1991-09-20

[Stage Direction]
The House resumed from Wednesday, September 18, consideration of the motion of Mr. Mazankowski that Bill C-21, an Act relating to the accounting of certain payments for the servicing and reduction of the debt of Canada, be read the second time and referred to a legislative committee.
Madam Deputy Speaker:: The hon. member for Ontario has 16 minutes left. The hon. member for Ontario.


Mr. Rene Soetens (Ontario):: Madam Speaker, it is a pleasure to continue debate on this bill which we started on Wednesday. At that time I made some comments relative to some past performances and will cariy on from where I left off.
What we are talking about is taking all of the revenues of the goods and services tax, revenues from the sale of various Crown corporations and other gifts to Canada and putting them aside specifically targeted and earmarked to be put against the debt of Canada. It is with that in mind that I would like to carry on my comments.
We all have to appreciate and understand that we are not talking about one particular bill, although that is certainly the subject that is in front of us. We are talking about the over-all policies of the Government of Canada.
Without some of the other pieces of proposed legislation, this bill in itself would be ineffective. We have to control government spending. We have to keep the revenues of the government reasonably stable, and therefore, this bill will have some effect.
Another proposed piece of legislation that I am involved in is receiving some representations. It represents the dilemma that all Canadians face, certainly. I was involved in the hearings concerning the establishment of the goods and services tax, as well as back in my own constituency.
One of the fears of Canadians is that if this ends up being a "cash cow", the Government of Canada would simply create all kinds of new programs to spend all this new-found wealth, if we can describe it that way.
In my constituency, Canadians said: "We understand we have to pay the debt. We understand we have to address the deficit, and if you can assure us that the revenues you get from the GST will not be spent on new programs, that it will be used to address the debt, then, we might not like the goods and services tax, but we will be able to accept it much more readily because we all know that we have to sometime pay the bill." This bill does that.
To give you the alternative, in the finance committee hearings this week dealing with the control on government spending, we have had some excellent representations. I think it reflects the concern in the country because we had appear before us, a group called the Canadian Taxpayers' Federation.
I would just like to quote one paragraph from its representation: "We support the principle of the Spending Control Act because it represents the beginning of a solution to the prisoners' dilemma. While all of us collectively might agree that the federal government should reduce its deficit, each of us individually has been unwilling to suffer cuts to those programs from which we, as individuals, have benefitted".

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I think that is very well said. Certainly in the last few days in the Windsor area, we have had another manifestation of the problem. We have had the truckers closing some transportation routes, demanding that the government cut taxes. They were demanding that this spring in my riding, the heart of where the trucking industry started the blockade in Ontario. They were demanding that the government cut taxes. That is one side of the coin: cut taxes. This groups says they collectively are not willing to absorb their share of that cut.
This week we have had in the finance committee an alternative presented to that of cutting taxes. That view was presented by the taxpayers' coalition about Canadians not willing to share their concern. In fact we have had people lined up trying to get their share of this "cash cow", if I can describe the GST as some others have.
To give you the best examples of the alternatives, the Canadian Federation of Agriculture this week appeared before the committee and said: "CFA is concerned that these programs will be considered under the new policy initiatives enrichment provision section which are not exempted from the proposed legislation and will therefore bring some cuts in other agricultural programs or elsewhere." It went on to talk about how it needed more money.
There was another group that appeared before us as well and that was the Canadian Association of University Teachers. I would like to quote a sentence from their presentation: "We also feel that the government is dangerously limiting its own room for manoeuvring in the years to come and we fear that once again higher education will be forced to pay the cost". Their presentation talked about how they needed more money.
Yesterday the National Action Committee on the Status of Women appeared before us. They came to comment about their perceptions with regard to child care. They had a tremendous program of additional demands for money from the federal government. You can see that just this week throughout this country the debate rages; one side saying do not spend it, cut taxes, and another side saying they want more money.
That is the dilemma we face and that is why I think we have made the right decision in dealing with the GST;
that the funds generated from the GST have to go into that special account and just cannot be spent anywhere.
It is not just the GST revenues. I would like to relate some other revenues that might be going into this debt servicing reduction account.
In the past the Government of Canada has sold off some corporations that we, collectively, paid for with Canadian taxes: Nordion Corporation, Air Canada, de Havilland, Canadair, just to name a few. The Canadian taxpayer, having paid for these corporations for all these years, when we sold them, where was the benefit to the taxpayer? Did we get a dividend? Did we get a reduction on our debt? We got nothing. The money was put somewhere in general revenues, and it disappeared. Nobody can identify specifically the dividend from our investment in that.
Let us look a little further because we are now embarked on the sale of a Crown corporation, Petro-Canada. Taxpayers have put a tremendous amount of money in that. I would think that when it is ultimately sold that Canadians would want to know that the money from the sale of the corporation has gone to reduce the debt that in fact was incurred when we purchased the corporation in the first place.
Could you imagine some other corporations that we might sell? Can you imagine selling CN Rail? Think of the billions of dollars that would generate if we ever got around to talking about selling it. The CBC-I am not sure anybody would want to buy that-but think of the potential revenue of selling CBC. VIA Rail is another Crown corporation we could get rid of that Canadians might be willing to buy privately. We could put all of that money, however much there might be, into reducing the debt that we incurred in owning those things in the first place.
How about the Royal Canadian Mint? Can you imagine if we sold that how much we could get for it? People might be interested in selling all of those things if they knew that when we sold them the revenue would be used to reduce the debt that was incurred.


Mr. Mills:: Why don't you sell the House of Commons?


René John Soetens: Well, now we have heard from the Liberal Party opposite. They want to sell the House of Commons. That is the level of debate they put into this thing. They should know that the House of Commons is
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not for sale. They have often tried to sell it, tried to get people to buy it with money but it is not for sale. Anyway, that is the process.
There is another program. In fact this week the Fraser Institute appeared before the finance committee and it talked about a program where they would establish a prize of $40,000 for the individual who could come up with the best savings each year in the operations of the Government of Canada without a commensurate reduction in the level of service. For any Canadian, whether it be a constituent from my riding or any other riding, or even a member of Parliament, who can come up with a particular program that will reduce costs without reducing level of service, there is a $40,000 prize. The member for Ottawa Centre, I believe, came up with a suggestion, as he put it, of a gift to the Government of Canada to reduce the debt that exists. Rather than have it spent someplace else, it would be donated. He retracted on that because he said: "Well, first we have to reduce the debt of the Liberal Party", so he would donate it there.
The idea is that there are people willing to make contributions to the Government of Canada to reduce the debts of this country. Rather than have it simply spent on some new program, have it spent somewhere in this country on some spending that may not be commensurate with the idea of the person who gave the money in the first place. We now have put in place a mechanism so that money just is not spent that comes out of it.
Now, you have also heard, Madam Speaker, all of these Canadians talk about the GST as a great generator of revenue. Well, that might be true but I guess we should look at the first four months of this fiscal year. I saw a report in The Globe and Mail this morning which suggested that net revenue on the GST to the end of July, which is the most recent available, amounts to about $4.6 billion. Our budget for the year is just over $16 billion. If this great generator of extra revenue is going to generate the billions that people are lining up to spend, they had better look at that July number again. It says that we are basically on target, that we are generating the revenue we said we would generate in the first year, and I think that is heartening to know.
More important, even though the facts do not yet point that way, if those who suggest this is a great generator of revenue are right, is it not great to know that this debt reduction fund account will be in place and it will prevent the Government of Canada from simply
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creating a new program, from simply spending it someplace else? Very clearly, this money will be earmarked exactly where the constituents in my riding have said it should be. If we have to pay this tax, and if there is extra revenue, we want to know that the Government of Canada is not just going to frivolously spend it. That is what we will accomplish when we finally pass this bill.
The debt burden has been built up over years. Some 20 years has seen a tremendous amount of growth in that debt. There was some debt prior to the seventies, but basically it has been a growth of debt over the last 20 years. It is a result of Liberal spending and Conservative spending. It is a result of 15 or 16 years of deficits and compound interest on debt that existed over the years. So, that is there. How it got there I am sure all Canadians are aware.
But it has to stop. You cannot do it instantly, you cannot just wipe out that debt, you cannot just wipe out the deficit, because there are many Canadians who rely on the very important programs for their particular needs. So it will take many years of fiscal responsibility based on tough committed action to reduce the debt to a more manageable proportion.
I think the debt servicing and reduction account is a threshold step to make certain that we continue and accelerate and progress toward this vital goal that all Canadians have.
It was some 60 years ago that Prime Minister Mackenzie King told this House that "the promises of yesterday are the taxes of today". This legislation takes a different course. It is a promise of action, made concrete by law, that the burden of deficits and debts will be reversed so that they do not add to the taxes of tomorrow. It is further hard proof of our commitment to the fiscal responsibility that is a key foundation for future economic growth for Canada and increased prosperity for all Canadians.
Madam Speaker, I want to conclude by thanking you for the opportunity to address the House on this very important bill, and also to encourage all members of this House to support, not just the bill but the concept that revenue to the government has to be specifically earmarked so that we can reduce the debt-the deficit first and ultimately the debt-of this country, so that our children, my children, your children, do not have a burden to face.

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When they, in the future, run for Parliament as undoubtedly they will, they will not find themselves faced with the fact that 35 cents out of every dollar has to be spent on the interest before they even start to look at any other expenditures. That is a burden that we all find, Madam Speaker, and I hope that when all is said and done, we will keep that thought in mind: that the children of the future should not have the burden that we have today.


Dennis Joseph Mills: I am going to try and keep my sense of humour here today; it is the end of the week. However, I cannot believe the charade that is being put before us by this bill.
First of all I want to say there is absolutely no way that this government can possibly understand the way this GST is breaking the morale of this country. There is absolutely no way that this government can understand the fact that the creators of wealth in this country are those people who go out and work hard and, through incentive, create the revenue that allows us to pay down the very debt we are all concerned about.
Conservatives are not the only ones concerning themselves about debt. We concern ourselves with debt as well. Yes, we did leave a debt of $180 billion at the end of 1984, but from 1980 to 1983 we had one of the worst world recessions. From 1984 to 1988 you doubled the debt, so let us not throw daggers at each other on the debt.
Where I have problems with the Conservative government is its total lack of imagination. It thinks the way you eliminate debt is sell off Via Rail, sell off Air Canada, sell off the Royal Canadian Mint, sell, sell, sell. That is the extent of their creativity, one word: sell.
I know this member sits on the House of Commons Standing Committee on Finance. He has listened to pleas from all sectors of this economy. My simple question to him is this: at what point in time does he feel that he can stop pushing the morale of this country further down? At what point in time does he feel we should stop doing that, and get back into a more hopeful, wealth creation mode? I do not think he or his party realizes-or at least I am not seeing any demonstration of it-that the pain out there right now, because of the people unemployed, because of the many small businesses that are just hanging on by their fingernails, is being exacerbated by this GST. This debt reduction fund has absolutely nothing to do with reality because the money you receive on the excess GST, if it went into general revenue, still goes against the debt.
The general revenue fund is not some separate institution. It is all part of the same balance sheet of the Government of Canada. Why you are setting up this bogeyman called the debt reduction fund is beyond me. Why could you not use the same kind of creativity to put some job creation plans forward? I am not saying spend more, but let us put our energy back into putting people back to work.
Again, my specific question is, how much more do you really want to push the morale of this country?


René John Soetens: Madam Speaker, it is interesting that the member started off and threw a bunch of daggers and then said he would not throw any daggers on the debt, so I will not throw any daggers either.
I would just point out that when the morale of this country was good-and I will acknowledge that-the deficit went. We doubled the debt in the period up to 1977, in two years. We doubled it again three years later and we doubled it again four years after that. Within a period of about eight years, the opposition quadrupled the debt. Perhaps that is even quadrupled. Anyway, it is a big number.
You ask how we are going to change the morale? Well, we are changing the morale because we are making long-term decisions.
The GST is not just an isolated program. There is a number of companies in my riding which were real winners by the GST because we got rid of an unfair manufacturing tax. That is how to start to improve situations in this country. That is how to help those people who create the wealth you were talking about. There is no other way to get out of the dilemma this country faces other than improving the over-all wealth of Canada, the over-all generation of funds through job creation and through investment decisions. It is the GST that has made a lot of those decisions easier. People will be willing to make those decisions and spend the money on GST as long as they can be assured that the money will be targeted against the very thing that you and I have
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raised, and that is the debt. This bill guarantees that will happen.
The alternative is we could tell the truckers tomorrow that we will reduce the taxes on their concerns. It is easy to do. It just raises the deficit. Morale would be great, but you know my kids do not want their morale shattered like that.


Mr. Rey Pagtakhan (Winnipeg North):: Madam Speaker, I would like to make a brief comment in this debate.
The member from the government side speaks of the deficit of money. I wonder why he neglected to mention a very fundamental deficit and that is the deficit of the people, the poor of our country. To me it is a real deficit. Because of the poverty of over 1 million Canadians, many of our children drop out of school. When they drop out in alarming numbers, they develop no skills to prepare them for the work force.
Does the member not see that preparation of our youth for the work force will guarantee the future of our country, guarantee their employment and guarantee our productivity?
The Senate of Canada recently issued a report and I wonder if the member has read that report on poverty. In it is mentioned very clearly that if we invest $5 billion today, 20 years hence we will have a return of some $28 billion to this country in terms of increased productivity, increased taxes from the revenues that will be generated from these workers, reduced payment to the welfare assistance program because these people will be productive, and so on.
I ask the member what proposal would he have to solve the problem of poverty out of this GST income? I would suggest that for this to proceed, a fund from the GST has to be earmarked for the poor of our country.


René John Soetens: Madam Speaker, in my speech I made a comment about people lining up to spend money that was not there and you have just had another example of people lining up wanting money. This money has simply replaced the federal sales tax. So, to this point there is not all this extra money.
The member talks about the deficit of the people and I understand his concern and it is a very legitimate concern. He says there was a report that if we simply threw $5 billion at the problem today, we would get $28 billion back, I believe, in 20 years is what he said. That $5
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billion today is $5 billion that is borrowed. Compound interest on that $5 billion over 20 years, I do not know what it would be worth, but it would be a lot more than $28 billion. So it is a net loss.
The point is that we are not short of money in the education system. That point has been made. Canada has one of the highest per capita expenditures on education in the world. Our problem is that we are not educating the students with the money we are putting in the system. Maybe that ought to be reviewed. There are a lot of students coming out of schools who are unable to read or write. How come? How come they can go to school and not come out at the other end with a useful skill? So, I do not think throwing money at it is the solution. Perhaps we have to readdress just how the money is being spent to ensure that we in fact accomplish some of the things that the hon. member is concerned about. Yes, there is a deficit, but simply throwing money at the problem is not the answer.
We have to invest money wisely in job creation. We also have to invest money to ensure that those creators of wealth have the opportunity to multiply their successes to address the very concern that the member has raised.


Mr. George S. Baker (Gander-Grand Falls):: Madam Speaker, I have just a few words on this bill at second reading stage. Of course, at second reading stage we are debating the principle of the bill.
I presume, after reading the title of the bill, that the principle of the bill is that 7 per cent tax that everyone pays. No matter where they go they cannot avoid that 7 per cent tax. If they go into a store they pay the 7 per cent tax. If they get into a taxi they pay the 7 per cent tax. Why, we even pay it when our life is ending. It is everywhere. The principle of this bill is to take that 7 per cent GST and eliminate the debt of Canada over a period of time.
It strikes me that there is something seriously wrong with that approach if the tax is unevenly distributed throughout Canada. In other words, people in northern Canada or British Columbia or Newfoundland, people at the far extremities of this nation, cannot just go down to the factory or close to a factory and purchase an item. In between the point from which an item is manufactured in Canada and the point at which someone buys it, in

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between that space, there is a proliferation of that 7 per cent GST.
In other words, it could be argued that someone who lives in British Columbia pays more into the GST fund than someone who lives where the item that person is buying is manufactured. Someone who lives in northern Canada would also pay more. The item has to be manufactured, trucked to a distributor, taken by the distributor, moved to the retailer and then sold to the individual.
Is it really fair for the government to say that it will retire the debt of Canada by means of the GST and as a result have people in the far extremities of this country shouldering a greater percentage of the national debt on a per capita basis than other people? The actual principle of the bill is faulty.
Living in provinces that already have a high retail sales tax is quite different from living in a province that has no retail sales tax. It started with the telephones. People picked up their telephone bills and saw that the federal government had now gone into retail taxes on long distance telephone calls. They looked at the bill and saw one tax added to the total cost and then another tax, and they were paying double on that tax. It was not just 8 per cent plus 7 per cent to make 15 per cent. It was 8 per cent on the total amount and then 7 per cent on that total amount, which added up not to a 15 per cent tax but a 16 per cent tax and a 17 per cent tax.
When you look at the tax itself, it is unfair because-


An hon. member:: Oh, oh.


George Baker: The hon. member for St. John's East is pointing out, and I agree with him, that in Newfoundland we pay a very high provincial sales tax and now this outrageous 7 per cent GST on top of it. We end up paying over 20 per cent sales tax because there is a tax on top of a tax. The tax idea of the GST was faulty right from the beginning in that it presented a situation where the GST would generate a 7 per cent sales tax in Alberta but people have to pay 20 per cent in Newfoundland because there is a provincial tax on top of a federal tax.


An hon. member:: Oh, oh.


George Baker: The hon. member from Alberta is pointing out that one tax is provincial and the other one is federal. I already said that.
Is it really fair to have a bill like this that says: "Well, all right, we are going to take all the revenues from this and we are going to retire the national debt on that basis."
The ordinary Canadian must be sitting back and saying: "Well, my goodness, if that is going to take care of the national debt then what about all the other things that the Government of Canada brought in which it said were to take care of the national debt?"
The government totally changed the unemployment insurance scheme in this country on the basis that the national debt needed to be serviced and it could no longer afford to contribute to the unemployment insurance scheme. Day after day in this Chamber we listened to the minister saying: "We have got to get out of unemployment insurance because we have got to retire this national debt. We cannot afford to be part of the unemployment insurance scheme any more and we are now going to make it more difficult to get unemployment insurance". It then brought in this outrageous scheme where people now have to figure out which side of the line they live on. If they live on this side of the line they need 13 weeks to qualify, if they live on this side of the line they need 10 weeks to qualify. That was all in the name of retiring the debt. Every public servant was sent these memos saying that they were making a great contribution toward retiring the national debt.
In the case of the unemployment insurance bill-I recall it was C-21 and this one is C-21-the government had a gold button it sent to all the public servants, or gold plated I suppose but not really gold, saying C-21. Everybody got it this past year. Lo and behold, open up the button and it says: "Made in the U.S.A.". It sent them mugs that said: "Working together for the retirement of the debt". If you turned over the mug it said: "Made in Thiwan".
We have listened to the government say: "We are going to retire the debt, get rid of the debt and that is why we changed the unemployment insurance scheme". The government even removed the railway tracks in some provinces on the basis that it could not keep making those expenditures because the national debt was too high. It discontinued the railway services. We can no longer go to North Sydney, Nova Scotia by railway because that service has been discontinued from Truro. In Newfoundland there is no more freight service at all and practically all the tracks are up now. I think the tracks are being sent to somewhere in Venezuela. The
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railway ties are being piled up but they are not much good. It left a big roadway across the province. I only wish Newfoundland had made a settlement with the Government of Canada to pave them or something so at least it could be used instead of just having some crushed stone there.
All of this was done in the name of the national debt.
Madam Speaker, I can recall them standing in this Chamber and saying that they must now impose great restrictions on our postal service because of the national debt. That was the rationale.
Canadians would turn around now after hearing about this bill and say: "Oh, does this mean we are going to get back our post office now because we lost it because there needed to be payments into the treasury because of the national debt". They lost their post office because of the national debt.
It takes two weeks on average for a letter to be sent from point A to point B in this country because of the national debt. I know members of Parliament get these surveys all the time conducted by learned consulting groups and accounting firms that say: "The service is great." That is only if the letter is addressed and typewritten, put out by a computer and the address is directly in the centre of the envelope. Not if one sits down and writes the address.
Every member of Parliament is being phoned by students saying that their student loans have not been approved although the notification has been sent to the university. As one knows, students go and pick up their student loans at the university. Notification has been sent, but it has not arrived there yet. It was sent out two weeks ago. So and so wrote a letter to her granddaughter last Christmas some time and it arrived just the other day. All of this was done in the name of the national debt.
The transfer payments to provinces for health and education were cut in the budget because of the national debt. Does this mean now that the Government of Canada is going to turn around and reinstate the transfer payments to the provinces for health and education, for
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the running of our hospitals, for equipment in our hospitals? Hospitals today are under this incredible squeeze, all by provincial governments, because the provincial governments were cut back by the federal government in the name of retiring the debt.
Every budget speech, if one goes back over and looks at them every year, and that was the rationale. There was no other rationale. It said: "We have to cut down on transfer payments to provincial governments for hospitals, health and post-secondary education. Why? Because of the national debt. It was not because of anything else. That was it. That is all.
Does this mean now with this 7 per cent of everything in this country, when an individual walks into a store anywhere, he or she pays 7 per cent and all this money goes into the retiring of the debt? And this is going to retire the debt, this is what is needed to retire the debt?
Does this mean now that the federal government-it would make sense- would turn around and reverse what it did in the previous budget, which was to state that in order to retire the debt, it had to reduce the payments for health and post-secondary education in the provinces?
It is one or the other. Either this is going to reduce the debt, or it is not going to reduce the debt. Either this is the sole means of doing it, or all of these other things have to be done as well to do it. The question is: What is it? Why is the Government of Canada behaving every single day like some massive tax grabber?
Madam Speaker, here is a good one for you. You will be interested in this, coming from Montreal, Quebec. I obtained a copy of a proposed new cost recovery policy. Why is it there? It is there because the federal government continues to say day after day, month after month, to the Public Service of this country: "Look, you've got to find ways of raising more money. We want you to collect more money. We want you to cut back."
The federal government brought in a scheme three years ago to give a manager in the Public Service a bonus if he could find ways of collecting new taxes, to give him as bonus if he could get rid of more people. They called it a productivity bonus. In other words, if you cut down on the numbers of employees under you then you received a cash bonus before Christmas, a productivity bonus. It was

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really pay-offs for lay-offs. That is what it was. You navigational aids remain available and winter replace-cannot blame the Public Service.	ments are installed in many cases.
Now here is a good one for you, Madam Speaker. This one was just the other day. Here is the statement: "Earmarked taxes," which is what this is in this bill, "could take the form of a charge on commercial carriers or on shippers in relation to the value of the cargo, or to the water transport charge, or a charge based on fuel purchased."
Of course what this is is a discussion paper, a proposed new cost recoveiy policy for the Department of Transport. As you know, there were various measures enacted recently by Transport Canada to increase the taxes at airports where airplanes are charged a fee for landing and then new airport taxes were put on top of that and existing ones were increased. The authority to do that was found under the Aeronautics Act. It is quite simple.
Beyond that authority one finds in individual acts the Government of Canada was stymied, it did not know how it could extend that principle which was contained in certain pieces of legislation to a broader spectrum to allow government departments and civil servants in managerial positions to be able to come up with ideas to have more taxes, to earmark more taxes for specific reasons. It found the solution in this session of Parliament and it went through this House in the Financial Administration Act, and members who were on the finance committee would know what I am talking about. The Financial Administration Act was changed to encourage and to allow government departments to seek ways of raising new taxes within their department.
Here is one of them. Now what is this? What does it mean? What it means is that the federal government is now going to have an earmarked tax on buoys. On buoys. Not on men or women, but buoys. These are buoys. Of course I looked it up and it said they do not call them buoys, they call them floating navigational aids. They say here, here's a brilliant statement: "In many parts of Canada most floating navigational aids are removed during the winter." A very intelligent statement, especially when the ice is around. A continuing "nav-aids" charge would still be justified because non-floating
Well, it is kind of difficult when there is ice for a hundred miles. How does one navigate over ice or under ice for 200 miles? One is still going to be charged for it. Yes, one is still going to be charged.
I notice you telling me two minutes, Madam Speaker. I have not even got to the point of the bill that I was going to talk about but I will continue with this point. The federal government is in this psychology of earmarking taxes, of having government departments devise means of taxing people.
Here is one here that says it is now going to make a charge on cargo. Here is the suggestion to the government. I do not know whether it is going to do it. Some of the companies think it is going to do it. Companies right across Canada were sent letters by the government saying it was going to do it. It is going to tax you for using buoys in the water, so much per nautical mile.
It comes from this order by the federal government that you have to tax everything. You have to collect more money to pay for this, pay for that, pay for something else.


An hon. member:: At least we are paying for it.


George Baker: Madam Speaker, the hon. member says: "At least we are paying for it." Well, Madam Speaker, if you add up all the things that it brought in taxes on, and you add up all of the things it has cut out, if you add up all of the things it has removed, now it says: "Oh, no, we did not get any money from that at all, now we are going to get it from a new 7 per cent tax."
I would strongly suggest to the Government of Canada that it restore all of these things it has cut. Why not be honest with the Canadian people? Stop wasting money, stop wasting the taxpayers' money everywhere one looks, and stop overtaxing the people of this country.


