand full of cash, is offensive not only to women but to all people concerned about the dangers of sexism.
I call upon the Zap Dance Bar in Hull, just down the street from the Lido, which this government knows well, to withdraw immediately this advertising. I challenge them to use the profits they have made from this disgusting and damaging exploitation of women to make a contribution to a women's shelter in Ottawa-Hull.
We may have marked how far women have progressed on International Women's day, but this kind of trash reminds us we have taken only small steps along a long road to a decent society.


CANADA WINTER GAMES
Mr. Albert Cooper (Peace River):: Mr. Speaker, just over a week ago the Canada Winter Games came to a close in Charlottetown, and I would like to commend all Islanders for an outstanding job.
The Canada Games are a testimony to the partnership of the public, private and voluntary sectors of our society. The Government of Canada contributed about $18 million to this celebration of sport and youth. The legacy of capital facilities, together with the wonderful memories and friendships that were generated, will live on to serve well the children and grandchildren of Prince Edward Island.
1995 will see a significant milestone in the history of the Canada Winter Games. Grande Prairie, the largest community in my riding of Peace River, will serve as host city, the most northern host city of any Canada Winter
March 11, 1991

Games. In thanking P.E.I. for their wonderful hospitality during this year's games, I invite Islanders and all Canadians to Grande Prairie in 1995. Come and experience northern Alberta hospitality.


AIR TRAFFIC CONTROLLERS
Ms. Mary Clancy (Halifax):: Mr. Speaker, I call upon the Minister of Transport to act immediately to investigate the situation at the Halifax International Airport and to assign more air traffic controllers to that airport at once.
Last week, the under-staffed control tower was shut down for two hours by a controller exhausted from two 16-hour shifts in less than two days. The unidentified controller worked the extended shifts for a sick co-worker.
The controller on duty at Halifax is not to be blamed. He acted wisely and responsibly. As he was working his second 16-hour shift in two days, he understandably became tired. It was the proper course of action in the best interests of safety to turn his responsibilities over to Moncton. Nevertheless, one wonders what would have happened had an emergency situation developed at Halifax and what will happen in the future while understaffing remains a problem.
One wonders if it may not be the government's intention to see if Moncton's flight service centre should handle Halifax's much busier airport. Nova Scotians, however, are not prepared to accept that there is a suitable substitute for on site staff control facilities.
The controllers are an essential part of aviation safety and they must be located at all major airports handling passenger flights. The cutbacks to air traffic controllers, begun in the middle 1980s and continued in the most recent cuts are-


Mr. Speaker:: The hon. member has exceeded her time.


PUBLIC SERVICE
Mr. Geoff Wilson (Swift Current-Maple Creek-As-siniboia):: Mr. Speaker, the Public Service Alliance of Canada and its president, Daryl Bean, have been intemperate in their response to the recent federal budget,
which restricts public service wage increases to 3 per cent per year over the next three years.
"Absolutely insane" rants Mr. Bean, while threatening a strike and suggesting that public service members defy any possible back-to-work legislation.
Can this be the same Public Service Alliance of Canada which has imposed a 3 per cent wage settlements on hundreds of its own employees? Is this the same Public Service Alliance which last year endured a strike from its own secretarial and administrative workers in order to arrive at a 3 per cent wage settlement?
Is this the same pretentious Daryl Bean who says it is okay for PSAC to give its employees 3 per cent and yet, in the same breath, says it is "absolutely insane" for the Government of Canada to do the same thing?
What sanctimony, Mr. Speaker, what utter hypocrisy. It is time the PSAC sought credible, responsible and consistent leadership.


CANADIAN ARMED FORCES
Mr. Howard Crosby (Halifax West):: Mr. Speaker, over 100 members of the Canadian Armed Forces arrived today at CFB Shearwater in Halifax County. I am sure all members want to join in welcoming these proud Canadians back to their home and native land.


Some hon. members:: Hear, hear.


Howard Edward Crosby: It is time parliamentarians looked beyond the very moment of the day to the role played by our military forces in Canada and beyond. Paraphrasing the words of Sir Winston Churchill: "If we do not give them the tools, we cannot expect them to do the job".


LAND CLAIMS
Mr. Brian L. Gardiner (Prince George-Bulkley Valley):: Mr. Speaker, on Friday the B.C. Supreme Court Chief Justice brought down his decision in the Gitksan-Wet'suwet'en land claims case.
In a decision that has set back many important previous decisions, the Chief Justice ruled that the Gitksan-Wet'suwet'en have no aboriginal claim to the area they have lived in for years.

Oral Questions
The Chief Justice said this was "a political trial". Indeed, the reason for the case was because the provincial government had refused to negotiate land claims in the first place.
This ruling, which may be appealed, should not be used by either the B.C. government or the federal government to avoid negotiating and resolving the land claims issue.
Both governments have an opportunity and an obligation to show leadership by ending years of discrimination and mistreatment of aboriginal people in Canada by taking the questions of self-government and land claims seriously.



ORAL QUESTION PERIOD


Ms. Sheila Copps (Hamilton East):: Mr. Speaker, in the absence of the Prime Minister, I direct my question to the Acting Prime Minister. We live in the freest, most democratic and most varied country in the world. Hundreds of millions of people would like to live in Canada. Frustrations certainly run deep, but then opportunities are unlimited. As members of the Parliament of Canada we are duty-bound to take every means necessary to renew the federal system. In addition to what is already being done, Parliament must advocate specific propositions on all aspects of constitutional reform. With that in mind, when will the Prime Minister finally widen the mandate of the Beaudoin-Edwards Committee?


Hon. Pierre H. Cadieux (Solicitor General of Canada):: Mr. Speaker, I should think that all members of the House agree with the preliminary remarks of my colleague concerning the importance of Canada and how hundreds of thousands if not millions of people in the rest of the world would like to live here and continue to build this country as we would all like Canada to be. With respect to the specific question of my colleague, Mr. Speaker, the Prime Minister said on many occasions that indeed he had struck appropriate committees to examine the issue and urge all participants to come up with a constitutional amendment which would meet the expectations of all Canadians. I am sure all people will strive to achieve that goal.


Sheila Maureen Copps: Mr. Speaker, from time to time, all members of this House have honest differences, but there is one thing upon which most of us can agree and that is that we have a great country. It is worth saving.


Some hon. members:: Hear, hear.


Sheila Maureen Copps: Clearly, in saving this country there is a role for the federal Parliament to play in examining the specific issues of division of power.
I ask the Acting Prime Minister in place of the Prime Minister: When will the government allow the Parliament of Canada to have a real say in the constitutional issues that are facing our country at this critical time?


Pierre H. Cadieux: Mr. Speaker, as I said in French a few minutes ago, I think every member of this House would agree with the preamble of my hon. colleague with respect to the importance and greatness of this country and how so many people outside would like to be part of it.
With regard to the specific question, the Prime Minister has answered that question on many occasions. He has indicated that he has set up various commissions or committees in order to look at the constitutional question and to find, particularly, a better amending formula.
Parliament, as usual, will take its part in the debate. As suggested by the Prime Minister last week I believe, if the hon. member wants to use an Opposition Day to discuss this question, she is welcome to it.


Sheila Maureen Copps: Mr. Speaker, we are talking about the approach of an all-party parliamentary committee to examine all the issues relating to the Constitution, not merely the amending formula.
For the Prime Minister or representatives of his government to suggest that the deed could be done on a single Opposition Day is simply senseless. I would like to ask the Acting Prime Minister once again. The constitutional clock is ticking. The best chance that we have for a national consensus to save this country must emanate from a public parliamentary process.
March 11, 1991

I want to ask the Acting Prime Minister when he and his government will be prepared to table in this House the public parliamentary process that will lead to real constitutional reform.


Pierre H. Cadieux: Again, Mr. Speaker, as was addressed by the Prime Minister on a number of occasions, it is important to have a public forum in order to discuss these very important issues because that is one of the things that Canadians had against the Meech Lake process. That is exactly what the Spicer commission is all about. I invite all Canadians to make their views known to that particular commission, and I am sure that in due time all parliamentarians here will have the occasion to participate in an appropriate debate.


BANK OF CANADA
Mr. John Manley (Ottawa South):: Mr. Speaker, my question is for the Minister of Finance. The minister will agree that if his own budget projections are going to be achieved, Canadians must become convinced that inflation will come down.
Does the minister still believe that the Bank of Canada and its governor have the credibility to reduce inflationary expectations of Canadians when the bank's annual report reveals that wages at the bank itself rose by 9 per cent last year and the governor's own wage increased by about 4.2 per cent?
Does the minister condone these increases, or is he willing to ask the bank to set the example he expects Canadians to follow?


Geoff Wilson: Mr. Speaker, I think that my hon. friend is aware of some of the details of the figures that he is talking about, but I would like to get these on the record for the House.
The increase in the salary bill last year for the Bank of Canada is based, first and foremost, on a 4 per cent basic structural increase for employees at the Bank of Canada. In addition to that there was a 1.2 per cent effective increase as the bank upgraded the quality of its staff by laying off people who were replacing people who were in low-income areas with people who were more highly
Oral Questions
qualified and therefore people who would be paid more money.
The final point is that there is an element of increase based on the performance pay that employees of the staff were getting.
As far as the salary of the governor is concerned, we found that there were a small number of senior officers of Crown corporations who had not received an increase for the last year. All the deputy ministers and a number of other senior members of Crown corporations had received a salary increase, so we thought it was only fair and appropriate to give the limited number who were still left the same increase.


John Paul Manley: Mr. Speaker, I believe Canadians will be incredulous to hear that the governor of the Bank of Canada and his employees got a performance pay increase for what they have done to Canada in the last couple of years.


Some hon. members:: Hear, hear.


John Paul Manley: In the last 10 days the minister admitted that his pre-1980 election tax reform was the wrong policy for the time. Now the governor has admitted that his monetary policy of the same time was wrong. Who is going to pay the performance penalty for the recession that those policies have brought on? How about the minister and the governor?


Geoff Wilson: Mr. Speaker, it is all very well for my hon. friend to make these statements, but he was one of the ones standing here in the House saying: "Don't increase interest rates because that would be the wrong thing to do".


Some hon. members:: Hear, hear.


Mr. Wilson (Etobicoke Centre):: What we have found and what the Governor of the Bank of Canada said in his statement was that the economy was going very strongly in that period and that possibly if anything interest rates might have been a little higher. That would have been the opposite of what my friend is saying now so he is trying to get on both sides of the issue once again.


Some hon. members:: Oh, oh.


THE CONSTITUTION
Audrey Marlene McLaughlin: Mr. Speaker, my question is for the Acting Prime Minister. We heard over the weekend the premier of Quebec say he only wanted to have negotiations on a bilateral basis with the federal

March 11, 1991
Oral Questions
government. We know from last week that the finance minister is planning to negotiate and discuss new fiscal arrangements with the provinces and we have a number of committees and commissions that are now studying the constitutional issue.
My question to the Acting Prime Minister is simply this. Will he commit today, on behalf of this government, that there will be no negotiations with any one province or any group of provinces until the Canadian people have been heard and until all of the commissions and committees have reported?


Hon. John C. Crosbie (Minister for International Trade):: Mr. Speaker, there will be no such commitment. The government will carry on in the normal way dealing with the provinces of Canada with respect to fiscal matters as well as others. The fiscal agreements that the hon. Leader of the New Democratic Party is referring to are not routine exactly, but matters of regular government business. A five-year term of the equalization agreement expires next year and there are going to be a series of discussions and negotiations with the provinces on fiscal agreements between the Government of Canada and the provinces, that is from a fiscal point of view, rather than a constitutional point of view.
No one is suggesting any change in jurisdiction. This is a matter of a transfer of funds from the Government of Canada to the provinces. We will be continuing to carry out the business of Canada in the normal manner, as the people of Canada expect.


Audrey Marlene McLaughlin: Mr. Speaker, I think it is important that the government assure Canadians that there are no negotiations that are going on on a bilateral basis that will affect future constitutional talks. I would also in the same aspect like to raise another matter.

The Prime Minister said that the deputy ministers meet to advise the government on national unity. Will the Prime Minister or the government immediately table in the House the terms of reference given the deputy ministers? Can he also give us the assurance that the final product will be tabled in the House and made available to all Canadians?

Hon. John C. Crosbie (Minister for International
Trade): Mr. Speaker, there is nothing unusual in that the procedure that has been adopted with respect to advice to the government on constitutional matters. Deputy ministers of the government are there to administer government departments and to give the government advice.
The Prime Minister has sought the advice of certain or all of the deputy ministers of the government in connection with possible constitutional negotiations and they will give the government their advice when they have completed their work.
There are no terms of reference that can be tabled here today. The results of the advice given to the government will be used by the Prime Minister and members of the government insofar as they think the advice is the kind that should be followed by the government. As events proceed, we will see what advice the government is acting upon.


Audrey Marlene McLaughlin: Mr. Speaker, I think if anything is clear from ongoing constitutional negotiations in Canada, it is that this has to be a constitutional round for all Canadians. The court ruling by the B.C. Supreme Court last week against the Gitksan-Wet'suwet'en raised a lot of questions again for people about aboriginal title and aboriginal rights, particularly in that ruling suggesting they do not apply in B.C.
I think what this means is that this government must give a commitment to all Canadians indeed in this round of constitutional talks we have an urgency to deal with outstanding aboriginal issues and it must be done in this round. This must be a round for all Canadians.
Can the Acting Prime Minister assure this House that aboriginal issues will be a substantial part of this constitutional round of talks?


John Carnell Crosbie: Mr. Speaker, this constitutional round, it is agreed I believe on all sides, is for all Canadians, all provinces, all issues and all of those who have an interest, including the aboriginal groups in Canada. Aboriginal interests and issues will certainly be a part of the discussions that take place in this constitutional round. That has been made clear.

We are trying to involve the people of Canada as widely as possible in this discussion, as are a number of the provinces. That is the purpose of the function of the Spicer commission that was set up by the government and which commission was attacked last week in such a deplorable manner in this House of Commons.
We are trying to involve the people of this country as much as we can in the discussions and get their views. Certainly aboriginal issues will be an important part of the matters to be discussed, and hopefully settled.


POST-SECONDARY EDUCATION
Mr. Ronald J. Duhamel (St. Boniface):: Mr. Speaker, my question is to the Minister of Finance.
A week ago last Wednesday the Minister of Finance would not admit in this House that he had indeed cut funding to post-secondary education. I want to quote from the tabled estimate documents, which read: Secretary of State, EPF post-secondary education payments- that is referring to transfer payments-changed. There is a minus in front of the $485.8 million.
When is a cut a cut? Why this double-talk? Will the minister stand up in the House today and admit to Canadians that he has indeed cut cash payments to provinces for education, thereby threatening Canada's competitiveness and our nation's quality of life?


Geoff Wilson: Mr. Speaker, the opposition member has finally used the right word. I have never said that the cash payments were not cut. What I did say is that the total payment, the cash plus tax transfers, will be increasing by the population growth, and that is a continuation of what we did starting in the 1990 budget.
I should point out to my hon. friend-and this might be unusual for me, Mr. Speaker-a quote from Leonard Shifrin. "The blinkered Liberal and NDP rhetoric is not on the mark." He went on to say: "Scoffing at its plan to amend the Fiscal Arrangements Act so medicare standards can continue to be enforced is downright danger-
Oral Questions
ous; what they should be doing is pushing the government to deliver on the measure."
We are committed to delivering on this measure. But the point that I want to make is that the total transfer, the tax and cash transfer, is not being cut. The hon. member would be well advised to look at the substance of it.


Ron J. Duhamel: The minister's source does not understand any better than he does.

Last year, the Association of Universities and Colleges of Canada and the Canadian Federation of Students predicted that cash payments would be cut in Quebec in 1997, in Ontario in 1999 and in the other provinces soon afterwards. The freeze the government has just put on these payments has made the situation worse. The federal government is withdrawing completely from cash payments. Why is the minister taking away from the poor and the poorest regions? Why does the government insist on attacking the programs that unite us as a country?


Geoff Wilson: The total amount of the major transfers that the federal government will be making to the provinces in the next five years is $183 billion. That is a significant amount of money and the provinces can use that in support of medicare or post-secondary education or other forms of education or highways, whatever they want to do.
The point is that the tax transfer is a substantial amount of money, and it will continue to grow.
My hon. friend made the comment that we were penalizing the lower income parts of the country. On the contrary, we have designed this so that the total transfers will increase at 3.7 per cent per annum over that five-year period. For the Atlantic provinces it will grow in excess of 4 per cent, and for the non-equalization receiving provinces of Ontario, Alberta and B.C., it will be about 2.5 per cent.
So, we have structured this in a way so that there is greater growth in those regions of the country which need the help the most.

March 11, 1991
Oral Questions


EMPLOYMENT
Mr. Alfonso Gagliano (Saint-Leonard):: Mr. Speaker, my question is directed to the Minister of Finance. Conservative policies have lead to 150 layoffs at Black & Decker, 150 at Marconi and 2,000 at CN, which makes a total of more than 7,000 layoffs in Montreal in a matter of months. Today in Montreal, one person out of four is living below the poverty line. Montreal now has the highest poverty rate in this country. There are more than
222.000	unemployed workers in Montreal. My question is directed to the Minister of Finance: When does he intend to table in this House, before Canadians, an economic policy that will create jobs for the people of Montreal?


Hon. Tom Hockin (Minister of State (Small Businesses and Tourism)):: Mr. Speaker, the hon. member speaks of the lay-offs in his region of Quebec. The government is sympathetic and understands the enormity of change in certain ridings in the industrial structure in Quebec. However, I remind the hon. member that we have
1.280.000	more people at work today than in 1984. I remind him as well that the manufacturing base of Canada, according to the Royal Bank in its report of December 19, 1990, is almost 10 per cent above what it was at the end of 1982.
The strength of the Canadian economy is still there, but if it will be matched by further declining interest rates and further declining inflation, I am sure that we will see a real amelioration of the economy in his region as well as across Canada.


Alfonso Gagliano: My supplementary is directed to the Minister of Finance. So many people are unemployed in Montreal today because of his high interest rate policy. When will the Minister of Finance realize, once and for all, that his economic policies are disastrous for Canada and especially for Quebec? And when will he announce an economic recovery program for Montreal? What about the Picard report, which has been on the shelf for two years?


Geoff Wilson: Mr. Speaker, the budget is designed to generate economic renewal in the country, not just in the city of Montreal or the province of Quebec, but in all parts of the country by getting interest rates down.
My hon. friend is going back to his roots when he says the only way we can get the economy going again is to sprinkle money around in different parts of the country. That keeps interest rates up and that is what this budget is designed not to do. We want to get interest rates down because that will be felt by every business person or every person in Montreal who wants to buy a new home or a new car or whatever.
The old way, certain people have the advantage of it. This way, our way, everybody gets the advantage of lower interest rates.


BANK OF CANADA
Steven W. Langdon: Mr. Speaker, my question is for the Minister of Finance who, last week, told Toronto business people that high wage increases were hurting Canada. Yet, the Bank of Canada has now reported 9 per cent salary increases and John Crow himself has seen his salary range jump by $103,000 since 1986.
I want to ask this government how it can keep any credibility when it sets these big income gains at the top and then freezes the incomes of low-income secretaries throughout this country?


Geoff Wilson: Mr. Speaker, I think my hon. friend is very well aware that last year the senior members of the Public Service, deputy ministers and senior executives in Crown corporations, had an increase of 4.2 per cent. That compares with an average for federal public servants of, I believe 5 per cent, which was the average, and a good deal higher for those in the private sector.
We have demonstrated a good deal of restraint in government. We have also committed that with the wage policy that will proceed from here. Senior members of the Public Service will get no more than the average of the public sector settlements by the federal Public Service.


Steven W. Langdon: Mr. Speaker, how is it possible to describe a $103,000 increase in five years as restraint? It is not just salaries, either, at the bank that have gone up, travel has gone up 25 per cent and staff expenses over 11 per cent.
How can the government justify this rich life for those veiy Bank of Canada people who are telling the rest of this country to pull in their belts?