Mr. Ross Reid (Parliamentary Secretary to Minister of Indian Affairs and Northern Development):: Madam Speaker-


An hon. member:: Run up the debt.
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An hon. member:: That is what we would call an incestuous-


Ian Angus Ross Reid: Yes, incestuous, but I will not go into it in this Elouse. I will be apologizing later.
It is a great pleasure as usual to follow my friend and colleague and countryman, the hon. member for Gander-Grand Falls. I had the privilege just last week to be driving on the Trans-Canada highway in Newfoundland. As I came up the hill out of Benton, it was very confusing all of a sudden. It was mid-day. I thought for a second I was in the middle of the big runway at the international airport in Gander. Here was blacktop, pavement, six lanes of pavement. I did not know where it had come from. It had no lines on it. I did not know which was the passing lane, which was the new shoulder. We do not have shoulders on the paved roads in Newfoundland much. But now we do. All we have are little yellow dots down the road. As sometimes is the case, some people were driving a little quickly. There was an RCMP officer coming and we all slowed down and I had the opportunity to look. There is nothing but pavement.
Do you know what the big issue is today in the town of Gander? The bypass. Where are we going to put the road: through or around Gander? But, Madam Speaker, as you know, except at certain times every four years in Newfoundland, pavement just does not arrive from nowhere. Pavement is paid for. It is very expensive. We are talking over $1 million a mile. That is for what we are used to, which is two lanes, but now we are going four lanes right across the province. All through my constituency it is four lanes. Into Gander it is four lanes.
You should see what they are doing in Corner Brook with bypasses and overpasses and underpasses. Do you know where that is coming from Madam Speaker? That is coming from the $800 million that this government was able to pay to the province of Newfoundland and Labrador: "Let us sign an agreement. The railway is not being used, it is a disincentive to industry, it is a disincentive to transportation. Let us build the roads that are essential through this province so that we have half a chance to transport goods around the province."
Very quickly if I may, Madam Speaker, on this GST. We are talking about cuts in the government. This government has not cut 2,500 jobs out of its Public Service, just like that. Like the Government of New-
Government Orders
foundland and Labrador has done, just like that. Just like that, 2,500 jobs gone this year. And what, in the name of good financial and fiscal management?
Wage freezes. We live in a small society in Newfoundland and Labrador. We tend to know each other. We have neighbours, we have friends, we have relatives that come and go in our lives in politics and in business and that sort of thing. That gives us an opportunity to speak to these people, people that we went to school with, our cousins, perhaps our brothers even. It gives us the opportunity to pass messages along.
If my brother were the President of the Treasury Board in Newfoundland and Labrador, I would tell him first of all that he should not cut these jobs, he should not close six hospitals, he should not close technical schools. The last thing I would tell my brother if he were President of the Treasury Board is that I would not take the goods and services tax and harmonize it with the provincial sales tax, as is happening in Newfoundland and Labrador. But my brother is not the President of the Treasury Board.


George Baker: I thought the hon. member heard me when I said that I was not my brother's speaker. But I might remind the hon. member that when he referred to Benton, the community of Benton is just outside of Gander, and he is correct, it is on the Trans-Canada Highway. I must admit when you do go up over the hill, you are confronted by all of this blacktop. Now, in Newfoundland when you have got good pavement that is what you call it, and everybody just looks forward to having paved roads. I mean, there are parts of my federal riding that have these dirty rotten dirt roads and you are down to the crank case in mud in the spring and you cannot move, and this sort of thing.
But I must admit that when you come up over that hill in Benton and you see all of that beautiful new pavement, well there is a reason for that. That is the beginning of the riding of that great Liberal member who called the tenders and his name happens to be Winston Baker.


Mr. Jean-Robert Gauthier (Ottawa-Vanier):: Madam Speaker, I would like to get back to the bill. It is all very well for us to have an historical accounting of how they build roads in Newfoundland, but I want to ask my friend and colleague about the bill.

September 20, 1991
The annual deficit is the object here of this initiative. I want to ask the member, if he really believes this is nothing but smoke and mirrors on the government's part, in his opinion will this change the debt position of the government in any way? Will this create any new income? Will it bring in new revenues? Will it prevent it from spending further than it has spent, like it announced today, or yesterday? Rather, they are moving 200 public servants from the riding of Ottawa-Vanier to Regina. Welcome: "Oink, oink, oink," as Jeffrey Simpson says this morning. Welcome again to Brian Mulro-ney's Ottawa.
Ladies and gentlemen, you haven't learned anything yet. It moved 200 public servants to Regina and it found $236 million for the so-called TRIUMF KAON particle accelerator.
I just wonder if the member could comment briefly on how this bill is going to prevent this government from going: "oink, oink, oink," come every election time.


George Baker: Madam Speaker, I must admit, and people looking at this must think it is quite a coincidence, all of a sudden for the Government of Canada to find all of this money to develop an industry that has been demanded in British Columbia for years. The scientists out there have been demanding it. They have been demanding it year after year after year after year to create those jobs. All of a sudden, what a coincidence. The day the election is called out there, yes, the very minister who used to be in the cabinet out there with that government goes down and announces that particular expenditure.
Meanwhile back in the hon. member's riding now, what do they have? They have all of the employees there being offered zero per cent wage increases. And all at the same time, we have 4,600 of the upper management people getting their bonuses. So that is the Government of Canada's way, it is entirely political, and I am sure that all we can look forward to for the next two years are political announcements, loads of money to spend, because they have taxed everybody to death.


Madam Deputy Speaker:: It being eleven o'clock, pursuant to Standing Order 30(5), the House will now proceed to statements by members pursuant to Standing Order 31.


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


Mr. Charles-Eugene Marin (Gaspe):: Madam Speaker, I would like to draw the attention of the House and Canadians in general to the fact that September is influenza information month, jointly sponsored by the Canadian Diabetes Association, the Canadian Lung Association, the Canadian Medical Association and the Canadian Public Health Association.
The purpose is to promote the vaccination of high-risk groups, and I am sure you will agree, from personal experience, Madam Speaker. People at risk are usually those over 65 and and those suffering from chronic illness such as asthma, heart disease or diabetes.
These people should get a flu vaccination to protect themselves against infection and avoid often serious complications. All high-risk individuals are urged to make an appointment with their doctor or call their public health office for further information. The flu vaccin is now available and all those -


Madam Deputy Speaker:: Unfortunately, the hon. member's time is up, but I would like to thank him for his excellent advice.


YUGOSLAVIA
Mr. Jesse Flis (Parkdale-High Park):: Madam Speaker, on Tbesday on behalf of the Liberal Party, I called on the Prime Minister to support the ceasefire in Yugoslavia, and to act on the request by the presidents of Yugoslavia and Croatia for peacekeepers from the United Nations. I congratulate him on the speed with which he acted on our suggestion.
I trust, however, that Ambassador Fortier will do more than just inform the United Nations Security Council and the European Community. Canada's position, in light of the new internationalism, must be to place individual and minority human rights above the absolute rights of sovereign states.
September 20,1991

I met yesterday with representatives of the Canadian Croatian Information Centre. These Canadians, many of whom are sitting in the gallery right now, know it is possible for all people to live in harmony when there is true democracy. One woman said: "This war should not been seen as Serbs against Croatians. It is democracy against communism".
If true democracy is to prevail, the UN must act now.


THE ECONOMY
Mr. Garth  Ihrner@Halton-Peel: Madam Speaker, two days ago in this House the hon. member for Hamilton West quoted some of my words to the press. It was his intent to demonstrate that I did not agree with the Minister of Finance that the recession is over.
This was a highly partisan attempt to gain a few political points, and the member ought to be ashamed of himself. As usual he was ill-informed and misinterpreted my statement.
As both he and I know, leading economic indicators show the recession is clearly over. Unemployment figures also show that it will take some time before all of the lost jobs are regained. Until those jobs come back, neither of us I am sure, will be satisfied.
I have no hesitation in saying that the policies of the Minister of Finance, including spending restraint, falling interest rates, low inflation and deficit reduction are the very reasons those jobs will be regained and will be permanent.


LINGAN MINE
Mr. David Dingwall (Cape Breton-East Richmond):: Madam Speaker, the closure of the Lingan mine in my constituency of Cape Breton-East Richmond will undoubtedly have a negative effect on our economy, an economy that is already hurting.
On previous occasions in this House I have warned both the federal and provincial governments that the opening of the Westray coal mine in Pictou County, Nova Scotia, would mean in effect the closure of the Lingan mine in Cape Breton.
On several occasions, both in Question Period as well as statements, I have brought this to the attention of the Prime Minister. I am supported by senior management
of the Cape Breton Development Corporation, a federal Crown corporation, which has supplied information to the Government of Canada that if the Westray coal mine proceeded, Lingan would have to close.
Details of the compensation package which was worked out between union and management for the displaced workers at Lingan has yet to be announced. I insist that the president and the board of directors of the Cape Breton Development Corporation, as well as the minister, honour their commitment and provide the details of that compensation package immediately and not waste any more time in providing those answers.


INTERPROVINCIAL TRADE
Hon. Alan Redway (Don Valley East):: Madam Speaker, for over 124 years, Canada has been closely linked by interprovincial trade. Six provinces; Quebec, Prince Edward Island, Nova Scotia, Manitoba, Saskatchewan and Alberta trade more within Canada than they export to foreign countries.
Of the three largest manufacturing provinces, only Quebec is more dependent on trade with other Canadian provinces than on foreign trade. Quebec's manufacturing shipments are roughly split between international markets and the rest of Canada. In 1989, 14.5 per cent of Quebec's shipments of manufactured goods went to Ontario. Only 5.9 per cent of Ontario's went to Quebec.
Interprovincial trade is vitally important to all provinces. If Canada breaks up and trade flows are disrupted, each and every one of us would personally be worse off than we are today.


THE ENVIRONMENT
Mr. Jim Fulton (Skeena):: Madam Speaker, the co-chair of the International Joint Commission Science Advisory Board has called for a declaration that chemical contaminants in the Great Lakes are a hazard to human health.
Some 37 million Canadians and Americans are facing health threats ranging from infertility to birth defects from the toxic wastes dumped into the five lake system. This adds to the urgent IJC call for an outright ban on the 11 most persistent toxics and demonstrates once again the need for a zero discharge timetable, solemnly

September 20, 1991
5. ft 31
promised by the Prime Minister four years ago. Further delay would be criminal.
On Wednesday, the minister of energy attempted to abandon Canada's commitment on global warming. He said, and I quote: "It is Canada's policy to stabilize greenhouse gas emissions by the year 2000".
On November 7, 1990 in Geneva the Minister of the Environment stated, and I quote: "Canada has pledged to fully eliminate controlled CFCs by 1997. We have also committed, as a minimum, to stabilize at 1990 levels all other greenhouse gases, most notably carbon dioxide, by the year 2000".
Let us trust that Canada did not lie in Geneva.


FARM CREDIT CORPORATION
Mr. Geoff Wilson (Swift Current-Maple Creek-As-siniboia):: Madam Speaker, I applaud the announcement by the Minister of Agriculture that FCC headquarters will at long last move to the prairies.
The bulk of farm credit business is on the prairies. The base of Saskatchewan is agriculture. The move makes sense. However, it will come as no surprise to westerners that the opposition parties are bellyaching about this long overdue decision.
The Liberals call it a crass effort to buy votes. What hypocrisy. Ottawa Liberal members should stop toadying to Daryl Bean long enough to understand that a considerable part of Canada lies beyond the lush pastures of the national capital region.
The NDP are no better. They have 10 members from Saskatchewan who should be elated about this relocation. But no, they are so tied to the apron strings of the Public Service Alliance and the big Ontario union bosses that they are forced to do what they do best, criticize, find fault and be negative.
I congratulate the Minister of Agriculture on this relocation, which demonstrates the continuing commitment of this government to bring federal institutions and agencies close to the people they serve.


EASTERN ONTARIO'S ECONOMY
Mr. Don Boudria (Glengarry-Prescott-Russell):: Madam Speaker, the economic recession has again hit the riding of Glengarry-Prescott-Russell. Yesterday, St. Isidore Meats Inc., the only pork abattoir between Toronto and Montreal, announced it was closing, laying off its last forty employees. A few months ago, thirty more people lost their jobs in St. Isidore.
Madam Speaker, it seems that every week another disaster strikes the people of Glengarry-Prescott-Russell and eastern Ontario. This morning, I would again like to tell the government opposite that my colleagues from Stormont-Dundas and Renfrew-Nipissing- Pembroke, I and twenty-eight municipalities of eastern Ontario asked the government to act and set up a development program for our region. We need it now.


DECENTRALIZATION
Mr. Gilles Rocheleau (Hull-Aylmer):: Madam Speaker, the Mulroney government is literally draining the national capital with its decentralization policy, which I have decried many times. After the move of the National Energy Board to Calgary in July, the national capital is now dealt another blow with the announcement of the transfer of the head office of the Farm Credit Corporation from Ottawa to Regina. Quebecers will have no alternative but to leave Quebec to pursue their career in Saskatchewan. Since the constitutional offers are about to be presented, we can expect this haemorrhage to intensify and in the worst case, gifts to be given across Canada to help the "pill" go down. The decentralization of thousands of jobs has very serious consequences for the Quebec side of the Ottawa River. It is high time that Quebec took back all its powers and became sovereign.
September 20, 1991


WOMEN'S RIGHTS
Ms. Dawn Black (New Westminster-Burnaby):: Madam Speaker, women are marching this weekend in cities across the country to take back the night. Shelters for battered women are unfunded. Women's sexual histories are on trial once again.
An all-party report of the House of Commons subcommittee on the status of women called for a strong rape shield law, adequate funding for shelters and crisis centres, mandatory gender sensitivity training for judges and members of Parliament. The need has never been more evident.
Recent events here have shown Canadians the type of behaviour that is sometimes directed at women members of Parliament. It is not hard to see why there is no pay equity when a government representative, responsible for pay equity, makes offensive comments about women.
New Democrats call upon this government to implement the recommendations of that report now.


ADMINISTRATION OF JUSTICE
Mr. Ken Atkinson (St. Catharines):: Madam Speaker, this week saw 15 innocent people charged and summoned to appear in criminal court. Among them was the Commissioner of the RCMP and two members of the force.

These charges resulted from private prosecutions under section 507 of the Criminal Code. This section allows a justice of the peace, who sometimes has no legal training, to determine if a summons should be issued. It should be changed to require a judge or a Crown attorney to review the evidence and charges before they are continued.
Fifteen people spent an intolerable summer with their reputations tarnished because of the media's misunderstanding of private prosecutions and the vengeful mind of one person. It even hurt our entire country by causing an unwarranted run on our dollar.
This misuse of our justice system should not be allowed to happen to any citizen of our country again.


ECONOMIC DEVELOPMENT
Mr. Bob Kilger (Stormont-Dundas):: Madam Speaker, the city of Cornwall and other communities in eastern Ontario need a federal economic development program now.
Federal programs such as FEDNOR and the Canada-Quebec Subsidiary Agreement have proved to be beneficial to northern Ontario and particular regions of Quebec. A similar program is required for economically depressed areas in eastern Ontario.
Unemployment is well above the national average in Cornwall, where over 1,500 lay-offs and job losses have occurred in the last two years. The absence of an economic development program has inhibited businesses and investment from locating in eastern Ontario.
The negative impact of cross-border shopping and the geographic reality has eastern Ontario up against northern New York state and western Quebec in attracting business and investors. This places border communities like Cornwall at a distinct disadvantage.
Cornwall, and cities like Pembroke and Hawkesbury, need an federal economic development from this government immediately.


THE ECONOMY
Mr. Steven W. Langdon (Essex-Windsor):: Madam Speaker, the Conservative government continues to attack the Ontario government for its budget deficit and, at the same time, faces a situation where its own deficit is rising far faster than it projected in the budget last year.
The latest figures show that for the first four months of this fiscal year, the budget deficit that the Conservative government is running is twice as high as the budget deficit which it ran last year. At that rate we are looking at a potential budget deficit of over $35 billion.
This is not something this government can use as ammunition if it seeks to show the rest of the country that fiscal rectitude is an important consideration.

September 20, 1991
Oral Questions


EARTH SUMMIT
Mr. Arnold Malone (Crowfoot):: Madam Speaker, an extraordinary event will take place next year when more than 100 world leaders will meet at an earth summit in Rio de Janiero. We will be discussing preservation of the ecological integrity of the planet. We will also be discussing the integration of the environment and the economy in both developed and developing countries, and the need for a partnership between north and south.
The earth summit is officially called the United Nations Conference on the Environment and Development. It will take place in Rio de Janiero June 1 to 12,
1992.
The Government of Canada is actively preparing for the conference in concert with partners in the provinces and the territories, in industry, in environmental and development groups. We are working with our aboriginal people, Canadian youth, women's groups, religious and peace organizations, scientists and academics, all of whom are part of the Canadian team. The delegation has requested that this example be emulated at the international level.


VICTIMS OF VIOLENCE
Mr. Stan Keyes (Hamilton West):: Madam Speaker, Canadians reeled in shock this past summer at the tragic deaths of several young Canadians. In southern Ontario two young women, Leslie Mahaffy and Nina DeVilliers, and a child, Kala Klaudusz, met violent and needless deaths.
Canadians have expressed shock and horror at these incidents and are asking themselves where is the justice. People see the perpetrators of violent crimes released prematurely from jail, violent offenders are walking the streets on day passes.
Canadians are asking themselves: "Why is our justice system working against us? How can we be protected against violent offenders today and in the future?" Both society at large and the victims of violence are demanding that justice be done. We must remember to put a face to these tragedies.
During this fall session I will table a private member's bill dealing with the rights of victims of violence. It will give the victims of violence a stronger voice in the
disposition of convicted offenders and will return to society a sense of security and faith in their system of justice.



ORAL QUESTION PERIOD


Mr. Jim Peterson (Willowdale):: Madam Speaker, my question is directed to the Minister of Finance. The government says that the recession is over, but the economic indicators say otherwise. Manufacturers' deliveries are down. The trade surplus is at its lowest level in ten years, and unemployment continues to increase. When will the government at least admit that its policies are harming the Canadian economy?


Hon. Don Mazankowski (Deputy Prime Minister and Minister of Finance):: Madam Speaker, quite the contrary. The hon. member knows there was substantial growth recorded in the second quarter. The budget projections of February 1991 assumed that recovery would start occurring in the second half. Recovery has actually started one quarter earlier than that which was projected and it was at a very robust level of 4.9 per cent on an annualized basis.
We projected all along that the recovery would be modest to moderate and we projected growth in the order of 3.1 per cent in 1992. We now anticipate that growth will be something in the order of 2.5 per cent to 3 per cent in the second half.
Export volumes have increased by over 25 per cent at an annual rate in the second quarter. Business confidence is up. Consumer confidence is up. Housing starts are up. Housing sales are up. All of these are positive indicators that lead me to believe that we are on the road to a sustainable moderate recovery.


James Scott (Jim) Peterson: Madam Speaker, yesterday the Canadian dollar closed at 88.09 cents. Will the Minister of Finance give to this House the name of just one Canadian industrialist who has come up to him and said: "Thank you, Minister. Your high-dollar policy is really helping us to compete and to create jobs in Canada".
September 20, 1991


Donald Frank Mazankowski: Madam Speaker, the hon. member is intelligent enough to know that you cannot artificially manipulate the value of the dollar. There are market forces at play that contribute to the value of the dollar, and I remind him that notwithstanding the fact that interest rates have declined by over 5.5 per cent, or 550 basis points, from last year, the spread has declined from about 565 basis points to 280 basis points.
Notwithstanding that fact, when we had the high spreads and the high interest rates the dollar was worth 84 cents. Interest rates have come down. The value of the dollar has gone up.
This tells us that there is confidence in the Canadian economy and strength in the integrity of the Canadian dollar. That should be applauded and not be criticized.


James Scott (Jim) Peterson: Madam Speaker, for this minister to support his high dollar policy is totally wrong.
Labour does not like it. Small business does not like it. The Canadian Manufacturers' Association said: "It is putting Canadian manufacturers out of business and their employees out of work." Who is wrong, Canadians or this government?
Will this government reverse its high dollar policy to help resuscitate Canadian industry and get Canadians back to work?


Donald Frank Mazankowski: Madam Speaker, one of the contributing factors to the upward pressure on the dollar is the fact that the provinces have been borrowing very extensively in the international marketplace.
As a matter of fact, in the first half of this year, they have borrowed $10.9 billion in new debt issues. That is double the amount of the whole year of 1990. That puts upward pressure on the dollar.
The other fact is that North America is a safe haven for investment when there is uncertainty throughout the world, and that is another contributing factor.
I remind the hon. member that the President of the National Bank, Andre Berard, as reported in Le Devoir as reported this morning, said that reducing producing
Oral Questions
production costs is just as important to economic recovery as readjusting to the high value of the Canadian dollar.
It is not just the value of the dollar that is contributing to our difficulties. It is production costs. It is labour efficiency. It is labour cost components. Those are the things that we must address together.
My colleague, the Minister for International Trade, will be unveiling a strategy to improve our competitiveness and our prosperity. That is a positive sign.


Hon. Herb Gray (Windsor West):: Madam Speaker, I also have a question for the Minister of Finance.
Yesterday, the head of the second largest newsprint manufacturer in the world, Hugh Fletcher, speaking in Toronto said: "The difference between an 88-cent dollar and an 80-cent dollar is the difference between disaster and reasonableness."
Why is this government running an economic policy that international business leaders who have to make decisions about investing in Canada are calling a disaster? That does not sound like confidence to me.


Donald Frank Mazankowski: Madam Speaker, these same business leaders were complaining about high interest costs a year ago.
Interest rates have come down by 5.5 per cent. They are still coming down. The Bank of Montreal announced that its prime rate would be 9.25 per cent. That certainly is a far cry from the 22.75 per cent when that minister sat over here on the treasury benches.


Herbert Eser (Herb) Gray: Madam Speaker, Canadians watching will note that the Minister of Finance neglected to respond in any way to the comments of Mr. Hugh Fletcher, international business leader and head of the second largest newsprint manufacturing company in the world.
Mr. Fletcher also said, speaking of the monetary policy, the high dollar policy of this government, that the Governor of the Bank of Canada is "killing prospects" of international investors putting more money into our crucial forest products sector.
Why is this government acting to kill prospects of international investment in the forest products sector if it is interested in international confidence and business

September 20, 1991
Oral Questions
leaders like Mr. Fletcher investing in Canada? Why does it not reverse its harmful economic policies right now?


Donald Frank Mazankowski: Madam Speaker, perhaps I should remind the hon. member and Mr. Fletcher that the average value of the Canadian dollar over the last 40 years was 92.6 cents.
When he talks about the value of the high dollar, on a historical basis he is right out of kilter on this thing. The fact of the matter is that the dollar, as he knows, is set in the marketplace. There is intervention by the Bank of Canada to ensure that there are not erratic ups and downs in the level of the interest rates. It is the marketplace that establishes the rate.
In so far as investment, there has been a turnaround of about $7 billion since the free trade agreement came in. Before the free trade, there was a net outflow of investment dollars. As a result of the free trade, the investment policies and the confidence that business has in this government, there has been a net inflow of investment dollars.


POVERTY
Hon. Audrey McLaughlin (Yukon):: Madam Speaker, my question is directed to the Deputy Prime Minister. Yesterday, we again heard that nearly one-third of single parent families live in poverty. One child out of five lives in poverty. Here is my question. We are about to debate the future of our country, and during this debate, we cannot afford to ignore these frightening figures because these children are our future. For many years, this government has failed to take any new measures to deal with a disastrous situation. What is the government going to do, not in a couple of years but now?


Donald Frank Mazankowski: As I indicated yesterday, Madam Speaker, this government has initiated a number of programs that has improved the situation of children. I agree with the hon. member that children and the family unit are basic to our society. We have attempted through
tax reform to try to improve the lot of families, in particular with respect to children.
I also want to remind the hon. member that since we have come to office, more than 1 million people have been taken off the poverty roll, which includes over
300,000	children. The changes to the child tax credit and the various tax credits that have been provided to lower and middle income people and the refund of the GST tax credit, all of these things are in recognition of the very important fact of family life, and particularly those families who live on lower and middle incomes.
Always we wish that we could do more. The minister of health is currently looking at a number of child initiatives which are being developed. When they are developed, they will be announced in the House in the appropriate fashion.


Audrey Marlene McLaughlin: Madam Speaker, this government has been in power since 1984. It is time to stop wishing and put in some initiatives for these children.
On November 24, 1989, this House unanimously-including the Deputy Prime Minister, the Minister Responsible for the Constitution and the Prime Minister-voted unanimously to make a commitment to eradicate child poverty by the year 2000.
I ask the Deputy Prime Minister: As well as the initiatives that absolutely need to be taken now, and as we move into the constitutional debate, is the government seriously considering a social charter which would give specificity to these fine words that were uttered in 1989, two years ago, to really address the basic issues that will unite this country?
I ask the Deputy Prime Minister: Will his government seriously consider a social charter which will include the right of children to have a decent standard of living and to have food and shelter and education in this country?


Donald Frank Mazankowski: Madam Speaker, one of the best ways that we can improve the lot and the confidence of children and future generations is to deal more effectively with the burden of debt which has been inherited by this government and which this government is trying to deal with without very much support from the New Democratic Party.
*g*

September 20, 1991

In so far as her question about a social charter, the hon. member will have access to the document next week. It will be presented in the House. It will be debated. I am sure that the hon. member will have an expressed point of view at that particular time.
As the Minister Responsible for Constitutional Affairs has stated on many occasions and as the Prime Minister has stated, this is a beginning and not an end. What the government is proposing is an advancement of proposals which we hope will find favour and we hope the hon. member and her party will engage in a further discussion to develop the kinds of programs and policies that will lead us to the kind of Canada that we all aspire to achieve in terms of a strong economy, a sensitivity to social concerns, but most important, a strong political unit.


Audrey Marlene McLaughlin: My supplementary question is for the Minister Responsible for Constitutional Affairs. Canadians are very concerned that our health care is in jeopardy, there is no child care program, that poverty still exists in this country despite the words that we have said in this House.
Clearly we all agree that this country needs a shared commitment to making Canada the best place possible. I want ask the minister: Is he seriously considering, and will he consider in principle, that a social charter would give form and substance to those sentiments, and is he considering that now?


Right Hon. Joe Clark (President of the Privy Council and Minister responsible for Constitutional Affairs):: Madam Speaker, one of the advantages of having specific propositions on the table, as there will be next Tuesday, is that some of the concerns that might have been raised about the contents of the proposals of the government will be allayed, will be answered by the publication of the specific document.
The hon. member will know that Premier Rae, in Ontario, who I understand is planning to publish a document with respect to a charter, had at one point been interested in bringing forward and devising a charter itself. His officials, as I understand it, encountered some difficulty in translating that interesting idea
Oral Questions
into a charter that would work and would be acceptable within the Canadian system.
I want to repeat what the Deputy Prime Minister has just said, that the proposals that we put forward on Thesday are proposals that will be considered, that are designed to achieve real change in the Constitution, that are firm but that are not final. If it is the view of members of the Special Joint Committee on the Constitution that there needs to be improvements brought to that package, certainly we will look with an open mind on all practical improvements.
I emphasize that we are interested in improvements, things that will work, not simply proposals for change.


SCIENCE AND TECHNOLOGY
Mr. David Berger (Saint-Henri-Westmount):: Madam Speaker, my question is directed to the Minister for Science.
For the past seven years, members of this government have told Canadians time and again that there is no money for the National Research Council, no money for industrial research, no money for medical and environmental research.
My question to the minister is: Where has the government suddenly found the money to fund the KAON project?


Hon. William C. Winegard (Minister for Science):: Madam Speaker, as the member knows, in the last budget of February there was $1.5 billion set aside for science and technology initiatives in this next several years. That funding is still in place and has nothing whatsoever to do with the KAON project.
KAON project funding, as far as the Government of Canada is concerned, would come in in later years and that funding is not at all a part of the $1.5 billion.


David Berger: Madam Speaker, I am glad that the government has suddenly found a rich uncle. I would like to tell the minister that the line starts right here.
Is the minister saying that the government has now found money to support adequately university research, industrial research, medical and environmental research, or is this just pure political opportunism?

September 20, 1991
Oral Questions


William C. Winegard: Madam Speaker, I think it would be just as well if the hon. member would wait until he sees the proposals for spending the $1.5 billion.
Furthermore, I think it would be just as well if he waited until the consultations with respect to prosperity and competitiveness are over, until we see what further funding may be needed to do some of the things he has on his plate.


FARM CREDIT CORPORATION
Mr. Mac Harb (Ottawa Centre):: Madam Speaker, my question is for the Minister of Agriculture.
The news that the Farm Credit Corporation headquarters is being relocated to Regina has sent shock waves rippling through more than 200 families of public servants in the national capital region.
My question is: Why is the government fuelling public cynicism by announcing this move on the eve of a provincial election, and where is the immediate real support for which farmers are asking?


Hon. Bill McKnight (Minister of Agriculture):: Madam Speaker, I want to inform the hon. member that the most valued resource that the Farm Credit Corporation has are the employees of Farm Credit Corporation.
The move and the relocation of some 200 headquarters staff to Regina will take place over the next 12 months. We hope it is concluded prior to the crop year.
The NDP seems to object to putting 200 jobs into the province of Saskatchewan, locating Farm Credit Corporation where 60 per cent of the clients that Farm Credit serve reside, where over 50 per cent of the dollars are lent out by Farm Credit Corporation. I do not understand why the NDP objects to it so much.


Mac Harb: Madam Speaker, as we know the Farm Credit Corporation runs on a non-deficit basis. The minister also knows that the cost of the move and future expenses will be borne by the farmers through higher interest rates. Clearly, the relocation is of no benefit to the farmers whatsoever.
So I repeat my question and ask the minister to answer me and not the NDP. Why is this government using public servants to interfere in provincial elections?


William Hunter (Bill) McKnight: Madam Speaker, as the hon. member knows and as eveiyone in the House knows, the policy of this government is to locate the services that the government provides closest to those clients the department serves.
I draw to the hon. member's attention the relocation a of the National Energy Board to Calgary.
I draw to the hon. member's attention for the same rationale that over 60 per cent of the client group served by Farm Credit reside in the prairie provinces. More than 50 per cent of the dollars lent out by Farm Credit are in the prairie provinces. That will bring the Farm Credit Corporation and its headquarters staff closer to producers.
I say to the hon. member that he has recognized that Farm Credit operates on a break even basis or operates on a basis of no cost to the taxpayer. It also operates on a competitive interest rate policy. Its interest rates are competitive with any commercial institution in Canada.
The savings that will be acquired over the life of the corporation, as they are amortized over the life of the corporation for this move, will be consumed within the corporation and will benefit the farmers and the clients of Farm Credit.


MEME BREAST IMPLANT
Ms. Joy Langan (Mission-Coquitlam):: Madam Speaker, my question is for the minister responding for the Minister of National Health and Welfare.
In April Surgitex withdrew the Meme breast implant from the market.
On June 5, Carol Cyr was implanted with two Memes in a hospital in Montreal.
My question to the minister is: How could this happen? Is the Meme off the market or is it not?


Hon. Pierre H. Cadieux (Minister of State (Fitness and Amateur Sport) and Minister of State (Youth) and Deputy Leader of the Government in the House of Commons):: Madam Speaker, as the hon. member has indicated, the Meme breast implant was recalled and to my knowledge it is off the market.

September 20, 1991


Joy Langan: Madam Speaker, the hon. minister should know that in fact the Meme has never been recalled by this government. It was withdrawn voluntarily by Surgitex.
On August 7, in a press release the minister said the Meme implant is not currently available and cannot be reintroduced until evidence is reviewed by Health and Welfare.
On September 5, the director of the minister's Bureau of Medical Devices said on CBOFT Radio when asked about Carol Cyr: "It is in no way the business of the federal department of health and welfare".
Could the minister tell this House just who is responsible?


Pierre H. Cadieux: Again, Madam Speaker, some of the statements made by the hon. member are correct. It is off the market. The minister of health has ordered his department to look into this issue again, as it has been raised on a number of occasions and it is of concern not only to the department but to all women in Canada.
With respect to whether or not a doctor proceeded after the recall, doctors were informed of the recall of the Meme breast implant. If a doctor did go ahead with such an operation, I would suggest that the person in question contact the appropriate medical college in order to file a complaint.


THE CONSTITUTION
Mr. Garth Turner (Halton-Peel):: Madam Speaker, Canadians are awaiting the announcement next Tuesday of the proposed changes to the Canadian Constitution. From what we hear so far, the west will get an elected Senate, Quebec will get distinct status, and aboriginal people will get self-government.
My question is to the Minister responsible for Constitutional Affairs. Will middle-class Canadians also get something they deserve: the entrenched right to own
Oral Questions
private property, including the right not to be deprived of that property without just compensation?


Charles Joseph Clark: Madam Speaker, I very much hope and believe that all Canadians can receive from this package and this process a country that is united and prosperous and that will be able to look to the future, turning all of our attention to means by which we can grow stronger and more prosperous without diversion of constant constitutional problems.
With regard to the specific question respecting property rights, I appreciate the strong representation that has been made by the member and by others in this House.
I cannot divulge the contents of the package until it is released by the Prime Minister on Ihesday, but I can tell the hon. member that the concern raised by him and by hon. members has been taken seriously by this government.


ROMANIA
Mr. David Kilgour (Edmonton Southeast):: Madam Speaker, my question is for the Minister for International Trade in the absence of the energy minister, and it relates to the announced $315 million Cemavoda nuclear power station in Romania.
A report of the International Atomic Energy Agency last week indicated that fully a quarter of the station's safety problems has not been dealt with by the present government in Bucharest.
It would also strongly appear that the management of the Export Development Corporation is privately very hostile to this proposed loan.
Will the minister deal with both of those issues please?


Hon. Michael Wilson (Minister of Industry, Science and Technology and Minister for International Trade):: Madam Speaker, there has been a report by the International Atomic Energy Agency.
In this report it has noted a significant degree of progress from this time a year ago when it set out its

September 20, 1991
Oral Questions
proposals as to what should be done to put the Cemavo-da proposal in a position that it could be actively pursued.
We have followed this carefully. We believe that there is still further progress that must be made, but it is on this basis that we have moved forward with the financing from the Export Development Corporation in order to allow the proposal to be completed.
With regard to the second part of the hon. member's question, I am not aware of any opposition.


David Kilgour: Madam Speaker, the Iliescu government in Romania continues to inflict what are most often considered to be anti-democratic and authoritarian measures against many of its citizens.
What guarantees has the minister received that once the Atomic Energy Commission of Canada's management contract expires that the government there will continue to show concern for both the safety and human rights of the Romanian people?


Michael Holcombe Wilson: Madam Speaker, as I indicated, the international agency has observed some improvements in things in Romania.
It is a question of human rights that the hon. member has raised. This is something that has been a concern of the federal government. We will continue to make representations in that regard to the government.
As my hon. friend knows, there can be no guarantees in the future. However, what we can be sure of is that since this particular project will be very supportive of improving the standard of living of people in that country, and improving the standard of living almost inevitably leads to fewer excesses in the area of human rights difficulties, we are confident that that will take place in this regard as well.


THE ECONOMY
Mr. Alfonso Gagliano (Saint-Leonard):: Madam Speaker, my question is directed to the Minister of Finance.
The 1991 economic rendez-vous organized by the Conseil du patronat du Quebec this week generated 48 job-creation projects, since no action plans were forthcoming from the Tory government.
Would the Minister of Finance be willing to lower the value of the Canadian dollar to help support projects that will boost the economy in Montreal, Quebec and Canada?


Hon. Marcel Danis (Minister of Labour):: Madam Speaker, perhaps I may respond on behalf of the minister responsible for the Montreal area, who this week attended the economic forum referred to by the hon. member for Saint-Leonard.
The hon. member knows as well as I do that Montreal's economy is going through a very difficult period, largely as a result of structural changes. To help Montreal's economy back on its feet, we included in our February Budget a number of measures to reduce the deficit, bring down inflation and reduce unemployment. That is what we did. The hon. member asked what we are going to do now. If the hon. member would like to wait until Monday, when the Prime Minister will be in Montreal, he will see the results of our economic policy, for Montreal.


Alfonso Gagliano: Madam Speaker, we already know what the Prime Minister will do Monday in Montreal: He will put on a big show to say that- We know what the situation is like in Montreal, Madam Speaker. It is pretty bad! Will the governement act responsibly and support these 48 projects or is it going to put them on the backburner, like it did with the Picard Report?


Marcel Danis: Madam Speaker, I can assure the hon. member that we intend to give very serious consideration to every project that is brought to our attention.
I would like to ask the hon. member who is so fond of talking about Montreal where he was when the Conservative government voted in favour of Bill C-21, which made it possible to invest more than $55 million in occupational training in Quebec? He was against the bill!
When we transferred the Space Agency to Montreal, what did the hon. member have to say? He was against the transfer. When we passed Bill C-22 on drug patents, what did the hon. member say? He was against the bill. Only two Liberal members supported the bill. One is unfortunately no longer with us, and the other one is sitting next to the hon. member. Obviously, every time
September 20, 1991

we do something for Montreal, the hon. member says no!


Some hon. members:: Hear, hear.


SOUTH AFRICA
Hon. Walter McLean (Waterloo):: Madam Speaker, some months ago Canadians and Parliament welcomed Nelson Mandela to speak of change in South Africa to the Canadian Parliament and people.
This week Canadians are learning from his deputy, and for 26 years his fellow prisoner, Walter Sisulu and his wife Albertina, about the progress and the change toward democracy and the development needs of the future of South Africa.
I know that members will join in welcoming them here in the House today and on their tour of Canada.
I have a question for the Secretary of State for External Affairs. Last week the Commonwealth committee, which she chairs, spoke of resource needs and the Commonwealth meeting it.
What will Canada do to contribute to the resource needs of a democratic South Africa?


Hon. Barbara McDougall (Secretary of State for External Affairs):: Madam Speaker, I think all members of the House can be proud of Canada's role in fighting apartheid for many, many years. I think that the changes that have been made in recent months and recent years, thanks to outside pressure as well as support for the democratic forces inside South Africa, have been an important factor.
This year, Canada will be providing $15 million in aid specifically for human resource development and education and other aspects of that issue. While I was in Delhi, I announced that we would be giving $1.5 million to the UN High Commission for Refugees to help the political exiles whom we can all help to celebrate on their return home. We will be helping with their resettlement.
There is no country more pleased than Canada about the progress that has been made, but we continue to look to further sanctions to continue the pressure until full democracy reigns in South Africa.
Oral Questions EDUCATION


Mr. Robert E. Skelly (Comox-Alberni):: Madam Speaker, yesterday in the House, the Minister of Indian Affairs and Northern Development said that all aboriginal students in Canada can have access to a post-secondary education under the program that has been put in place by this government.
I cannot say that the minister deceived the House, but the communications branch damage control strategy from his own ministry, which the minister cited from memory in many parts, indicates that as many as 3,000 students will be unfunded this year. That is 3,000 potential students who, rather than going to school, will end up on social assistance which costs the government roughly 10 per cent less than a post-secondary school education.
Bands and tribal councils, including Squamish, Nanaimo and other bands in the minister's riding, have been handed actual budget cuts by his department this year, contrary to the minister's assurance yesterday and the Prime Minister's promise in Victoria.


Madam Deputy Speaker:: I am sure the hon. member does have a question some place, somehow in there.


Robert Evans Skelly: My question to the minister is: Will he undertake to reverse these post-secondary education budget cuts to bands and tribal councils and assure that the 3,000 underfunded students will be able to enrol in school in the 1991-1992 academic year?


Hon. Thomas Siddon (Minister of Indian Affairs and Northern Development):: Madam Speaker, I am glad the hon. member has decided to re-ask the question which was asked yesterday by the hon. member for Western Arctic.
Again I repeat the answer, that this government has made the most generous program in history on behalf of aboriginal students. In fact the funding for the post-secondary program has been increased by almost 400 per cent since 1985. The number of post-secondary students enrolled in these programs has increased by more than 300 per cent to over 22,000 in the present year, and cabinet agreed in the spring to increase these funds by an

September 20, 1991
Oral Questions
additional $320 million over the next five years, increasing the total commitment to well over $1 billion.
The problem raised by the hon. member is one of the management and distribution of funds among the regions and the question of which students are more qualified, which others are less qualified and which ones submitted their applications late.
I can assure the hon. member that according to the list in front of me something just slightly over 1,000 applications are-


Madam Deputy Speaker:: As we all can see, long preambles and long questions bring long answers. I still have quite a few names on my list. Can we please go to a question right away? The hon. member for Comox-Al-bemi.


Robert Evans Skelly: But, Madam Speaker, truthful answers bring information to the House and that is always helpful as well.


Some hon. members:: Hear, hear.


Some hon. members:: Oh, oh.


Madam Deputy Speaker:: The hon. member will put his question right away, or I will go to someone else.


Robert Evans Skelly: Madam Speaker, I asked the minister about his own department's communication strategy which indicates that as many as 3,000 students will be unfunded this year.
My question to the minister, given his answer yesterday that all students will be funded, is: Are those 3,000 students who are projected to be unfunded this year going to be funded?


Thomas Edward Siddon: Madam Speaker, I do not know what document the hon. member is citing or the date of it, but I have a note dated September 13 which indicates that approximately 1,200 students will not be funded for reasons of late application or other reasons. I have asked my officials, as indicated in the House yesterday, to look carefully at the regional distribution of funds and to deal with individual applications.
I can assure the House that all continuing students and all high school graduates coming from aboriginal communities will be funded under this program. With the additional $200 million available per year under the
Pathways to Excellence Program, there is no excuse for a post-secondary student and young Indian-


STUDENT LOAN PROGRAM
Mr. Ronald J. Duhamel (St. Boniface):: Madam Speaker, my question is for the Secretary of State.
A student from Winnipeg called me today, one of over 100 calls I have received, to ask the Secretary of State to remove the new 3 per cent tax on student loans, this unfair, discriminatory tax imposed on the poorer students who need to borrow for college and university education, one that needs to be paid up front and in cash.
Will the minister remove this brutal damaging tax today?


Hon. Robert de Cotret (Secretary of State of Canada):: Madam Speaker, I would like to refer my hon. colleague to the answer I gave him last Monday on this issue.
The Canada Student Loan Program is a program introduced 27 years ago. It is under full review. The administrative costs have been rising very sharply. The 3 per cent has been imposed because of that rise in administrative costs. We are reviewing the whole program.
I have talked with the Canadian Federation of Students and within the very near future I will be proposing amendments to the program to cabinet, and I will be tabling those amendments in the House.


Ron J. Duhamel: Hopefully, the tax will be removed, Madam Speaker.

When the minister was President of the Treasury Board, he introduced this new discriminatory 3 per cent tax on student loans and said that it would compensate for bad loans. Why impose this new tax when the vast majority of students do pay back their loans? Isn't this immoral, in any case insensitive and perhaps even illegal?


Robert René de Cotret: Madam Speaker, I will repeat in French what I said in English. This program was introduced 27 years ago and is now under full review. Obviously, it is going to be amended to reflect the current situation. These amend-
September 20, 1991

merits are about to be submitted to cabinet and will be tabled in the House.


Mrs. Beryl Gaffney (Nepean):: Madam Speaker, my question is for the minister of youth.
On June 10 and September 17 last the minister in this House twice denied that there had been funding cuts to the SEED program.
Let us use the national capital region as an example. According to the minister's own figures, federal funding for the SEED program, which is a student summer employment program, has been cut in this region from a 1989 level of $1.4 million to $424,000 in each of the last two years, a 70 per cent reduction. Hundreds of students could not find jobs in this region.
Will the minister reinstate funding to at least the 1989 level?


Pierre H. Cadieux: As I have indicated before, Madam Speaker, the budget for the Challenge program was increased for this year.


Beryl Gaffney: Madam Speaker, deny, deny, deny. The figures are here in the minister's own ministry. These cuts have caused tremendous hardships and lost opportunities to the young people of this region.
I ask the minister again: In preparation for next year's budget, will the minister reinstate the moneys to enable the youth of our region to have some hope for better job opportunities in 1992?


Pierre H. Cadieux: Madam Speaker, considering that the premise of the question is based on the Challenge budget, the Challenge budget for this year was increased and the numbers show that.
Oral Questions MULTICULTURALISM


Ms. Margaret Mitchell (Vancouver East):: Madam Speaker, my question is for the Acting Prime Minister.
The rise in racial violence and multicultural intolerance in Canada was inflamed this past summer by the Conservative convention resolutions. Will the government implement these resolutions which stated that the multicultural department should be closed down and multicultural funding should be cut?
If not, will the Acting Prime Minister on behalf of the government affirm today what it intends to do to promote greater understanding of multiculturalism and to implement the Multicultural Act actively?


Hon. Gerry Weiner (Minister of Multiculturalism and Citizenship):: Madam Speaker, I thank the member for the opportunity to reinforce the commitment of the government.
The new department was confirmed on April 21, and I serve as the Minister of Multiculturalism and Citizenship. We have been very active in promoting the vision that I know the member is very supportive of, to help Canadians understand how important our diversity is and how it contributes to strengthen and enrich this nation.
More and more our program areas have been working to combat racism and racial discrimination and work to promote equality, equality of opportunity. The basic right of all Canadians is the opportunity to participate. Of course our programs of integration are working very well, our citizenship courts, the pride we all have in our citizenship. Just watch our continuing efforts as we go across the country, building important partnerships with all Canadians.


Margaret Anne Mitchell: Madam Speaker, I think it is incumbent on the Prime Minister to reaffirm his policy on behalf of the government as a whole. It is a very serious concern to people.
The Manitoba native justice inquiry and racial incidents in Halifax and Montreal this past summer are evidence that problems are very serious and that the federal government must act more aggressively to enforce minority rights and eliminate racism.
I ask the minister: Will the government initiate a major public education campaign and also establish a representative citizens' panel to investigate causes of racism, to

September 20, 1991
Oral Questions
consult with minority communities and make recommendations for government action?


Gérard (Gerry) Weiner: Madam Speaker, it is this government that began the whole March 21 initiative some three years ago, which is a national awareness program to help Canadians understand the devastating effects of racism and the need to erase it from our society.
In fact, last March 21 we were pleased to welcome one of our very important partners, the Canadian Association of Broadcasters, an idea that had its birth in British Columbia, in the hon. member's province, and it contributed some $10 million of support to a very active program to help Canadians understand the benefits of our diversity.


CRIMINAL CODE
Kenneth David Atkinson: Madam Speaker, this week we saw charges against 15 individuals dropped after they had been approved by a justice of the peace. The crown attorney involved in the case described some of the charges as a gross miscarriage of justice.
I recognize the value of private prosecutions in our justice system, but will the Attorney General review section 507 of the Criminal Code in order to ensure that this type of abuse of process does not happen to any individual again?


Hon. Kim Campbell (Minister of Justice and Attorney General of Canada):: Madam Speaker, I am not sure that the difficulty that we saw described so graphically by the Attorney General of Ontario arises necessarily from the statute but more with how it is implemented.
As a British Columbian, I can say that these matters are handled very differently in my own province from the way they are handled in Ontario. I believe they are also handled very differently in Quebec and in Alberta.
What I have indicated is that this is a subject that I would like to see discussed by all of us who have the responsibility for the enforcement of the criminal law-I have it in the territories; my provincial colleagues have it
in the provinces-to ensure that a device which I think is an important part of a democratic justice system is not used to create injustices. I think that could probably be done without legislative change but with great care in the role taken by our prosecutors.


DAVID MILGAARD
Mr. Russell MacLellan (Cape Breton-The Sydneys):: Madam Speaker, my question is for the Minister of Justice.
When Mrs. Joyce Milgaard met the Prime Minister recently and asked about her son's wrongful conviction, he said he would look into it right away which gave Mrs. Milgaard a good deal of hope.
In the House of Commons on Thesday, the minister said that the Prime Minister merely said that he would look into the state of his health, which I think is veiy cruel and misrepresents what actually took place.
This case must be reopened. I want to ask the minister: When is she going to stop playing God and reopen the David Milgaard case?


A. Kim Campbell: Madam Speaker, first of all, I have looked very closely not only at the comments of the Prime Minister but at subsequent comments of Mrs. Milgaard which confirm the Prime Minister's commitments with respect to David Milgaard's health. I have already indicated in the House the steps that were taken.
The Prime Minister I think had a very humanitarian concern and communicated with me immediately. I communicated with the people in Correctional Services Canada, and my understanding is that no request has been made by David Milgaard to change his location.
I do not play God with these applications. I am bound by the law and by evidence. I will review every application that comes to me on that basis as fairly and equitably as possible.
The first application that came to me did not meet the threshold. If another one that comes does, it will be granted. If it does not, it will not.
September 20, 1991


Madam Deputy Speaker:: I have received notices of two points of order. I will first recognize the hon. member for Comox-Alberni.


POINTS OF ORDER
Robert Evans Skelly: Madam Speaker, during his response to my question in the House a few minutes ago, the Minister of Indian Affairs and Northern Development indicated he was reading from a document dated September 13 of this year.
I would like to refer to Beauchesne's Parliamentary Rules and Forms, citation 327 on page 115, which states:
(1) a Minister of the Crown is not at liberty to read or quote from a despatch or other state paper not before the House, unless he be prepared to lay it on the Table.
The principle is so reasonable that it has not been contested; and when the objection has been made in time, it has been generally acquiesced in.
I would ask that the minister table the document he was referring to, and I would be fully prepared to table the ministry's damage control communication strategy which I referred to in my question.