Geoff Wilson: Mr. Speaker, I described to the hon. member, in response to a previous question, the specifics of the Bank of Canada situation last year.
The basic salary increase was 4 per cent over there. The salary increases for senior public servants, including the senior officers of the Bank of Canada, from here forward will be exactly the same as for deputy ministers, including the ministers on this side who will be taking a freeze of their ministerial pay. In this range of ways we are demonstrating restraint.
I would expect that we would get a little bit more support from the hon. member for this restraint policy, because it will help the companies that he is concerned about in Windsor, the same companies that he stands up and complains about their difficulties in meeting the competition from across the border-


Mr. Speaker:: The hon. member for Algoma.


Mr. Maurice Foster (Algoma):: Mr. Speaker, my question is for the Minister of Employment and Immigration. She knows that this Friday over 1,000 miners will be laid off at Denison Mines in Elliot Lake. This will bring the total to over 3,300 lay-offs or 80 per cent of the mining jobs there since last July.
I want to tell the minister that these miners are being told that it will take seven or eight weeks for them to get UIC benefits. I wonder if the minister, in spite of the fact that they have only had little over a week's notice of the lay-off, could step into this situation, take action and
Oral Questions
ensure that these payments are made in a prompt way, and not have these miners and their families wait seven or eight weeks for the benefits from their UIC.


Hon. Barbara McDougall (Minister of Employment and Immigration):: Mr. Speaker, I thank the hon. member for his ongoing concern in this area.
We have of course continued to pay special attention to this part of Ontario that has been hit very hard with some job cuts. All I can assure the hon. member is that I will look into the processing times. Clearly we want to provide our services as efficiently as possible there as elsewhere.


Maurice Brydon Foster: I have a supplementary question, Mr. Speaker.
Over two months ago the minister had put before her department a program for industrial adjustment under the Community Futures Program of $6.3 million. I wonder, in view of the importance of training, retraining and upgrading programs to these miners who are being laid off and additional ones, if the minister can approve immediately that budget.
I ask this question because I am concerned about the $100 million cutback in the budget by the Minister of Finance and want to ensure that miners who lose then-jobs and other Canadians are not going to be affected adversely when it comes to industrial adjustment, training and manpower programs.


Barbara Jean McDougall: Mr. Speaker, I want to assure the hon. member that, thanks to the passage of Bill C-21, of course we do have additional funding for training, training allowances, Community Futures and so on. There is actually a net increase in the amount of money that will be available over all rather than a cut.
I would also like to point out that actually the funding that has gone into this region in the last year has been close to $9 million. We will continue to watch events as they arise.
We are of course concerned about other parts of northern Ontario as well. They have benefited from our industrial adjustment service and from Community Futures, as has the region the hon. member represents.

March 11, 1991
Oral Questions


RESEARCH
Mr. David Berger (Saint-Henri-Weslmount):: Mr. Speaker, ray question is directed to the Minister of Finance.
I have here a letter from the president of the Natural Sciences and Engineering Research Council, who wrote recently to the presidents of Canadian universities to inform them, and I quote: "That budget cutbacks may oblige the Council to reduce the number of researchers subsidized by the federal government".
In his Budget, the Minister of Finance claimed that to increase productivity, we must invest in training and developing the skills of Canadians. Could the minister explain to the House how a reduction in the number of researchers financed by the federal government will help meet the objectives set in his Budget?


Hon. William C. Winegard (Minister for Science):: Mr. Speaker, the Natural Sciences and Engineering Research Council for the year we are just moving into is receiving a total increase of something like 4.8 per cent. Under the existing circumstances I think that is a reasonable amount.
In talking to the president of NSERC, my understanding is that it is going to put more and more of that money into the operating and scholarship components of its operation and less into some other parts, which in essence is what the member is asking for.


David Berger: Mr. Speaker, again, I have a letter here from the president of the council which states that given the budgetary constraints facing NSERC one of the likely effects of these changes will be a reduction in the number of researchers supported. This is a letter written just recently to presidents of universities across Canada.
I would remind the minister that two years ago the Prime Minister's own blue ribbon committee recommended doubling the budgets for university research in Canada. I want to ask the minister a question.
Given that such an investment would lead to increased productivity, increased growth, and a lower deficit, will the minister on behalf of the government at last commit to providing the urgently needed funding for university research and the training of researchers right across this country?


William C. Winegard: Mr. Speaker, I think it is quite apparent to most Canadians that if we do not get this national debt under control, if we do not get interest rates down and subsequently get the dollar down, it will not matter much what you are going to put into the NSERC or the MRCs. There will be no base funding for the universities, and that is really the issue.


THE CONSTITUTION
Mr. Lome Nystrom (Yorkton-Melville):: Mr. Speaker, my question is for the Acting Prime Minister on the important issue of the future of the country in the constitutional sense.
Given discussions in Montreal about the Allaire committee over the weekend, the fact that Belanger-Cam-peau will report very soon, and the fact that we have a committee of federal deputy ministers studying things such as the division of powers, I want to ask the Deputy Prime Minister whether or not the time has now arrived when members of this House-his party, my party and the Liberal Party-should be looking at substantive constitutional issues such as aboriginal rights and the division of powers.
Given the fact that the committee on the amending formula will start travelling and will have public hearings next week, would he not consider expanding the mandate of the committee to deal not just with the amending formula, which is important, but to allow Canadians to speak about national unity regardless of its process or content?
Have we not arrived at that time?
Hon. John C. Crosbie (Minister for International
Trade): Mr. Speaker, there is nothing preventing members of this House looking at substantive issues in connection with our constitutional future. In fact I would think that many of them are doing just that.
March 11, 1991

Oral Questions
As a matter of fact, in the Conservative caucus we have a committee on constitutional issues which is devoting a lot of time to considering these issues.
You do not need the government to organize for the opposition that it should form caucus committees or whatever to consider these issues. The process at the present time is that we are attempting to get the views of the Canadian people through the Spicer commission. We have our own Commons-Senate committee on the process of amending the Constitution. We have six or eight provincial inquiries under way.
When the Prime Minister and the government feel the time is right, we will make a decision as to what the next step should be. In the meantime we are doing our homework and we hope that other members will as well.


Lorne Edmund Nystrom: Mr. Speaker, I think the time is right now to deal with both process and content of constitutional change.
In light of the fact that some $8 million has been allocated for the national unity task force in the next year, could the Acting Prime Minister tell the House whether any of this money has been spent or will be spent on special interest groups to study national unity, groups such as the Business Council on National Issues, the Chamber of Commerce, or any other groups? Has money been spent or has it been allocated to those groups on that important issue?


John Carnell Crosbie: Mr. Speaker, the money involved that the hon. member is referring to is to be used by the government in order to prepare and to study all of the options that should be looked at in connection with possible future constitutional arrangements in Canada. It would include meeting the expenses of constitutional experts and people with experience who are called upon.
I cannot tell him here today as to how much has been spent to date or on what particular subject. This is the kind of use that this funding will be put to.
When we have seen what the full range of views of the Canadian public is and when we have seen this year what are the considered views of the various bodies organized by the provinces that are looking at this question, the Government of Canada will come forward with what it
thinks is a solution to these problems. We will then invite a debate not just in this House-


Mr. Speaker:: The hon. member for Nepean.


CHILDREN'S RIGHTS
Mrs. Beryl Gaffney (Nepean):: Mr. Speaker, my question is for the Acting Prime Minister.
In May 1990 the United Nations General Assembly adopted the convention on the rights of the child. On September, after adoption by 20 nations, it entered into force. Canada was not one of those 20 nations.
In spite of what the finance minister says, this government has cut millions of dollars from health care and education budgets, areas where the United Nations convention outlines minimum standards.
Could the Acting Prime Minister explain when Canada will ratify its commitment to this agreement and what measures will be taken to ensure that Canada is able to live up to the terms of this convention on the rights of the child?


Hon. Marcel Danis (Minister of State (Youth) and Minister of State (Fitness and Amateur Sport) and Deputy Leader of the Government in the House of Commons):: Mr. Speaker, the hon. member knows that the Prime Minister is very concerned with the rights of children in this country. That is why he chaired the summit last year at the United Nations.
My colleague from the opposition has many premises in the question, one of them being that our social programs are in danger. She should know that 35 cents of every dollar goes to pay for the debt.
The best way that we can take care of the children of this country and the health programs of this country is with the budget the Minister of Finance has introduced. That is how we will do it. That is how we will succeed.


Beryl Gaffney: Mr. Speaker, if the Prime Minister were really serious about the convention on the rights of the child, why has Canada not ratified our agreement?
Surely, the Acting Prime Minister will realize that because of the division of powers between the provinces and the federal government, the only mechanism that he

Oral Questions
has to guarantee compliance with the convention is the funding that he transfers to the provinces.
Now that his government has drastically cut the provincial funding, I ask the Acting Prime Minister to ensure that Canada can meet its commitments to the convention on the rights of the child.


Marcel Danis: Mr. Speaker, my hon. friend should know that transfer payments to the provinces with regard to children have not been cut. They have increased by 3.7 per cent, while at the same time the federal government is increasing its programs by 3.4 per cent.
We are doing our share and we should hope that the provinces will do theirs.


ABORIGINAL RIGHTS
Ms. Ethel Blondin (Western Arctic):: Mr. Speaker, my question is for the Acting Minister of Justice.
I would like to ask the minister what policy direction the federal government is willing to take to ensure the protection of aboriginal rights as enshrined in the Constitution, in light of the B.C. court decision with respect to the Gitksan-Wet'suwet'en case.


Pierre H. Cadieux: Mr. Speaker, as my hon. colleague knows, a very lengthy judgment was rendered on Friday in the particular case to which she is referring.
The Department of Justice, as others I am sure, is looking into that particular judgment right now, which obviously is subject to appeal. The appeal delays have not expired yet.
With respect to the question of aboriginal title, that particular decision was with respect to aboriginal title to land. The decision, I am informed, is on that particular subject with respect to a specific area in British Columbia and should not affect aboriginal titles or rights elsewhere in Canada.


Ethel Dorothy Blondin-Andrew: Mr. Speaker, the aboriginal people across Canada felt the blow of the
decision of the B.C. Supreme Court regarding their aboriginal title and the questions they have about that.
What specific and immediate steps are being taken by the federal government with regard to policy regarding aboriginal rights? How would they specifically deal with the fall-out of this decision which has deeply impacted the spirit of the aboriginal community in Canada?


Pierre H. Cadieux: Mr. Speaker, as I said a few minutes ago, that decision is very lengthy. If I am not mistaken it is somewhere around 390 pages. The case took four years. It is a very complicated case. I am sure that all legal experts on both sides of the issue are looking into the decision right now.
With respect to the specific question of aboriginal title to land claims, et cetera, the Government of Canada has a very specific policy on that, in that the Government of Canada is interested in settling land claims at the negotiating table and therefore invites the Gitskan and other Indian groups to come to the negotiating table, which I must say has been done. The Government of Canada again requests the presence of the Government of British Columbia to the same table.


HEALTH CARE
James Capsey (Jim) Karpoff: Mr. Speaker, I have a question for the minister speaking on behalf of the minister of health.
On Thursday, the Newfoundland Liberal government announced it was closing 360 acute care hospital beds, laying off medical personnel, reducing hours of operation in community health centres, and removing eye testing from medical coverage, as well as freezing the medicare budget at last year's level.
Yet, on Friday, the Minister of State for Finance and Privatization stated that he felt Newfoundland was setting a good example that he hoped other provinces would follow.
Does the minister agree with the minister of state that these cutbacks are the example he wants provinces to follow in medicare? If so, how do such cuts maintain national medicare standards?


Marcel Danis: Mr. Speaker, as I mentioned a few minutes ago, our transfer payments to the provinces in the areas

of health care and post-secondary education, the global area, have increased by 3.7 per cent. This year alone, the federal government will spend $14 billion on medicare and health care.
We know that the provinces are experiencing difficult situations. We are experiencing difficult financial situations. It is as a result of the budget proposed by the Minister of Finance that we will put the economy back in good shape so that our children will have a good medicare and health care system for the future.


James Capsey (Jim) Karpoff: Mr. Speaker, my supplementary question is for the same minister.
This government has said that it will enforce national medicare standards. Yet the Newfoundland government has withdrawn a basic health service, namely, eye examinations.
Will the minister use his authority under the Canada Health Act to force the reinstatement of this basic medical service in Newfoundland?


Marcel Danis: Mr. Speaker, the Minister of National Health and Welfare is committed to ensuring that the Canada Health Act is complied with. That is what we intend to do.


PORTS CANADA
Mr. Jim Jordan (Leeds -Grenville):: Mr. Speaker, my question is for the Minister of Transport.
Just prior to last Christmas, some 20 leaseholders in the Prescott area of my riding received a notice from Ports Canada that their current leases on cottage lots were cancelled and that new leases would be issued. The new leases showed increases of over 700 per cent in three years. This was done with very little or no dialogue with the leaseholders, some of whom have been leaseholders for 35 years and more.
Will the Minister of Transport give me and these citizens some assurance that he will intervene; that, if
Oral Questions
increases are warranted, they will be tempered with reason: and that he will not allow his department to impose increases which in any other facet of Canadian life would be illegal?


Mr. Ross Belsher (Parliamentary Secretary to Minister of TVansport):: Mr. Speaker, I want to thank the hon. member for bringing this matter to our attention.
I am not personally acquainted with what he is referring to, but I will bring it to the minister's attention and have it looked at for him.


James Scott (Jim) Peterson: Mr. Speaker, since free trade, Canada has lost 277,000 or 13 per cent of all our manufacturing jobs.
This wholesale deindustrialization of Canada is going to have a devastating impact on Canada's economic future. Will the Minister of Finance tell us how, with this deindustrialization, does he think Canada can compete in the future? How can we compete if we have nothing left to compete with?


John Carnell Crosbie: Mr. Speaker, with reference to these canards about the free trade agreement, the hon. member seeks to emulate the Canadian Labour Congress which listed a figure like that and then listed all the jobs that have been lost, which included Air Canada, which included government agencies, which included auto parts companies, none of which were included in the free trade agreement.
I refer the member to a speech by Frederick Telmer in Kelowna, British Columbia: "The persistent assault on the FTA manifests a flight from reality."
I refer him to: "Free trade gets ringing endorsement from the Canada West Foundation."
I refer him to: "Trade deal benefits Manitoba", and so it goes across the country.

March 11, 1991
Routine Proceedings BUSINESS OF THE HOUSE


DESIGNATION OF ALLOTTED DAY
Hon. Harvie Andre (Minister of State and Leader of the Government in the House of Commons):: Mr. Speaker, I would like to designate tomorrow as an allotted day, an opposition day.



ROUTINE PROCEEDINGS


Hon. Alan Redway (Minister of State (Housing)):: Mr. Speaker, pursuant to Standing Order 32(1),

-I have the honour to table, in both official languages, [English]
copies of a report entitled "Summary of the 1991-95 Corporate Plan of Canada Mortgage and Housing Corporation".


PRIVILEGE
Mr. Don Boudria (Glengarry-Prescott-Russell):: Mr. Speaker, a few moments ago I, and several other of my colleagues, heard the chief government Whip refer directly to comments made by the hon. member for Willowdale as being untrue.
I believe the word he used was "liar". He repeated the word on a number of occasions.


Some hon. members:: Shame.


Don Boudria: Of all people in this House, the chief government Whip should know that such language is unparliamentary according our rules and according to the citations of Beauchesne. I would urge the hon. government Whip to withdraw the comments he made, which of course are contrary to citations 319 and 320 of Beauchesne.


Mr. Jim Hawkes (Calgary West):: Mr. Speaker, I do not remember the hon. member who has just spoken being on his feet.
If I offended anybody in the Chamber with my use of the word, I would be happy to withdraw it. If some member, in particular, felt that their honour had been impugned, I would appreciate it if they would rise in the Chamber and complain. Then we could be a little more specific.
In the future, if we do insult one another, I think we have the responsibility to stand in the Chamber and indicate that we feel insulted.


COMMONWEALTH DAY
John Carnell Crosbie: Mr. Speaker, 60 years ago the Commonwealth was bom.
In 1931, under the Statute of Westminster, Canada and the other dominions, which included at that time Newfoundland, gained full independence as members of the Commonwealth of Nations "equal in status and in no way subordinate to one another though united by a common allegiance to the Crown".
Today, Monday, March 11, we take pride in the accomplishments of a much expanded, multi-racial Commonwealth as we mark the 15th annual observance of Commonwealth Day across Canada and in 49 other member countries embracing over one-quarter of the earth's population.
The Commonwealth has been central to the growth of Canada's role in the world and remains a key element of its external political, trade, and aid relations. Through a common language and shared heritage and loyalty to common ideals, it has enriched our partnership in many countries in Africa and Asia and has reinforced our historic ties with the Caribbean. It has also provided inspiration for shaping that other great language family to which Canada can claim a birthright-the francophone community of states.
The Commonwealth is dedicated not only to a basic set of values-democracy, the rule of law, fundamental human rights and equality for women-but has given moral and practical leadership in some of the major issues of the day: condemning racism, dealing with debt,

the environment and drugs, promoting the security of small states.
With strong Canadian support, programs such as the Commonwealth Fund for Technical Co-operation, the Commonwealth Scholarship and Fellowship Plan and the Vancouver based distance education facility. The Commonwealth of Learning, have immeasurably broadened opportunities and promoted interchanges among their people.
The past eventful year brought the welcome admission of the Commonwealth's 50th member, Namibia, after that country with steadfast Commonwealth support won its independence from South Africa on March 21, 1990. Sustained Commonwealth pressure, including the work of the Commonwealth Committee of Foreign Ministers, chaired by my colleague, the Secretary of State for External Affairs, has been instrumental in the historic progress registered in the last year toward the dismantling of apartheid in South Africa.
It has been a year of progress in other sectors as well. My colleague, the Hon. Mary Collins, played host last October in Ottawa to a major conference of Commonwealth ministers responsible for women's affairs, which called for full equality for women and their full integration in the development process.
As we start the countdown to the 1994 Commonwealth Games in Victoria, a Commonwealth working party, chaired by Mr. Roy McMurtry, has proposed an ambitious scheme of amateur sport development in member countries.
A Commonwealth election observer mission, which included a Canadian observer, Mr. Barry Tbmer, has just two weeks ago travelled to Bangladesh to monitor the recent elections held in that country.
The real strength of the Commonwealth is that it is pragmatically oriented and people driven. It links societies and thousands of individuals in a vast international network of professional, service, cultural and sport organizations. These form the real lifeblood of the Commonwealth and ensure its continuing vitality. One which we in this House know well is the Commonwealth Parliamentary Association.
Routine Proceedings
The coming year will be full of challenge for the Commonwealth. Under its new Secretary-General, Emeka Anyaoku, who has our full support and confidence, it must adapt to meet tomorrow's needs and particularly those of its youth. A blue ribbon panel of leaders, including Prime Minister Mulroney, is examining the role of the Commonwealth in the 1990s and beyond, and will make its recommendations to the next Heads of Government meeting in Harare, Zimbabwe this coming October.
Somewhat contrary to the view that states in their external relations have only cold-blooded interests, it is a pleasure to pay tribute to an international association whose virtue is to maintain friendly contacts and fruitful dialogue among states of great diversity. It is this capacity for building bridges which gives the Commonwealth its special importance and potential, and which will make it even more indispensable in the future.
I am sure members will join me in congratulating the Commonwealth, which was bom 60 years ago today.