Hon. Harvie Andre (Minister of State and Leader of the Government in the House of Commons):: Madam Speaker, the hon. member was on his feet with his request for tabling and withdrawal. Having Beauchesne's in his hand, he might have looked at those sections of Beauchesne's which state that it is not permissible to say in the House that somebody has not told the truth, which I heard him say about the Minister of Indian Affairs.
Will he withdraw that statement?


An hon. member:: Absolutely.


Madam Deputy Speaker:: Does the hon. member for Comox-Alberni have anything to add?


Robert Evans Skelly: Madam Speaker, I am not sure what point the hon. member is making. Is he suggesting that I indicated that someone was not telling the truth?
I indicated in my question that I understood that in this House it is impossible for a member to indicate that another member deceived the House. I did not do that.
Points of Order


Madam Deputy Speaker:: This is also what the Chair has heard.


Thomas Edward Siddon: Madam Speaker, I certainly heard the hon. member say quite clearly that the minister was not being truthful with the House. I will review the record of Hansard. I certainly do not intend to make a federal issue of this. However, I can assure the hon. member that when I table the document he has requested, he will find that there are no 3,000 unfunded student applications.
I am prepared to table that document but not until we review the transcript of Hansard, because if the member said what I thought I heard him say, he will have to withdraw that reference.


Madam Deputy Speaker:: I have listened to both the hon. member and the minister with all the attention possible. It was not my understanding at the time but I will review the "blues" as well.
Will the hon. member please resume his seat.
It is not my understanding that the hon. member said that the minister was not telling the truth. This is not what I heard but the "blues" will be checked.
The hon. member seemed to want the document tabled. If the hon. minister said he was not quoting anything, this is what the Chair will accept. If he thinks there is a document which he should table, it would be greatly appreciated.


Thomas Edward Siddon: Madam Speaker, I certainly have no difficulty acceding to the request. I have nothing to hide. These figures speak for themselves.
However, I repeat that I expect the hon. member for Comox-Alberni to do the honourable thing. I intend to review the record of Hansard to ensure that he does.


Mr. Rod Murphy (Churchill):: Madam Speaker, the minister seems to think that it is his right to determine whether or not he will table that document. That is not his right. There may be another dispute which is separate from the tabling of the document. He referred to the document in the House and Beauchesne requires that the document be tabled.

September 20, 1991
Routine Proceedings
The other dispute can be settled separately.


Madam Deputy Speaker:: I may want to tell the hon. member that the minister has tabled the document. I think this point is closed. As far as the other one is concerned, we will all check the "blues".
I have another notice of a point of order. The hon. member for Regina-Qu'Appelle.


PRESENCE IN GALLERY
Mr. Simon de Jong (Regina-Qu'Appelle):: Madam Speaker, I would like to introduce a group of young Canadians of Croatian descent who are in the gallery today. These young people have been visiting with members of Parliament throughout the last few days and I would like to welcome them to Parliament Hill.


Madam Deputy Speaker:: I know that the hon. member, who has been in this House for quite a while, knows that this is not his place to do so. He has found a way, which was out of order, to do what he wanted to do in the first place.



ROUTINE PROCEEDINGS

[Stage Direction]
[English ]

Mr. Murray Cardiff (Parliamentary Secretary to Minister of Agriculture):: Madam Speaker, on April 11, 1991 Royal Assent was received for the Farm Income Protection Act, which provides legislation for federal programs to provide long term stabilization and support for farmers.
This act also provides for the implementation of special measures to respond to short term needs not addressed by other programs.
Last spring, the farm support and adjustment measures were introduced to respond to such short term needs. Pursuant to subsection 12(7) of the act, the Orders in Council related to the implementation of any short-term measures under the act are to be laid before the House of Commons.
Eight Orders in Council were approved May 30, 1991, by the Governor in Council pursuant to subsection 12(5)
authorizing the minister to enter into agreements with the provinces or take any other appropriate action such as the implementation of initiatives under the farm support and adjustment measures.
It is my pleasure to table these orders in both official languages on behalf of the Minister of Agriculture.


Madam Deputy Speaker:: I thank the hon. parliamentary secretary. It is very rare that we do or should get a speech with the tabling of documents.


PETITIONS
Ian Angus Ross Reid: Madam Speaker, pursuant to section 36(8) of the Standing Orders I have the honour to table, in both official languages, the government's response to five petitions.
(Editor's Note: See today's Votes and Proceedings.)



POINT OF ORDER


Mr. Nelson A. Riis (Kamloops):: Madam Speaker, I wonder if I could direct an observation to my hon. friend, the government Whip. The press release that the Minister for International Trade released regarding his recent visit to Iran does not include any figures in terms of Canada's contribution to Iran. I understand it was in the nature of $1 billion in terms of lines of credit and refinancing operations.
Would the minister at some point explain to the House what that $1 billion commitment to Iran included?


Mr. Jim Hawkes (Calgary West):: Madam Speaker, it would have been a courtesy if I had a copy of whatever it is that the member is reading from. I gather it is a press release of some kind. He said two things simultaneously. He said that there are no figures in the press release and that he wants the minister to explain the $1 billion.
If it says $1 billion then there is a figure in the press release. If there is not, there is not.
I am not sure exactly what he is asking the House.
September 20, 1991

Routine Proceedings


Nelson Andrew Riis: Madam Speaker, I am sorry for not making it clear. Apparently Associated Press picked up from Teheran Radio that the Canadian government had committed $1 billion in export credits and refinancing. That is where it came from. Teheran Radio apparently was the only place where the amount was actually mentioned publicly.
The minister in his press release-and I apologize for not providing a copy to my hon. friend, I assumed that he would have the minister's press releases with him-does not make any reference to-


Madam Deputy Speaker:: The hon. member for Kamloops, I am sure, knows very well that this is not a point of order. We are getting into an extension of Question Period. This is certainly a question which he may want to ask Monday. The hon. member for Calgary West may want to answer but he is certainly not obliged to do so.


Frederick James (Jim) Hawkes: Madam Speaker, I think I now understand the question. He wants the Minister for International Trade to explain a radio report from Teheran news which the minister may or may not have had the opportunity to hear.
I would suggest to the member that if he wants to leave the Chamber and phone the minister's office, he may have what is bothering him cleared up in five minutes. If he does not have an answer by Monday, I would be happy to bring it to the attention of the minister and see what the minister might be prepared to do.



THE COOPERATIVE CREDIT ASSOCIATIONS ACT


Hon. Gilles Loiselle (President of the Treasury Board and Minister of State (Finance)) moved: for leave to introduce Bill C-34, an Act to revise and amend the law governing cooperative credit associations and to provide for related and consequential matters.


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

Mr. Ron Fisher (Saskatoon-Dundurn) moved: for leave to introduce Bill C-275, an act to provide for greater certainty in the reconciliation of the personal interests and duties of office of members of the Senate and of the House of Commons, to establish a conflict of interest commission and to make consequential amendments to other acts.
He said: Madam Speaker, it gives me a great deal of pleasure to introduce at this time a bill to do as you have just described. It shows the ability of the private member to be able to introduce matters of extreme interest and concern to the country.


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


Beryl Gaffney: for leave to introduce Bill C-276, an act to amend the Excise lax Act (extremity pumps).
She said: Madam Speaker, this bill is as you have outlined. Some people, for health reasons, are requiring a piece of medical equipment called an extremity pump. We are simply asking that it be included in the Income Tax Act for allowance for deduction.


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


Beryl Gaffney: for leave to introduce Bill C-277, an act to amend the Income Tax Act (air conditioners).
She said: Madam Speaker, again this bill is as you have outlined. It is simply that those who suffer from multiple sclerosis or any breathing disease require an air condi-

September 20, 1991
Routine Proceedings
tioner in the room, and it is being included under the Income Tax Act for assistance.


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


Beryl Gaffney: for leave to introduce Bill C-278, an act establishing the office of the ombudsman and amending acts in consequence thereof.
She said: Madam Speaker, by way of explanation, these bills are all being reintroduced as they were all lost on the Order Paper. I think the way it reads it is self-explanatory.


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


Beryl Gaffney: for leave to introduce Bill C-279, an act to amend the Food and Drugs Act (breast prostheses).
She said: Madam Speaker, as you know, this bill states that a moratorium be placed on the Meme breast implant until it is proven to be a safe product. The minister of health has, momentarily, taken it from the market. This bill is being reintroduced to make sure that the Meme's removal is entrenched in law.


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


Alan Redway: for leave to introduce Bill C-280, an act to amend the Canada Pension Plan Act (disability pension).
He said: Madam Speaker, this bill is aimed at correcting a long-standing, but I believe only a technical injustice in the limitation period for making application for the Canada Pension Plan for disabled people. Unfortunately, the way the legislation reads now and has read for many years, provides a barrier for disabled people to apply for their Canada Pension Plan benefits if, for some reason or other they have decided to delay their application even though they have contributed for years and years and years to the fund. It may be for many legitimate purposes, including the fact that they do not want to be a drain on the public purse and on the public fund until they need the money.
The legislation now bars them from a later application. This would allow them to do it in the event they have made contributions for at least one-third of their contribution period. Then they would be eligible to receive a pension.


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


Mr. John Manley (Ottawa South) moved: for leave to introduce Bill C-281, an act relating to indoor air quality.
He said: Madam Speaker, the purpose of this bill is to reflect the concerns of many Canadians, most of whom spend approximately 90 per cent of their time indoors. This bill authorizes the Minister of National Health and Welfare, among other things, to establish a national research centre to study issues related to indoor air quality and indoor air contaminants and authorizes him to take other action which would ensure that Canadians enjoy a safe environment not only outdoors, but indoors as well.


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


Ms. Ethel Blondin (Western Arctic) moved: for leave to introduce Bill C-282, an act to establish the Aboriginal Languages Foundation.
September 20, 1991

Routine Proceedings TOBACCO RESTRAINT ACT
She said: I am very proud to reintroduce this bill, an act to establish the Aboriginal Languages Foundation. This is a bill that has widespread support across this country.
The purpose of the Foundation is to facilitate throughout Canada the acquisition, retention and use of aboriginal languages that contribute to the country's aboriginal heritage by ensuring the perpetuation, revitalization, growth and protection of aboriginal languages. This would be in concert with what has been done for heritage languages, of which there is an institute and of which there is none for the aboriginal languages.


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


Rodney Edward Murphy: for leave to introduce Bill C-283, an act to amend the Electoral Act (election expenses).
He said: Madam Speaker, following the private member's bill introduced by the member for Saskatoon- Dundum on conflict of interest for members of Parliament and the Senate, this is companion legislation with regard to cleaning up the Election Act. It calls for strict controls on election expenses and legal enforcement for those election expenses.
As the Speaker is aware, ever since 1984 we have had a veiy large loophole in the definition of election expenses. This has to be cleaned up. I am afraid that the Royal Commission on Electoral Reform and Party Financing will not be able to finish its work in time, and the government will not pass legislation in time for the next federal election. Therefore, I have included a very comprehensive definition of election expenses, including polling by political parties, and I would hope that we would have all-party consent to have this legislation passed in time for the next federal election.


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

['Agreed.']
Nelson Andrew Riis: for leave to introduce Bill C-284, an act to amend the Tobacco Restraint Act.
He said: This bill rose from a survey that was done recently in western Canada which indicated that a substantial number of retail outlets sell tobacco to young people of age 15, 14, 13, 12, 11 and 10 years. This is against the law. Madam Speaker, probably one of the reasons these people were breaking the law is that the fine is only $10 if convicted.
This bill raises the fine from $10 to $1,000 for a first offence; $2,000 for a second offence, and $5,000 for a third offence for the selling of tobacco products to minors. I think it is time that we take this seriously and do what we can collectively to ensure that young people are not encouraged to smoke.


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

Jesse Philip Flis: Madam Speaker, next year Canada will be celebrating its 125th anniversary of its birth. Many organizations will also be commemorating the 125th anniversary of the birth of a world renowned scientist, Marie Sklodowska Curie, who discovered radium which healed the sick of the world and of Canada. Presently a successful play is being performed in Quebec depicting her life. It will be performed next year across Canada. A senior citizen's home in Montreal bears her name and a charitable organization in Toronto is also named in her honour.
These 500 petitioners are adding their names to the other 5,000 plus Canadians calling upon Parliament to convince the Canadian stamp committee to issue a stamp honouring a great scientist, Marie Sklodowska Curie.

September 20, 1991
Government Orders GOODS AND SERVICES TAX


Ethel Dorothy Blondin-Andrew: Pursuant to Standing Order 36, I rise to present a petition on behalf of the citizens of the first nations across this country who number 480 on this petition and are protesting against the GST being imposed on first nations. Whereas the first nations of Canada are immune from taxation by virtue of their aboriginal and treaty rights, whereas these rights have been in part affirmed by the Royal Proclamation of 1763, the Constitution Act of 1982, section 35 and by recent decisions of the Supreme Court of Canada, specifically the Sparrow case, I appeal to the government to remove this tax immediately.


Robert Evans Skelly: Madam Speaker, I have a similar petition to the one just presented in which several hundred aboriginal Canadians from across this country in virtually every province state: Whereas the federal government has set in place a goods and services tax on January 1, whereas the first nations of Canada are immune from such taxation by virtue of aboriginal and treaty rights, and whereas these rights have been in part affirmed by the Royal Proclamation of 1763, the Constitution Act of 1982 and recent decisions of the Supreme Court, the undersigned, your petitioners, are calling on Parliament to fulfil its responsibilities to the citizens of the first nations in Canada by taking immediate steps to rectify the deficiencies of the policy guidelines, including changes which will protect the taxation immunity of first nation citizens, both on or off reserves, including those citizens who do not as yet have recognized reserved lands.


Nelson Andrew Riis: Madam Speaker, it is my pleasure to present a petition on behalf of a number of constituents from Kamloops, British Columbia, who are urging the government to remain firm and maintain the adequate levels of funding for the Royal Canadian Mounted Police to enable the force to fulfil its mandate.


Nelson Andrew Riis: On another matter, Madam Speaker, I wish to present a petition from constituents of Barrier, Louis Creek, Heffley Creek, Kamloops, British Columbia, as well as Birch Island and Red Deer, Alberta who are indicating their concern with the intent by a firm called Multinational Resources to dam the North Thompson River at Vavenby, British Columbia in order to divert the water to the San Diego,
California area. The petitioners are calling upon the government to state categorically that it will not permit our fresh water rivers to be dammed and diverted into the United States of America.


QUESTIONS ON THE ORDER PAPER
Ian Angus Ross Reid: Madam Speaker, I ask that all questions be allowed to stand.


Madam Deputy Speaker:: Shall all questions be allowed to stand?


Some hon. members:: Agreed.



GOVERNMENT ORDERS


[Stage Direction]
The House resumed consideration of the motion of Mr. Mazankowski that Bill C-21, an act relating to the accounting of certain payments for the servicing and reduction of the debt of Canada, be read the second time and referred to Legislative Committee F.
Robert Evans Skelly: Madam Speaker, I appreciate the opportunity to take part in this debate today. This legislation sets up a special fund or a special account within the government accounts to receive in part the huge revenue overruns from the goods and services tax. The government at one time led us to believe that this tax would be revenue neutral. Now we find out that through deceit or incompetence the goods and services tax is yielding far more revenues than the government was willing to admit to the Canadian people and these revenues are flowing into the general accounts of the country.
It creates a problem for the government when it is intent, based on its Tory ideology of cutting back programs in health care and social services and education, to cry poverty in order to justify the cutbacks in these social programs. I guess it is a bit embarrassing when these huge volumes of revenue are flowing in through the goods and services tax, which the government denied was going to happen. Now people are justifiably arguing that if there is a surplus of revenues, how can it justify cutting
September 20, 1991

back on those social programs, when the revenues of the country are increasing.
Many of the things this government does are reminiscent of the old days of Social Credit in British Columbia and some of the financial stunts pulled there by the government in order to justify the continuation of that right wing conservative cost-cutting ideology it used, not necessarily to try to control the finances and balance the books, but to serve its ideology, which is to cut programs designed to serve people and at the same time reduce the tax burden and the regulatory burden on the people who serve them. That is the corporations and the wealthy families of Canada.
The Social Credit in British Columbia set up what they called "rainy day funds." This was so that they could set revenues in these special funds and bring them out during a rainy day. Well, of course, under the Social Credit it was always rainy in British Columbia and the finances were always in a situation that could be called "rainy day." Unfortunately, it was never rainy enough for the Socreds to use these special funds in order to serve the purposes they were set up to serve.


An hon. member:: Not even at election time?


Robert Evans Skelly: Well, I will get into that later on.
In fact a most recent example of this kind of budgetary flim flam was the so-called budget stabilization fund which was set up by one of the Ministers of Finance who have gone through the revolving door of that office in British Columbia over the last little while. It was called the budget stabilization fund, or as these things are commonly abbreviated, the BS fund, which more appropriately names the fund.
The account is designed to serve two purposes, as members will know. The first purpose is to set up an accounting fiction so that the government can take its surplus revenues and put it in this account so that it will not be seen by the public as being available for expenditure on social programs.
What the government does is it takes the cash in that special account and by selling the account treasury notes, it gets the cash back into general revenue where it is spent. We have had a couple of examples recently such as the $273 million KAON project in British Columbia on the threshold of a provincial election where the
Government Orders
Conservatives are trying to help their friends the Socreds in British Columbia to get re-elected in spite of all the things they have done in the past five years.
It was suggested by some of our members last night who were asking for aid for the farmers in the prairie provinces to assist them to overcome some of the problems of world market conditions and the conflict of subsidies that were taking place that payments be made to the farmers immediately rather than waiting until the time that it was most politically expedient so that the government could support its crony out there, Grant Devine, to try to get him elected. Therefore, the purpose of the aid to the farmers is more to elect Grant Devine than to provide any kind of assistance to agriculture in Saskatchewan.
The Socreds used the funds for the same kind of purpose. They used to stash away money into special funds, or rainy day funds, or political slush funds. When it came close to election time they took the money out of those funds and used it to improve their chances of getting re-elected.
This time I do not think they are going to be that successful. I am convinced they are not going to be that successful, so we will see an end to this kind of nonsense at least in the province of British Columbia.
There is a second purpose for the use of these kinds of funds and accounts, this flim-flam accounting, which is to deceive the people of Canada as to the actual volumes of revenue which are flowing into the federal treasury. The government would like to, because it has embarked on a cost-cutting program, cut programs in education, in health care, in social services, cut services to women and unemployed workers and training programs and that kind of thing. It wants people to believe that there is actually a tight revenue expenditure situation in this country.
It diverts a substantial amount of the revenue generated by the goods and services tax into this special fund and it is able to tell the public: "Sorry, you can't have a national child care program because the money is already spoken for. Sorry, you can't have a literacy program that is designed to achieve the objective of cutting illiteracy in this country in half by the year 2000 so that maybe we can approach the literacy rate of Mexico. We can't do that because the money has already been designated into this fund to pay off Canada's debt".

September 20, 1991
Government Orders
The idea is to keep the revenue and expenditures as close as possible so that people will not be able to petition the government to set up programs like child care, which the government has been promising for the last few years.
This goods and services tax will probably bring in sufficient revenues over this year to pay for the full cost of that program. What the government has to do is divert those revenues into this debt payment fund so that it will not have to pay for the child care program it has been promising for years and years and years.
It is a method of deceiving the people of this country using the kind of economic flim-flam through special accounts and special funds that the province of British Columbia under Social Credit has been using for years and years and years.
Anybody who understands British Columbia politics, surely most people west of the Rocky Mountains in this country, are going to understand that this is flim-flam. They are not going to believe it and it is not going to work.
I have a second concern about this proposal to set up a special fund in which to put all the surplus GST revenues or the revenues from selling Crown corporations and other revenues which may come to the government from other sources. That is that it does not address the real causes of the debt. While we may be putting these funds into the debt payment account, the real causes of the debt are still operating to increase the debt of Canada.
As one of our members pointed out this morning, when the Conservatives came into office in 1984 the debt of the country was $180 billion. In a recent report by the Department of Finance that debt load has now risen to over $400 billion. Under the Tories, from 1984 to 1991, the debt has risen from $180 billion to $400 billion.
It has more than doubled now to the point where the debt of each and every Canadian man, woman and child is $15,000. That is the accomplishment of the Tory government over the last decade, to double the debt and saddle $15,000 on to every man, woman and child in this country. That is the Tory record.
Statistics Canada did a recent study that was suppressed by the Tory government because it did not want the results to come out. That study showed what the causes of the debt actually were.
Frances Russell released the study in the Winnipeg newspapers back in March of this year. She talked about the suppressed Statistics Canada study which indicated that 44 per cent of Canada's national debt is not due to program spending. It is not due to runaway expenditures on such programs as health, education and welfare.
According to StatsCan's study, 44 per cent of Canada's debt is due to tax concessions to large corporations and wealthy individuals. That is one of the roots of the debt problem in this country.
This legislation does not address that problem. While we are setting up this fund, while we are paying the GST into this fund, and while we are paying revenues from the privatization of corporations into this fund, the real root of the problem is not being dealt with at all. That debt is going to increase and increase until the government actually deals with the root of the problem.
The second major contributor to the debt, according to Statistics Canada, in fact responsible for 50 per cent of Canada's public debt, is the high interest rate policy. Both of these policies, tax concessions to corporations and tax giveaways to corporations, were pursued by both the Liberal and the Conservative governments over the last three decades.
The high interest rate policy is the same. It has been pursued by Liberal and Tory governments over at least the past two decades. According to Statistics Canada, it is that high interest policy which is responsible for something like 50 per cent of the total public debt in Canada, that huge mushrooming debt which has reached over $400 billion under the Tories, or $15,000 for every man, woman and child in this country.
There are two issues. First, tax concessions to corporations which account for 44 per cent of the debt, and second, the high interest rate policy that causes that debt to mushroom is responsible for 50 per cent of the debt.
What about the social programs that the Tories like to talk about and the Socreds in British Columbia like to
September 20, 1991

talk about? What about those social programs that are accused by those political parties of being the major cause of our debt in this country?
According to the Statistics Canada study, which the Tories attempted to suppress, program spending accounts for only 6 per cent of the total debt problem in this country.
If program spending is only 6 per cent of the problem, why do the Tories haul out 100 per cent of their big guns to deal with that problem and leave the problem of interest rates alone? Why do they leave the problem of generous tax concessions to corporations alone?
Why do we not deal with the real issues, the things that are the root of this debt problem, root them out, solve those problems and reduce the debt that way?
Of course, that counters Tory ideology. We run up against a bit of an ideological road-block. If there is one thing that justifies the existence of Tories, it is cutting programs. They love to cut programs.
It does not matter whether we have good times or bad times in this country. Tory times are always bad times. In good times or in bad times Tories love to cut programs, in particular social programs. How have they opted to deal with the national debt? They have attacked transfer payments to the provinces. Most of those transfer payments go to pay for health care, social services, education, post-secondary education, programs and services that are needed by people all across Canada. These are programs that are very difficult to cut without decreasing the standard and quality of life in this country. Yet those are the programs the Tories have targeted with 100 per cent of their big guns.
Why not attack the problem of corporate tax concessions? We see all across this country the difficulty people are experiencing in shouldering the burden of taxes that Tories have loaded on them over the past decade. Income taxes, excise taxes, sales taxes, all the taxes that people pay have increased dramatically. People in the small business sector are complaining about the huge burden of taxes that the Socreds and Tories have placed on them. I hope this is not reported in British Columbia. If so, I withdraw the name Socred.
People all across the country are complaining about the burden of taxes that this Tory government has
Government Orders
imposed on them in the small business sector. In the wage-earning sector, hourly paid workers have tried to get increases in their wages just to maintain pace with inflation and with the cost of living. Yet every time they make ends meet, every time they see the possibility of being able to put a little more food on the table, of being able to move ahead a little bit and aspire to the Canadian dream, the Tories come back and crush them with another load of taxes, increased income taxes and the goods and services tax. That area of Canadian society is being beaten down the worst.
I have a letter here from one of my constituents discussing the goods and services tax and the impact it has had on old age pensioners. It says: "Mr. Skelly, I am an old age pensioner trying to do my darndest to stay in my old house. I have had some work done on my house and I am shocked to see how much GST I have paid out. I have hired a plumber, a carpenter and an electrician to do some work. So far this year, not counting the small amounts of 50 cents to $3 I have paid in GST, I have receipts totalling $351 on GST alone". That is what she has paid out on GST alone.
We were told by the Minister of Finance and by every Conservative speaking in the House in favour of the goods and services tax that the poor people, the pensioners in this country, would be getting a tax credit that would help offset the problem of the goods and services tax.
Well, this lady gets a tax credit too. In fact, her tax credit is $254 a year. She has to pay $110 of GST more than she receives from the tax credit. In fact she is farther behind than she was when the goods and services tax was brought in. This woman suggested to me that as a result of GST she may be forced out of her own home and may have to go to a senior citizens' home or institution as a result of the tax burden that, along with the GST, this government has imposed on senior citizens.
I had to laugh at the member for Halton-Peel when he was talking about having protection for private property in the Constitution. The goods and services tax has virtually told pensioners in this country that if they are not able to afford to pay this tax and cannot repair their house, this government is going to take them out of their house and put them in institutions and senior citizens' homes.