Mr. Jesse Flis (Parkdale-High Park):: Mr. Speaker, it is with pride and pleasure that I rise today on behalf of the Official Opposition, together with my colleague who just spoke, to mark Commonwealth Day 1991.
Now when the move among nations is toward broader economic and political alliances, we can look at our 60-year history as one of the 50 members of the Commonwealth, a multilateral organization in its best form.
The Commonwealth has since its adoption been a leader in the global commonwealth toward democracy. It has assisted smaller member countries like Namibia, Maldives, and has by virtue of its existence as a multi-racial, multinational and multi-faith organization-to use Her Majesty's words from her Commonwealth message today-being true to the principles of equality between all, regardless of sex or economic status, and has been a leader in the development of democracy.
The evolution is continuing and today we have the opportunity to prove the continuing vitality of the Commonwealth by declaring specific and current objectives.
This year will be the celebration of science in the Commonwealth. We will have the opportunity to expand on the work done by member countries. Here in Canada

March 11, 1991
Routine Proceedings
in 1987 we were in the vanguard of world opinion when the report of the World Commission on Environment and Development was tabled. This was part of an ongoing contribution to overcome threats to the global environment. Now we can apply the same collective spirit and education to the world of science and see our world continue to improve.
I was hoping that the hon. minister would have spent a little more time on how Canada would be contributing in this theme of science in the Commonwealth but he did not.
In South Africa, sanctions have worked and we are witnessing the break-up of apartheid, something many of us thought we would never see. We must keep up that pressure and ensure that all the members of our commonwealth countries have the same rights to freedom and democracy that we enjoy right here in Canada.
There are other contributions the Commonwealth can make to the world. It includes almost one-quarter of the world's population and enough geography to have a real impact on ending the flow of illegal drugs internationally-
Through Official Development Assistance money we can ensure more education and health care for the other members of our family in the Commonwealth, though the recent budget cuts in that funding are weakening where we should be strengthening.
I wish to congratulate the hon. member for Northumberland for reminding the government that you do not cut back on the backs of the poor.
We are concerned about north-south relations. We must never forget our obligations as part of a large extended family. When one member of a family needs a hand, the other members must rally around and support the individual in order to support the whole family.
Today the world is looking for peace, good will, understanding and democracy. The people of the world want to live in health, wealth and security. We are part of the best role model in existence and have much experience to share internationally.
I hope we will continue to take our role internationally very seriously and will consistently work towards the betterment of the world and its people.


John F. Brewin: Mr. Speaker, I rise on behalf of our party, including my colleague from Saskatoon-Dundum, to put forward greetings and join with those of the other parties in this House on the occasion of Commonwealth Day 1991.
As has been noted, 60 years ago today the Statute of Westminster came into force and the British Commonwealth of Nations, as it was then called, came into existence.
The Commonwealth replaced, of course, the British Empire, the empire on which, it was said, the sun never set. The empire is, of course, at this stage of the review of history, somewhat maligned. But it should be understood that through that empire both hope as well as exploitation passed. The Commonwealth, as the empire before it, expanded the horizons of people around the world, not only at its centre but at its outer reaches.
Now, the Commonwealth, of course, is no longer British. In fact, in recent years, thanks to the lack of leadership of the British government under Margaret Thatcher, the active leadership of the Commonwealth passed from the United Kingdom to other countries.
The Commonwealth draws together people from 50 countries around the world. As much as has been said today by the minister on behalf of the government of the shared values of the Commonwealth, I suspect that that is somewhat exaggerated rhetoric when one looks at the reality of the Commonwealth. What is shared, simply, is a history. The values of the Commonwealth are not shared as well as they ought to be.
We see, for example, in the response to apartheid in South Africa, governments such as that of the United Kingdom failing to share the overwhelming consensus of other governments and people in the Commonwealth on how to deal with the evils of apartheid.
The Commonwealth itself suffers from deep divisions of wealth. Millions within the Commonwealth still live in abject poverty. Democratic freedoms are an illusion to too many within the Commonwealth. But it must be acknowledged that the Commonwealth, through the

Commonwealth, has passed much of the genius of the British people; Shakespeare, the concept of parliamentary government, the rule of law, the beauty and openness of the Anglican form of the Christian religion and, in reverse, in recent years, the devotion of the Muslim religion, the discipline of the Hindu religion and the honour of the Sikh religion. We have all learned from our association with the Commonwealth that we are part of a larger world, that we share a history with the people of Bombay, Papua New Guinea and Barbados.
As has already been said, if this institution is to survive another 60 years, we must strengthen official development assistance. The Commonwealth must be far more effective than it has been as the voice of the poor and the dispossessed. To do that we must strengthen programs of public education and interchange.
In that regard, and before I close, let me make reference to the Commonwealth Games, coming as I do from Victoria. We have a special interest in the 1994 Commonwealth Games. We are very proud we have been chosen to host those games. The Commonwealth Games are the friendly games. They draw together people from this great institution. If they are to be in keeping with the true value that is said to be that of the Commonwealth, we must do what we can to see that the occasion is used to bring people together, to learn the realities of people's lives, to see that they are not just the best ever games for Canadian athletes, but the best ever games for athletes in every country of the Commonwealth.
As has been noted, the Canadian government and the Commonwealth have provided some leadership in trying to expand the vision not just of the Commonwealth Games, but of the Commonwealth itself through the establishment of a working group chaired by Roy McMurtry. I suggest to the government that it must look carefully at the requests that come for funding from that organization for programs recommended unanimously by that group. The government has been generous in its funding of the francophonie games and the work leading up to it. It must have the same approach to that of the Commonwealth Games.
We join with all parties in urging that all peoples of the Commonwealth give this day the honour it deserves.
Routine Proceedings


PETITIONS
Guy St-Julien: Mr. Speaker, I wish to table pursuant to Standing Order 36, a petition from residents of Vassan who insist that the Government of Canada drop its plans for the development of Parliament Hill, which would cost $68 million and involve building a parking garage and shopping centre under the Parliament Buildings, and that the government acknowledge the need for preserving the natural environment and historical character of the Parliament Buildings and Parliament Hill in Ottawa.


Mr.   Maurice@: Mr. Speaker, I appreciate this opportunity, pursuant to Standing Order 36, to present a petition with more than 275 signatures, mainly from residents of Daveluyville who emphasize Canada's reputation as a peacekeeper. They ask that Canada put a stop to its military intervention in the Persian Gulf and are in favour of a negotiated settlement including the Palestinian question.


Mr. Rene Soetens (Ontario):: Mr. Speaker, pursuant to Standing Order 36 I have two petitions I would like to present today. The first petition, signed by quite a number of constituents from my riding, is concerned with the Senate. The petitioners comment as follows. Knowing that the Senate was established in 1867 for the purposes of representation of the regions of Canada and providing a medium for sober second thought, and that the Senate now performs no useful function, is completely partisan and has proven after many efforts to be impossible to reform, your petitioners humbly pray and call upon Parliament to abolish the Senate outright.


René John Soetens: Mr. Speaker, the second petition, signed by again many of my constituents including many from the east end of the city of Toronto, are concerned about the impact of various contents of food on those people with allergies. The petitioners say that

March 11, 1991
Supply
restaurants and food packagers are not required to disclose all food contents. Members of Parliament and others have brought forward Private Members' Bills and issues on the same subject.
The petitioners therefore request Parliament to enact blegislation amending food and drug regulations in order to require manufacturers to list specific food ingredients and additives used in pre-packaged foods in place of general classifications now permitted and further to require restaurants and food retailers to provide on demand to customers a list of all food ingredients and additives in prepared foods.


QUESTIONS ON THE ORDER PAPER
[Stage Direction]
(Questions answered orally are indicated by an asterisk.)
Albert Glen Cooper: Mr. Speaker, I suggest that all questions be allowed to stand.


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


Some hon. members:: Agreed.



GOVERNMENT ORDERS


[Stage Direction]
The House resumed consideration of the motion of Mr. Peterson (p. 18259).
The Acting Speaker (Mr. DeBlois):: I wish to inform the House that because of the ministerial statement, Government Orders will be extended by 15 minutes.

When the debate was interrupted at 2 p.m, the Minister of State (Finance and Privatization) had the floor.

The hon. member had only one minute left.


John Horton McDermid: But, Mr. Speaker, it is going to be a wonderful minute.
In the one minute that is left to me, I want to say that before we broke for Question Period we were talking about economic recovery. The plan for economic recovery sets us on a path where growth, investment and confidence can be sustained and flourish in the years to come.
In doing this, our plan is going to contribute directly to preserving the bonds that link us as a nation. One of the best things we can do to strengthen the unity of our country is to strengthen the economic union and the fiscal condition. This will give us the resources and the regional confidence we need to resolve the other issues and aspirations that challenge us.
Canada has come a long way in 123 years. We should not be selling ourselves short. We have forged a country that is the envy of the world, a tolerant and open society with a superior standard of living.
This prosperity was put at risk by abandoning the traditional Canadian value of paying our way.
Hon. members, I believe that-


The Acting Speaker (Mr. DeBlois):: The hon. member's time is up, unless the House agrees to extend.


Some hon. members:: Agreed.


An hon. member:: No.


The Acting Speaker (Mr. DeBlois):: There is not unanimous consent.


Hon.   Chas. L. Caccia@Davenport: It is very difficult to take the minister seriously, considering the gravity of the motion and the way that he has dealt with it. His last remarks are particularly offensive because by suggesting that we have to pay our way, the government, by implication, has decided that Canada should improve its financial condition by fighting it on the back of 10.2 per cent of unemployed Canadians, the highest percentage in a long time.
Mr. Speaker, you will agree that that is very poor thinking displayed by the Minister of State for Finance and Privatization. He hinged his argument during his rather lengthy intervention on four arguments. The first one was on the fact that, in his opinion, we are doing much better in high technology exports.

I would like to ask him whether he could explain, if we are doing so much better, why in the past 12 months Northern Telecom in Kingston had to lay off 60 people; why Honeywell Bull had to close in various provinces in the computer manufacturing section, 100 people; why Comterm in Montreal had to lay off 176 people in computer manufacturing; why Northern Telecom in Saint John had to lay off 120 people in telecommunications equipment; why STM Systems Corp. had to lay off 125 people in computer services; why Jonal and Ericson in Don Valley, Ontario, had to lay off 280 people last August in computer software; why Unisys in St. Laurent, Quebec, had to lay off 230 people in computer equipment?
And the list is far from being complete.
That, Mr. Speaker, is the first of my four questions.
The second question has to do with the great advantages of the free trade agreement to which the minister referred in his speech.
We would like to know on this side of the House where the 500,000 jobs are which were promised by this government at the time of the signing of the free trade agreement. I hope that in replying to this question, the minister will refrain from including hamburger-stand jobs.
Third, the minister on various occasions in his recovery speech made reference to market forces and the greatness of the market forces in which he believes.
Perhaps the minister might like to enlighten us as to why the market forces are not being applied in labour relations when it comes to the civil servants of the federal government.
Finally, the fourth question stemming from the minister's intervention is this: What is needed, according to the enlightened Minister of State for Finance and Privatization, is a substantial reduction in inflation and in Canadian inflationary expectations. These are his very own words.
This seems to me a rather sick joke, if the minister is implying that inflation is to be fought on the back of 10.2 per cent of unemployed Canadians today. Perhaps he might enlighten us on some of those points.


John Horton McDermid: First of all, the hon. member knows full well that his last statement was facetious and does
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not need any more comment than that. This government of course is not cutting back on the back of the 10.2 per cent who are unemployed today. We on this side feel as badly about it as anyone does. We have made that very clear, and that is why one of our largest expenditure increases in this fiscal year is unemployment insurance, to ensure that the safety net is there until the economy is back growing again.
The hon. member knows full well about that. He talked about lay-offs. Yes, there have been lay-offs. There is no question that there have been lay-offs, and we do not take satisfaction in that either.
He rhymed off a number of companies that had lay-offs. I want to point out two things to him. I am going to rhyme off a number of companies that are increasing employment starting with I.E. Aerospace Canada in Winnipeg; in Mississauga, General Electric; in Thunder Bay, Eamway Industries; Trans-Alta Resources Corporation in Malton; Abitibi-Price in Manitoba; and Journal Printing of Sudbury.
I want to refer him to the study that was done by the Canada-West Foundation that said: "Canada increased high-tech's exports by $4 billion since the deal while such imports from the United States fell by $600 million". The study is there. It is an independent study. It is not a government study. It is an independent study.
I saw an article in the paper just the other day for McDonnell Douglas in our area, close to the area that he represents and close to the area that I represent. There was a request for 500 employees at McDonnell Douglas in Malton the other day. Of course, there are employment opportunities out there. There is no question about that.
One of the problems is that individuals like my hon. friend from Davenport have nothing positive to say about anything. All he does is stand up here, criticize and knock and put the country down. We support Canada. We work for Canada. We do not knock it down. We praise it and will continue to do so. I suggest the hon. member do the same.


Steven W. Langdon: I have a very simple question for the minister, Mr. Speaker.

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It comes out of his last statement that suggested that the member for Davenport could do nothing but knock this government and, therefore, that was putting this country down.
I want to ask the minister when this government and its ministers started to identify themselves as "this country". Across this country, there are millions of Canadians who would like nothing better than to affirm their country by kicking this government out as fast as possible.


John Horton McDermid: Mr. Speaker, I am not sure what the question is there, but I will tell you that there are more millions across this country who will not vote for the NDP in the next election. That is for sure.


Jesse Philip Flis: Mr. Speaker, in the one minute, I have a very serious question for the minister.
The minister knows my riding of Parkdale-High Park. He knows that Stelco, which manufactures nuts and bolts, is closing and all the workers will be unemployed.
The John Inglis plant that used to employ a lot of my constituents has closed, but I do not think we are into an argument here why the plants are closing, et cetera.
What I would like to ask the minister very sincerely is: What help can I give my constituents who come to me during appointments, produce 30 or 40 letters that they get from companies where they have applied for jobs, including McDonnell Douglas, and get refusals.
They then go to the CEC for retraining. They come back to me and say: "The earliest I can get retraining will be in a year or in a year and a half".
These people want to work. They show me letters of how they tried to get jobs. They have gone to the Canada Employment Commission, and they cannot get them. I am sincerely looking for assistance for these unemployed, not only in Parkdale-High Park. I am sure he has them. We have them across Canada.


John Horton McDermid: Mr. Speaker, there is nothing enjoyable at all about being unemployed. I have been. I know exactly what it is like. It is extremely difficult. When I was out of a job in the early 1960s, all I did was start knocking on doors. I just kept knocking and knocking. I
got turned down an awful lot of times, but finally one opened. It was not a job that I really wanted to take, but it was the only thing available at the time. I took it. I eventually got back into my profession, the job that I was trained to do. I eventually got back to it.
All I can say to people is to keep trying, to keep trying and keep plugging. I have the same problem in my constituency in Brampton, where people come to me and ask for advice. And that is all I can tell them, to keep plugging and to keep trying.
We cannot train every single unemployed person, unfortunately. We do not have that kind of money and the hon. member knows that. That is why there are line-ups waiting for retraining today. We are putting more and more money into retraining. Through the unemployment insurance program now there are going to be hundreds of thousands of additional dollars for training. We are doing as best we can, as much as we can afford.
But the Canadian people are also telling us: don't raise our taxes, don't increase the deficit, and for heaven's sake toe the line. So, there has to be a balance there, and I believe the Minister of Finance has found that balance.


Steven W. Langdon: Mr. Speaker, I want to say first that this motion which has been put forward today by the Liberal Party is a motion which we will support. We will not support it because it covers what we feel to be a complete approach to dealing with the problems of this economy. We noticed, for instance, that many of the tax measures which we think have to be made fairer in this country, which come out of years of both Liberal and Conservative budgets, are not talked about in the Liberal motion.
We notice too that there are problems with the lack of commitment on the part of the Liberal Party to get us out of the free trade deal, which is hurting so many people across this country. We will not in any sense be endorsing the motion that is in front of us as a solution to the recession, but we do think that it expresses the lack of confidence that Canadians across this country feel in this government. It is a lack of confidence which emerges with tremendous force as you talk to people in city after city across this land, as our economic recovery group in the New Democratic Party has been doing.
March 11, 1991

The number of people who say that they want to impeach the Prime Minister defies description. The number of people who come up to us and say: "We voted Conservative last time. Never again." defies description.


An hon. member:: Hear, hear!


Steven W. Langdon: There is in this country a tremendous, devastating absence of confidence in our national government at a time when we face an economic crisis of increasing magnitude. I have to say as a member of Parliament that that is something I feel very sad about.
I wish that this government in this budget that it brought down just two weeks ago had given to Canadians a budget of hope, a budget which would have given Canadians a sense that this government had finally started to listen to the Canadian people and had started to say: yes, we must deal with the recession. Yes, we must deal with the unemployed. Yes, we must deal with the tremendous sense of deprivation which many farmers are feeling across this country. Yes, we must deal with the tremendous sense of unfairness that many aboriginal Canadians feel. Yes, we must deal with the problems of unity which are there in our country.
[Translation\
Mr. Speaker, I think it is very difficult to understand a Budget that talks about national unity but, when it comes down to it, does nothing for the unemployed in the province of Quebec. We can read the Budget from cover to cover, trying to find something for the unemployed, but there is nothing. There is no response to the economic needs of the province of Quebec.
Mr. Speaker, I think this is very sad when we consider the threat to the unity of this country.

We saw on Friday the realities of the recession brought very much to light for people across this country with the release of the unemployment statistics for February. When the government brought in its budget on February 26, it claimed that it was responding and that it saw ahead the chances of recovery. Yet the unemployment figures for February is the first sign of what is happening
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to the economy in the month of February. It is the first sign that has come out.
Those unemployment figures were devastating: an increase in unemployment from 9.7 per cent to 10.2 per cent, a jump of one-half a percentage point. That is thousands and thousands of people; 77,000 people across this country have lost their jobs. In the last year, 430,000 permanent jobs were lost in this country as a result of the policies of this government. That kind of tragedy is especially grim in my own province of Ontario, my own city of Windsor, where in my constituency we have seen unemployment go well above 13 per cent and 14 per cent.
What is tragic is that it is not just something that is hitting the manufacturing sector of Ontario, as perhaps this motion by the Liberal Party might suggest. This is instead a devastating attack on unemployed people, on workers, on fishermen, on farmers. We can see across the country unemployment figures that just leave us close to tears.
We can see in St. John's, Newfoundland 12.5 per cent unemployed. In the province of Newfoundland itself a total of 18.2 per cent unemployed; in the province of Quebec, 12.1 per cent unemployed; and in the province of British Columbia, 9.9 per cent unemployed. That compared to Ontario where it is 9.5 per cent unemployed.
Those are just statistics, but we have met some of the people behind those statistics as we have gone across the country. There is a sense of despair, a sense that hope is disappearing. For the life of me I just cannot understand why this government has not been prepared to bring in a budget that says: here is the human problem and we are going to try to do something about it.
The minister who spoke just before me suggested that the government was increasing its expenditure on the unemployed. He was not correct. Because so many more people are unemployed, the government is having to spend more unemployment insurance money, but each and every single penny of that money will be paid back by the unemployed. It will be paid back by workers. It will be paid back by small businesses. The only thing that dealt with the unemployed in this budget was a $100 million cut to the Canadian Jobs Strategy.

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We could talk about other parts of the budget too. We could talk about the transfers for post-secondary education, for instance, something so important to the future of our country. Because of the freeze which has been put into effect until 1994-95-and these are not figures that I have generated or that the NDP research has generated, but come from the Canadian Association of University Teachers-$3.8 billion, will be lost in transfers to our post-secondary institutions. That is $3.8 billion which should be going to help develop the future of our young people, the future of our work force.
It is not just those of us in the opposition who have looked at this budget and expressed serious concern for what is going to happen to our economy as a result. Some of the economic forecasters have looked very carefully at the budget. I want to quote a few of these. I want to quote first from Informetrica, which is based here in Ottawa and is again an independent institution which in fact does a number of contracts for the government. It is not as if they have a in-built bias against this government in any sense. Yet they point out that the result of this budget, according to their detailed calculations, will be that over the next two years there will be 122,000 jobs lost.
They go on to make some points with respect to the budget, and I quote:
In the midst of a recession, the most powerful automatic stabilizer in the Canadian fiscal system has been "turned off", with a dramatic increase (24.4 per cent) in unemployment insurance contributions.
In the midst of a recession, this government has reached out and forced Canadians to pay more for their unemployment insurance coverage. Informetrica also states:
After persistent "lectures" from the government about the problems of inflation, indirect taxes have been increased-and labour costs increased. These two items will add about 0.4 per cent to the CPI in 1991, and another 0.2 per cent in 1992.
In other words, it is a budget which will increase inflation despite the fact that the government talks in its budget about the importance of dealing with inflation.
Let us take another group, the Conference Board of Canada, which is usually on the government's side. What do it say? It says in its assessment of the budget which just came out this past Friday: "The budget risks extending the recession and making it deeper". It also says that this budget will "cut GDP growth, income growth in 1991, compared with what it otherwise would have been". It goes on to say there is no fiscal policy stimulus whatever in the budget to help get the economy through the current recession.
In other words, this business financed group is saying precisely the same thing that the New Democratic Party is saying, that there is nothing in this budget to help with the recession. It goes even further and says: "The recovery during the second quarter is now somewhat more at risk than before the budget because this budget takes purchasing power out of the hands of consumers".
It goes on to attack the believeability of the government's inflation targets. It concludes by saying that it expects at least 67,000 jobs lost as a result of this budget, not quite as tough an analysis as Informetrica but completely similar in what it anticipates will happen.
The question is: Was there a choice? Could we have done something different? I want to use the last part of my comments to suggest that yes, there was a choice. We could have taken a different path. We could first have cut the interest rate gap between ourselves and the United States which historically has been 1 per cent, maybe 1.5 per cent. If we had done that, we would have reduced interest rates dramatically in this country. We would also have brought the value of the Canadian dollar down, which would have been a big help to our exporters and would have meant thousands of jobs across this country.
Also, the reduction in interest rates would have meant a reduction of about $6 billion in the expenditure that had to be made to pay interest on our national debt. We could have taken that $6 billion and invested it in the future. We did not have to increase the deficit. We could have taken the money saved from reducing interest rates, invested it in education for our young people in the future, in research and development so our companies would be more effective in world markets in the future and in training.
The minister has just said we do not have enough money for training. That is a tragic admission to have to make when there are over 1.4 million people out of work in this country.
March 11, 1991

We could have invested in better infrastructure for the future. We could have spent some of that $6 billion on that. We could have spent the rest of that $6 billion on emergency help for the unemployed. It should not be necessary for an unemployed person who has worked for years for a company in this country to have to turn to welfare to keep his or her family fed. That should not be possible as his or her only outlet in Canada in 1991.
We could have put a fair tax system into place and replaced the GST by doing that. If the large corporations in this country and those who are wealthy paid their fair share of taxes, we would not need the GST. Across this country individual consumers and small business people would not be suffering the economic consequences of the GST.
There was the basis for a budget of hope. There was the basis for a different direction, for a new approach, an approach that would have shown it cared about people. I just wish this government had taken that approach instead of the mean and counterproductive approach which its budget demonstrates.


Mrs. Monique B. Tardif (Parliamentary Secretary to Minister of Supply and Services):: Mr. Speaker, I listened very carefully to the hon. member who, in his questions to other speakers and at the beginning of his own speech, launched a fairly wide-ranging attack against free trade.
I would like to draw his attention to an article in the Financial Post, published on March 5 under the heading: Free trade not cause of recession. This was an analysis by the Royal Bank, the second in as many years to examine the results of the free trade agreement.
The first caveat was, that before the agreement came into force, already two-thirds of our trade in goods was free between our two countries. The agreement will be effective for a period of ten years, so that what has already been implemented over the past two years does not reflect the full impact of free trade.
In a survey conducted by the Royal Bank, the main problem in the current recession was identified as high labour costs.
What also struck me in this article, Mr. Speaker, was a short paragraph which says:
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The principal objective of the free trade agreement was to secure access to the U.S. market and to provide incentive for Canadian industry to restructure, to take advantage of activities in which we have a comparative advantage.

I like their conclusion, Mr. Speaker, when they say: [English]
As long as wage increases exceed productivity and continue to fuel inflation, interest rates and the Canadian dollar will remain high in Canada. We will lose trade centres and jobs to the U.S.
In last week's budget, the federal government tried to remove one reason for high wage increases by targeting low inflation rates. Ottawa is also trying to set an example by announcing caps on wage increases for federal civil servants. The provinces should do the same.

I would like to ask the hon. member whether in a period like the one we are experiencing today in Canada, Mr. Speaker, he doesn't think it would be better to try and identify together the solutions to the problems facing this country? Should we not make a joint effort to build a stronger and more productive Canada that will be in a better position to deal with all the social problems we are experiencing?
Personally, I think we need the help of governments, the private sector and the labour unions. I think Canadians as a whole can be realistic and, instead of looking for a single solution, are able to imagine a range of solutions that would make good use of the full potential of our Canadian workers.


Steven W. Langdon: Mr. Speaker, I agree that we as members of Parliament must work together to find solutions, if we can, but we must also be prepared to debate and discuss and clarify our various positions as parties and as members of this House. For instance, if we consider inflation, we can say yes, that is a problem. We must deal with this problem. The Economic Council of Canada suggested an approach to deal with inflation. It suggests that all groups in our society meet to examine the issue of inflation and set goals to control it. What did this government do? The government

March 11, 1991
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ignored that suggestion. The government decided to set its own goals, with the Bank of Canada.

That is not the way to establish co-operation. That is not the way to get people to work together in this country, if we are to work together as a society, as has happened in Quebec. One of the things I have admired in the province of Quebec is the pulling together of the different economic actors to talk about economic policy and where it should head in the future. This has taken place both under the Pequiste government and under the Liberal government in Quebec. It is not an approach which is being taken by this government.
Instead, this government says: "We will set the inflation targets", despite the fact that its own Economic Council of Canada said the opposite. It said: "If these targets are to work, everybody has to be involved in setting them."

The hon. member mentioned the subject of free trade. I admit it is a complex issue. We cannot say that all jobs were lost because of free trade but it is a fact that many jobs were lost for that reason.

In my constituency, for instance, we have seen 40 plants shut in this past year. These plants have transferred to the United States. They have transferred in part because of the rationalization that free trade meant had to take place. They have transferred because the value of the dollar was so high. And the value of the dollar was as high as it was, I believe, because that was part of the free trade bargain. A former Conservative cabinet minister has said precisely the same thing, someone who I think the member who spoke used to be a parliamentary secretary to, if I am not mistaken-though I do not remember for certain.
So, we have to recognize-

Our factories are under a lot of pressure as a result of free trade. We see this throughout Ontario, and I imagine the same applies to Quebec. The hon. member mentioned the Royal Bank, and other members mentioned the Can-West Foundation. All these groups supported free trade before the decision was made, so it
is not surprising to see the same groups support free trade now.


The Acting Speaker (Mr. DeBlois):: Resuming debate. [English]


Mrs. Diane Marleau (Sudbury):: Mr. Speaker, before I start my speech, I would like to beg the indulgence of this House. In view of the fact that within our party we have a large number of members of Parliament who wish to address this question, it would be appreciated if you would allow us to split our time so that our speeches can be of 10 minutes duration with a five-minute question and comment period, if you would agree to that.


The Acting Speaker (Mr. DeBlois):: Does the House agree with the opposition's request that its speakers share their speaking time, so that we will have 10 minute periods, followed by 5 minutes of questions and comments?


Some hon. members:: Agreed.


The Acting Speaker (Mr. DeBlois):: I would appreciate it if all hon. members would make this clear at the beginning of their speech, so that it is easier to keep on track.


Diane Marleau: Mr. Speaker, I will be speaking for 10 minutes and sharing my time with my colleague, the member for Ottawa-Vanier.
I am addressing this motion which we have brought forward condemning this government, essentially for its very poor economic management which, in effect, is bringing about the deindustrialization of Canada, especially in Ontario and the industrial manufacturing sector in southern Ontario.
I would like to bring a very personal view to this discussion. I want to explain that we in northern Ontario, who come from resource based towns, understand what it means when you lack that industrial and manufacturing infrastructure.
I was bom in the town of Kirkland Lake, which is very much a one industry town. From the time I was very young I knew, because we had no other infrastructure, no other diversification, that when the demand for the mineral produced in our town declined, jobs would be lost and there would be no other jobs. Eventually, when the minerals ran out, most people had to move away

from this town. As a result, people of my age group, people I went to school with, no longer live in the area. They migrated south, east and west.
We are again seeing the same phenomenon across northern Ontario, where our young children, my children perhaps and children who are starting to come into the work force, have a great deal of difficulty in finding employment in any of the towns in northern Ontario because many of these towns lack the kinds of infrastructure and diversification necessary.
I then moved to Sudbury, which as you know was at one time also very dependent, and still is somewhat dependent, on mines that produced base metals.
In the early eighties during the severe recession which this country was subjected to Sudbury was especially hit very hard indeed.
Our unemployment rates rose to 28 per cent and 30 per cent. So, I can understand, firsthand, what it means to be living under these conditions.
During these very difficult times, we had in place some very caring governments, all levels of government, which got together and brought forward policies to continue to help the area diversify. I believe that today Sudbury is in a very good economic position as compared to many other areas of this country because the dollars that were spent then created the diversification which we now enjoy.
What bothers me about what is happening throughout the country, and especially in southern Ontario, is I see the loss of good manufacturing jobs. The statistics show us that in the 1981-82 recession, for every five jobs lost, one of them was lost forever.
Today, in the same vein, for every two jobs lost, one will never return. What, pray tell, can we tell these people? Where will they go for employment? What kinds of opportunities await them?
There are absolutely no government programs in place to help this sector.
I listened to my colleague, the Minister of State for Privatization, say that there were some jobs being created and there have been some. He mentioned, in
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particular, jobs created in Sudbury within Journal Printing. There were, I believe, four or five jobs created in that industry in Sudbury, but let me also remind the minister that those jobs were created as a direct result of a government grant which came to that company from FEDNOR. So it does pay to have government intervention in the sector.
What this government has done, though, in a lot of other areas, is totally cut back in job creation, such as $100 million from the Canada Jobs Strategy. Can you imagine how much good that would do if it were left in place?
It is absolutely essential that this government starts listening to Canadians. Perhaps the worst fact of all is that Canadians feel this government is not listening, is not caring and is putting together an economic policy in some backroom somewhere with someone who is not affected. It is extremely frightening for the people of Canada.
What I would ask is that this government please-and we are all willing to co-operate-let us have some realistic job creation goals and realistic programs. We are all aware that we have a problem with the debt, but we are also all aware that if we do not invest today in our young people, we will not compete in the future, and that if we do not invest those dollars today there will be no jobs there in the future.
It is extremely frightening that this government keeps insisting on this high interest, high dollar policy which, in itself, has created much of the problems we face.
Now some of the members opposite have said: "Well, it is not necessarily free trade that created all of the job losses". I really do not care what has created it, I just want to see it end. Somehow we are in a recession and I do not see this government's policies bringing an end to this recession whatsoever.
There are ways around what is happening now and one of them is, perhaps, in a concentrated effort at job creation. Perhaps it could be a building infrastructure in transportation. With good infrastructure and good transportation our economy can thrive. We live in a vast country and we need the kind of government intervention that can help the transportation problems.

March 11, 1991
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We also need research, development and training. Rather than cutbacks in transfer payments to the provinces which will again put pressure on the university sectors and on the education sectors, we need some co-operative venture between the provinces and the federal government to allow training and re-training at a faster pace. What is happening now is that one government, the federal government, is acting on its own and it is getting out of the business of governing and putting the onus on a province which is further and further taxed.
The welfare rolls have increased in the province of Ontario by, I believe, 100 per cent. That is twice the number of people on welfare today than a year ago. That is not reflected in the unemployment statistics, but it is a very real problem within the province of Ontario and within most other areas of the country as well. One cannot turn one's back on these people. People do not go on the welfare rolls because they wish to be supported by the state. They go on welfare because they have no other means of support.
I would beg this government to do everything in its power to create the kinds of infrastructures, the kinds of job strategies that would enhance employment opportunities in our country.
The other problem we see happening within our country is the foreign control of many of our industries, yet the Conservative government has removed almost all of the barriers to more takeovers. With these takeovers, in many cases the companies are shut down or the profits are siphoned out to another country, and we are left with very little. We must control our own destiny. It is especially important. I beg this government to do everything in its power to bring about some turnaround in this economic fiasco facing Ontario.
Look not only at the unemployed people, but at, for example, a taxi driver. I spoke to a taxi driver while I was in Toronto the other day. He is losing his home because he is getting only half the fares he used to because business people are no longer travelling. He is faced with the loss of his home. He found it very difficult to believe this government was not trying to do something to enhance business in this country, to enhance jobs, because for every job lost, someone else makes less money.
The spin-off effect, the problems that are spread from one end of the country to the other are something this government must address.


Some hon. members:: Hear, hear.


The Acting Speaker (Mr. DeBlois):: Questions and comments. A five-minute period, starting with the hon. member for Ottawa-Vanier. You have two and a half minutes.


Mr. Mac Harb (Ottawa Centre):: Two and a half minutes. Very well, Mr. Speaker.

First I want to congratulate the hon. member on her well put speech.
I just received the report of the National Consortium of Scientific and Educational Societies and I would like to ask my colleague to comment on some of its recommendations. The consortium recommended that the Minister of Finance stop reducing the transfer payment to the provinces for post-secondary education until the first ministers agree on an alternative arrangement to fund Canada's universities adequately and reliably.
The National Consortium relies on a comment made by the Prime Minister of Canada when he stated: "In our second mandate we will concentrate on long-term investment in peoples' skills training, education, and strategic technologies.
Today I received another release, this time from the Canadian Association of University Teachers. They are quite alarmed. In fact Bob Kerr, the president, stated that Canada's system of post-secondary education is hovering on the brink of bankruptcy.
In the release which is also signed by the Canadian Federation of Students there is another quote by Professor Kerr: "What the government does not seem to understand is that universities play a vital role in the national economy, in the present and the future".
I would like to ask my colleague to comment on this particular statement. In her area of Sudbury, has she heard from students and teachers at universities like we have been hearing here in the national capital region?


Diane Marleau: Thank you for a well-put question. The post-secondary level of education in this country has been severely taxed and severely hit in the past. The people in the education field in my area are extremely concerned with the cutbacks that have already occurred within the system, and they are wondering how they can withstand more serious cutbacks as they see them coming.
The biggest issue is that if we do not train our young people today, how can we have the competitiveness that we need? Our human resources are key. We have the natural resources, but we must train our young people to add value to these resources so that we are the ones who are manufacturing and selling our exports to the other countries and not shipping these resources out to those countries where the labour is cheap and perhaps the training is not very good. If our training is very good, we can afford to pay ourselves some decent wages because we can produce goods that are of higher quality and we can sell them for better value. We will have done the training of our young people and we will also at the same time have done the research and development that needs to be done in order to come up with newer, more innovative techniques in the manufacturing sector. It is absolutely essential.
These are areas within our country that have made our country great in the past. We must not slacken our efforts in that area.


Sergio Marchi: Mr. Speaker, I commend the member of Parliament for Sudbury for a well-articulated display of economic wisdom. However, I am wondering whether she knows that in Ontario of some 31,000 people who were recently laid off, almost
20,000	of those individuals came as a result of complete shut-downs of plants and closures, and therefore they are of the permanent variety.
I wonder whether she might draw the House's attention to the fact that these are not just lost in a temporary short-term sense but that they are long-term and permanent. It tells us that we have to make severe and serious structural changes.


Diane Marleau: I would like to add to that comment. Shame to this government for doing the kinds of things that it has done. It is unconscionable that it would
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continue in closing its ears and shutting its eyes when we see this total deindustrialization, the loss of these longterm jobs. Has it no care for what happens in Canada?
I see the member across from me shaking his head. I do not believe that this is a laughing matter, hon. colleague. I do not foresee any greatness for our country when a government chooses to continue in its policies of total devastation within our economy.
I would ask the member across the way to please go back to his leader and convey the message which we are trying to bring forth.


The Acting Speaker (Mr. DeBlois):: On debate. The hon. member for Ottawa-Vanier has the floor for 10 minutes.


Jean-Robert Gauthier: Mr. Speaker, I will be sharing that time with the hon. member for Sudbury.
The motion before us takes stock of the disastrous consequences the Conservative government's policies have had on the Canadian economy. There are three points in that motion. First, it proposes:
That this House condemn the Government for:
(1)	maintaining a high interest/high dollar policy that gives foreigners a continuing competitive advantage over Canadian producers;
It is a fact as well as the truth. The current recession, which was largely made in Canada by this government, is fuelled by a conservative policy of high interests and an over-valued dollar.

In the past year the Ontario economy has borne much of the burden. Between January 1990 and February, Ontario lost 56,000 jobs,l most of them in the manufacturing sector, half of them by experts who will be difficult to replace. Ontario's industrial base has been eroded and much of the damage will be, as I said, permanent.
The blame for this economic mess can only be placed on the insensitivity of this Tory government, which has purposely engineered a recession and thousands-I say, thousands-of personal and business bankruptcies. The pain being felt throughout Ontario and within my riding of Ottawa-Vanier is terrible.

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Businesses in my riding and throughout Ontario paid a high price because of the unsound policies of the Conservative government. Several went bankrupt. I will quote some statistics on that. Others had to lay off employees. Some could not afford expanding and modernizing and others are struggling to survive. Did the government forget that the vitality of the Canadian economy depends to a large extent on the small business? I am asking the question, Mr. Speaker. A large part of Canadian jobs are created by the small business.

The cost of Tory government policies is staggering. One has to spend a couple of days researching a speech to find out that there is untold evidence to support this statement.
The Canadian Manufacturers' Association says high interest rates are the primary cause of the fall in the volume of manufacturing shipments and will cost manufacturers in Canada about $3.2 billion more in interest charges in 1990 compared to 1987. The picture is bleak.

Second, under number two, the motion before us calls for this:
That this House condemn the Government for:
[-1
(2)	cutting support for export promotion, science and technology and research and development, thereby accelerating Canada's slide into non-competitiveness; -
Mr. Speaker, in the very important field of high technology, this government's policies were definitely a step backwards. The government-made recession has put through hell the high technology businesses established in the Ottawa area for example.
Over the past year, we witnessed the closure of Leigh Instruments, one of the oldest and most popular company in the area, with 750 jobs lost. Mitel Corporation had to make temporary lay-offs and cut jobs. Newbridge Networks, a telecommunications company, had to shut down its plant and lay people off. Gandalf Data laid off 70 employees. And it goes on, Mr. Speaker; my list is quite long.

In The Ottawa Citizen of March 7, high-tech consultant Denzil Doyle estimated that Ottawa had lost at least 15 per cent of its high-tech industry last year and perhaps as many as 4,000 employees. Doyle says there isn't any sign of new companies to rejuvenate the industry. That is bad news. There are problems in the high-tech sector. The recession is probably the main problem. It has produced the worst business climate for the high-tech sector in a decade. It has made the selling of corporate equity very difficult for them. It has put even more pressure on already thin research and development budgets.

Mr. Speaker, nearly half of the jobs in Canada involve the use of computer technology. Yet, almost 90 per cent of this technology is imported. In 1984, this government was saying, and I quote:
The State should do its share (to strenghten the field of technology
in Canada) by creating a favorable climate and encouraging the
entrepreneurship required to foster innovation on a large scale.

We have been going down in research and development. We are doing less today than we were doing six years ago. Yet, this government promised it would do something about it.
In 1987 Canada's proportionate spending on R and D was only half that of Germany, Japan and the United States, and was less than smaller countries such as Switzerland, Sweden and the Netherlands.

Finally, Mr. Speaker, the motion before us states:
That this House condemn the Government for:
(3)	its economic mismanagement that has caused record bankruptcies, put 1.4 million Canadians out of work and brought about the de-industrialization of Canada, especially Ontario.
Mr. Speaker, unemployment in Ottawa, the national Capital, rose to 7.8 per cent in February, a 21 per cent increase over the preceeding month.
We now have 5,000 more people out of work than the
33,000	we had in January.
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The number of bankruptcies among consumers in Ottawa rose from 527 in 1984 to 1,214 in 1990, a 130 per cent increase.
Over the same period, business bankruptcies increased by 80 per cent, from 174 in 1984 to 314 in 1990.