September 20, 1991
Government Orders
How differently we have treated the wealthy in this country. We have given the wealthy all sorts of perks, such as travel perks. People can fly in corporate aircraft and have it deducted from their expense account as a cost of doing business. In entertainment expenses, this government concedes to corporate Canada something like $3 billion in two-martini lunches. I recall a book written by an expert on taxation who was talking about a birthday party that was held for a corporate executive in downtown Toronto, orchestras were hired and champagne came in tubs. There were hundreds and hundreds of thousands of dollars in expenses. Yet, because some corporate customers were there, the party was written off against the taxes of the company.
Mr. Speaker, please allow me just a few seconds to wind up. This bill is not going to solve the problem of Canada's debt. It is not going to pay off Canada's debt because it does not deal with the root problems of the debt. The root problem is the unfairness of the tax system which allows the rich to get off with no burden of tax at all while the poor are stifled and have a huge tax burden on them. It does not deal with the problem.
Until we restructure and balance our tax system so that people who have the money and have the economic power are paying the revenues then the debt is-


Mr. Van  De Walle@Acting Speaker: Questions and comments.


René John Soetens: Mr. Speaker, I am sorry I did not catch the whole presentation but it is always interesting to listen to NDP members talk about the poor people of this country and how they have to defend them. Then he even proceeds to talk about this letter he has received from a veiy poor constituent of his who had to pay this terrible amount of $354 in GST.
Let me just explain what that means for that poor person he is defending.
In order to spend $354 in GST in a six month period she would have to buy $5,000 worth of taxable goods. If that was the only income the person had and the only expenses the person had I would agree with the member that obviously this person is a very low-income person. I will presume that person lived some place and paid rent of $500 a month, which is a very difficult and low rent to find in Canada, but for argument's sake that may be the
rent in that part of Canada. That is another $6,000 a year that person spent. Of course there is no GST on the rent. The person now has a place to live and has bought these lovely things, $5,000 worth of goods to sit on, to watch television, to wear or whatever those items might be used for. Now she has to eat.
We do not have to pay GST on the food we eat at home. I do not know how much to allow for that, but for argument's sake let us presume that people pay about one-third of their income on food. If I add the $5,000 and the $6,000 to another $6,000 that person has now spent up to $17,000 in the first six months of this year. That is really a remarkable number. Multiply that figure by two and that is $34,000 for the year that this person, who the member is defending, makes. Of course, that is $34,000 after tax.
Now we ought to say: "Well, what kind of taxes does that person pay on income tax?" Let us be generous and say that it is only 30 per cent. This $34,000 all of a sudden jumps up to $45,000.
Lo and behold, I am listening to the NDP talk about the poor people of this country and the member uses an example of a person who probably has a $45,000 income. That is our point. It is the people in the $20,000, $25,000 to $30,000 income area who need the help. They get the GST credit. We need this particular bill to ensure that we do not go out and spend all this extra money that they think we are getting, which we are not.
I would like to ask the member if he really believes that it is the higher income or middle income Canadians who are being disproportionately penalized, as his presentation argues, or is it the low income Canadians who benefit from the tax credit we ought to be speaking on behalf of?


Robert Evans Skelly: Mr. Speaker, I am absolutely astounded by the question from the member. Not only did he come late, but he was a few sandwiches short of the picnic.
As I pointed out, this person lives on an old age pension. She does get some help from her family. Can the hon. member tell me if a $45,000 income-earner in this country is entitled to a $254.10 GST rebate? He had better check his own documents before he starts invent-
September 20, 1991

ing this straw person of a figure because it certainly does not relate to the conditions that this woman lives under.
She says that if it was not for the health of her son who is also attempting to send two kids through university and pays enough taxes for three old age pensioners, she would not be able to do even the kind of work she is doing. I take your remarks as an insult to my constituent, and I am certainly going to send it to her.
It is typical of the lack of understanding of the circumstances and the situation being faced by poor people in this country by those Tory people opposite as a result of the policies that they have imposed on poor people in this country.


Dennis Joseph Mills: Mr. Speaker, I found myself agreeing with an awful lot of what the member for Comox-Albemi said when he talked about the accounting fiction that is involved in this, but I would like to get a point of clarification on some remarks he made toward the end of his speech when he talked about business expenses.
Do I take it from the hon. member that the NDP is against legitimate business expenses? It is a fact of life that when we promote and try to display and demonstrate what our product or services are that-whether it be in this country or in any other part of the world-we have legitimate business expenses.
You have to fly to these places. You talked about travel. Sometimes you bring your sales staff or marketing staff together to celebrate, maybe, a particular achievement of a corporation, or levels of quality or performance that have been met. I was getting a sense from the member that he really was not committed or supportive of legitimate business expenses. I would like to hear his or his party's view on that.


Robert Evans Skelly: Mr. Speaker, thank you very much for that question.
It was not my intention to suggest that those type of expenses be done away with entirely, or scrapped, or that they are even part of the problem of the unfair burden of taxation that we are experiencing in this country.
What I am looking for is a little more balance. I think you will find from some of the studies that have come down recently, including this one by Global Economics
Government Orders
Limited, that Tory taxation policy has resulted in a huge burden of taxes being imposed on small business, on wage earners and on people at the lower end of the income scale, whereas there has been a lifting of the tax burden on the wealthy families in this country, and on large corporations.
There should be more of a balance, which would result possibly in more examination by tax auditors of things like business expenses or travel expenses, to make sure that when those tax concessions are granted by government-this was the policy of Ed Broadbent-there is an actual return to the country and to the business from those expenses.
That is why I quoted the story that appeared in the book Behind Closed Doors, which you may have read, about how the rich had hijacked the tax system in Canada. It described a private birthday party of a very wealthy Canadian with champagne in buckets, orchestras and invited guests which ended up being deducted as a business expense. The cost of that party ended up being shouldered by the people of Canada because of the foregone taxes from that corporation.


Mr. Lyle Vanclief (Prince Edward-Hastings):: Mr. Speaker, I appreciate the opportunity to rise today to make a few comments on Bill C-21.
I would like to tell you, Mr. Speaker, that I will be sharing this time with my colleague from Nepean. I will speak 10 minutes with five minutes questions and answer, and my colleague will do the same.
This bill is the Debt Servicing and Reduction Account Act. I want to take a minute to explain to people who are watching today what this bill is.
Most of us have been in business and we certainly all run our own personal accounts. When we have money come into our bank account or into our business, we apply it against the debts we owe. It is very seldom that we set up a special bank account from which to make mortgage payments.
This is a marketing plan and a marketing game by the present government. It is saying to Canadians that it is going to take special money and use that money to pay against the deficit. What else would the government do with income other than to pay its bills? And part of its bills is the interest on the accumulated debt the country carries.

September 20, 1991
Government Orders
This whole bill is an absolute farce, absolutely needless. In the same light it is not a bill that, as a member, I can oppose. But it is needless because if I was to stand up here and say I was opposing the bill, the members on the other side would say that I did not want to pay off the deficit.
First Canadians were told, back when the government started to talk about the GST, that it would be revenue neutral, that as a country we were going to do away with the federal tax that was there before and replace it with a goods and services tax. The net $18 billion that the previous tax had raised was going to be raised by the GST. The GST was going to raise about $24 billion and the tax credits, et cetera, that would be returned to low income people would account for about $6 billion and so the net would be $18 billion.
Well, the truth has come out, Mr. Speaker, and the GST is raising more than that. It is raising more than that in a recession, so it is quite obvious that if and when-and hopefully that is soon-the economy turns around, it is going to be a cash cow. Some of the government members said that right from the start, and I applaud them for their honesty. Now I think they had their knuckles rapped by the powers that be in their caucus, but they were honest enough to tell Canadians that.
Naturally, if this account, if that section of income from the Canadian government brings in an extra $3 billion or $4 billion or whatever the case may be, where else would it go? Why would it not be applied against the bills that the government has? One of those bills is the interest. If we pay off a bigger section of our bills, then naturally the annual deficit of the country will be less.
So let us not be fooled by what is actually happening. I am very sceptical about what the government is telling Canadians, that they do not trust themselves to allow this to go into the regular funds in the regular bank account of the government, so they are going to put this in a separate account in order to make sure that they themselves keep themselves honest, if that is possible. They are saying that the only thing that account can be used for is to pay off some of the debts.
I hope that is the case because Canadians have become very sceptical. I hope that the government shows Canadians that they are not going to use that for patronage handouts and to come up with election promises as time goes on. That is what Canadians are saying, Mr. Speaker, that if the GST raises $4 billion or $5 billion more than the government has been up front in telling Canadians it is going to raise, it will put $2 billion or $3 billion of that against the deficit and take the other $1 billion or $2 billion as an election comes close and come out with election goodies. That has been done before, and I can tell you that all of Canada is going to watch that.
All that being said, Mr. Speaker, I do recognize that we do have an extreme deficit problem in the country. The deficit is nearly 5 per cent of our gross domestic product and there are very few countries-probably only Italy-that has a higher annual deficit in proportion to the gross domestic product than does Canada. That is the serious problem we have to address.
Unfortunately, the present government has failed to live up to the promises it made prior to 1984 and in 1984. Quite frankly, had it done that, had it lived up to what it told Canadians it would do, had it lived up to the reason Canadians elected one of the highest-if not the highest-majorities in this House for any political party in Canadian history, we would not be in the problem we are in at the present time. Within 24 hours of getting elected, it got too concerned about getting elected another time and said: "Okay, here goes the patronage and here come the handouts".
Canada went through six years of the best times this country has ever gone through. Any sound business or company would take advantage of the opportunity when they are making money to pay off some of their bills. This government did not do that.
Instead of fulfilling the promise to Canadians to have the deficit down to $16 billion by 1991, where are we? We are predicting a $30.5 billion deficit again in this fiscal year. When we look at the figures that are coming out now, in the first four months, the Canadian deficit is over $12 billion. I can figure it out. That is over $3 billion per month and 3 times 12 means a $36 billion deficit, not $30.5 billion.
September 20, 1991

Some very highly regarded people in the banking industry are saying that in all honesty, we are probably heading toward a $35 billion deficit, not a $30.5. Therefore, we have to address that.
It is time for some accountability. It is time to look after that account which is going to be set up, albeit needlessly. But if the government wants to set it up, I will support the setting up of it, but I am still very sceptical of why the government feels it is necessary.
The government has to address the problems that we have in this country and spend the money wisely. In its agenda it declared a number of years ago what had to be addressed. There has been a failure to reduce the deficit. There has been a failure to improve spending on research and development. There has been a failure to improve education and training. There has been a failure to improve the national infrastructure and a failure to assist the transition during implementation of the free trade agreement.
I cannot stress strongly enough, that unless we address all of these items and others, these I have just mentioned in particular, we are not as a country going to be as competitive as we can and should be.
I am embarrassed that I cannot remember the name of the gentleman who wrote it, but I recommend an article which was in The Ottawa Citizen a couple of days ago. It was an excellent article on the tools that we are missing as a nation. We are not addressing the 30 per cent drop-out rate from secondary schools. That is a resource we are not using in this country. It is a resource this government is not even giving lip service to as far as further education and research and development. Unless we train ourselves and train our people, we will not be competitive in the future.
I do not think I need to take time to say much more. We have to address these things. I can say that Canadians will be watching this present government. I stress to the government: Why not be candid and forthright with Canadians and explain to them: "Yes, we have failed to achieve our goals. No, we have not met the goals. We want you to help us to meet those goals". Be right up front and say: "Yes, we want to use the GST. Yes, it is not going to be revenue neutral. But we will take the extra money and we will not have to lock it up in a safety deposit box so that in a weak moment we do not
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get our hands on it in order to use it". Try to give Canadians that faith in themselves and tell them how it will use that money.
I hope the government can understand why the opposition parties and the general public are sceptical of this government's plans. After all, the government has not done what it promised to do in the first place. If it had, we would not be in the position we are in right now.
In closing, I would just like to stress that Canadians will understand if the government is forthright with them and tries to show that it can be trusted. I ask the government to make that effort.


Dennis Joseph Mills: Mr. Speaker, I think my colleague brought a very important point to the attention of this House. That was the fact that the economy of this country between 1984 and 1988 was one of the most successful economies we have had in this country for many, many years. During that period of time the government not only refused to address expenditure control, but it never ever talked about the fact that it doubled the revenue, that there was close to a $50 billion grab through increased taxes from mostly middle income Canadians and small businesses.
My question to my colleague is this: Don't you think that that would have been a more legitimate debt reduction fund, the middle income and small business debt reduction fund, which could have lifted the morale of those people who are basically carrying the tax burden of this country and who basically doubled the amount of tax they put into the treasury during that heated up period?
I think that would have done a lot more to advance the trust factor of this government. But, no, they walked on by and failed to give that credit to small business and to the middle class taxpayer. I think that is one of the reasons why this government has such a very low trust factor.
So my question to my colleague is: What does he think about setting up not just the GST debt reduction fund, but the small business debt reduction fund, or the multinational debt reduction fund? After all, all of these are sources of income not unlike the GST.


Lyle Vanclief: Mr. Speaker, in response to my colleague from Broadview-Greenwood, there is no question that he and some people with him in addressing the problem

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of how we as a country address our national debt have just done a tremendous amount of work on that.
He is so right. I guess in a slang term we have all heard that there is more than one way to do something or, as one of my colleagues says there is more than one way to skin a cat. As a country, we have to look at all the different methods and ways that we have of doing that. We have gone through, as he has said so clearly, six or seven years of tremendous success in this country busi-nesswise, et cetera, a boom time when no one took advantage of it as a government to pay down the debt, to pay off the mortgage that we are carrying as a country. During that time all that the government could see was some way in which it could better itself and try to make itself look better down the road.
Then, when we got down the road and reality hit home, it tried to put something in. Indeed, it did put something in, such as the GST. But instead of putting that in, if it had insisted on putting it in a few years earlier when the economy was going up-and it knew it would have a detrimental effect on the economy and it might level it off, but albeit at a decent level-it waited until the economy was on the downslide and then it kicked it in, and boom, the bottom dropped right out of the economy and where are we now? It has pushed the economy over the edge to the extent that all of the small businessmen and indeed the large as well, but the small ones in particular that are the ones this country operates on and which contribute to the debt reduction of this country, are no longer able to stay in business.
So, as a government, it has bitten the hand that feeds it, and now all Canadians are suffering the consequences of such disastrous management of the national economy.


Beryl Gaffney: Mr. Speaker, I am pleased to stand here and share this time with my colleague. I am delighted to have an opportunity to speak to Bill C-21 which is before us this afternoon and which is an act relating to the accounting of certain payments for the servicing and reduction of the debt in Canada. At the same time I am pleased to speak to this, I am somewhat sceptical of the government's motives. But I was pleased when in the February budget we were told they would create a fund which would credit all revenues from the GST, all proceeds from privatization and all gifts to Canada would be placed in an account for the purposes of reducing and servicing the debt.
I think not just I but all Canadians rejoiced at that planned initiative of the government.
The constituents in my riding have always expressed to me their particular concern about servicing, reducing, and eliminating the debt so I am pleased that I am able to present their collective views today. I am pleased to offer in this House my support in principle to Bill C-21 at second reading so that it can go to committee and be closely scrutinized. I mentioned earlier that I am also sceptical about the ability of this act to actually reduce the debt.
My scepticism flows from the government's dismal record on bringing forth the kind of responsible fiscal policy that it has always tried to claim as its trademark. The government in 1989 introduced a very ambitious five-year fiscal plan to begin the work of getting rid of the deficit and eventually the debt. What happened? As we know, in 1988-89 we had an operating deficit of $28.7 billion, in 1989-90 a deficit of $30.5 billion, and we are expecting $30.5 billion in 1991-92. The operating deficit has risen nearly $2 billion.
Herein lies my scepticism. Under this new ambitious plan of deficit and debt reduction of which Bill C-21 is a part, how much of a tab will the government run up in the next few years?
We already know that this new account itself will be in a deficit of at least $20 billion per year for the next five years. The deficit has continued to go up and down. During the years this government has been in power, it should have been reduced in better times during the 1980s. It was not.
What happened during the 1980s? We know that this government took office in 1984. From the period 1984 to 1988, and it was just alluded to by the member from Broadview-Greenwood, this country saw unprecedented growth, higher than ever before in the history of this country. I know that my colleague mentioned $50 billion. My understanding was that it was considerably higher than that.
What did they do? Did they put any of this excess revenue beyond all their wildest dreams, excess revenue over anticipated revenue, against the debt? Not one penny of it went against the debt. What did they do? I would like to know because I have never seen an
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accounting of it and I know that I and my colleagues, and certainly Canadians, would be most interested in seeing how that money was spent.
During 1984 to 1988 this government was certainly the last of the big time spenders.
This government has chosen over those years to stick it to Canadians when they are down. Between 1988 and the period we are in now, the economy is down. Inflation is high. Bankruptcies are soaring. People are out of jobs. They introduced the GST during a recession. They pursued a high dollar, a high-interest policy when people could barely, if at all, make ends meet.
We have had no fewer than 33 increases in taxes in the last seven years, furthering the burden on the average Canadian, and yet no reduction. In fact there has been an increase in either the deficit or the debt.
The recovery from this recession is expected to be slow and uneven with unemployment, the worst aspect of recession, being one of the last vestiges to recover.
The government should have been reducing the debt as I mentioned earlier during the 1980s, which were the good times, and using available resources to help people in the economy during the bad times.
I would like to mention some of the things that the government should have been looking at and probably funnelling money into and yet has reduced granting moneys to these particular areas. As I mentioned earlier about the work force, unemployment is on the rise.
Research and development: we should be expanding our industries here in Canada and yet we have withdrawn money and reduced our input financially.
Education: our young people are the biggest resource that this country has and yet moneys have been reduced drastically to the provinces in the area of education.
Illiteracy: can we Canadians afford to have a high percentage of our Canadians illiterate? I would think not.
Infrastructure: a couple of years ago one of my colleagues and I travelled this country talking to people in municipalities and to mayors of municipal councils.
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We asked them what was the biggest problem they had with increasing the economy in their own particular area.
Over and over again we were told it was Canada's infrastructure. I am talking about roads, bridges, sewers and adequate water supply that they would not have.
I recall in Cape Breton visiting the mayors of different municipalities there. They were not able to entice industry to their island because they did not have the adequate sewage treatment plant, nor did they have the money to build those sewage treatment plants. Businesses would not locate or relocate to the island of Cape Breton unless they had those services.
There was no money forthcoming from the federal government to attract industry to Atlantic Canada at all. I think this is a disgrace.
Canada in its federation is here to help depressed areas or areas where the economy is most suffering. Certainly this government has ignored that since it has come to office.
We have had no fewer that 33 increases in taxes in the last seven years furthering the burden on average Canadians and yet again no reduction-and in fact an increase-in either the deficit or the debt.
I would like to focus on a particular clause of this bill which is clause 4. It would establish the very sources of revenue to be credited to the account in addition to income from the GST and revenues from any unconditional gift to Canada or gift which has had as an express purpose the servicing or repayment of debt or reduction of the deficit.
A third source of income from this fund would be the net proceeds from the complete or partial privatization of a Crown corporation, specifying only those proceeds in excess of the value listed as assets in the accounts of Canada would be credited to this account.
There is one fund which I would like to draw to the attention of this House to enter into debate. That is a little known account called the Canadian ownership account.
Over the summer after discussing with a constituent, Mr. Leslie Bennett, I wrote to the Minister of Finance asking for complete and detailed information about a

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huge sum of money which sits in this account. I have yet to hear back from the minister.
The best information available to me is that as of March 31, 1990 the fund totalled $1.9 billion. This money comes from a levy which was set in June 1982 retroactive to May 1981, which was rolled into the domestic price of oil and gas consumed in Canada to finance "future acquisition of foreign owned assets by federal Crown corporations in the energy field", Petro-Canada. Its purpose was to help meet Petro-Canada's goal of 50 per cent ownership.
The amount of $1.9 billion is a lot of money in my books. I have yet to see it show up anywhere with respect to deficit or debt elimination.
Perhaps it was to be earmarked to pick up the slack in the loss of money for discretionary spending this government has. I hate to use the word "patronage", possibly, or "slush fund".
In any event I presume, since it was designed with respect to a Crown corporation, that it will be used in this fund. At least I sincerely hope that the government is serious in this and will redirect that money for that area.
I will be keeping an eye on it. I am here to make sure that the moneys which Canadians and certainly my constituents so dearly want to see go for debt reduction are going to that area. I will also anticipate an answer from the minister to the question which I have directed to him in this regard.
In closing, I would like to say that while I support the principle of the bill and will support the bill at second reading, I also have many concerns. I will be carefully monitoring the progress of this legislation when it goes before the committee.
I think all Canadians-and I hope this government is serious too-are deeply concerned about the economy of this country. These are very tough times with the recessionary period we are in today. Bankruptcies are soaring. My colleague mentioned the importance of small business and how this recession has hurt small business. We know that small business accounts for 80 per cent of the jobs created in this country. They are created by those businesses that have 10 or less employees. Most of them are mom and pop organizations.
I thank you very much, Mr. Speaker, for the time you have allocated to me.


Mr. Peter Milliken (Kingston and the Islands):: Mr. Speaker, I welcome this opportunity today to speak to Bill C-21, an Act relating to the accounting of certain payments for the servicing and reduction of the debt of Canada.
Mr. Speaker, I had the privilege of being here Wednesday, during the Finance Minister's speech.

It was the longest, pious nonsense piece I have ever heard in this House. I was astounded that the Minister of Finance could maintain a straight face in the course of his remarks, because what he said was absolute nonsense, garbage. It did not reflect what he said it was saying all the way through. I must say that is the position of the Progressive Conservative Party in this country. It says one thing and does exactly the opposite. It is amazing, the statements that are made, and I will refer to those in the course of my speech.
However, first I want to quote from the words of the Minister of Finance. He sounded like his predecessor. I thought that having realized what a series of mistakes his predecessor had made he might have changed the word structure a bit, but he did not; he stuck with his words. This is what he said, and I am quoting from page 2326 of Hansard.
This government is committed to a policy of sustainable growth with price stability. We are committed to an economy that can support the social programs that have made Canada a good place to live. We are committed to ensuring that our tax system is fair and to deficit reduction and debt control. We are committed to this because we want to ensure that future generations will not be strangled by the huge overhanging burden of debt.
Then he had the unmitigated gall to say:
Since 1984 we have been taking a number of steps to reduce the federal deficit so that we can control and reduce the burden of national debt.
If they have taken those steps, it is patently obvious to every Canadian that they have not worked. In fact it has been a colossal disaster.
I want to deal with the issues that he said he had performed so brilliantly on. He listed six. He listed sustainable growth; he said that sustainable growth was one of them. That was a commitment and a policy. He listed price stability. He listed social programs so that we would maintain our nice place to live. He listed fair taxation, deficit reduction and debt control.
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I would like to deal with each one of those, and I would like to present some figures that will make the hon. member quiver in her boots.
On sustainable growth, he talked about how he was maintaining growth at a sustainable pace in Canada. Certainly until the latest recession which the government induced, we did have reasonable growth in this country. I do not deny it. Everyone said it was a period of great economic growth and prosperity in our country.
That was quite true, and I may say that it was the good Liberal policies of the previous government that brought about that sustained period of growth. In fact the government is always quoting 1984 figures as though that were the annus mirabilis. It was in 1983 when the economy came out of recession. Things turned around and we had great growth and it continued for many years after.
This government, through its botched policies, has failed to capitalize on that growth and make it continue throughout this period and has induced a recession instead. The figures I am quoting from are the government's own figures. They are published by the Department of Finance. The minister himself released these in the Quarterly Economic Review annual reference tables dated June 1991. Government expenditures on the national accounts bases increased from a figure of $106,527 million in 1984 to $151,847 million in 1990, almost a 50 per cent increase.
The minister calls this sustainable growth. I call it government overspending on an impressive scale, and I think most Canadians and most economists do. They say the government has not brought spending under control in spite of the minister's absurd assertions to the contrary.
Let us turn to price stability, the second great thing that the minister has pronounced as a sign of great Tory management. What rubbish. He says that we have had price stability. CPI increases since 1984 have been over 4 per cent in every year but one when it was 3.9 per cent, and that was in 1985.
Again, I am relying on the government's blue book of statistics; I am not making these figures up. But, in spite of the claims of price stability which he made with a straight face in this House on Wednesday, in May of this year the increase year over year in the Consumer Price
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Index was 6.2 per cent. That is in May of this year. The increase over last year was 6.2 per cent. That is the government's own figure. That is a shocking abdication of responsibility.
We know why it happened. If the hon. member had been here and listened to our speeches day after day, she would know why it happened: GST. The GST drove up the Consumer Price Index. We all said it would and the opposition, throughout the debate on that bill, maintained that prices would skyrocket as a result of the GST. But the Minister of Finance said: "Oh, no, we have it all planned; everything is planned. It will be just peanuts. Maybe 1 per cent at the most. It is peanuts. Don't worry about the GST". We are worried about the GST and Canadians are worried about the GST. They know they have had the wool pulled over their eyes by this government and the GST in more ways than one.
Now I want to turn to social programs. The minister says the government has maintained social programs for the benefit of all Canadians. Tell that to the people who are trying to collect unemployment insurance today and are told they cannot because they have not worked enough weeks. The government extended the working period for qualification. Ask those who are off unemployment insurance today because their benefits have run out since the government shortened the period of payment of the benefits. Ask the people who are working today who are paying the huge increase in premiums as a result of this government gouging them out by making them pay more and abandoning the commitment of the government to contribute to the unemployment insurance fund from other government taxation revenues. Ask those people if they think social services have been maintained in Canada.
Ask the senior citizens of this country who have had their pensions clawed back if they think social services have been maintained. Ask those who are receiving family allowance who are suffering the clawback if they think that social services have been maintained. Ask the hospitals of this country that have found their funds cut from the provinces because the federal government has abdicated its responsibility to make the transfer payments under the various agreements that have been entered into. Ask them if they think social services in this country are being maintained.