The Tories have already hit their predicted unemployment high rate for 1991 at 10 per cent. We got that news last Thursday. As a matter of fact they have exceeded 10 per cent. Ontario has its highest unemployment rate since August 1983, at 9.5 per cent. Canadian employers and employees will pay an extra $2 billion over the next year in unemployment insurance premiums to pay for Tory mismanagement.
Who knows what is in store for the next few months? It is true that the Tories have no desire to stay in office because they are trying to destroy not only the economy of this country but many other things. Under Tory management, productivity in Canadian manufacturing is declining. Between 1985 and 1988 the level deteriorated compared to other leading industrial countries. The Canadian Manufacturers' Association, no friends of ours, estimates that 180,000 manufacturing jobs will be lost by the time this recession hits bottom. It estimates that half of these jobs will be permanently lost.
The quality of Canada's job training will be another important ingredient in our future prosperity. The Tory government has chosen to make a $100 million cut in the Canadian Jobs Strategy, designed to help Canadians retrain and adjust to a changing labour market. A recent Coopers and Lybrand study stated, and I quote: "Canada suffers from a shortage of skilled trades workers. Furthermore the lack of a universal system for trades training and certification in our education system has produced a work force whose skills sets do not match the technology needs of today". These are some of the problems.
Statistics Canada found on apprenticeship programs that almost half the participants dropped out in Ontario. Toronto Star, March 6, 1991, a few days ago states: "Drop-out rate across Canada is 40.6 per cent or 49,620 dropped out in 1986-87". In Ontario, my province, the rate rose to 42.3 per cent or 60,320 people quit training, abandoned. The main reason given was dissatisfaction with the program.
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This is totally unacceptable from a government. In 1985, the Ontario government, a Liberal government, in a discussion paper noted crucial steps Canada must take to improve its job training system: one, design and support a comprehensive world class training system that matches our competitors; two, make training an unequivocal and integral part of our industrial development objectives; three, ensure fair and equal access to quality training for individuals in the cross regions and businesses. The paper concludes: "The government should take the lead in developing socially appropriate and industrial superior training and that the real level of federal financial support must be sustained and enhanced".
I notice, Mr. Speaker, that you indicate my time is over. Mr. Speaker, a nation that abandons training and development of its youth abandons its future. I suppose that these Tories over there do not care, but we do on this side and the quicker they get out of there, the quicker this country will get back on its feet.


The Acting Speaker (Mr. DeBlois):: Five minute question and comments period.


William C. Winegard: Mr. Speaker, I just want to correct some of the impressions left by my hon. friend concerning science and technology in Canada. Since 1984-85 we have increased spending on science and technology from $4.1 billion to $5.5 billion in the current year, a real increase of 8 per cent.
My hon. colleague again mentions financing of R and D in Canada.
I think he should be wise enough to know exactly where the difficulty is. If he looks at public sector spending-presumably, that is what he was concerned about and criticizing-he will see that in the latest figures I have, 1987, Sweden spent .73 GDP; Switzerland, .51; Japan, .6; Germany, 8.2; U.S., .45; the U.K., .46; Canada, .56; and Italy, .60. We do not do too badly in terms of public sector spending here.
The real problem comes if you look at the industrial component. Let me just rhyme off a few of those for his edification, Mr. Speaker. The industrial spending as a percentage of GDP: Sweden, 1.82; Switzerland, 2.27; Japan, 1.97; Germany, 1.82; U.S., 1.27; Canada, .57.
It seems to me that one of the reasons the private sector is having difficulty is that it had to struggle for years without the proper incentives or, indeed, without the proper programs to promote science and technology,

March 11, 1991
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and research and development, something this government has set about correcting.


Jean-Robert Gauthier: Mr. Speaker, I am pleased to have the minister in the House taking me to task.
One of the points that I wanted to make in my speech but that time did not allow was that this government has even shattered the dreams of Canada's top scientists in the matters of research and development.
The Ottawa Citizen noted on December 15 that few of the promises the Prime Minister made when he phoned the National Advisory Board for Science and Technology for which the minister was responsible in 1987 have been met. While the board urged the Prime Minister to increase the percentage of GNP spent on research and development from 1.4 per cent in 1987, it has fallen to 1.28 per cent, less than any other industrialized nation.
Here is the Minister of Science and Technology. Maybe he will get up and defend that record. In research and development terms, Canada is a third world country. What kind of future can the people of Canada expect with a Prime Minister who does not keep his promise? He failed to keep his promise to the scientific community and also fails to keep up with research and development so essential to developing the jobs in this country.


Mr. Marcel Prud'homme (Saint-Denis):: Mr. Speaker, I am from Montreal, and in Montreal, as you know, we have 14 per cent more unemployment. If I have time to speak in this debate, I will tell you how disastrous the situation is. In fact, there are more unemployed workers in Montreal than in all four Atlantic provinces.
I listened to a description of the situation in Ontario, and I wonder whether the hon. member could tell us about these three points-he told us he had three points he intended to make-so I would like to hear about the third one, because this is, of course, an opportunity to find out a little more about what is happening in other provinces. My speech, if we have time, will be about the situation in Montreal, but I wish the hon. member would tell me what the last point was he wanted to raise in this House.


The Acting Speaker (Mr. DeBlois):: The hon. member for Ottawa-Vanier has one minute to answer.


Jean-Robert Gauthier: Mr. Speaker, I want to thank the hon. member for Saint-Denis.
I would have liked to talk about training. I started talking about that but I didn't really have time to elaborate. I would have liked to talk about education. We have a problem in Ontario, Mr. Speaker, at the secondary and postsecondary levels. The drop-out rate among our students is disturbing. Health care and housing are some of the concerns of the people in my own riding and of people throughout the province.
They also want a strong, central government. And I know that the hon. member for Saint-Denis and Montreal is in favour of a strong, central government. The Conservatives are leaving us a government that is tax hungry. The Minister of Finance has refused to say anything about tax reform. Just imagine, where we are heading. We have the Minister of Finance who will not tell us what lies at the heart of this so-called tax reform.
As far as Ontario is concerned, I would have liked to talk about all that, but I am running out of time. I will get back to that later.


The Acting Speaker (Mr. DeBlois):: Resuming debate.


Monique Bernatchez Tardif: Mr. Speaker, perhaps I should revert to the last intervention of my colleague from Ottawa-Vanier who referred to drop-outs and housing problems. If he thinks these problems are peculiar to Ontario I can tell him that we have them in Quebec as well. I would remind him that even though the federal government is not responsible for education, it has made concerted efforts-vocational guidance sessions, among other things-which I think are one way of indirectly helping people who would otherwise drop out of the school system.
That being said, I would suggest that the motion before us today deals with the priority objectives of government economic policy. The first two parts of the

motion relate to a very important issue: competitiveness in our economy.
Enhancing Canada's competitiveness has been one of the government's foremost concern since 1984. The budget tabled by the Minister of Finance last February 26 made us look at the matter from a new vantage point. I want to debate that aspect of the motion in light of the budget and the strategy of the economic policy which the government has been steadfastly pursuing.
The 1991 budget responds to the twofold competitiveness and prosperity challenge facing Canada. We Canadians enjoy one of the world's highest standards of living and an unprecedented quality of life, but we have no guarantee that these conditions will remain unchanged. No longer can we rely on such factors as may have accounted for past successes if we want to continue to better our living conditions and our quality of life.
We have to get back on the road to economic recovery, but we must go one step further and achieve economic prosperity. To this end, Canadians are expected to co-operate more efficiently in a prosperity partnership which will seek to face up to our competitors' challenges.
As the world economy grew ever more competitive, Canada lost some ground as our trade partners became more aggressive on international markets. Trends in productivity remain one of the most telling indication of what Canada can expect in terms of economic challenges. Productivity growth spells higher standards of living for Canadians. Unfortunately we are not as productive as we once were, a fact to which my colleague in the opposition referred to a moment ago. To put it another way, we are finding out today that Canadians are less and less efficient at producing goods and services.
From 1974 to 1989, over-all productivity growth slipped to 25 per cent of the average level for the 20 preceding years. It did not go up at all during the first half of the 80s. With respect to labour competitiveness in the manufacturing sector, in the last 15 years Canada dropped from second to fifth among the industrialized countries of the Group of Seven.
In fact, Canada is the G7 country which recorded the lowest productivity growth over the last six years. My other colleague said earlier this is because we have gone
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down. No! We managed to improve our productivity in the manufacturing industry less than other countries and this, in spite of our strong economic growth. Such competitors as West Germany, Italy and France have not only equalled but exceeded our level of productivity.
Policies implemented in Canada in the 1970s and 1980s, have undermined its long-term productivity. A change of direction was necessary. The 1984 economic Recovery Plan described the economic challenges which Canada had to meet and the steps taken later on have helped create a framework much conducive to productivity enhancement. The Economic Recovery Plan stems from the wise realization of a need for basic recovery aimed at bringing about sustained growth and productive employment. Before laying out the solid foundations necessary for this renewal, the Canadians and their government joined forces to develop and implement an action plan to eliminate the many obstacles to economic growth. This action plan started off with energy and determination in two major closely connected directions.
First of all, federal program policies had to be changed to make it possible for the private sector to become the motor of economic recovery in an increasingly competitive international market. To support growth in the private sector, Canadians had to focus on change and progressively adopt a new positive approach towards entrepreneurship and adjustment to new market realities.
In some cases, this resulted in less regulation and government intervention. In other cases, it resulted in a reduction of subsidies and other government expenditures which were detrimental to a wise allocation of our limited resources. In others still, it resulted in a redirection and reinforcement of government activities necessary to support growth and adjustment. This was especially required in the areas of research and development, exports and investments, especially in the case of small-and medium-sized businesses.
On the other hand, Mr. Speaker, we had to address the federal deficit in order to control the constant increase of a federal debt resulting from past squanderings. In order to reduce the deficit, it was necessary to systematically and consistently limit the increase in federal spending. We had to carry out a thorough

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examination of federal spending in all sectors, including economic and regional development, social programs, federal-provincial transfer payments, public assistance to development and defence. All this in order to develop a system plan for slowing down government expenditures, while modifying the composition of the latter to reduce to a minimum the negative impact of budget cuts on the economy.
This action plan had to be fair, and it was. Some of the changes necessary for economic recovery represented a form of shock treatment. The pill may have been difficult to swallow in some cases, but it remained at least palatable when all economic groups or regions accepted to carry their fair share of the burden.
As early as 1984, it became clear that the refusal to change was no longer possible in Canada. If Canadians were adverse to the very notion of change, they were nevertheless aware that their refusal would prevent Canada from seeking solutions for renewal. If all Canadians wanted to avail themselves of the benefits, they all had to share in the effort.
It feels good and reassuring to see that Canadians were able to meet the challenge issued to them in the Agenda for Economic Recover and that their support spearheaded the crucial changes and innovations that have been and still are implemented by our government.
Also ensuring Canada's competitiveness are our vocational training and education programs which are well-suited to our economic situation and which considerably contribute to our prosperity.
A highly educated and trained work force adapts rapidly to new situations, thrives on working with new technologies, and is capable of becoming more directly involved in promoting the success of the firm. A highly skilled work force will naturally develop a more direct stake in its own productivity performance. In recognition, Mr. Speaker, of the growing importance of a skilled labour force, the government has been shifting its training focus, through the Canadian Jobs Strategy and unemployment insurance reforms to achieve a better balance between passive support and active training for the unemployed. In April 1989, the government launched a major new initiative to increase its effort in the field of training. However, it will take time before the benefits of the Labour Force Development Strategy become apparent. Particular attention is being given to
apprentice training for the young, which varies widely in quality across the country.
The competitiveness of a nation's tax system, which also plays a major part in the overall competitivity of a country, should be judged according to two fundamental criteria: the effectiveness of the system in raising revenues to fund the provision by government of important goods and services and to support a sound macroeconomic environment; and the ability of the system to raise revenues in ways that minimize interference with private decisions and the efficient operation of markets.
Judging by these criteria, Mr. Speaker, the Canadian tax system, such as it was in the mid 1980s, was an obstacle to our competitiveness. The high level of nominal tax rates and the narrowness of the tax base were the results of the many tax incentives granted during the previous 15 years. However, these incentives turned out to be inefficient instruments of public policy. They caused a major drop in public revenues, without a parrallel increase in economic activity.
The tax reform initiated by this government has brought income tax more in line with that of other countries and enhanced the overall structure of the tax system. Structural changes have broadened the tax base, lowered the nominal tax rates and reduced to a minimum the number of distortion-creating incentives.
The replacement of the manufacturers sales tax-an obsolete tax, harmful to the economy-by the goods and services tax was another important structural change in our tax system. The former tax increased the cost of goods produced in Canada and thus favoured imports. Having eliminated these problems, the GST is playing a key role in improving our competitiveness.
Right now, Canadians are more and more concerned with their ability to compete. Their fears are being fueled by macro-economic issues like inflation, interest rates and exchange rate, or by structural problems like investment efficiency, overegulation, and business climate.
It is incumbent upon governments to devise a framework conducive to the development of competitive companies. The 1991 Budget contains measures meant to restore fiscal balance and to move towards price stability. This will lead to a stable macro-economic climate, a renewed confidence in the Canadian economy
March 11, 1991

and a strengthening of the Canadian capacity to compete in a merciless economic world.
By collaborating to devise a common approach to fundamental economic problems, the federal and provincial Ministers of Finance are currently studying the growing cost of government as well as the various overlappings and duplications. Furthermore, at the request of the Prime Minister, the Economic Council of Canada is carrying out a major study of the impact of governments on Canadian competitiveness.
During tax reform, a number of incentives that enhanced the overall competitiveness of the economy were retained. It will be necessary to continue to review the operation and targeting of these incentives and consider possible improvements.
In particular, the government will be examining whether modifications to the R & D tax credit could ease its administration for taxpayers. It will also examine whether the tax system can be changed to remove potential impediments to the operation of capital markets in Canada. In this Budget, the government is proposing measures to remove the tax-induced bias against pension funds investing in common equities in Canada. This will stimulate share purchase, which would make Canadian businesses more competitive.
More will have to be done, however, to ensure Canada's future prosperity. We need to look hard at the quality of our investments in infrastructure, machinery and equipment, training, education, and research and technology; at private sector spending on training and research; and at other areas, such as education, where our level of spending compares well with international standards but our performance appears to be falling behind.
This is not an issue only for business, labour and government. All Canadians have an enormous stake in strengthening Canada's competitive ability by identifying the problems and developing solutions.
The government will launch a national effort to build a new partnership for prosperity that draws fully on the talents and efforts of Canadians in every sector of economic life. A discussion paper will be released in the spring to help focus public debate toward the building of a broader consensus on the problems Canada faces and the development of solutions.
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Through structural initiatives implemented by the government, combined with selective measures that reflect real will to get in tune with a changing economic situation, I am convinced the economic recovery is close at hand. The continuous decrease in interest rates over the last few months combined with the end of the conflict in the Persian Gulf, which will bring oil prices down and rebuild consumer confidence, will be the engine that starts recovery. We have every reason to believe that, spurred by those incentives, growth will be vigorous once again before mid-year.
The February 26 budget of the Minister of Finance is a major step toward the realization of competitiveness and prosperity objectives. It is a watershed budget, that institutionalizes the key elements that will ensure financial stability for years to come. It will make the country stronger and more prosperous, able to assume its proper leadership role on the international economic scene in the best interest of all Canadians from coast to coast, of all children and generations to come.


The Acting Speaker (Mr. DeBlois):: Ten minute question and comment period.
Resuming the debate with the hon. member for Davenport for a ten minute period.


Hon.   Chas. L. Caccia@Davenport: Mr. Speaker, it is very interesting to listen to the learned interventions of colleagues on the government side who inevitably, one by one, have concluded their interventions by expressing positive thinking as being the solution to our economic ills. It is reminiscent of some religious movements whereby if one believes it firmly enough and intensively enough a miracle will happen.
I am not sure whether this is the way to reduce the unemployment rate in Canada today nor whether this is the manner in which the role of government ought to be developed on behalf of Canadians. The reality unfortunately is not one that we can write home and gloat about.
We know from Statistics Canada and from independent sources, which are not partisan in nature, that between December 1988 and September 1990 some
108,000	jobs in Canada have been lost in manufacturing. We know that by contrast the jobs promised as a result of the free trade agreement were 500,000, in the opinion of the Prime Minister.

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We know that while the tax burden on corporations in the last five years has gone up 28 per cent, the tax burden on individual Canadians has gone up 62 per cent. Evidently, this has an effect on the ability of Canadians to spend, to consume and to keep the economic wheel turning. This is a remarkable differential in tax burden that has to be brought to Your Honour's attention.
Among industrialized nations we find that our standard living has gone from second place to eighth place. We find that between 1986 and 1990 in terms of sheer competitiveness, which is the latest political expression or the latest political concern when we want to describe our ability to function properly on international markets and on our domestic markets in relation to imports, we have fallen from ninth place in 1986 to sixteenth place in 1990.
This is a very serious slippage, if not a veiy serious drop, that must be highlighted; evidently something is going wrong. In an attempt at least to interpret the causes of unemployment, we must identify the roots, and this is one of them, obviously.
If you do not want to look at competitiveness, Mr. Speaker, I would urge you to look at research and development efforts. In that case, you will find that from the 10th place in which we were among the industrialized nations in 1984 we are now, in 1990, in 17th place. Here again something is not functioning properly. Should we blame the government for that?
I see the former minister in charge of science in the Chamber. Perhaps he may have some thoughts as to why we have gone from 10th to 17th place. If the public sector has been cut consistently and repetitively by seven consecutive Conservative budgets, then it would be interesting to know whether that slippage has been picked up in the private sector; and if so, where?
However, according to total accounts, nation by nation, in combining private and public, we seem to have performed very badly. We have gone from 10th to 17th place. One has to ask oneself, in light of 10.2 per cent of the Canadian workforce presently unemployed, what is it
that makes this happen? We have to conclude that the strategy of this government is not working.
We heard earlier from the Minister of State for Finance and Privatization about his profound belief in the marketplace. When I asked him, since he so profoundly believes in the marketplace and its wonders, to explain why in this latest budget the government has removed the instrument of collective agreements, which is a marketplace instrument, from negotiations between the government and federal employees, he did not answer that question. So there are contradictions within the government's attitude to let the marketplace do it.
Second, in our reliance on investment, we have increasingly relied on foreign investments.
Third, in removing trade barriers, we have exposed jobs and companies to competitive forces which are stronger than their ability to deal with them.
Fourth, we have seen over the last six years an intensification of the belief that government should be doing what big business tells it to do. This has come across in a variety of ways, and we witnessed that particularly intensively during the last election when it came to the free trade debate and the role of the BCNI, the Business Council on National Issues.
We also have to bring into this ever-enlarging equation the fact that since the government took over in 1984, there have been over 4,000 foreign takeovers and not one single application has been rejected. In other words, Canadians and Canadian capital are increasingly losing control of the Canadian economy, because control of the Canadians economy is the result of the foreign investment policy of this government, which is more and more in the hands of foreign investors.
In some cases we have seen also the irony of Canadian taxpayers having to pay for some takeovers, such as occurred when Boeing bought de Havilland and subsidies had to be paid to Boeing in order to make the takeover more attractive.
We have to take into account the fact that unemployment insurance, as a result of Bill C-21 has been privatized. It is no longer an institution in the hands of the government as far as its funding is concerned. We have to conclude, regretfully, that the regional transfer
March 11, 1991

funds have been reduced, that the training for the unemployed, as projected, has been reduced by $100 million at a time when unemployment has exceeded 10 per cent.
The government has on a variety of fronts attempted to dimmish the universality of several important social programs. As I said earlier, the 500,000 jobs promised by the Prime Minister flowing from the free trade deal have not materialized.
I will conclude by making this point. In the first year of the free trade agreement operations, 179 Canadian corporations were taken over. Obviously, when a Canadian corporation is owned by a foreign company in difficult economic times, what does it do? The first thing that happens is the parent company closes down the subsidiaries abroad. This is in part what is happening in Canada in the over-all picture.


Diane Marleau: Mr. Speaker, I want to congratulate my colleague on a very good speech. We on this side realize very well that this government is not paying attention, that it says one thing and always does another.
I want to remind my colleague of the promises made during the 1988 debate on the effects of the free trade agreement and the promises of adjustment funds and job creation initiatives on the part of the government to help ease the transition. Perhaps my colleague would like to add comments concerning these questions.


Mr. Caccia:: I thank my hon. colleague from Sudbury. I have also been looking around for the instruments the government would be looking to in order to make unemployed people employable, provided they have a skill, by way of improved education and training skills of our work force.
Today, unfortunately, we have to conclude-and on the basis again of international studies-that Canada is less well-equipped than it was six years ago to meet the challenges of the future, because of budget cuts, which are really made and invoked in the name of a financial deficit, without taking into account the human deficit these cuts are causing, because of people remaining idle and unable to be productive, to maintain themselves and their families. Thus, the losses that are, in human terms, inflicted upon people because of an enormous preoccupation with an illusive deficit cut which this government has not been able to come to grips with, while at the
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same time allowing a human deficit to expand and to increase enormously day by day and month by month, as a result of such narrow-minded policies.
The Report on Business from The Globe and Mail cannot be cited as a revolutionary source of data. In the March issue, on page 30 is the lay-off list expected by The Globe and Mail business magazine for Canada over the next while, and the figures are astonishingly depressing.
Between the big three automakers, there is a projected lay-off of 14,000; in the steel industry, an estimated 3,000 to 4,000; Air Canada, 3,000; Canadian National Railways, 2,200; Rio Algom, 1,700; Pratt and Whitney Canada Inc., 1,200; Sears Canada, Shell Canada, Imperial Oil, forest products, you name it, a phenomenal number of projected lay-offs which will occur in our economy, as predicted by an organization which has its feet solidly on the ground.
Evidently the solution would have to come from the proposal just outlined by the member from Sudbury. We are waiting for the evidence on the part of the government to prove to us that it intends to proceed along those lines.


William C. Winegard: It will only take me a minute, Mr. Speaker.
I just cannot help but comment on what an interesting reversal we have; all these comments from our colleagues on the Liberal side talking about training, et cetera. I cannot help but remind them that they were the group that held up Bill C-21, they were the group that patted their Liberal colleagues on the back, they were all such a grand bunch of ladies and gentlemen down there, holding up Bill C-21; $800 million worth of training funds held up by them because they were so concerned about training and education.
This is the same group that in 1977-and I say this to my colleague from Sudbury-gave away the Government of Canada's right to direct where EPF was going to go, gave it away as a block so the provinces could use it on highways or on anything they wanted. This is the same bunch now moaning all these marvellous things about training and education.
There is a word I cannot say in this Chamber, but, oh my, it does reek a little.

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Maurice Brydon Foster: Mr. Speaker, This is perhaps one of the most important resolutions to be put before this House this year, because it deals with not only the recession that we are facing due to the government's policy, but the actual deindustrialization of our nation. There is no area of the country more affected by this deindustrialization than the province of Ontario.
Clearly, the important groups right across the country have talked in terms of 229,000 manufacturing jobs lost as a result of free trade and the government's policy. We do not say that all of these jobs are lost because of the free trade deal itself, but because of the general economic policy of the country.
The Governor of the Bank of Canada has taken it upon himself to decide that Canada's inflation rate is going to be zero, or 2 per cent. Surely the industrial policy of the Government of Canada should not be decided solely by the Governor of the Bank of Canada. Clearly the government's economic policy, its monetary policy, its fiscal policy and the free trade agreement, during the period since 1989 when it came into effect, have resulted in the most drastic and dramatic loss of jobs of any period in our history.
Members of our caucus from northern Ontario had a series of hearings throughout northern Ontario in the past couple of weeks. We heard from groups all over the north from some eight different communities during a five-day period in which they talked about the absolute ravaging of the manufacturing industry for softwood lumber. That is all part of the free trade deal.
The imposition of an export tax of 15 per cent is bad enough, but when the dollar rose from 74 cents-whatever it was-in 1986 to 87 cents in this past couple of years, the impact is not a reduction of 15 per cent but one of 30 per cent.
A report arrived just today on members' desks which outlined the levels of the export tax which have been imposed on this industry during the past year. I believe the figure is something like $18 million in the province of Ontario alone.
Its impact is that practically every part of the softwood manufacturing industry in northern Ontario is either shut down today or is on very slow turns of work. That area has been deindustrialized. One of the largest producers, the Buchanan group in Thunder Bay which
has 3,200 forest products workers of the 6,000 in the softwood lumber section, told us that if many of these plants do not reopen by April, they will never reopen. They are one of the largest manufacturers. We see how that whole area has been ravaged.
As well, I want to talk about the mining industry and how the government has effectively removed all its support programs for exploration and development so that we see communities like Elliot Lake or Timiskaming which have lost several thousand jobs in the last two years. There will be no new mines coming on stream in the years ahead because there is no exploration and development taking place in those areas of northeastern Ontario.
The numbers involved are very large. We are talking about 15 per cent of all the mining jobs that have been lost in the last two years in northeastern Ontario and northwestern Quebec, something approaching 4,000 at least.
I was very concerned in the budget because the government has cut back by some $100 million in the new training budget at a time when literally tens of thousands of Canadians are being laid off from industries that have been obliterated or destroyed by the free trade deal.
What we need to be doing is retraining those workers to take on new jobs, new tasks and new opportunities. In my own community of Elliot Lake, we lost some 2,250 direct mining jobs last summer and probably another 1,500 or 2,000 in the service sector.
At the present time, we have 500 people on UIC benefits. We have another 700 on training, either pre-vocation or vocational kinds of training. Last week, we were notified that we would have another 1,000 people laid off this Friday for a six-week period, to be repeated again by a seven-week period this summer with 400 being permanently laid off.
We are talking of an industry losing some 3,300 jobs against a total workforce of 3,900 a year ago or 80 per cent. This for a community of 13,000 or 14,000 is simply a desperation situation. It is desperate.
I ask the minister today if she can give a commitment that the payments would be made within a couple of weeks of when people qualified for the UI, because they are being told by their UIC office in Elliot Lake that they have got to wait a minimum of six, seven or eight weeks.
March 11, 1991

Surely, that is unreasonable for 1,000 employees who have had little over a week's notice of the lay-off.
Equally important is the question of funding for training and retraining, job search, mobility and community adjustment because the impact is not only on those industrial workers but equally on those people in the service sector.
We are facing the most cataclysmic turnaround in industrial job unemployment that I can recall. I think it is worse than the 1981-82 recession. Clearly, we are coming at it from a much lower base in terms of job situations. In the 1981-82 period, of the 83 megaprojects across Canada, five of those were located in my constituency at that time. We have no megaprojects, we only have lay-offs and a desperate situation. The same situation applies in Sault Ste. Marie where we have had very significant lay-offs. We have a steel industry there which, as the whole steel industry in this country, is in a very desperate, sick situation.
Much of that is due to the government's economic and fiscal policy. You simply cannot compete in the United States market with the level of interest rates 5 per cent above the United States and a dollar at 87 or 86 cents. On top of that, in the free trade deal the people in the steel industry in Canada, whether it is Dofasco or Stelco or Algoma, all believe that they would be relieved of the threat and the problems of countervail. In fact, that has not happened.
Since 1989, we have had countervail imposed on steel rails. We have had countervail duties imposed on seamless tube pipes. It has made them unsaleable in the United States and that, combined with the high dollar, has just had a devastating impact on that industry. The entire industry is facing collapse, certainly at Algoma. This is mostly due to the government's policy and the broken promises of the FTA.
This resolution today really pin-points the folly of the government's policies: the fiscal, monetary, trade and tax policies. It is having a drastic and devastating impact on our industry and business in this country, but, most important, on the workers of this nation, the 1.4 million who are facing unemployment, loss of jobs and no retraining programs.
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I think it is a desperate situation. It is one that requires action by this government and one which the budget does not address. It simply exacerbates the situation because it calls on provincial governments and municipal governments to pay higher taxes, increasing the adverse economic impact on the entire nation.


Mr. Joe Comuzzi (Thunder Bay-Nipigon):: Mr. Speaker, I compliment my colleague from Algoma for bringing to the attention of this House the dilemma in which all of us in northern Ontario find ourselves.
I have sat on several committees with my colleague over the last several months where we have discussed those areas of the economy in Ontario that are truly affected, especially the area from which he comes. What I am talking about in particular is the softwood lumber industry. He has had several mills close in that area, as he has relayed in his speech to the House.
I would ask the member to relate what he saw happening, firsthand: the anguish and pain of individuals in the community, because of the families involved, the lack of work and without the proper training to go to another job even if there was another job to go to, in the softwood lumber industry. Could he tell us also about the terrible anguish that the community of Sault Ste. Marie is now facing because of the potential closure of its largest employer, something that would destroy not only 8,000 primary jobs in an industry that has been so vital to the future in the community of Sault Ste. Marie. Could he relate to us, in this House, the personal anguish and the personal pain that each family is experiencing because of this terrible economic policy that is affecting all of us in the north but, particularly, in Sault Ste. Marie and the district of Algoma of which we look upon in Thunder Bay-Nipigon as being part of our area.


Maurice Brydon Foster: Mr. Speaker, I thank my hon. friend and colleague from Thunder Bay-Nipigon for his question regarding the softwood lumber industry. It is an area that is common to both of us, although clearly in his community they have one of the largest softwood conglomerates in the entire area of northern Ontario.
The presentation that was made to our task force on the northern Ontario economy in Thunder Bay by a representative of the Buchanan Group perhaps was one

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of the most poignant. It is a case of representatives of the industry not knowing which way to turn. They know they are not viable the way they are. They do not understand why the government is willing to leave the export tax in place. They do not understand why the government has continued to push the dollar so high. There is a lack of confidence that there will be any out for this. At the same time the bankers and lending institutions are coming by to examine the books of these companies to see if the whole thing is viable.
When we get to the point of putting the question to the Minister for International Trade as to whether he is going to go to Washington and make a decision to abrogate this agreement or to negotiate out of it, it all turns to mush. There is just no decision to do that.
At the same time communities are crumbling. There are lay-offs that take place and people have to wait for six or seven weeks for their unemployment insurance benefits. They do not know how long this is going to take place.
It is the same for the laid-off workers at Algoma Steel in Sault Ste. Marie. They say: "Well, we are getting UI initially, at least, but we have no confidence in the future as to whether the industry is going to continue to operate". I think that is true throughout the north for the softwood lumber industry. Will the industry be there? Will the shut-down that is supposed to last for a couple of months last all summer, last all fall? They do not discern any commitment by the government to come to grips with the problem. They know that the companies are strapped. They have no borrowing power. Their line of credit is right up to the limit. So it is a directionless situation. Do they jump and try and get-


The Acting Speaker (Mr. DeBlois):: Order, please. The time for question and comments is over. Resuming debate.


Mr. Andre Plourde (Kamouraska-Riviere-du-Loup):: Mr. Speaker, as Parliamentary Secretary to the Minister of Industry, Sciences and Technology, I am pleased to rise on the motion introduced by the hon. member for Willowdale. I am happy to do so because we all know that Canada's economic competitiveness and future prosperity are an excellent discussion topic requiring the
involvement and the knowledge of every hon. member and every Canadian.
But most of all, I know that that debate will provide me and my colleagues with the opportunity to show how much we care for the Canadian competitiveness. In spite of all false contentions, Mr. Speaker, the government's commitment to make a strong and prosperous Canada during the 1990s and beyond is unprecedented.
Sciences and technology are crucial to increasing Canada's competitive edge and economic prosperity. Technological research and development are the great factors of growth in a world economy characterized by innovation and the spreading of knowledge.
The key to innovation is the skills and knowledge of our people. Benefits will accrue to men and women who will make the best of their kowledge and their skills to design, develop and create new or improved products, processes and services as well as to open up new markets.
Mr. Speaker, our government believes that Canada's prosperity is based on five pillars: access to international markets, effective management of our human res-sources, a better corporate financial situation, a corporate culture characterized by competitiveness, and a climate enabling us to benefit from science and technology-
In each of these sectors, Canada has a challenge to face. Most of these challenges are not exclusive to Canada. They are universal, created by rapidly changing international markets and an unprecedented pace in technological development.
We, as a government, are determined, to do what must be done to place Canada-that is, its industries, its scientific and research institutions, as well as all its citizens- in a position to transform these challenges into prospects for the future. We are doing so by using the best possible strategy. We have all learned the hard lessons of our predecessors' approach. They tried to fix everything with grants, but we have seen that such an approach leads nowhere.
We have followed a complete and judicious set of priorities, established to promote excellence in the field
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of science and technology, and to help Canadian corporations become more innovative and competitive.
Our priorities, Mr. Speaker, are to preserve and to increase, as far as possible, the ability of Canada to undertake pure research studies, to heighten its capacity to carry out applied research, particularly through the pooling of government, industry and university resources, and, maybe still more important, to noticeably step up research and development from sea to sea. Each one of these priorities is based on our commitment to an education of international standard; in other words, to the creation and preservation of a pool of highly qualified men and women which our country will need to be a winner.
As I have just said, Mr. Speaker, I am happy that this debate gives us the opportunity to clarify some misconceptions, some myths. With your permission I should like to consider for a few minutes one of the latter, which is particularly common, that is the myth that government support to science and technology is inadequate.
Quite frankly our level of support to civilian research compares with that of all other major industrialized countries.
Mr. Speaker, government expenditures in science and technology have been steadely increasing, from 4.1 billion dollars in 1984-1985 to about 5.4 billion dollars in the current fiscal year, an increase of more than 33 per cent. Looking at this science and technology envelope, we see that research and development expenditure went from $2.4 billion to $3.2 billion an increase of 30 per cent. Such increases exceed the 25 per cent growth in total program spending which clearly indicates that science and technology, as well as research and development, are an absolute priority for the federal government.
This increase in research and development spending went mostly to industries and universities. Federal spending in industrial research and development went from $422 million to $776 million, an increase of 85 per cent.
Our university research and development expenses increased by 34 per cent, from $538 to $721 million. Mr. Speaker, would any government do that if it refused to make commitments?
This trend will continue because research and development will remain one of our priorities. The recent
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budget provides that grants and contributions for science and technology will increase by 3 per cent annually starting in fiscal year 1992-93. Over a period of 4 years, this increase will result in a financial support of some $1.5 billion more thant present expenses for new or improved initiatives in science and technology.
You should consider all of this and the fact that the Conference Board of Canada acknowledges that the financial support we provide for research and development through our tax system is one of the most generous in the world. Yet, misconceptions continue to spread around. I am really puzzled. I think our critics are just badly short-sighted or lack good faith.
I will forget about monetary matters if I may and concentrate on the approach of our government to research and development promotion.
A very good example is the centres of excellence program. This program which includes participation by over 500 researchers from 35 universities and 37 major corporations, provided a total of $244 million in federal funds available to 15 networks.
It should be emphasized also that the purpose of these networks is not only to encourage research and development but also to ensure that our capacities in this area are used to foster such economic and social objectives in Canada as reinforcing our industries' competitiveness and promoting a better quality of life for Canadians.
These networks were set up less than a year ago, but their potential is already evident. Consider for instance the important position the fishing industry has in Canada and be advised that there exists an Ocean Production Enhancement Network which could offer new possibilities for the future and make it possible for this industry to remain competitive, in spite of necessary quota reductions.
The network concerned with pest control could improve considerably the level of productivity of both agriculture and forestry while pursuing environmental objectives.
Two other networks will make it possible for Canada to confirm the reputation of excellence it has gained in the areas of space research and communications. Finally, another network devoted to research in the area of heriditary conditions and another one on nerve regeneration and functional rehabilitation will make it possible

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for Canada to remain among the leaders in these two important health research sectors.
Last year, Mr. Speaker, we announced that we would allocate $35 million over a five-year period for the construction in Ontario of the Sudbury Neutrino Observatory valued at $61 million. This Canadian program international in scope will open a new vista on the universe and will make Canada a world leader in the research area of particle physics and astrophysics. In addition to encouraging scientific excellence and greater knowledge, this project will result in major economic fallouts for Northern Ontario.
Besides, Mr. Speaker, the Green Plan that was announced last December is very scientific and technological in nature. Three billion dollars will be used to fund a variety of initiatives related to the improvement of the environment, particularly the Great Lakes and St. Lawrence River Action Plan. A major part of these funds will be used for the development and application of scientific and technological solutions to environmental problems.
Once again, Mr. Speaker, I would like to go back to the education and training theme. The Prime Minister and this government work hard so that Canadian education standards reach the highest levels possible.
The Canada Scholarships Program, which is very successful, shows our unfailing commitment in this regard. We established this program three years ago to encourage a greater number of young Canadians and particularly women, to pursue graduate studies in sciences and engineering. The program has presently more than 6 200 scholarhip recipients and is successful beyond all our expectations.
If universities play a leading role in the promotion of the program, industry also began to play an active role this past year. Thirteen businesses are sponsoring the program and their number should increase during next year. This contribution from industry helps increase the quality and the expansion of the Canada Scholarships Program, which benefits all Canadians.
Mr. Speaker, the councils which fund university research also provide a vital contribution to the country's future by encouraging and supporting academic research and training. The programs and activities of the National Sciences and Engineering Research Council are a good
example. They are among the key elements of the national strategy for promoting co-operation between industry and universities. The Social Sciences and Humanities Research Council of Canada also funds in various ways research in the field of competitiveness.
Mr. Speaker, being committed to science and technology, the government is doing everything in terms of public awareness to promote a strong science culture in Canada. With this in mind we are conducting a national public awareness campaign to urge Canadians, especially young Canadians, to become more interested in science and technology and consider careers in these disciplines; to make science and technology an increasingly important issue for the public; and to raise the level of general science knowledge of all Canadians.
Mr. Speaker, the cornerstone of our campaign is National Science and Technology Week, organized in co-operation with the provinces, the territories and various groups in the scientific and technical community. Last October was the first time we focussed the attention of the entire country on science and technology. That experience was an unqualified success. More than 600 events were organized across the country, and we expect even more next October.
Mr. Speaker, I think the present government's achievements in this area are self-evident. However, although my colleagues and I draw great satisfaction from what we have accomplished, we are aware much remains to be done.
We cannot deny private sector investment in research and development falls far short of the standard in major industrialized countries.
Although Canada has a broad resource-based industry, most Canadian businesses are small. Nevertheless, a number of large industrial sectors in this country do far less research and development than their foreign competitors. It is clear that this in turn hurts productivity.
However, technological innovations are not limited to research and development activities as such. For example, a country can ensure the spreading or the improvement of production technologies, through licence agreements, joint ventures, employee transfers within multinational corporations, or foreign machinery and equipment purchases. Canadian businesses have seemed slower to adopt new technologies than their counterparts in other industrialized countries. We must recognize the

need to promote the spreading of technology in Canada, if we are to become more efficient.
Mr. Speaker, no wonder why the efforts of the present government, in science and technology, have mainly aimed at supporting, promoting, implementing, and stimulating the private sector into making more room for innovation.
We developed programs that will help industries and scientists to work together and join their capital and resources in research and development undertakings.
Under their new mandates, government laboratories, NRC included, must now work in close cooperation with Canadian industry.
Some programs will help industry to acquire new technologies abroad and we set up new initiatives to help whole industrial sectors to overcome some of the obstacles they encounter in trying to become more competitive.
In conclusion, Mr Speaker, allow me to quote one of our relatively modest programs: the Manufacturing Visits Program. This initiative is aimed at giving companies the opportunity to visit some of our most important manufacturing centers and observe their operatious. Our Spring program can handle 150 companies. Mr. Speaker, 127 companies in only two days have already registered in that program!
I therefore conclude, that the industry is beginning to move and that it is taking up the competitivity challenge. I also conclude this government is paving the way for a competitive and prosperous Canada.