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Nobody in Canada, except the Minister of Finance, thinks that social services have been maintained. Everyone thinks they have been cut, but the Minister of Finance buries his head in the sand and pronounces that everything is as it was. What utter hogwash. How could he make such a speech with a straight face, I say to hon. members opposite.


Some hon. members:: Name one that has been cut.


Peter Andrew Stewart Milliken: Unemployment insurance. I have just been through it. Hon. members have clearly been talking among themselves and paying absolutely no attention to my speech, which is typical of government backbenchers. If government backbenchers in this House listened to the opposition, they would vote this government out of office. We would have an election tomorrow and we would solve the problems of this country in one fell swoop. Most Canadians want one. If these people knew what Canadians wanted, they would be voting for an election. They would vote non-confidence in this government so fast these ministers would not know what had happened to them.
Let us turn to number four of the minister's great planks. He referred to fair taxation. He said he has maintained fair taxation in Canada. The figures do not support this. Let us look at the figures. He says that taxation is fair. Yet, in 1984 the direct taxes levied on persons in Canada, as opposed to corporations, amounted to $37 billion and change. In 1990, $73 billion and change, on persons. Got it?
Now, let us turn to corporations. Direct taxes in 1984: $11,319 billion, in 1990: $10,885. They went down. The taxes on corporations went down and the taxes on individuals almost doubled. That is tax fairness Tory style. Gouge the people and let the corporations off scot free. That is the message of the Tory government in this country. That is the way it believes in fair taxation.
Let us turn to indirect taxes, if you want another indication. Indirect taxes are the things like sales tax and excise tax, as well as customs duties, but they are perhaps not included in this figure.
The 1984 indirect taxes in Canada were $18,124 billion, in 1990: $26 billion. Individuals pay a good chunk of those indirect taxes, in case the hon. members opposite are unaware of that fact. Corporations do too, but that is the
kind of tax increase Canadians have had. However, the Minister of Finance, with a straight face, maintains that this government has provided fair taxation for Canadians. No one in Canada believes it. No one, except, perhaps, the minister. I am not sure. I do not know how he could believe it if he looked at the figures.
Let us turn to number five in the minister's litany, deficit reduction. He talks about the government's success in deficit reduction. Indeed, I quote his great statement: "Since 1984, we have been taking a number of steps to reduce the federal deficit."
On a national accounts basis, and again I quote from the blue book the government produced: "In 1984 the deficit was $30,024 billion, in 1990 it was $25,000,000,534." It has been reduced, I grant you that, by $5 billion, but it has never been below $19 billion and change since this government took office on a national accounts basis. This is not deficit reduction. This is just deficit carry-on. The government has failed to reduce the national debt.
Number six in his litany was debt control. He says: "We want to reduce the federal deficit so that we can control and reduce the burden of national debt." Well, the burden of national debt, again using the government's own figures on a national accounts basis, was $167 billion and change, almost $168 billion in 1984 and $357 billion in 1990. Almost $358 billion.
As a percentage of the Gross Domestic Product, the national debt has risen from 51 per cent in 1984 to 61 per cent.


An hon. member:: What about the deficit?


Peter Andrew Stewart Milliken: The hon. member just now asked about the deficit. I just gave the figures for the deficit. Honestly, if she would pay more attention to my speech. It appears that my figures go in one ear and out the other. I wish she would pay attention. She can read it in Hansard on Monday.
The fact is that the government's economic policy' has been an utter and complete disaster. I am not an economist, I do not claim to be gifted in this area, but I have some understanding of simple facts and figures, which obviously the Minister of Finance has missed in his presentation.
I want to quote from a statement issued by the Toronto-Dominion Bank, Department of Economic Research, its commentary on the 1991 federal budget.
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I know that the Minister of Finance did not deliver this budget himself, it was his predecessor. But when he took office, he said he agreed with everything his predecessor had done, which I thought was a bit generous.
I would like to read just a few sentences from this statement.
The 1991 budget of the Minister of Finance moves from an unrealistic short term scenario to an "Alice in Wonderland" medium term outlook. The 1990-91 budget deficit seems to be understated by close to $2 billion as the increase in interest costs are stated at only $1.8 billion when the government's sensitivity analysis would indicate at least twice that amount.
I will skip a bit.
The main problem of this budget is that it addresses none of
Canada's major economic problems.
As I said, this is exactly the position we have been placed in by this government's inactivity. I know figures are a little bit boring, but I have to go back in reading the Minister of Finance's comments to the government position paper announced in 1984, A New Direction for Canada: An Agenda for Economic Renewal. That was the title of this document introduced by the Minister of Finance's immediate predecessor.
Of course in this document they gave the worst case scenario for Canada. I have quoted some of these figures previously in this House. It is almost tedious to have to go back to a document like that, but yet the government said this was its policy. It claimed it was going to work. The Minister of Finance had the gall on Wednesday to claim that it had worked when patently it had not.
It said that the worst thing that would happen if it did not take control of the economy, as it claimed it was doing in 1984, was that program spending would reach $103 billion by this year, in fact by last year. It is a good deal over last year's figure. It went to $109 billion, that is program spending. It also said that government revenue in 1991, if it did not do something about it, would be $100 billion. It did something about it. It raised it to $120 billion, that is taxes gouged out of the Canadian public.
It said that public debt charges, if it did not do anything about the situation in 1984, would reach $34 billion by 1990-91. Well, it has not. They were a little lower than that last year, but they are probably going to be that
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figure this year, which is a sad commentary on the government's incompetence and ineptitude.
Finally, it promised that it could bring program spending under control and fight the deficit. Yet program spending has increased consistently throughout the government's term in office.
It has been a botched and total failure in terms of the objectives set out in the 1984 document. Either the 1984 document was another fraud perpetrated on the Canadian public for public relations purposes or else it had some meaning, if it had some meaning, clearly all of the objectives that were the worst case scenarios have been met and exceeded by the government except one.
Let us talk about this bill. This is another one of these public relations gimmicks that this government is so keen on pushing on the Canadian public. The purpose of the bill is to establish a fund called the debt servicing and reduction account in the Consolidated Revenue Fund of Canada.
The government is proposing to put certain funds in there, principally the GST revenues, and then say those funds will be applied to reduce the public debt and they cannot be applied for any other purpose.
I invite you, Mr. Speaker, to consider your position. I do not know how you keep your money, but suppose for the purposes of my discussion you have all your funds, however much that may be, in one bank account. Out of that bank account you pay all your expenses. All your paycheques go into the bank account. All the expenses are paid out of the bank account. But you decide for the mortgage on your house or for the rent you have to pay on your house, whichever it may be, but let us call it a mortgage for the purpose of my argument, to set up another similar account at the bank. You open a new chequing account. The purpose of that is to pay in a certain sum of money each month and then write the cheque for the mortgage payment on that account each month or have it deducted.
That is what the government in effect is doing in this case. The only hitch is if you were opening an account to pay your mortgage, as the government is doing in this case, surely you would put into the account as much as you would expect the mortgage payments will be. After

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all, most people have fixed mortgage payments or fixed rent payments. They may change annually but they are generally fixed for a period of time.
If you had a mortgage payment of say $1,000 a month, you would not put in $500 a month and then allow the account to develop a huge overdraft because pretty soon your banker would phone you up and say: "Mr. Speaker, we want you to transfer funds from your big account into the other one to cover this imbalance".
What the Government of Canada is doing to bamboozle the Canadian public is opening this special account and not paying in enough money to the account to pay the interest charges on the public debt. It is far below. In fact, at the end of five years, on the government's own figures, it is estimated that this account will have $100 billion deficit. That is how far short the payments that are going into this account are. Why bother opening it in the first place? What is the purpose of this?
This bill is being passed in this House for the sole purpose of convincing Canadians that the money they are paying in the GST is going to deficit reduction. They can say it is going into this special account. Well, any shortfall in this special account is either going to be made up out of the Consolidated Revenue Fund of Canada or in further government borrowing. That is where it is going to come from. To argue that somehow this money is saving the taxpayers of Canada anything or is committing their GST dollars to go to any particular thing is absolute rubbish and nonsense.
For the Minister of Finance to consider introducing such a bill as this is just pie in the sky, and he knows it. He knows this is a waste of money.
I would be interested in knowing from the minister at some point-and perhaps the legislative committee when it studies the bill could get these answers-how much more it is going to cost to administer this special account in a Consolidated Revenue Fund. I would like to know how many additional public servants are going to be hired to administer this special account. I would like to know how much more-


An hon. member:: Tax police.


Peter Andrew Stewart Milliken: They have already hired 3,000 tax police to collect the GST, and it may be up to 4,000 by now. It is the most expensive tax grab in Canadian history, but they
think that is good value for money. Who are we to argue? They do not listen to our arguments on that point.
How many additional employees are going to be required from the Auditor General to audit these accounts annually as is required by this bill? What are the additional expenses of passing this silly act of Parliament? How much is it going to cost to have it printed in the Statutes of Canada and carried there for years and years when it is doing absolutely no good at all?
Any reasonable person in this country, had he or she an account at a bank for paying mortgage payments, would put enough in it to defray the mortgage costs. This government is not even proposing that in this bill.
I suggest that the bill is a waste of the time of this House. It is silly and the government ought to withdraw it.


René John Soetens: Mr. Speaker, I enjoyed listening to the presentation. As is always the case, the member presents his case rather well. I am not going to debate all those statistics that he used, and some of them are probably accurate, but I would like to ask the member about two particular points.
I have been listening to not only his speech but a number of others on this bill, and I was not sure whether I was still sitting on the Conservative side of the House or the Liberal side of the House. What I was hearing was items like expenditure restraint, cut in programs, irresponsibility on the part of government with regards to spending, that we have increased spending 50 per cent, and those numbers that make it sound like we were spending like drunken sailors or socialists.
I have a question for the member and I would really like him to respond. We still have a $30 billion deficit and we are not going to debate that, I hope. At least that is the projected deficit. I would like the member to suggest to me and maybe to all the House how we can make his speech believable, because I think he used that word in the context of the finance minister's presentation. So that we can understand his speech to be believable, I would love for him to say now, very specifically, none of this balderdash about that if we improve the economy this will go down, which program it is that he can find. In fact I would love a series of programs that would get rid of that $30 billion. Do not just say cut the interest rate in
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half because that, as you know, will only save some $15 billion.
I would like to know where he would find the other $15 billion, even $10 billion or, as a matter of fact, $5 billion worth of programs that any member on that side of the House would support in the way of a cut.
I have listened to his argument about revenues. He complained that we have jacked the revenues up tremendously, so naturally he is not going to want to raise taxes.
I would like to know where he is going to cut, to make his speech even partly believable.


Peter Andrew Stewart Milliken: Mr. Speaker, I am sorry that the hon. member has missed some of my previous speeches because I have preached for restraint from this government before. I have urged the government, for example, to cut the interest rate which would reduce the interest payments as the hon. member has indicated by about half and thereby reduce the deficit by about half. I would start there.
In Question Period today the finance critic in our party criticized, very roundly, the government's high interest-high dollar policy which is causing such havoc in Canada and defeating any benefit Canada might have received from the free trade agreement.
In addition to that, I would slice the cabinet in half and I would save many hundreds of millions of dollars in payments to staff, in payments to additional high ranking public servants and so on. This cabinet is so oversized and overblown that it is unbelievable.
I would reduce the number of parliamentary secretaries and save another swat of money. I would reduce the government advertising budget. I think this government spent $91 million on the advertising for the goods and services tax alone. The total advertising budget of this government is gross. I could list a host of government publications that are some of the biggest wastes of money, clearly put out for public consumption to make the public believe something is being done, when in fact the government has not the faintest idea of what it is doing but puts out a nice glossy booklet to indicate that action is being taken. Those are other significant ways of saving money.
I would also suggest that the government could reduce its costs significantly by avoiding waste and duplication. 'Hie waste between government departments, the overlap between services provided by various government departments is very great, and then there is the goods
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and services tax, 3,000 new tax police hired by the government, hundreds of millions spent on new facilities across the country.
The government patted itself on the back before this recent strike, claiming what wonders it had done in Canada by reducing the Public Service by 15,000 over the last six years. It boasted about this as though this was some kind of triumph of reason over justice. I don't know which it was, or justice over reason perhaps. Whichever way it was, it promptly hired 3,000 more tax police to enforce its new goods and services tax.
It should have had the wit to bring in a proper tax that melded with provincial taxes. There is a whole taxation collection in place in most of the provinces of Canada, all but one. They could have made contracts with the federal government for collection of this tax. Any government but this one would have made that kind of arrangement. But this group fumbled and bungled the thing so badly, as typically as it has done with almost every other program it has touched, that one is not surprised that Canadians are saddled with hundreds and hundreds of millions of dollars of extra expenses because of its inability to take control of the situation and make proper deals with the provinces.
Those are the places where I would save money. I am not advocating wholesale cuts in programs. If the economy were properly managed we would not need them.


Mr. Fred J. Mifflin (Bonavista-Trinity-Conception):: Mr. Speaker, I want to compliment my hon. and learned friend on such a responsible address, on such an outstanding recitation of the facts, which I am sure are honest, correct and total, and indeed on the thrust of the presentation that he has put forward. I am particularly pleased and gratified that the hon. member has made it clear in the form of question as to why this government would see the necessity to introduce this kind of legislation. This is a legislation introduced by the government to legislate itself to make sure that the revenue neutral promise that it made a few years ago is now not going to take place.
There is no wonder people are confused as to why this bill is being introduced. As somebody put it earlier today, it is like passing a law that says if you are drowning you should try to swim to shore and rescue yourself. Why is there a need to legislate that? Can we not trust the government to try and keep its word and reduce the debt, as it said it was going to do? Why do we have to pass laws? I mean, are we going to have to pass other laws to make sure that the government does what they

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say they are going to do? Perhaps that is not a bad idea after all.
In particular, by way of a question, and I would like my hon. learned friend to comment on this, he is as aware as I am that during the election a few years ago, in fact three years ago almost to the day, the government was aware of the condition of the national debt and the burden of debt that is still upon us. In fact it has doubled in that relatively short time. I have before me today a release on the concern of the Canadian public over a child care program. I recall, as I am sure the hon. member does, when we were doing our campaigning the government of the day was making promises to the tune or in the vicinity of $4 billion for a child care program. What is now going to happen to those programs? What is going to happen to those promises?
If my figures are right-I did not do the sums myself but I am quoting reports in the media that I remember very well-the spending promises added up to somewhere in the vicinity of $12 billion depending on how the extension of the promises was worked out.
I do recall the Minister of Finance at the time saying that they were not promises and that they were all there in the budget. What was the concern?
Here you had a statement that $12 billion was being added to the then national debt, which did not seem to be of any concern. It was never an election issue. It never came up as a point of discussion.
All of a sudden, on November 22, we found we had this great national debt and all those great promises suddenly disappeared. Would the hon. member care to comment on that?


Peter Andrew Stewart Milliken: Mr. Speaker, I want to thank my hon. and gallant colleague from Bona Vista-Trinity-Conception for his very perceptive question.
Of course I am pleased to comment on this. The last election was another case of the government promising pie in the sky to Canadians when it had no intention whatever of delivering on the promise.
The hon. member I am sure remembers that the government introduced legislation in this House to establish a child care scheme. The legislation was sent to the Senate two days before Parliament was prorogued.
The Senate offered to sit through the weekend if the Prime Minister would delay the prorogation of Parliament in order to pass the legislation. The hon. member for St. John's East knows this. However, the Prime Minister said: "No, no, no. We will prorogue. We are going to the people". Off he went to the people.
Then he blamed the Senate for the lack of a child care program. He said: "It is the Senate's fault". I would have thought that a Prime Minister who made that kind of assertion in an election campaign would have introduced a bill on the first day reconvened and said: "Let's get it through now". Not this one.
Now we are told it may not happen at all. Why? Because the Conservatives botched the country's finances so badly. It was not just in 1988 that they promised deficit control. They promised it in 1984. They did not do it then. They did not do it in 1988, and no Canadian thinks they will do it the next time around either. No Canadian believes what they say.


An hon. member:: Oh, oh.


Peter Andrew Stewart Milliken: If the hon. member who is protesting so much would simply vote the government out tomorrow or on Monday when we have a confidence vote, if we vote it out of here, I will go against the government and I will invite her to do so. Let's have an election and see what happens.
She will lose her seat and so will three-quarters of the members on that side of the House and properly deserved because they have been so bad.


Mr. Dan Heap (Trinity-Spadina):: Mr. Speaker, I want to make just two or three main points.
This bill's stated purpose is to create a new account called debt servicing. Into this account the government says it would put surplus revenue from the GST, money from the sale of government assets and gifts to the Crown for the purpose of reducing the debt.
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I agree with my colleagues in the NDP who have said that this whole project, or this fund, is a phony. I believe it will not make any difference to the size of the debt or even to the deficit as some of my colleagues have explained. In fact, it is an attempt at brainwashing.
It is not the first that I have seen. Ten years ago we had the six and five legislation from the Liberal government. That ensured that people on pension, people receiving child allowance and all sorts of people of poor and middle income had their income chopped by 5 or 6 per cent one year or the other.
As I understand it, this did not result in any significant reduction of costs. It tried to brainwash poor people and middle income people into thinking that they were responsible for the financial crisis.
I remember a month after the debate on six and five talking to an elderly man looking rather grey standing on an unpainted, wooden porch in front of his poor home. He said: "We have been living beyond our means". That was an instance of the success of the false propaganda put out by the Liberal government to blame the victims for the recession we had in 1981-82.
This is a similar attempt in a similar recession to tell the victims that it is their fault that the economy is in a mess. Therefore, I heartily support all those who vote against this bill. I have to be absent on Monday, but if I could be here I would be voting against it, as my colleagues well know.
I do have a suggestion as to how the government can fill this fund if it really wants to. However, first I want to point out what caused the deficit. The former Minister of Finance and his colleagues say that it was caused by overspending on programs such as health, welfare, housing, education and so on, which benefit the very large majority of people of this country. Therefore, the people are to be made to feel guilty because that money was spent.
In fact, Statistics Canada has shown that there was no significant increase in the size of government spending in relation to the growth of the Gross Domestic Product. In other words, the economy was rising, people were working, goods and services were being sold in increasing amounts. The economy expanded and those programs, more or less, kept pace with the economy. They were not
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the cause of this $400 billion debt, as the government would have us and the public believe.
The cause was not poor people receiving pensions or welfare or unemployment insurance. It was not working people on middle incomes who received some benefits such as declining child allowances and health care, which the government has been cutting back and plans to cut back completely by the end of this decade, as far as the federal government is concerned and then dumping it on to the provinces. That was not what caused the deficits and the debt.
According to the report of Statistics Canada to which my colleague earlier referred, 50 per cent of that debt was built up by high interest rates, interest rates that were unprecedentedly high for an unprecedented or unstated purpose. Normally, interest rates float 1 or 2 per cent above inflation.
When I came here, the then Minister of Finance, Mr. MacEachen, answered my first question in the House by saying: "We cannot bring down the interest rates", which were then floating up between 15 and 20 per cent. "We cannot bring them down until inflation comes down". He said that throughout the rest of the term of the Liberal government. I have been hearing it from beginning to end from the Tory government and it is false. The interest rates bear no relation in this case to inflation. They have usually been four to six points above the inflation rate, rather than one or two points. That spread, which places our interest rates above the United States, has caused half of our $400 million public debt.
Forty-four per cent of the debt, nearly all the rest, was caused by tax giveaways in the last 15 years to the richest corporations and to the richest individuals in the country. Some of it filtered down almost to the middle level but most of it went to the richest. For example, the capital gains tax which mostly went to real estate and investors not to some poor farmer or worker in the city selling his home.
Also, there is the business entertainment tax, $1 billion per year for things like a seat at a football or a baseball game with guests, or birthday parties with guests, some of whom included corporate representatives. Therefore, it was called a business expense and subsidized to 80 per cent by that billion dollars out of our federal funds.

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There are other matters similar to that, but I will not go into it at great length. It is all there in the public record to be found. There was, for example, the dividend tax credit of $1 billion. There was interest deductibility for $750 million and so on and so forth. There were smaller amounts, but those are some of the big ones. It was those giveaways to the wealthy corporations, giveaways to wealthy individuals which ran the government deeper and deeper into debt while the programs that helped the vast majority of the Canadian people on low and middle incomes scarcely increased at all as a percentage of the economy of Canada.
There is also what has come to light recently, $5 billion or more that has been spent on contracting out work that is normally done by civil servants, a speech writer getting $700 a day, that sort of thing; a lawyer working for a fee for the government getting $840,000 in a year. That, of course, in many cases replaced work that would have been done by public servants of one or another group. While the government was reducing the number of public employees, it was paying not as much but more to get that work done by the people who were able to influence the government to give them contracts.
In fact, the government spent more on the contracted out work, over $5 billion, than it spent on the whole salary of the Public Service in Canada, which was $4.8 billion. It spent $200 million more paying other people to do the work than it spent on 150,000 public servants who are still on salary. It is the government's determination to milk the public treasury for the benefit of its friends, whether through tax giveaways to the corporations and rich people or through these fat contracts for work that could have been done and is often better done by the civil servants who are trained to do it and who have a conscience about how they do it.
What we have apparently-I cannot prove these details-looks as though it is a case of double dipping. The rich individuals and rich corporations whose tax rates were brought down, both the personal tax rate and the corporate taxes through all these tax giveaways, had money left over which no doubt many of them were able to lend to the Government of Canada at these lovely high interest rates. In other words, they got paid twice. They got paid once by the government when they gave them that tax giveaway, billions of dollars of tax giveaways. They got paid again when they invested in the government debt at an extortionate rate of interest to be paid by the taxpayers who were paying their taxes.
My suggestion, if the government is serious about actually filling this fund and not just putting it out as propaganda, is that it could very easily recover a large amount of that fund if it would send a letter to those corporations, to those individuals who received those billions of dollars in total of tax benefits and say: "Look friend, we helped you out. We are in difficulty now. Will you help us out by donating back to the government the taxes that you ought to have paid, but from which the government excused you", and the interest rate which was extortionately high. "You businessmen know that it was extortionately high, you were feeding on a gravy train, and now the people of Canada and the Government of Canada need that money. We will not charge you interest on what you held over the years and should have paid in morally, politically, socially, and economically. We will not penalize you for damaging this country's economy by persuading your cocktail pals in the government to rig the tax system so that the burden fell on the poor and the middle". There were thousands of individuals and corporations paying no tax at all. Even banks, some years, made $200 million or $300 million profit but paid no tax.
We are not asking them to pay a penalty for what they did. What they did was legal, but we are asking them in the name of the need of Canada, the need of the Canadian economy, to give back that money. It would go quite a distance, if not all the way, toward removing this year's deficit. If the government then restored the taxation, even if it restored it to the taxation level for the rich that was the case in 1984 without going back to 1974, because these tax grabs were given both by the Liberals and the Tories, if the Tory government only went back to 1984 and started taxing those people at the level they should have been taxed at, we would see our deficit declining year by year.
That is my suggestion. If the government wants to convince us that this bill is not a fraud, a scam, an attempt to propagandize and browbeat, and blame the majority of people in the country who are the victims of this recession and the victims of this tax scam for 15 years, if it really wants people to believe it is asking to get that debt reduced, that debt that is so profitable for many of the wealthiest people in Canada, that it really plans to
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reduce that debt, then it could ask those rich corporations and rich individuals to give back the money that the government originally excused them from giving.