Mac Harb: First of all, Mr. Speaker, I wish to congratulate my hon. colleague on his presentation. However, in order to clarify the situation, because he has just indicated that Canada is spending enough in the areas of research and development, I have here the annual report of the National Consortium on Scientific and Educational Societies which finally represents over 30 different national organizations, including the Canadian Association of University Research Administrators, YAssociation canadienne des ecoles de titre superieur, the Canadian Association of Physicists. This
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report, of which my hon. friend must certainly have received a copy, compares the situation in Canada and other industrialized nations.
For my hon. friend's information, it deals here with Gross Domestic Expenditures in research and development expressed as a percentage of the Gross Domestic Product. Here are some the comparative data: Japan, 2.92 per cent; Germany, 2.85 per cent; the United States, 2.8 per cent; France, 2.3 per cent; Norway, 1.87 per cent; Finland, 1.8 per cent; Austria, 1.3 per cent and Canada, less than 1.3 per cent. If we compare Canada's performance with these other individual countries, my hon. colleague will certainly agree with me that we have not yet reached their level. Even if we spent a little money here and there, it is not enough as an investment for the future.
Yesterday, or the day before, Mr. Speaker, the Minister of Industry, Science and Technology was reported as saying that the private sector was not investing in the area of science and technology. I wish to reply to that by saying that the federal government's share in research and development financing compared to that of the private sector, according to this report, decreased from 35 per cent between 1981-85 to 31 per cent between 1986-90. If we also consider the levels of public investment in those fields, we see a constant decrease and no increase at all.
So, instead of saying that we do enough, why is my friend not asking his colleagues in caucus to invest a little more in sciences and technology so to set a good example for the private sector? I would like to hear his comment on that, to know if he agrees with the report or not.


André Plourde: Mr. Speaker, my first words are to thank my colleague from Ottawa-Vanier and to tell him that I did not have the opportunity to read this report. Still I want to recall some of the remarks I just made in the House and say to him that our government's expenditures for science and technology have been steadily increasing, from $1.4 billion in 1984-85 to roughly $5.4 billion this year.

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Mr. Speaker, I pointed out as well that industries and universities benefited from the lion's share of higher research and development expenditures. You know, before I came here in 1984 I was in the industrial sector in the riding of Kamouraska-Riviere-du-Loup which I represent in the House of Commons. I was one of the shareholders of three companies.
Mr. Speaker, you know that before 1984 the regions in eastern Quebec-as others far removed from major centres-had government programs in research and development or science and technology. When I was working for my company and acting as President of the Chamber of Commerce we always had recommendations to make to the central government: Listen, we said, tell us more about existing programs.
Being active in a small business I had to fight to get information on existing programs. Why? Because government representatives and federal employees did not bother to visit us to tell us about the opportunities that were available. I can say, and I say it to my colleague from Ottawa-Vanier, that I made it my duty, since 1984, as representative of the riding of Kamouraska-Riviere-du-Loup and former industrialist, to make people from my constituency aware that this federal government, through its Department of Industry, Science and Technology, has programs that can help them in the area of research and development and that allow them to go and see what is going on elsewhere in Canada or in the world.
I can tell you today, Mr. Speaker, and I say it also to my colleague from Ottawa-Vanier, whom I invite to come and visit eastern Quebec so I can prove what I am saying, that in the peat industry, for example, a primary industry in my area, a lot of research and development is done, but only since 1984. There was no R&D before that because people were not aware of government programs. The Liberals did not publicize them.
Today, that firm called Tourbiere Premier or Tourbiere Berger or whatever works with the universities, Laval University, the Centre de biomasse du Quebec, the Quebec CRIQ. Thus, research and development is still done in that sector, as in the timber industry, in the private woodwork sector thanks to the programs that exist, Mr. Speaker.


Mr. Howard McCurdy (Windsor-St. Clair):: Mr. Speaker, I would like to explore the words of the hon. member a little further.
Is he seriously arguing that because he noticed there was some R and D going on in his area that is a reflection of the government's involvement and its investment in research and development? Isn't that a very small sample or a very tiny basis on which to make a generalization?
In any case, that is not the question I rose to ask. The member indicated, as did the Minister of Industry, Science and Technology, that government expenditures have gone from $4 billion when this government came to office to $5 billion now. I would ask this member whether he has thought about that at all.
That constitutes a 25 per cent increase. If we look at it most generously, let us say that is a 25 per cent increase over five years or closer to five and one-half years.
Would he work out the percentage change over that period of time, reflect on its significance in real dollars, and tell me whether he really thinks, given that the inflation rate for scientific equipment, just as an example, run at about 15 per cent per annum, that this is a great development in expenditures on research and development by this government? Or, would he agree with any rational observer and recognize that that amounts to bloody little change?


André Plourde: Mr. Speaker, first of all, in answer to the question asked by the hon. member for Windsor-St-Clair, I would like to refer him to my speech, where I said: "-the Conference Board of Canada acknowledges that the financial support we provide for research and development through our tax system is one of the most generous in the world. And yet, misconceptions continue to spread around."
I appreciate the fact, Mr. Speaker, that in opposition you can make figures say anything. But in his speech this afternoon the hon. member for Ottawa-Vanier mentioned how awful the unemployment rate has been since 1984. He talked about the bankruptcy rates since 1984, the high interest rates since 1984, the high inflation rates since 1984, but never did he mention the inflation, interest, bankruptcy and unemployment rates we had

before 1984, when his party was in office. But let me tell you something, as an entrepreneur, during 1980, 1981, 1982, and I am also saying this for the benefit of our NDP colleague, interest rates reached 20 per cent, 21 per cent, and 22 per cent. And because of those high interest rates, I saw people in my own constituency who had to give up their homes. If we had bankruptcies in those years, it was all because of the Liberal Party.
So you have to be careful when you compare cabbage to carrots. As far as I am concerned, I would rather look for carrots where I can find rabbits.


Howard Douglas McCurdy: Mr. Speaker, I think all hon. members on this side and those on that side who are neither deaf nor blind will know that my question to the hon. member was rather specific. It cited increased expenditures by this government on science from $4 billion when it came into office to $5 billion now. I asked him to do what I do not really think is the impossible, namely to do a little mathematics: divide those figures appropriately and what he would come out with is an annual rate of increase of roughly 5 per cent. The hon. member has already said, because he said it specifically, that inflation would have eaten up that increase.
In fact there has not been any significant real dollar increase in expenditures for research and development by this government and, as has been cited by almost everyone, the percentage of the gross expenditures for research and development attributable to the government has fallen from roughly 25 per cent when this government came into office to roughly 19 per cent now, while the industrial rate of expenditures has increased to around 50 per cent from 47 per cent formerly.
The hon. member, as enthusiastic as he may be, has not paid very much attention to the facts.
This debate, generally speaking, is about this government's economic policy. It addresses such issues as the high interest and the high dollar policy and it looks at support for export promotion in science and technology, and research and development as significant elements in any economic policy and condemns in effect the government for its failure in these areas.
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I hope I will have time to say something about the area which is of most interest to me within the context of this debate, but I think it would be useful to consider the impact of this government's policy on one single city in the country: Windsor. Windsor of course is a community highly dependent on the automobile industry. It is a part of those three or four cities that have a very large measure of impact on the entire Canadian economy. In fact, if one wanted to anticipate the results of this government's economic policies, one should have looked at Windsor a year ago.
What is the situation now? Using the February figures we obtained from the Canada Employment Centre, the unemployment rate in Windsor was 17.6 per cent. In other words, one person in five was unemployed. If we take into account those people who were unemployed due to so-called temporary lay-offs which amounts to about 4,000, there being about 24,000 people unemployed, we still have an unemployment rate of 14.1 per cent.
These unemployed people are going to the unemployment insurance office where there are not enough public servants to serve their needs. A consequence of that is that they are waiting around to get their benefits and meanwhile social assistance in Windsor has to pay the cost. It issues the cheques and runs back and pays it back and all kinds of rigmarole. We should also point out of course that since those people who are unemployed do not collect benefits for as long as they used to, that is another imposition on the welfare load. Of course the city is going to encounter a number of additional expenses, but let us put it down in simple terms.
The city of Windsor will realize another $1 million in welfare costs as a direct result of this government's policies. That is, January over January, 1990. The welfare cost to the municipalities in the province will rise from $5 billion to over $15 billion.
That is a reflection of what is happening to the automobile industry which is partly due to the recession this government so carefully caused because of its wrong-headed economic policy. Even beyond that, even before this recession hit, thousands of jobs were lost in the auto parts industry because the plants are moving down to Missouri and to Mexico.

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That is not all. If one looks at the situation as projected by the government's own Department of Industry, Science and Technology, one finds that yet more parts manufacturers are going to go down for the same reason that others have gone down: a dollar that has gone from 72 cents in American money to up to nearly 86 cents now, has made the auto parts industry so uncompetitive that they are having a difficult time making profit margins. Roughly half are in prospect of losing out altogether.
The high dollar-not high interest rates in the Windsor area in the parts industry because they borrow the money in the United States-means that there is no research going on in an industry that only does one-tenth the amount of research done in competitive nations. This government says therefore: "competitiveness", the kind of competitiveness that has this government sending out a message to all workers that the inflation they caused by high wage demands is responsible for a loss of our competitiveness. Therefore, we have to put the cap on the Public Service as a message to all other workers that competitiveness is going to be based on low wages, because of the idiotic, economic policies of this government, that is the only way we can compete with Mexico.
Let us take another look at Windsor. Windsor had an active tourist trade. An awful lot of Americans came over to buy in our retail stores and in our restaurants. The number of Americans coming to Windsor has dropped by half. The number of Americans coming to shop in our stores and eat in our restaurants has dropped by half; a direct consequence of the high dollar. One-third of our downtown retail stores and restaurants have closed as a result.
On the other hand, with this nice new economic growth-oriented GST, Canadians are going to Detroit in droves. The number going over there to buy has almost doubled. These are the economic policies: The high dollar, high interest rates, the GST, free trade. These are the elements the Prime Minister says must be the basis for any future constitutional change. My God, I think almost anybody in Windsor would say: "Putting the Prime Minister in charge of constitutional change on that basis, is like putting Nero in the position of chief of the fire department".
Earlier I listened to the minister of science and technology, and when I think of some of the things he said, I get awfully thirsty. He made the same claim as the previous government member made earlier; that this government has done tremendous things for research and development. Really the fault lies with industry.
Well, that is true to an extent. I indicated earlier the percentage of the gross expenditures in research and development attributable to industry has in fact increased by about 5 per cent. This means, since our over-all national expenditures for research and development-that is gross expenditures at the national level for R and D-has gone, since this government was in office, from 1.4 per cent of GDP to 1.28 per cent now.
There you see it, Mr. Speaker. I can see it in your eyes. You got it immediately. If the over-all percentage of GDP that we spend on R and D has dropped since this government came into office and the percentage that was expended by industry has gone up, only one conclusion is possible. The government's expenditures have gone down.
Before the members of the Official Opposition hasten to applaud with vigour what I am saying because I am condemning the government, when the former Prime Minister under the Liberals came to office in the 1960s, we were also then spending 1.4 per cent of our gross domestic product on R and D and it quickly fell down to 0.9 per cent.
So, this is a kind of a death-bed reformation, as it were, of the Liberal Party, but I congratulate it. We have been working on the Liberal Party so that it understands the problem. It understands its sins for the past and today wants to make up for it by supporting our argument with respect to research and development and I welcome that. What the hon. minister of science and technology did not say is what the National Advisory Board for Science and Technology said, what the Association for Advanced Technology said, what the consortium said, what everybody who has looked at the issue has said, that one of the significant problems with our level of research and development supported by industry is the high level of foreign ownership.
The high level of foreign ownership in our industrial sector is probably the single most important reason for our low industrial expenditure for research and develop-
March 11, 1991

ment. Yet this is the government that gave us Investment Canada. "Get more foreign ownership, -do not do anything to ensure that research and development is done by them in this country".
Moments ago the hon. member said that Canada had the most generous tax arrangements to encourage research and development in the world. Oh, yes, we do. We give it to American companies. We give it to foreign companies. They take the money and go home with it.
Yet this government has installed a system for the review of foreign acquisition of Canadian businesses that has utterly failed since its introduction to refuse a single acquisition in all that time.


An hon. member:: Not even one?


Howard Douglas McCurdy: Not even one. Not even one.
If it wants to do something about our level of research and development, surely one of the things it might do is find ways of targeting those tax incentives a little more carefully, to be a little more careful about what Canadian businesses are acquired. We cannot afford any more de Havillands, or any more Lumonics, any more Con-naughts, any more of the hundreds of examples that could be cited of high intensity technological industries in this country being acquired by foreigners.
Mr. Speaker, one of the most valued institutions for research and development in this country is the National Research Council. The National Research Council submitted a preliminary draft of its five-year plan. This draft was submitted by a president who was hand-picked to go in there and impose the government's priorities on the NRC. He went in with an axe and he axed, and he axed, until around 250 scientists had been lost to the NRC, in a crude and hard attack on those who had devoted many years of their lives to science in this country.
But that same president, that hand-picked axeman of the government, asked because he thought it was sensible to do so, minimally sensible to do so, in that five-year plan, for $250 million spread over five years so that NRC could adequately fulfil its mission.
They told him after the cabinet sat: "Oh, my God man, you have to cut that back". So that $250 million proposal never saw the light of day except by virtue of some good hard-working reporters-researchers who found it out.
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Oh, probably there was a brown envelope there someplace.
What they got after the NRC rewrote its five-year plan was $50 million spread over five years.
Mr. Speaker, I see you have that incisive look in your eyes again. You got it immediately. That will hardly keep up with inflation. In fact, if one considers what the impact is on IRAP, then you begin to get the message.
The Industrial Research Assistance Program has supported research in small and medium-size companies. It has been the single most valuable government program for the encouragement of industrial research and development.
The president of NRC said it should be funded at a level of $125 million over five years, that is to say half of all that was originally asked for. It got $50 million for the entirety of the NRC.
For those people who are interested in jobs and how jobs can be produced efficiently, it should be noted that IRAP is the most efficient job producing program the government has. It is $15,000 a job.
I would like to see that compared to Hibernia, the program under which the government just gave the multinationals $1 billion to play with. What was the cost of a single job there?
If there is any kind of consensus in this country and respect for our industrial need, it is that Canada must develop the capacity to produce value added through trade by the investment of knowledge and skills of our people.
We must become a research and development intensive country, and we must have a highly educated and trained work force. We are not doing it. This government thought that all it had to do was open up the country to free trade with the United States together with some embellishments that limit our capacity to undertake the industrial restructuring that we require, such as the ownership rules and so on.
This government has failed to do, as this resolution identifies, what is necessary to encourage industrial research and development. It is steadily eroding its own capacity to do research and development. It has launched an attack on the universities by its cutbacks in EPF. It has incapacitated the universities' capacity to do basic research. It has made it more difficult for students

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to afford to go to university in a variety of ways, and it has the gall to cut $100 million from training programs.
This has been a pattern of a consistent policy of attacking those very measures and tools and institutions that are necessary in economic development.
As Peter C. Newman, the National Advisory Board on Science and Technology, the consortium and as every commentator knows, this government, rather than improving our competitiveness, is presiding over the deindustrialization of Canada. This is not a government that the Canadian people want to continue. We ask it to resign.


Mr. Jerry Pickard (Essex-Kent):: Mr. Speaker, I listened with a great deal of enthusiasm to some of the comments that my colleague from Windsor-St. Clair mentioned.
Because he and I represent neighbouring areas of this country in southwestern Ontario, we have very similar concerns. Without a doubt, when we start looking at the situation that has occurred in Windsor, in Essex county and in Chatham and Kent counties, we have seen unlimited devastation. We have seen thousands and thousands of job losses in a very short time.
As a matter of fact since the free trade agreement came in, we have seen 4,800 jobs lost in the manufacturing sector alone. When we talk to the farm community, it is very clearly stating that this goes beyond the farm community to the financial experts who are looking at what is happening. The banks and the finance companies are saying, straight out, one-third of the area farmers in Essex and Kent County are in serious financial difficulties.
I listened to the Federation of Agriculture in Kent County and the Federation of Agriculture in Essex County just a month and a month and a half ago, in January. Their greatest concern was to have enough dollars in order to plant crops this year. They are not talking about difficulties. I heard statements such as a lack of direction in this government, despair, dire straits, we are under attack. These were statements that were made time and time again, not only by the agricultural community, but by the work force, the municipalities involved, the social service groups that came forward, by
everyone who seemed to be there. It was a consistent bit of testimony.
Another interesting point to our region was the fact that we heard: We are cut off from Canada. This government does not care about southwestern Ontario. We are cut off from Canada by its monetary policies, its CBC cuts, the VIA Rail reductions. We see, time and time again, that not only has the monetary policy been very devastating, but communications has been reduced drastically. Now we are faced with rural newspapers, small newspapers in this country, under attack as well.
It is a fact that the agricultural community is under attack, and it is voicing that very clearly. When one-third of the farmers in the most prosperous area in Canada in farming-and may I point out that in the two counties of Kent and Essex they produced in the 1988-89 crop year $450 million worth of agricultural produce-we are looking at figures like that and saying in two counties, one-third of the farm community is really not going to make it.
Things have to be done in order to improve that situation.
We also clearly heard, and again it relates very strongly to my colleague's area, the very dire concerns about what is happening to the work force. The work force in Kent and Essex county, as I mentioned just a moment ago, lost some 5,000 jobs basically. If we look at Windsor, Windsor has suffered 36 per cent job losses, and my colleague from Windsor-St. Clair can confirm that point.


Mr. de Jong:: Point of order, Mr. Speaker.
I understand that after a member's address there are 10 minutes allowed for questions and answers. I am interested in the hon. member's remarks but I noted that his question, in fact, is several sheets of paper already typed out. So he must have anticipated the question before the speech.
I wonder if the hon. member can get to the question so that some other members might also be able to pose some questions to my colleague.


Jerry Pickard: It is a shame but this time is called question and comment. Maybe this member is not aware of what this time period really is. Question and comment allows me to prepare in advance, as all Liberals do. Possibly you do not. There are comments that I have heard from you that were not prepared in advance-but
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we will not get into that. However, I would like to continue with my points here.
It is very clear, Mr. Speaker-


Simon Leendert de Jong: It is not an opportunity for you to make a 10-minute speech.


The Acting Speaker (Mr. DeBlois):: I suggest that the hon. member end his remarks because other members want to make comments or questions.


Jerry Pickard: The point I am trying to make, Mr. Speaker, and I am certain that my colleague from Windsor-St. Clair has the same viewpoints because we did go through Essex and Kent counties listening to the drastic concerns that are there, heard the welfare people suggest strongly that there is absolutely no question that the federal government has dumped upon the communities with regard to Bill C-21, with the welfare rolls doubling in one year, with job losses dramatically increasing-


Howard Douglas McCurdy: Mr. Speaker, I must congratulate my colleague for giving such insightful reinforcement to what I had already said. He said, I think, that there has been considerable job loss. There has been considerable job loss in Windsor, but what he did not say was that the status of research and development in Ottawa is of significance even in Windsor.
I just wanted the Speaker to know, because I think he would want to be informed, as I am sure my hon. colleague on the Liberal side would want to know, that I received information just today with respect to NRC that 400 scientists have applied for early retirement, the deadline being tomorrow.
Now what you have got to understand is that that is 400 out of only 3,000, roughly 15 per cent of the scientists at NRC. What that means is that this government has caused such a deterioration of morale at NRC that it has become a sinking ship and its crew are trying to get life-jackets as fast as they possibly can, and that is a reflection of this government's policy with respect to research and development.


Simon Leendert de Jong: A very short question, Mr. Speaker. In the New Democratic Party we do not need to deliver 10-minute speeches in order to get to the question.
The question I would like to pose to the hon. member concerns as well the Liberal record because he did point
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out in his speech some of the omissions and sins of the previous regime. I think it is important to point these out, not in terms of any sense of forgiveness of what this government has done, but certainly the hon. member will remember the scientific research tax credit scheme that the Liberals introduced in their dying days.
I wonder if my colleague could comment on that type of expenditure of where the government, under Mr. Lalonde at that time, threw these vast amounts of money supposedly at research and development but, of course, it ended up in the pockets of lawyers and in the pockets of accountants and very little of it actually did occur in actual research.


Howard Douglas McCurdy: Mr. Speaker, I am pleased to respond to that. I mentioned that when Pierre Trudeau took office in 1968, the GERD: GDP ratio was 1.4 per cent and it then plunged to .9 per cent.
It is important to note that the Lamontagne report, quite some time ago in the 1970s, suggested then that a GERD target of 2.5 per cent be established and accomplished. It is worth noting, for example, that between 1970 and 1977, Liberal science spending fell from $980 million to just a little over $900 million.
It was in 1977 that the Liberal government abandoned the 50/50 split for transfers to fund universities. It is notable that they were responsible for the six and five arrangement, having cost the system about $2 billion by its own action.
It is also useful to point out that some of the economic policies that the Liberals implemented during the 1970s, if the money had been used as investment for research and development and industrial technological development, we probably would not be in the situation we are in now.


René John Soetens: Mr. Speaker, it is a pleasure to participate in this particular debate today.
I note that it is moved by the hon. member for Willowdale. I happened to be in Willowdale about 10 days ago and if I presented the motion to the people that I talked to, a group of people concerned about the economics, et cetera, of the country, they would wonder where this member came up with this idea because it certainly does not reflect their opinion, and all the people I talked to were his constituents.

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I find it somewhat interesting that he can reflect this position. In fact, many of them were critical of the job his brother did in ruining the province of Ontario.
I notice that he makes that comment in here. He says in the resolution: "It is economic mismanagement that has caused record bankruptcies, put 1.4 million Canadians out of work, and brought about the deindustrialization of Canada, especially Ontario."
It is a pity the member was not in Toronto the day I was to listen to a phone-in show on CFRB radio. It is one of the most widely listened to shows in the Toronto area. The subject matter was: What has gone wrong with the economy? What is causing the concerns of the business community, of the consuming public?
In spite of the best efforts of the radio talk show host to encourage the discussion to criticize the federal government, he was unsuccessful in the space of an hour in eliciting one negative call about the federal government. But he certainly was successful, in spite of his efforts, in putting calls on criticizing the provincial government of Ontario for the way it has taxed small business. It was in fact those callers who specifically criticized the provincial government's interference in the Ontario economy, the massive skill with which it interfered in the last five years, as being the brunt of the problem that they in fact were experiencing.
I am not prepared to simply accept that. I appreciate that there are some problems today in the Ontario economy, and I am also prepared to accept that there are problems throughout the entire Canadian economy. We cannot just throw these things away in isolation and say that there is nothing happening or that there are no attempts to improve the situation. I would like to talk about some of those things.
I have just listened to two speakers-and they were rather eloquent-comment on how desperate things are in their parts of Ontario. I represent a riding in Ontario as well, and perhaps my riding is the real Ontario. They must live in a different part of the world. I appreciate that Windsor has a large automotive industry and that they are claiming that the automotive industry is destitute. I understand that. Of course, my riding in Ontario has right beside it the great city of Oshawa, which is known for its automotive participation as well.
I do not know where these members live, but in the town of Whitby, which is in my constituency, in the last two years there has been a tremendous influx of automotive parts manufacturers. They moved to Whitby. They may have come from the United States or they may have come from Japan, but having listened to the two speakers just now , I believe they probably came from their ridings because they thought they would get better representation on the other side of Toronto. Maybe that is where they came from.
I am not sure where they came from, but I can tell you that all is not dead and done in the car industry, by any stretch of the imagination. Yes, there is a slowdown today, but the reason for the slowdown is simply one of when you don't sell it, you don't produce it. That is the problem they have. It has nothing to do with any economic free trade agreement or any of these other heresies that one hears on occasion. It is simply a function of economics: when consumers stop spending, they obviously stop producing.


Mr. Wappel:: Why does he stop spending, Rene? That is the question.


René John Soetens: What happens in this scenario is that we have to carry on and govern. There are things we have to deal with. We have to deal with them in the long term, not the short term. We have tried the short-term solution. In fact, we tried it rather extensively in Ontario in the last five years and proved that it did not work. In the previous five years we tried it here in Ottawa with another Liberal government, which simply thought that we could spend our way out of the scenario that we are in. That obviously did not work. We went through the greatest recession in a long time, back in 1981-82. Spending government money is not the solution, because the government only has one place to find its money; it really does not have any of its own. It comes from the taxpayers of Canada. When you take it from the taxpayers of Canada, they are the ones who object and they are the ones who then do not have it to spend.
I would like to carry on a little further because a number of members have also referenced the Canada-U.S. Free Trade Agreement as part of their problem. I note that one of the two speakers comes from and in fact mentioned the great agricultural area of Canada he represents, and it is. I have no doubt that it is probably one of the more attractive areas for farming and for the
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farming community. It can produce some of the best crops. It has probably the greatest variety of ability to grow crops in Canada. All in all I think it has the position to which the member I think rightfully referred, that it is probably at the forefront of Canadian agricultural development.
Of course, he carries on about how desperate things are in the farm community. Yes, there are some desperations. Part of the desperation I am sure relates specifically to some very high costs of borrowing money. The Government of Canada is trying to deal with that. It is trying to bring those interest rates down, but bringing down interest rates artificially only helps for one year.
The government tried that in the late seventies only to have rates go much higher and an awful lot more farm bankruptcies took place when interest rates were at 18 and 20 per cent than did in the last year. They talk about the impact of the Canada-U.S. Free Trade Agreement and I guess I have to talk about that, because I would not want the opposition members to believe their rhetoric that says that free trade has been bad for the agricultural community.
In fact, in the two-way trade in agriculture, there is a trade of about $8 billion per year that takes place between Canada and the United States. In the first full year of that particular agreement, which would be 1989, Canada's trade in agrifood products with the U.S. increased some 13 per cent, while Canada's imports decreased. We can see that there was a positive situation in that scenario.
The 1990 figures show Canada's trade in agricultural products is up 20 per cent over 1989 which is a 13 per cent increase again over 1988. If whisky and alcoholic beverages are included, the figures are increased even further.
For the first time ever, in 1990 Canadian exports to the U.S. in agriculture were over $4 billion. Canadian exports of grain and oilseeds totalled some $687 million in the first 11 months of 1990, which is up over the numbers for 1989.
There is a whole series of statistics which goes on here to talk about the changes. I think the most important area we can talk about is not just the export of raw agricultural products, I think we have to talk about the
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impact on the Canadian food processing industry, because there are a lot of jobs which are a direct result of agricultural production and those jobs result from food processing.
Here are just some of the impacts. Investment in the food processing sector increased in 1989 by more than 15 per cent, by 40 per cent in the baking industry and by 73 per cent in the red meat industry. Fifty new plants have opened in Canada, 24 in 1990 alone. That does not sound like it is a disaster in the food processing industry because of free trade.
There have been 54 additional plant expansions, 27 of those in 1990. There have been 26 new investments and then some additional mergers as well. All are examples of restructuring, but restructuring that has been healthy for the industry.
When I listen to the members from the Windsor area talk about the negatives of the free trade agreement on their industry, we all know the automotive industry was not affected by the free trade agreement and now we have the food sector showing some very positive signs with regard to its over-all health. I am not sure if those members travel in their ridings, but from the statistics I see it is certainly different than what they are espousing as they speak here in this debate.
I would like to expand on the recession to a degree because, yes, it is having an impact. It is having an impact in my riding. It is having an impact across Canada. There are people losing their jobs and they are losing them for a whole series of reasons. One of the things that is certainly there is the issue of competitiveness and how we deal with the Canadian competitive society. There have been a number of ways of addressing it and certainly some of them relate to proper research and development, some of them relate to investment decisions.
It is interesting that members, particularly in the NDP, have tremendous examples which they espouse every week of companies that pay no taxes because they have taken advantage of certain investment incentives in research and development. They criticize and say that there is not enough research and development going on. Then they criticize when the government in fact creates

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incentives for business to do that research and development to create jobs.
Another area they seem to ignore is this whole issue of inflation and the bank rate. It may be difficult to ask people to take less, to cut their salaries in order to make the Canadian economy more competitive, but let me just give a couple of examples which I think are very relevant on the issue of Canadian competitiveness. They are examples that exist in my particular riding, in my particular area of Ontario.
When you are concerned about Canada's ability to compete with a 2 per cent or 3 per cent inflation rate, let me give some examples of what is going on in order to help you understand that if we do not do something the problem gets worse.
Lear Siegler, a company in my riding, just negotiated a union contract. I do not fault the company and I do not fault the union. That is free enterprise. They can negotiate as they please and they can draw their own results. They settled for a 39 per cent increase.
The union president publicly boasted about the fact that they now have a starting salary at the end of the contract of $20.68 an hour. Great, I am glad they were able to do it, but do they have no sense that when one starts at $20.68 an hour in Whitby, Ontario, when one starts at $15 an hour in some other community in Canada or when one starts at $5 an hour somewhere else in the world, they are uncompetitive.
They do not seem to be concerned about that. I have made note of that particular company for one reason. I have no doubt that six months from now or a year from now, the NDP is going to be in this particular chamber yelling: "There is another company that closed because of free trade. It had nothing to do with the fact that the union demanded and got a 39 per cent salary increase".
What happens to that 39 per cent? Clearly people in my constituency look at that and they say: "My goodness, we want a share of that".
Let me give you another example. The teachers in my riding just negotiated a 14 per cent salary increase. Fine, it is the free process of negotiation. If they can negotiate a 14 per cent salary increase, I give them full marks. However, what is not included in that 14 per cent is that they also negotiated a reduction in the number of students in the class. This means the school board also
has to hire more teachers. Now we have the school board saying that it needs a 15 per cent tax increase in the municipality.
That works through to the bottom line some place. In Ontario now we also have the story out that the nurses have settled for a 29 per cent salary increase. It is still rumour and I am not sure of the exact number, but it seems that rumour is being substantiated in a number of areas. Great, that is the bargaining process and I respect that.
The only thing I am trying to lead up to is that when we have an inflation rate of 5 per cent and we are negotiating 13 per cent and 14 per cent wage increases, we have to understand that all the other people who live in the area start to look at those dollars and say they want the same thing. If they all get the same thing, then they eventually become uncompetitive.
Therefore, in my riding, houses that used to sell for $100,000 now sell for $250,000. Tell me how the worker was better off. How is the worker better off having doubled his salary, when the cost of housing has gone up two and one-half times. I do not know. I am not saying which is the cause of the other. I am not sure which came first.
I can say one thing. As we collectively demand a lot more and get a lot more, there are others even here in Canada, even in Ontario, who will work for less. They will be competitive and they will be the ones that get the jobs, and those jobs will move from town to town unless we collectively accept that we are in this challenge together.
That is why the government has very clearly put forward this competitive strategy. It is a good strategy. In the case that I mentioned, the Lear Siegler workers who managed to get a 39 per cent salary increase, full marks to them.
If at the same time they upped their output by 39 per cent, that would be tremendous. That is called competitiveness. The net effect to the consumer is marginal, because they are producing an awful lot more. The net effect to the bottom line of the company is marginal because in fact they are selling a lot more, and yet it has been beneficial to the worker in the plant.
What I am suggesting by my comment is that if we are all in this thing together, if we recognize this problem, there is nothing wrong with large increases in pay as long
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as there is some offsetting factor to increase the over-all competitiveness of the company. Whether that is by allowing the company to put in new modem equipment, which is being done by many companies, or whether it is done on the basis of encouraging additional investment in new plans, all those things are appropriate as long as we respect that we have to work together in what is considered a competitive environment.
The issue of interest rates of course is raised. Imagine having a $250,000 mortgage or a $200,000 mortgage, assuming you made a down payment on that house in my riding, and now you are going to have to make payments on it. It is a lot easier to make payments at 12 per cent. It is a lot easier to make payments at 11 per cent, and it is much easier to make them at 10.75 per cent where there are some mortgages available at that rate right now.
Of course the reason I made reference to this is because when the Liberals were in office their attitude was: let it go to 18 per cent, let it go to 20 per cent, let it go to 21 per cent. I know it happened. My mortgage went to those levels. I can comfortably stand here today and say because of actions we took, yes, it hurt when it went to 12 per cent. Yes, it hurt when it went to 14 per cent, but it sure never went to 21 per cent because we took the steps we had to take at the appropriate time to keep that inflation rate from going high, to keep the interest rate from going through the roof, which is the attitude members opposite would have.
I know they are not too concerned about the people out there who have mortgage payments. However, in my riding it is easier to justify 11 per cent mortgages than it ever was for the Liberal member of Parliament at the time when there were 21 per cent mortgages in the area.
That all works into competitiveness. When you do not have to make those huge mortgage payments, the end result of that whole situation is that you need less money to make payments. You can therefore presume to live on an income. It is a little easier than if you had large payments. That whole scenario reflects itself along the line.
That is just another example of how the competitiveness situation fits into it. There are additional examples I could give on the impact on the Canadian economy. Maybe I will follow through with one final area relating to economic development.
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The motion that is presented suggests that we are really not involved in that process. It is true that in my riding there is limited access for people to be involved in economic development programs. We certainly do support some of the things we have going through the Atlantic Canada Opportunities Agency, western diversification and even such things as assistance for the farm community.
I have talked about some of the agricultural situations with the information I have. Those are all very positive steps my constituents can support. If the over-all economy of Canada is healthy, not just one little comer, not just the Toronto centre region or the Vancouver centre region, all of us benefit. If the people of Nova Scotia are better consumers because they have more money to spend, hopefully they will be consuming more Canadian products.
That is the process we are involved in. I am convinced the government is on the right track, absolutely contrary to the resolution before the House today.


Mr. Bob Kilger (Stormont-Dundas):: Mr. Speaker, I represent a riding the eastern Ontario riding of Stormont-Dundas, which is a mix of urban and agriculture. I do not want to delay the comments. I want to get right to the nuts and bolts of the debate. However, I cannot neglect mentioning that Cornwall, for instance, has an unemployment rate of 15.5 per cent. Over 3,400 people are unemployed. We will not go over the reasons. I understand that it gets repetitious at the end of a debate, and the day is drawing to an end, but I would like to reflect a moment on the member's comments and a very sensitive point with regard to the deficit, as well as the government's ability in terms of what resources it has available to it and what it may want to do to stimulate the economy.
I want to make it abundantly clear to all members of the House that the example I am going to use is that an agreement between the province and the federal government in no way, shape or form should be misconstrued as being a reflection on this one province. It is a good example of what the government has accomplished most recently in a subsidiary agreement between the province of Quebec and the federal government in the area of

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economic development, an $80 million package of which $41 million will be put into the program by the province of Quebec. The other $39 million will be put in by the federal government.
I congratulate the government on this initiative, along with the province of Quebec, because it is the type of initiative that is needed in other areas of the country I submit to you, Mr. Speaker, and to the member.
I would just like to go back to last Friday and what the Parliamentary Secretary to the Minister of State for Small Businesses and Tourism said in the House regarding this particular subsidiary agreement between Canada and Quebec. I would like to quote his words. They begin with: "Help reinforce the economic infrastructures in Quebec". The member went on to say: "Both governments realize that some regions in Quebec have a very high unemployment rate and are experiencing serious economic problems. These initiatives will stimulate the economy in these regions by helping them carry out major projects which will give these communities renewed economic vigour".
I fully understand how the parliamentary secretary felt. He must have felt as proud, and rightfully so, as the government should of this initiative. However, I would submit to the member and to his party that this type of initiative could address itself to a region like mine in eastern Ontario.
For months, through the efforts of the hon. member for Glengarry-Prescott-Russell, the hon. member for Renfrew-Nipissing,-Pembroke, myself and others have undertaken and asked the Minister for Industry, Science and Technology if in fact we could not undertake this type of initiative, which is similar to FEDNOR and now similar to this most recent one, the subsidiary agreement. It is a tremendous example.
I wonder if the member would care to comment on whether this type of initiative could be undertaken in other regions of the country like eastern Ontario, and maybe there are others.


René John Soetens: Mr. Speaker, I appreciate the intervention or the comments of the member. I am not fully conversant with the program which he referred to that took place in Quebec, other than I presume it is an ERDA-type agreement that creates economic activity. I guess I would suggest that is happening in parts of Ontario through FEDNOR in one sense already.
The question is: Should there be more of that? Should particular parts of Ontario be included in those kinds of programs? If we did not have a $30 billion deficit, it would be nice, wouldn't it? I guess at this point in time my comment would be that we have a certain budget set aside for economic activity and development. We would like to have more, but within the constraints we have it would be impossible for us to grant every request for every subsidy and for every economic idea that comes along.
In my riding I have all kinds of people who are quite prepared to come forward with ideas to create jobs if somebody else will put up the money. It would be nice if we had it, but we do not have it. I guess under our current budget constraints the money we have will have to do and will have to be spent as far and as wide as we can.


Howard Douglas McCurdy: Mr. Speaker, I heard the hon. member from upstairs in my office, and I thought I must hasten down here to put him straight.
First of all, he said that the free trade agreement was not changed. He should reread the deal and read of the change to 50 per cent North American content.
Second, there is another element of this free trade agreement that someone else and I have cited in this House, that is a dollar which has hit 86 cents instead of 73 cents. That is a result of the free trade agreement. When we have jobs moving to Maquiladora, Missouri, Kentucky and so on, it is a consequence, at least in part, of the free trade agreement.
Shortly after he alleged that since we are insistent on identifying the corporate welfare bums we are opposed to any kinds of incentives for research and development. That is not true.
What we oppose is billion dollar giveaways to multinational oil corporations to do what they are going to do any way to make a profit. We are opposed to the luxurious dispensation of the taxpayers' money for business lunches that accomplish nothing. We are opposed to a capital gains tax exemption for investment in the United States. We are opposed to incentives for investment in real estate that never depreciates even though the value goes up.
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There is a difference between just giving money away and targeting that money for a specific purpose.
Finally, he gives us the usual discourse on competitiveness that identifies the fault with labour. I find it strange that he did not cite the fact that the real income of ordinary Canadians has gone down since the middle of the seventies, but meanwhile the incomes of good Tory executives have consistently gone up during all that time. Moreover, those high interest rates somehow find their way into the pockets of the same people whose salaries are going up.
Why does Mr. Crow not represent the same model of tolerance of a salary kept at a zero increase so he can fight inflation too? When he does that, I think Canadian workers will maybe begin to listen.


René John Soetens: Mr. Speaker, is it not amazing that a member who represents an area of the automotive industry can cry foul that the automotive industry is being ravaged by the free trade agreement? It is interesting that in my riding and adjacent to it in that same two-year period the automotive industry has spent in excess of $3 billion in creating new jobs, new investment. Maybe the problem is in his riding, not in Canada. I can only suggest that.
Another thing I would add is that obviously the gentleman who has just spoken does not really have much to do with the business community. I came from the business community and that lunch he criticizes, that lunch that I used in promoting business in New York City, he would deny the company access to it. It is funny he did not complain when I created through that business promotion lunch $60 million worth of trade for Canada in the United States. He thinks that is an unjust expense. Little does he know about the business community and the methods under which it operates.
Business promotion is important. Part of the business promotion aspect is to make sure customers know who you are, where you are, and what the products are that you have to sell. He does not know that, and that is why he would make those negative comments about that particular area.
I should also like to add that last year in one town in my riding, an area that is supposedly being ravaged by the free trade agreement, there were 68 new companies which built new facilities. They were all small businesses. None of them were these large corporate conglomerates he is talking about. They created 360 new jobs in one town in one part of my riding.
Supply
The hon. member can carry on about all the negatives that go on in this country. He ought to travel to some part of Canada where there are some positives which means: just leave his riding and he will see it everywhere.


The Acting Speaker (Mr. DeBlois):: It being seven o'clock p.m., it is my duty to interrupt the proceedings and put forthwith every question necessary to dispose of the business of supply, pursuant to Standing Order 81(14).
The House has heard the terms of the motion. Is it the pleasure of the House to adopt the motion?


Some hon. members:: Agreed.


Some hon. members:: No.


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


Some hon. members:: Yea.


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


Some hon. members:: Nay.


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


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


Mr. Speaker:: I declare the motion lost.
* *
*


BUSINESS OF THE HOUSE
David Charles Dingwall: Mr. Speaker, I thought that perhaps in the spirit of co-operation the government House leader and the Minister of Finance might want to give consideration to the following motion:
That the remaining question necessary to dispose of the budget debate, Ways and Means Proceeding No. 18, be put and divided on immediately and that the two days that remain in the budget debate be added to the number of allotted days in the present supply period.
That is to indicate the co-operation of the Official Opposition.


Harvie Andre: I think that opening position has some basis for future negotiation, which I will be glad to engage in with the hon. member.


Mr. Speaker:: It being seven-thirty o'clock p.m., this House stands adjourned until Thesday, at eleven o'clock, pursuant to Standing Order 24(1).


[Stage Direction]
The House adjourned at 7:28 p.m.