Ron Fisher: Madam Speaker, I congratulate my colleague from Trinity-Spa-dina for a very astute analysis of the situation which the treasury of our nation has found itself involved in and also a very astute analysis of the government's rationalization for trying to get out of it and blame and put the burden on those who are absolutely blameless insofar as trying to reduce the national debt or the annual deficit.
I am not sure if the hon. member pointed out that under successive governments, Liberal and Conservative, as demonstrated by the Stats Canada study which was done pointed out, 44 per cent of the debt which this country has accumulated is directly attributable to tax concessions to the wealthy, which includes individuals of course and corporations, directly attributable to that, 44 per cent.
Another 50 per cent is attributable to the high interest rate which can be laid at the doorstep again of successive Liberal and Conservative governments. There is no doubt whatsoever that this present government was tardy in bringing the interest rates down to a level which was commensurate with the ability of this nation to be able to sustain and was tremendously damaging thereby.
The Stats Canada study also found that a mere 6 per cent of $400 billion, a pittance in the whole scheme of $400 billion, was directly attributable to living beyond our means.
Yet, if we listen to successive finance ministers of this present government, they have tried to make Canadians believe that they are directly responsible for this by living beyond their means. Of course what they are implying is that we have to cut back on social programs. That is the context in which they put every criticism of the financial destitution of this country.
What has happened is that it has led Canadians to feel guilty about going to their doctors, and medicare is a social program. It has made Canadians feel guilty, as if there was not enough self-imposed guilt, for being
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unemployed. They make Canadians feel guilty for being on welfare or social assistance. Those programs account for a mere 6 per cent of our federal debt, through absolutely no fault at all of those people who go and see the doctor, no fault at all of those who become unemployed and certainly no fault of those on social welfare.
We have heard a lot within the last couple of days about children. My leader today referred again to children, for the second successive day, in the lead-off questions from my party. Fifty per cent of the people receiving welfare in this country are children. Yet this government says that those children ought to feel guilty for having been so irresponsible as to have to go on welfare, to receive public programs. By implication it implies that 50 per cent of the people receiving welfare who are children ought to be guilty and feel guilty for receiving that money from the public purse.
I would like to ask the hon. member from Trinity- Spadina whether or not there are many people in his constituency who would agree with what he and what I have said. Perhpas he can give us some examples of people who are suffering at the hands of this government and perhaps are even compelled to feel guilty, through no fault of their own, by programs which this government has foisted upon Canadian people.


Daniel James Macdonnell Heap: Madam Speaker, I thank my colleague for reinforcing what I was saying about the general origins of the $400 billion national debt. He has asked about examples, perhaps from Trinity-Spadina.
I have been talking this summer with a number of people who have been thrown into unemployment by termination, not layoff, in plants that have been closed very often directly and solely due to the free trade agreement with the United States. Sometimes, in the opinion of those workers when I talked with them, they blamed it on the GST and the high tax. That is why their little firms, firms with maybe 50 or so people making clothing, closed down forever, permanently, because of the GST and the high Canadian dollar and the high Canadian interest rate.
It is all one package by this government for the same purpose, to weaken the power of working people and to strengthen the power of multinational corporations,

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whether they be American, Canadian or Mexican. It is all part of a package.
I want to give a few contrasts which people in my riding are noticing. The government increased unemployment insurance premiums by $180 a year for each Canadian worker, but it increased also the more than $2 billion capital gains tax exemption for Canada's wealthy. It cut $340 million in social assistance funding that goes to Canada's poorest, but it kept the $1 billion subsidy to business entertainment expenses. This is the government that is trying to cut expenses? Give me a break.
This government cut $100 million from the Canadian Jobs Strategy for retraining workers, but it kept the billion dollar manufacturing and processing tax credit. It reduced support for social housing by $32 million, but it kept the billion dollar dividend tax credit. Those are the giveaways to the rich, while it was taking from the poor, upside down Robin Hood. That is what this government has done. That is why this country is in financial trouble. All except the richest. They are doing just fine.


Dennis Joseph Mills: Madam Speaker, as I have been listening to this debate over the last two days, I have been struggling to find anything good about why we are taking the time to do this, in light of the fact that there seems to be so many other important issues pressing us in terms of the country today.
It sort of dawned on me as I listened today that the one benefit of debating this bill is that it gives all of us in this country and this House the opportunity to review the tax policy of this government since it took office.
When the member for Etobicoke Centre took office, he promised comprehensive tax reform. I do not think that there would be anyone in this country who would agree that he has achieved any kind of comprehensive tax reform.
Comprehensive tax reform has to meet certain tests. One of those three tests would be simplicity. We certainly cannot say that anything he has done on tax reform is simplicity. We will remember that he did take over a tax regime that had been built up for many years. He did have a big challenge in front of him.
When most Canadians actually take a look at the Income Thx Act of Canada, they are horrified-15,000 pages of rules, regulations, exceptions, exceptions to exceptions. Even the best tax lawyers and the best tax accountants in this country say that they have a difficult time following the Income Thx Act of Canada. He had a chance to simplify the tax system and he did not achieve that.
The second test is fairness. That is where I think the government is really boxed in because without fairness in the tax system there can be no productivity. In fact, without fairness in the tax system, there is basically a system that is a disincentive to productivity. Because he did not simplify and put a fair income tax system in place, he has even exacerbated that problem by bringing along the GST which even amplifies the fact that the whole tax regime is not fair.
The third test is efficiency. There is no way that anyone would say that this government has done anything which even resembles efficiency which it comes to the tax regime, whether it is on the income side or on the GST side. That is where we have a problem in this country.
As I was walking the streets of my riding this summer in downtown Toronto, the east side of downtown Toronto, Queen Street or the Danforth, yes, there are a lot of concerns in the country today in terms of the environment and national unity. But one of the biggest complaints I heard from my constituents, and I know most other members have heard it well, was: "Taxes are killing me. The taxes in this country are causing me to consider whether or not I even want to stay and do business in this country".
People are losing their sense of drive. They look around and they see that the harder they work the more taxed they become when it should be the reverse. The harder they work, there should be a system whereby they are rewarded for that work rather than punished.
That is where I think this government has really failed.
It is not as if we on this side of the House or we in the Liberal Party are not concerned with the deficit and the debt. We are concerned about the deficit and the debt.
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There is one thing that we do realize, that is in order to attack that deficit and debt the most important thing is to make sure that the human capital in this country believes that it is being treated fairly.
When we have a tax system where just three years ago there were close to 8,000 Canadians who made in excess of $250,000 a year and who through legal loopholes in our current tax system did not pay any income tax, that is not perceived fairness. Three years ago we had over
2,200	corporations with retained earnings in excess of $25 million and did not pay any tax at all either.
What we have is a situation where people feel that they are not being treated fairly. When people do not feel like they are being treated fairly, that affects productivity. That has to be one of our biggest preoccupations today as a country.
Canadians want to be global traders. They want to be internationally competitive, but it is incumbent on all of us in this House who are legislators to create the environment that motivates our work force.
Is it a motivational plus when we are in the midst of a recession to hit people with the GST? Is it a motivation for small retailers, small restaurateurs, when times are tough as it is to hit them with all of the bureaucracy of the GST?
That is what is wrong with our country today. They have forgotten to treat the human capital of this country fairly. Unless they start going back to that human capital, unless they start listening to what is really bugging people, what is causing people to feel so low, I think the problem we have in this country is going to continue. We are not going to get out of this deficit and debt situation.
I do not share the view of the Conservative government that the way to attack the deficit and the debt is by dismantling. Government by retreat, government by dismantling programs and services, government by just selling off Crown corporations for quick cash, that is not the way to do it.
I am absolutely supportive of the government when it tries to look for ways to eliminate waste and make our Crown corporations more efficient. Anybody who would not agree with that would be nuts.
This is a government that is not using the creative process. It is not encouraging the creative process. It is not trying to figure out ways to get productivity into this
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country. It is not a government that is trying to stimulate entrepreneurship.
I have heard members of the Conservative Party today ask us on this side of the House what we would do to try to reduce the deficit and the debt of this country. It seems to me that one of the things that we are going to need is lots of foreign capital in this country, if we are going to attack the problems that we have in terms of reducing the deficit and debt.
Before foreign capital makes its investment, it looks at the working environment. It looks to see if there is a productive labour force. It looks to see if it is a happy, motivated labour force. If foreign capital sees that that condition exists, large pools of capital will move to our country.
We are hearing it from every economist right across the world. We have an amber light right now on investing in this country. I suggest that one of the reasons we have those amber lights is because they are concerned about our productivity. They are concerned as to whether or not we have a motivated work force.
The only instrument that this Parliament has to motivate the work force of this country is our tax system. I would bet you, Madam Speaker, and I would bet anyone in this House, that if we had a simple, fair, efficient tax system the productivity levels in this country would increase dramatically. That productivity will send a signal to foreign investors.
What happens when foreign investors come here and bring those large pools of capital and put them in financial institutions and put them in sectors of our economy that need help? They compete to put that money out into the market and that is what puts downward pressure on interest rates. Those pools of capital will put downward pressure on interest rates. When downward pressure on interest rates is there, what does that effect? It effects the attitude that bankers have toward entrepreneurs. Small business loans are more readily available. Mortgages on homes are lower. That, in turn, leads to a quality of life, an attitude which is so desperately lacking in this country today.
I daresay that if that condition existed, where our motivated work force was there, foreign capital, as a result of seeing that we have that asset, that human capital turned in the right direction, then all of a sudden costs of goods would be lower and exports would be

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higher. All of these things will come together. But we are starting backwards in this thing.
The Conservative government right now expects the morale of this country to be totally indifferent to the 32 tax increases that it has imposed upon it during the last seven years; 32 tax increases plus a poorly designed GST. I am totally opposed to the GST, but I could actually see a situation, if we had a fair, simple, personal and corporate income tax system, of Canadians reacting to a GST in a positive way if it was a well-designed GST. This GST is a nightmare. It is cruel.
In my riding, I have over 300 restaurants and 150 of them have patios. There are a lot of very small breakfast restaurants. Do you know what they do in my riding right now, Madam Speaker? In the old days people would go for breakfast three or four at a time in the early morning or on a Saturday. One week one person would pay and the following week another person would pay. It would be one bill for the waitress. Now, do you know what they do? They all ask for individual bills to avoid the GST. Do you know what a nightmare that is for a small restaurant where the average bill for bacon and eggs and homefries might be about $3.25 or something like that, when instead of making up one bill for three or four people everybody wants an individual bill? Madam Speaker, it is nuts. It is not fair, it is a disincentive to productivity, it hurts the morale of this country and it hurts the attitude. There is no way that anyone on the Conservative side of this House could ever argue this. I believe they are sensitive to it, but somehow they have just swept it under the table. That leads to another point. When we have a tax system that is unfair, it leads to an underground economy. I am sure you realize, Madam Speaker, that the underground economy in this country is growing by billions of dollars.
There is a Professor W. E. Diewart at the University of British Columbia who has spent many years of his life studying the underground economy in this country. Do you know, there are estimates right now that the underground economy in this country is running between $50 and $80 billion? Most of that economy is there because people believe that the current system is not fair. The favourite trick is someone will come around to your house and says: "I tell you what, this paint job on your home would normally be maybe $3,000, but because this government is gouging us with the GST and it is not fair,
and you agree it is not fair, I tell you what I will do, I will reduce the cost to about maybe $1,500 or $1,800 cash. And what will happen is that you don't have to pay the tax on the normal $3,000 but I get the break because you have given me the cash".
Madam Speaker, that is what a poorly designed GST does to the underground economy of this country. It is absolutely disastrous, and I can tell you- Excuse me, sir?


Mr. Brightwell:: What about the income tax?


Dennis Joseph Mills: Well that is the point. That is what an underground economy is all about.


A.H. Harry Brightwell: It's not all GST, that is the point I wanted to make.


Dennis Joseph Mills: *


:
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tax rate, why not expose what they are bringing into the treasury?
I don't understand where the government is coming from. The member from Ontario earlier today referred to the fact that in the old days when we took in revenue it just went in to the general revenue fund. It is all the same balance sheet. It is the same set of books. Why create this special fund? It is a diversion. It means nothing. If we are going to go back to the point of trust, that is an action which decreases the trust factor of our government.
Therefore, I along with my colleagues will be supporting this bill as it goes to committee. As one member, I can tell you that when this bill comes back here for third reading, unless some miraculous thing happens in committee, there is absolutely no way I am going to support it. It is smoke and mirrors and it does not address the fundamentals. There is no way I am going to be anything other than crystal clear in opposing this poorly designed GST, which is a monster and a disincentive to the productivity of this nation at a time when, instead of getting kicked, we should be encouraged.


Mrs. Barbara Sparrow (Parliamentary Secretary to Minister of National Health and Welfare):: Madam Speaker, I listened very carefully to what my colleague on the other side of the House had to say with regard to the debt servicing and reduction fund. I note he speaks with great care and sincerity.
The one thing I have to say is that the word "trust" is quite right. I really look forward to more trust and all of us here working together to rectify systems and policies. If you do have a more efficient and better way to run a GST or a tax system of this sort, I look forward to sitting on the committee with you, because I think these are the kinds of things we are all interested in.
We have never said it was perfect. What we did say was that the old manufacturers' sales tax was wrong and pointed out the difficulties we had in raising the funding from one industry that represented 20 or 22 per cent of all the economy of Canada. We were burdening one industry, 20 per cent of the economy, with $18 billion.
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We could not even sell our products abroad competitively. GATT rules one way and you move into a value added tax or a GST which is accept by GATT.
By the way, it is interesting to note that the European market, as they move in 1992, make it mandatory that all their members have a type of a value added tax.
My colleague suggested that we are a government in retreat. I really take exception to that. I do not think this is a government in retreat. In fact, I think we have made many bold moves that are not popular with the people but, indeed, are right for Canada. The first thing was getting rid of the National Energy Program, which really devastated the province I come from. It was the first major move. Free trade is necessary if we are going to compete globally. Life has changed and all international trading has changed so much that, indeed, it is going to be one area that will force Canadians to become more competitive.
Deregulation is another area we moved in and is an area I support. Fear did cause a great number of problems in the country. I am pleased to note that Investment Canada has made a great deal of progress.
I believe you were referring directly to privatization and, indeed, I support the privatizations we have made and really look forward to completing more of them.
You talked about foreign capital, and you are right. Foreign capital can really create the environment for our labour force. But the labour force has to be good. It is part of the stability of this country, with the infrastructure and with the governments.
We do need a tax system to motivate. I know you have spent a great deal of time and energy with regard to a flat tax, which is one way to go.
I happen to believe it is the fairest way to go. We should treat everybody equally with no write-offs and no deductions. I would pro-rate it according to gross income because we should be helping the lower income people and maybe asking the high income earners to contribute a bit more.

September 20, 1991
Government Orders
As for debt servicing and reduction from the GST, it replaced the manufacturers' sales tax and will be one of the strong support systems in getting the deficit down. When we get that down, we can lower taxes.
I agree that we have to lower personal income tax to create the incentive. Which route would the member take to lower the income tax rate without doing what we are doing to get it down? I believe in our philosophy and I have been here since 1984. We have to reduce the deficit and the debt and we cannot increase taxes. I am not sure the member gave me the direction for us to go.


Dennis Joseph Mills: Madam Speaker, I appreciate the comments of the member for Calgary Southwest.
First of all, not one of the European Common Market countries has a two-tiered value-added system. They all have single-tiered systems. The bottom line is that we have a two-tiered system, different from most of those countries. However, let us not get distracted by that because the other question was a more relevant question.
I want to address the retreat from governance. I really cannot figure out what the member meant by saying the government is not retreating. This government has retreated from its national responsibilities on a list of issues so long I could probably spend the rest of the day talking about it.
This central government is so decentralized that the provinces of this country are now running this town. I just have a philosophical disagreement with you. I happen to believe in a strong national government.


An hon. member:: You are a socialist.


Dennis Joseph Mills: I am a socialist. Can you imagine the member from Calgary calling me a socialist?


An hon. member:: I cannot believe it.


Dennis Joseph Mills: I cannot believe it. Thank you very much. That really helps a lot in Broadview-Greenwood. Would you say again that I am a socialist? Not too many people in my riding of Broadview-Greenwood think I am a socialist.
I think Investment Canada has not done such a great job, actually. I used to be a big fan of Investment Canada, but I think it needs to be recharged with man-years and more money. Right now we need so much foreign capital
that I would plead with the Minister of Industry, Science and Technology to quadruple its budget so that it can go out and hustle foreign investment.
I am not going to argue about FIRA and Investment Canada. I like to have controls on things. I do not like people coming in here and buying things up holus bolus without us having some say in it.
I want to make one last point. I have talked about dismantling and giving away. The member mentioned free trade and gave me sort of a low ball there. If the member could prove to me with clarity that our water was not included in the free trade deal then I would probably shift my attitude on the free trade agreement slightly.
I am telling the member right now that this government has given away water. I swear by it. There is absolutely no way.
I want to answer the member's last question. I believe that-


An hon. member:: Oh, oh.


Dennis Joseph Mills: What was that, minister from Fergus, where your farmers are going dry right now and you need water but we have given it away to the Americans?
My point about tax reform is that I would go to the human capital and turn it on before I would stick it to them with the GST. That is just a fundamental difference.


David Kilgour: Madam Speaker, I was recently in British Columbia.
Do you know what they are calling Canadians in Bellingham, Washington these days? They are calling us "cheese heads". Do you know why they are calling us cheese heads?


An hon. member:: No, why?


David Kilgour: Because thousands upon thousands of lower mainland residents are driving down to Beilis Fare near Bellingham in Washington State to buy cheese and every other product under the sun. The label that stuck is cheese heads. I am told before we had the GST there was a great deal less of this traffic going back and forth across the border.
I remind the hon. member of that because I know that the member for Calgary Southwest is in favour of whatever Uncle Sam says in Washington. Why is it that
September 20, 1991

even Ronald Reagan did not bring in a sales tax similar to the one we have?
I have to ask a question of my colleague-


Madam Deputy Speaker:: You do have to ask a question because the time has expired. After the question there will be a short answer.


David Kilgour: I talked to a member infinitely less partisan than I am about the government which has more underestimated the intelligence of Canadians than any other in history.
Would he favour some type of sales tax, for example, that might apply at the end of the year to manufacturers' sales based on sales without having to go through every layer of the system? Does he think that would be an improvement over the GST, as they do in Washington State? They simply tell manufacturing company x that at the end of the year they have to send a cheque for 1.25 per cent of their sales, the same as the GST.


Dennis Joseph Mills: Madam Speaker, that is a great question. It is a complex question. I cannot answer it in the time I have left. I have a colleague about to speak. Stay tuned for the next round and we will address it.


Some hon. members:: Hear, hear.


Madam Deputy Speaker:: Who says there cannot be good civilized fun debate in the House of Commons on Friday afternoon.


Mac Harb: Madam Speaker, Bill C-28 is an act relating to the accounting of certain payments for the servicing and reduction of the debt of Canada. They call the act the debt servicing reduction account or reduction act.
What an insult to the intelligence of Canadians.
I will refer to one scenario. Mrs. Smith has an account in a bank and she earned $10,000 a year. Her expenditures exceed the amount of revenues. Whether Mr. and Mrs. Smith have one account, two accounts, or three accounts, the bottom line is that she has a deficit at the end of the year.
If the government sets up this account and goes to it on an annual basis to borrow from it then the account would become redundant. If the government were to set up the account and go outside to borrow without taking
Government Orders
from this account then it will pay unduly high interest rates on money it probably already has in an account.
Again, it does not make any sense at all.
I have spoken to a number of accountants, those who are chartered, those who are not chartered, and they all agree that this act is a public relations gimmick. The reason it is a gimmick is because in their minds, whether the Minister of Finance or the cabinet or the government in general, they thought they could respond to the public cynicism with something that might attract some support or some attention by saying that all of the revenues from the GST would be put toward the deficit reduction.
That is simply because a lot of people we spoke to in the past couple of years, vis-a-vis the GST, said that if their money was going toward the reduction of the deficit they would have no problem with it. Rightly so, but that is not the case simply because there is an existing deficit in excess of about $28 billion every year.
Regardless of the surplus, whether from the sale of a Crown corporation, gifts to the Crown, revenue from the GST, whether the government wants it or not, that money indirectly is going toward the general revenues. The government can call it account a, b, c, d, but in general terms they are still general revenues.
At the end of the year there could be a million accounts and still be a deficit. It is deficit. I do not understand for the life of me why the government is trying again to mislead the public with the enactment of an account. It is misleading. The hon. member knows from the figures of the Minister of Finance this account 'will not even be functional until 1996, simply because we are in the position of a deficit between now and 1996.
There is no such thing as servicing the debt because the over-all revenues are going to go to the account which is whatever you want to call it. You have on the balance sheet a deficit, whether it is $1 or $28 billion. I would ask the hon. member to review the finance department information sheet, which clearly states that between now and 1995-96, we are in a deficit position. If that is the case, why are we-


Madam Deputy Speaker:: I am sorry to have to interrupt the hon. member, but it being three o'clock p.m., the House will now proceed to the consideration of

September 20, 1991
Private Members' Business
Private Member's Business as listed on today's Order Paper.



PRIVATE MEMBERS' BUSINESS


Mr. Vic Althouse (Mackenzie) moved:: That, in the opinion of this House, the government should consider the advisability of introducing amendments to the Income Thx Act so that taxpayers whose income may fluctuate from one year to the next would be able to average their income over five years.
He said: Madam Speaker, this motion I believe is of interest to a great many members of Parliament who will have been receiving correspondence, had calls at their offices and have been stopped in the streets as this particular part of the tax reform package that has been ongoing has come into place.
The background is that the government set out in a tax reform paper in June 1987 its intention to remove the block averaging provision that existed at that time in the Income rIax Act and in fact still exists and will until the end of 1991.
If the House can persuade the government to change its position with regard to block averaging, there will not be a hiatus between tax years so that the tax application will continue to be run in an even-handed manner, if we can persuade the government to change it for the 1992 tax year.
The people who are affected tend to be people whose incomes fluctuate wildly. I am going to be directing most of my remarks to the effects that this policy change has on farmers. It is equally difficult for people who are in the business of entertainment, artists, professional athletes, writers, real estate people, sales people, freelancers, consultants, as well as farmers, ranchers and fishermen. In short, the proposed changes affect anyone who has the likelihood of a very large income one year and then several years of almost zero or very small incomes.
The provision of the Income Tax Act which used to permit five-year block averaging, as it is known in the agricultural community, permitted you to average out
the incomes for those five years and pay the tax according to the tax bracket that you would fall into with that averaging.
The government in its White Paper argued because they were changing the tax brackets, reducing the amount and making the steps somewhat smaller that it was not going to hurt anyone to be caught in a higher tax bracket one year versus a much lower one in following years.
When you add in the effect of provincial tax, it still makes a difference in most provinces of about 18 percentage points when you move from one bracket into one of the higher ones. So it is still something of great concern.
At any rate, I digress. I was telling you the background to the proposal which, as I said, began with the 1987 tax reform paper. It was subsequently put into place through a Ways and Means Motion in 1988. We will still be able to have an effect on continued tax policy if we can convince the government before the end of 1991 that it should continue with this.
The government said it really was not a terribly important thing because only 3 per cent or 4 per cent of farmers and ranchers used it, but I will present some actual cases that show that for those five or six it can create very real hardship by not having that option available to them.
The advisers to the department I think engaged in some very creative means of accounting. I have not been able to produce the results that they published which showed their estimate of the effects. I cannot find any other people in the tax field or any other economists who can generate the high figures that they have to show how much money the government thinks it is losing through the averaging provisions. Any realistic view, using the government's own data, does not generate the amounts of money it says it would lose if it continues to have five-year averaging.
The government came up with figures that approach $100 million. Yet, when you look at the fine print of the studies they have done, it is probably only somewhere between $8 million and $17 million of those figures that actually apply to block averaging. So the numbers that are put out as information are, I think, exaggerated badly.

September 20, 1991

Along with the proposal to do away with five-year averaging, we had a proposal which is being implemented. It would force farmers wanting to use the remains of the block averaging to also include inventory in that year's income, which again skews things quite badly.
I would just say as an aside that the arguments that the people who advise the government brought out for collecting extra money due to the move to including inventories as income each year, have also, I think, been sadly over-estimated. Farmers and fishermen have been on a straight cash accounting method. They can file income tax on the basis of how much cash was taken in and how much cash was spent during the year. If they intend to use any of the loss provisions or averaging provisions, they have to start including inventory. The government estimates that as they switch inventories into the calculations that there will be more tax collected. Yet, anyone who is active in the field of farm accounting and tax consulting says that if there is any advantage to the government in collecting more taxes, it would only occur in the first year and after that there is no more advantage. The amounts that the tax people presented to Finance, which made the decision based on those figures, were extremely optimistic, to say the least.
At any rate, the farm groups and some individual farmers have been quite vocal about the effects of this change. I wanted to put on the record briefly a few of the comments that accompanied the announcement in 1988. We had, for instance, the Alberta Wheat Pool which noted that "These income averaging provisions were originally allowed by the governments as a recognition of the cyclical nature of the agriculture industry, where incomes often fluctuate considerably from one year to the next. As the industry has not changed in this regard, Alberta Pool firmly believes that these averaging provisions should be retained for farmers and that the livestock inventory provision should be extended to non-livestock inventory, including crop production".
The Canadian Federation of Agriculture said: "Net farm income is subject to very large year to year swings. There are currently provisions in the Income Tax Act that are designed to deal with these factors. These provisions are very important and their continuance is
Private Members' Business
strongly supported by farmers. Five-year block averaging is one of these provisions".
With this motion I am urging members of the House to support a review of the government's intention to do away with the five-year block averaging provision and to make it a continuing process so that there is no lapse in the program in the tax year beginning in 1992.
There were other groups as well which had things to say about the proposed loss of the block averaging system. The rural and municipal associations of the three prairie provinces, Alberta, Saskatchewan and Manitoba, say: "The five-year block averaging provisions were originally introduced into the Income Tax Act in recognition of the cyclical nature of the farming and fishing industries. One or two years of prosperity is often followed by years of distress. Despite the reduction of personal income tax rates proposed in the white paper, farmers require relief from the imposition of high tax rates in good years. Such high tax rates ignore the fact that farmers must be able to set aside some of their cash flow in good years for the years when the cash flow is reduced or non-existent. The five-year block averaging provisions are heavily relied upon by farmers and their removal would be a crippling blow to the industry".
Even one of the farm groups which has aligned itself traditionally very closely to the Conservative Party, the Western Canadian Wheat Growers, had this to say: "Farmers require the relief offered by the ability to block average income. Under the cash method of accounting, farm income shows a great deal of volatility. Under the accrual system," which I might point out is the system of including inventories which the government is proposing that farmers now switch to, "there is even more volatility. The impact of this could be to thrust farmers into the situation of wide income fluctuations between marginal tax brackets and consequently a higher tax burden than should be applicable. The rationale in the tax reform 1987 paper is that with reduced brackets and only 12 per cent spread between the highest and the lowest there is no need for block averaging. When provincial taxes are added the spread becomes 18 per cent and in many cases this could amount to a significant tax payable".
There are other tax problems that are accentuated by the government's intention to get out of the block averaging situation. I would like to just present, in the

September 20, 1991
Private Members' Business
minutes that I have left, some cases that have come to my attention.
In the current economic recession that farmers in my province have been in for some time, the inability to five-year average becomes even more crucial. For instance, one of my constituents gave up land because he was pressured by his creditors and received a $30,000 debt write down from his bank. Under section 80 of the Income Tax Act, his non-capital losses of preceding years wiped out any gain on the debt and he may in fact eventually have to pay tax on the full writedown that the bank gave him. In other words, the bank wrote off $30,000 worth of debt and said it could not be collected. They wrote it off but the income tax department, through section 80, may in fact still want to collect taxes on that because it considers that the writedown was income and wants its tax on that income even though he never saw it.
Several other producers are being assessed because of paper profits as well. For instance, one producer had to declare a capital gain after he transferred land to the bank, because the land had been purchased at a lower price many years ago than what the bank took it back at. Since his paper income is now over $50,000 because of the paper transaction of the new value of the land, he is subject to the clawback provisions and has to repay his family's tax allowance and child tax credit advances.
In other words, the man did not get any money for his land, but in the process of taking it back on him the bank showed the recovery value as more than what he had originally paid for it. The difference was considered to be a capital gain and that was applied against his income. The man has no money and needed those child tax credits and the family allowances. He in fact had spent the money and is now being asked to go find money to pay taxes on that because under section 80 of the Income Tax Act he is required to consider that as income. If this continues there is no way that he could even use the averaging provisions to get out of this, if we had a similar case in the future after block averaging is no longer available.
I have a similar case. A man was losing his farm. These things in my province take a couple of years of process because of the provincial laws that we have. We have had
them in effect ever since 1944. He had actually gone out to work one winter to raise some money to keep his family alive. He had worked for eight or ten months and then the job played out because he was working in the far north and when it starts to melt they lay everybody off. He went on unemployment insurance because he had no money coming in from the farm. It was in process, the bank was in the process of taking it over.
When his tax year was finally finished and the disposal of the land had occurred, the department said that he had a taxable capital gain and his taxable income was considered to be above $44,000, even though his real cash income, cash in, cash out, the amount of money that he had to work with, was in fact $27,000. Since this occurred in 1988 he was able to average his income due to the phasing in period. It helped him avoid the minimum tax. However, he was forced to pay back $4,269 on the unemployment insurance benefits he had received.
There was a clawback because it was construed that even with averaging his income had exceeded $44,000, even though in reality his family had $27,000 before tax to spend simply because of the application of capital gains to the disposal of assets as banks and credit institutions move in and reclaim farm land.
I raise this along with the issue of five-year averaging, because we are entering a period when farm debt continues to be high, the prospect of farmers facing foreclosures is increased in the coming year. All projections point to that. If we lose the ability to use five-year averaging, the inequity that will be visited upon these people who are now finding themselves in 1992 and beyond facing farm foreclosures will be even greater than the inequity that I have just outlined here. The five year averaging did allow these people to mitigate their circumstances a little bit. I believe this provision should be continued, and I urge the hon. members to support my motion to have the government revisit the question with a view to continuing five year averaging after it would have been phased out at the end of this tax year.


Mr. Lee Richardson (Parliamentary Secretary to Minister of IVansport):: Madam Speaker, it is with pleasure that I rise to speak on Motion No. 81, presented by the member for Mackenzie. The motion is to consider the
September 20, 1991

advisability of reintroducing amendments to the Income Tax Act to allow some form of averaging.
One of the fundamental principles of our income tax system is that the tax burdens of Canadians should reflect their ability to pay. In other words, the proportion of the income paid in tax should increase with income. This is achieved mainly through a progressive tax rate structure with tax rates ranging from 17 to 29 per cent, as was alluded to by the hon. member.
Another fundamental principle is that ability to pay is measured on the basis of income earned or received in a year. Only in a very few cases, such as the lifetime capital gains exemption and the cumulative net investment loss rules, are income and personal circumstances of other years are taken into account.
When income of individuals fluctuates significantly from year to year, the total of the income taxes they pay over several years may be greater than if their income stream has been more constant over that period. This is because in those years when incomes were high, they are subject to higher marginal tax rates and thus pay a greater proportion of their income in tax. In such circumstances, averaging the income over a number of years would result in lower taxes each year, thus lowering the total tax burden over the period.
An understanding of the underlying objective of averaging measures is essential in considering the need for the reintroduction of explicit averaging measures such as those referred to by the hon. member for Mackenzie.
Equally crucial, however, is an understanding of the circumstances that may result in an individual's income fluctuating over a lifetime. Specifically, who is most subject to those fluctuations, in what circumstances and how does the tax system currently treat those individuals.
It is not my intention to review all of the circumstances in which Canadians may experience large year over year changes in their incomes. The hon. member has referred to farmers. Madam Speaker, you may be more familiar with the fluctuations in the incomes of artists or performers.
However, I believe that most would agree that retirement is the most frequent and significant cause of such a
Private Members' Business
change. At retirement the vast majority of Canadians experience a reduction in their incomes.
I would like to take this opportunity to remind members of the existing tax assisted measures for retirement saving and the improvement to the system adopted by this House last summer as part of a major series of pension reforms that have been introduced in recent years. All are aimed at improving the income security for Canadians in retirement.
Tax assistance for retirement pensions is based on a simple principle. Within limits, amounts set aside for retirement should not be taxed when saved, but rather when received as pension income. Thus, tax assistance for pensions allows averaging of income between higher income years when an individual is working, is employed and low income year of retirement. The benefits of this averaging are compounded by the fact that the investment income earned on retirement savings is not taxed until income is paid out after retirement. The result is a significant reduction in the over-all tax burden to retired individuals.
These tax advantages are extremely important in providing income security for Canadians in retirement. They also represent costs to the federal and provincial governments.
For the federal government, these advantages to individuals amount to $5 or $6 billion a year and for the provinces, an additional $3 billion a year.
I noticed last year this House adopted changes which improved tax assistance for retirement. These changes had two key objectives; to increase the fairness of the system and to make it more flexible.
To increase fairness, the new system established uniform limits on the tax assistance for all Canadians. The benefits are now the same whether a pension saving is measured in terms of contributions or promised benefits and whether it takes place in one plan or more than one. Over a career the new limits will allow individuals to save, free of tax, amounts sufficient to provide annual retirement income amounting to 60 to 70 per cent of what they earned before retiring
In fact, these measures allow Canadians to average their incomes between active and retirement years to benefit from the associated reduction in tax.

September 20, 1991
Private Members' Business
To increase the flexibility of the system, last year's reform also introduced a new carry forward provision. As we know, it is not always possible to put aside a set proportion of earnings for retirement each year. Circumstances such as a temporary reduction in income, purchase of big ticket items or unforeseen expenditures may prevent individuals from saving as much as they would like through tax assisted retirement saving vehicles. Prior to these reforms, the unused contribution room was lost if that room was not used in a given year. However, the enactment of these changes to the Income Ihx Act means that taxpayers are now able to carry forward unused deductions for up to seven years.
Many Canadians, especially those starting out in employment or facing fluctuations in earnings for any reason, will find the new carry over provisions of unused RRSP contribution room a great advantage. Similarly, the flexibility for those who lose or change jobs will help them maintain their pension savings.
The new higher contribution limit to the RRSP-$15,500 in 1995-will be of particular benefit to self-employed individuals. Farmers, for example, will be able to mitigate the tax consequences of year by year fluctuations in their incomes while at the same time saving for retirement.
In closing, I would like to stress that as a result of the changes adopted last year, the system of tax assistance for retirement saving is second to none in the world. It provides millions of Canadians with the opportunity to provide equally and adequately for themselves in their retirement. It also provides all Canadians, including those with large year over year fluctuations in incomes a vehicle through which they can average their incomes over their lifetime and benefit from the associated reduction in their tax burden.
I think it is clear, Madam Speaker, that the objective set out in Motion 81 is largely met by the current tax assistance system for retirement savings embodied in the Income Tax Act.


David Kilgour: Madam Speaker, I would like to salute the member for Mackenzie as well. At least, I think the member for Calgary Southeast was saluting the member for Mackenzie.
The sophistry, Madam Speaker, that we just heard from the member, and I say this with respect, having
known the member for a long time, but I think I detected a speech that was being read, rather than being given spontaneously, but I was too polite on a Friday afternoon to get up and ask him to stop reading a speech that no doubt he prepared, rather than somebody in the Department of Finance.
I would like to pick up a thread that was made, I think, yesterday by a member. Right now the average farmer in Canada produces food for about 95 to 100 Canadians. At the same time, since most farmers are men, his spouse has to go off the farm to earn money to feed the family on the farm. That, Madam Speaker, is a catastrophe. I am sure it is the case in Quebec, but I know it is the case in parts of Alberta, throughout Saskatchewan and throughout Manitoba and throughout much of Ontario.
I think it is in that spirit that the member for Mackenzie has put the motion. We simply have to do something to help farm families who are not going to be here too many years if we do not do things like this proposal to help them.
You probably saw, Madam speaker, the Canadian Press report that came out earlier this week saying that family incomes from 1980 to 1988 have gone down in Canada, down after taxes from $40,200 to $40,000. I might point out too, Madam Speaker, that the share of after tax income going to the 10 per cent of families with the highest incomes rose to 22.4 per cent from 21 per cent in that period, while the share going to the lowest 10 per cent of Canadians also increased to 2.9 per cent from
2.5	per cent.
The 32, 33, or 34 tax increases we have had from those opposite have obviously had a significant effect on the plight of the Canadian family, including of course, farm families. The fact that people in parts of Canada are suffering enormously through the various policies of the government, including high interest rates, higher and higher taxes on middle and low income Canadians, is something I think should disturb everyone in this House.
Madam Speaker, I would refer you, if I could, to another matter that recently came up, which was a statement by Statistics Canada in June that 58 per cent of married Canadians have less disposable income after taxes than if they lived in a common law relationship. I
September 20, 1991

believe most members would agree that marriage should be encouraged by any prudent national government and not penalized as it is now in our country.
Tax reform, as we heard from the member for Broadview-Greenwood today should mean-and I think he means-moving some of the present burden away from those who cannot afford to pay more and more taxes, middle and low income Canadians, to those who can, successful firms and high income individuals.
As I said before, there have been 32 or 33 tax increases by this government since 1984. In closing I would simply say I hope that all members here-there are members here, Madam Speaker, in the House this afternoon-will see fit to vote for this motion when it comes for a vote, particularly because it will help the farmers in western Canada that the member for Mackenzie and I try to represent.


Mr. Marc Ferland (Portneuf):: Madam Speaker, I welcome the opportunity to speak this afternoon to Motion No. 81 in the name of the hon. member for Mackenzie, which concerns the advisability of amending the Income Tax Act so that taxpayers will be able to average their income when it fluctuates over a certain number of years.
Before 1988, the Income Tax Act contained two provisions for averaging income over a number of years: forward averaging and block averaging. Both methods were based on complex calculations and allowed taxpayers whose income fluctuated substantially to average their income tax over a number of years.
More specifically, individuals whose income in a year exceeded 110 per cent of their average adjusted income of the preceding three years could chose to average the excess.
Averaged income was deductible in computing taxable income but gave rise to a special tax at the highest marginal rate of the year. In subsequent years, the averaged amount was brought back and taxed as regular income with a refundable credit provided at the top marginal rate. Furthermore, before 1988, individuals whose chief source of income was farming or fishing could average income from all sources over a five-year
Private Members' Business
period. This provision involved a calculation whereby the taxpayer recalculated tax liability as if one-fifth of his or her total income over the period had been earned in each of the five years. An election to block average was made in the last year of the five-year period and reduced taxes payable in that year or resulted in a refund of taxes paid in the earlier years of the period.
As hon. members are aware, in 1988, the government proceeded with a reform of personal and corporate income tax. The purpose of personal income tax reform was to make Canada's tax system more equitable, strengthen our competitive position and stimulate growth and job creation.
The reform provided for lower tax rates and a broader tax base. The lower rates demanded by hon. members opposite stimulate employment and investment, which helps improve our standard of living.
A broader tax base, achieved by eliminating special tax benefits, makes our tax system less complex and more equitable, in addition to limiting opportunities for fiscal planning by mainly wealthy Canadians, something the hon. member for Mackenzie has always criticized.
So, starting in 1988, the old system with its 10 tax rates from 6 to 34 per cent was replaced by a three-rate structure: 17, 26 and 29 per cent. Another key element of this reform was the conversion of personal exemptions into often increased tax credits. Contrary to the exemptions, which tended to favour high-income earners-something the opposition always denounced-the credits are fairer in that they provide equal tax relief across the board. The third major change was the elimination or reduction of many tax benefits. For instance-and this affects businesses and business owners-tax deductions for business expenses such as meals and entertainment were considerably limited.
Because of the fewer tax rates and income brackets, the opportunity of the forward averaging provisions was called into question and eventually abolished as part of the tax reform. Income averaging has not been allowed since the 1988 tax year, while the averaging provisions relating to farm producers and fishermen do not apply to five-year periods starting after 1987. The averaged amounts deducted previously can be added to the year's income until 1997 and the taxpayer will remain eligible to

September 20, 1991
Private Members' Business
a federal tax credit at the current marginal tax rate at that time.
Let us now examine, Madam Speaker, why it is that the new tax rates and the fewer income brackets resulting from the tax reform make the averaging provisions less relevant. Before the reform, there was a 28 percentage point difference between the lowest tax rate (6 per cent) and the highest (34 per cent). It was huge. Thus, there were huge variations in the tax paid by taxpayers whose income fluctuated from one year to the next. With the reform, the difference between the minimum (17 per cent) and maximum (29 per cent) tax rates was reduced to 12 percentage points. So, fluctuations in revenue are less likely to noticeably affect the tax burden.
Combined to the conversion of exemptions into tax credits, the fewer rates enhanced the fairness and progressive character of the tax system.
Doing away with the averaging provisions also helped simplify the system as well as compensate for the reduction in the number of tax rates.
While there are no averaging provisions in the current system, strictly speaking, income and tax can easily be deferred under other provisions.
More particularly, tax assistance for retirement savings has enabled taxpayers to spread their income over the years in which they earned it and those following their retirement. Tax assistance is based on the principle that retirement savings are taxed when they are withdrawn and not when they are accumulated. This means that someone who has a very large income today can obtain the maximum, as my colleague just explained, and enjoy it later, at the same time paying much less tax on it.
Therefore, contributions to registered retirement savings plans (RRSPs), registered retirement plans and deferred profit sharing plans are not taxable when they are paid. Similary, investment income in these plans is not taxed as it is earned. Retirement savings are taxable only when benefits are paid by the plan. For the great majority of taxpayers whose retirement income, and thus marginal tax rate, is lower, tax-assisted retirement savings are a good way to spread income and defer tax.
As you know, Madam Speaker, the limits on tax assistance for retirement savings were recently changed. The new regime that takes effect this year corrects all
the shortcomings of the old system and gives Canadians fairer access to tax-assisted retirement savings. Before the reform, taxpayers whose employment situation was different did not enjoy the same level of tax assistance. More particularly, those whose employer did not provide a pension plan could not benefit from tax assistance in setting up an adequate retirement fund. Those with relatively modest pension plans could contribute more to an RRSP than taxpayers with a very good pension plan.
I believe this was a satisfactory response to the demands of our friends opposite who during the past few years have constantly asked for a fairer and more equitable system that would take more from the rich and give more to the poor. The tax reform does just that.
Because of the current limits, the number of tax planning measures available has tended to increase. Before, some taxpayers did not have access to appropriate tax assistance while others benefited to an extent that in some cases was downright outrageous.
The key element of the new system is this: A maximum of 18 per cent of income is eligible for tax-assisted retirement saving, regardless of the type of plan.
Thanks to deferral of the unused portion of RRSP contributions, the new system will be more flexible and allow taxpayers to adapt retirement savings contributions to their current and future financial needs.
This will be of particular interest to taxpayers whose income fluctuates. The new limits will eliminate the barriers that prevent many individuals from taking advantage of tax-assisted retirement saving. They promote autonomy and encourage people to save now for tomorrow's retirement.
Madam Speaker, I believe that the durable benefits of tax reform and the attractive prospect of income deferral offered by the new tax-assisted retirement saving system will respond more effectively to the needs of Canadians than would a number of complex averaging measures.
As you know Madam Speaker, in the past governments have been criticized for the unfair aspects of the system. The richer you were, the less taxes you paid, and the poorer you were, the more you paid. This tax reform helps to avoid the incredible differences that existed in the past. In fact, I am surprised the NDP member for
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Mackenzie should wish to reinstate a system that was abolished at their urgent request.
Thank you, Madam Speaker.


Dennis Joseph Mills: Madam Speaker, I want to salute the member for putting this motion forward on income averaging. I think, as you said earlier today Madam Speaker, this has been a good afternoon because we have been focusing on an issue which I think is priority one in this country. I salute the member who is bringing to the forefront an issue which is not only of concern to farmers.
In my riding, Broadview-Greenwood, which is downtown Toronto, there are many people in the motion picture industry, artists, and entertainers. This is an industry where it is either feast or famine, it can be a terrific year. It is the home of Degrassi Junior High, and we have many large film studios in the riding. This problem about income averaging is talked about all the time. We have many entertainers in our riding. Our riding is the home of Kim Mitchell, a Juno Award winner, who decided last year decided to do a lot of touring. He had exceptional success and a couple of good hits. Of course he had a balloon year in terms of his income, as Blue Rodeo, who are from my riding, did the year before.
This is an area where, not only farmers but also artists, really have to put a tight focus on income averaging. This goes back to the point that many of us in the House were making earlier, and that is fairness. Being an artist can be a tough, lonely grind. Quite often people go many years, thousands of hours, when they do not make anything. They work from hand to mouth, pay cheque to pay cheque. It is a very tough game. Then all of a sudden they have a successful year. It seems that the averaging concept is not really addressed.
I salute the hon. member for this. I hope that we can get this idea to a point where we can not only deal with it in a fair way but also in a simple and efficient way.
It has been a strange afternoon in terms of tax reform because things react so quickly in the country now with fax machines. As we were talking this afternoon about
Private Members' Business
tax reform and fairness in the tax system, I received a fax from the Toronto Construction Association. It is pleading with all of us in this House, not only about averaging but also concerning the payroll deductions the minister has currently put forward in his latest budget and the fact that he is not allowing the provincial payroll tax to be deducted under the federal system.
The Toronto Construction Association, which is on its knees right now because of a lack of activity, is begging us in this House to plead with the minister and his officials in finance to review this situation. I will send over the letter from Mr. Roly Nicholls, the chairman of the board and vice-chairman of the Toronto Construction Association, and ask the minister to hear their plea concerning fairness for their sector.
It has been a constructive afternoon. I hope we can continue to put this hon. member's motion forward to the next stage.


Mr. Les Benjamin (Regina-Lumsden):: Madam Speaker, I want to compliment my colleague from Mackenzie for trying to get reinstated, starting next year, something that has long been of benefit to many thousands of farmers, fishermen and entertainers since the early 1950s.
When I was a station agent in a little prairie town in the 1950s and early 1960s, I did income tax returns for many farmers. In one year they would have a gross income of $10,000 or $12,000 and that would happen one, two or three years in a row, mainly because of low quotas and no boxcars and that sort of thing, or the quality of the crop. Then in 1952 we had a bumper high grade crop and incomes jumped up to $30,000, $40,000 to $50,000. The fact that they could average saved them thousands of dollars in income tax. In some of those years when they got little or no crop, they had to pay little or no income tax.
As a result of the very nature of agriculture, the fishery and the entertainment industry, incomes fluctuate wildly, from year to year to year. There is nothing new about that.
I listened to the minister of grains and oilseeds yesterday when he was responding to the NDP opposition day motion, again moved by my colleague the hon.

September 20, 1991
Private Members' Business
member for Mackenzie, in which he wept as many or more tears as anybody else in the House about the plight of agriculture and what a tough time farmers were having. He railed against the European Community and the American subsidies. He said: "We have got to do everything we can do".
Most of what he said none of us could disagree with. We have to do everything we can to ease the burden, no matter how small or large, on the agricultural industry.
While he was making his speech the government's law does away with five-year averaging for farmers, fishermen and entertainers. It does away with it. That is some way to help agriculture. Is that what he means by doing all we can do to help agriculture?
I had understood the government was going to call for third reading today on the bill concerning the At and East freight rates. However, there is some fuss being made about that in New Brunswick. There is an election on in New Brunswick so it has been put off. It will not be called until next week at the soonest.
The At and East freight rates have meant an up to $40 million a year benefit for grain producers. It meant a benefit to Saint John and Halifax in milling wheat and flour. It was a benefit to Halifax in feed grains.
Is this the way the government is going to do all it can to help agriculture? By doing away with the At and East freight rates? It is a benefit to both grain producers and the ports of Saint John and Halifax.
The terminal at Saint John has already closed down. It has been closed for a year. Is that what the minister means by "doing all we can to help agriculture". I think it happened a year and a half or two years ago. We had what was called a two-price system in which we charged ourselves-Canadians charged Canadians-anywhere from $6 to $10 a bushel for grain consumed in Canada for human consumption.
That was the one area where the farmer got his cost production and some profit. That meant up to $200 million a year for grain producers. What did the Tories do? The minister of grains and oilseeds just sat and took it. The Minister of Finance and the Minister of Agriculture, who have been there and are prairie farmers, did not say a word.
There goes up to $200 million a year of benefit for western grain producers. Is that what the minister means by "doing all we can to help"? There is the bridge rate, the movement of grain by rail cars in the winter months from Thunder Bay east. That is no longer available.
Is that what the government means? Is that what the minister of grains and oilseeds means about doing all we can to help? I can recite a list of items as long as your arm that the government of this day has done over the last several years to hurt agriculture, and in particular the grain industry.
For example, freight rates. I remember the hon. member for Vegreville, the member for Kindersley- Lloydminster, and the then member for Swift Current-Maple Creek screaming just as loud as I did when the Liberals did away with the Crow rates. We fought that battle for three years against the Liberals.
The Tories take over and what do they do? They keep it. What has happened since the Tories came in? The freight charges for grain producers have gone up and up every year. Want to do something to help agriculture? Why not put a freeze on those freight rates? Why not say that there will be no increases until farmers are getting a price for their commodities that gives them the cost of production plus something to live on?
How about freezing those grain rates? How about keeping the At and East rates? How about restoring the two-price grain system? How about paying some of the storage costs in the terminal elevators in Vancouver, Thunder Bay, Prince Rupert and Churchill as the government used to do under the Temporary Wheat Reserves Act? How about it? This is not any big, multibillion dollar subsidy, because we cannot compete with the treasuries of the European community and the United States. We know that.
There are a host of smaller items that when together mean something to our agricultural community. I am particularly surprised and flabbergasted that rural members in the Conservative Party would accept this government measure and not demand a reinstatement of the five-year averaging provisions. I do not understand them. As one of my aboriginal friends said: "They speak with a forked tongue. They have a hot mouth and a cold heart". That speech yesterday by the Minister of State for Grains and Oilseeds was a classic example of the hot mouth and cold heart of the government. There, is
September 20, 1991

absolutely no reason why it cannot allow averaging. It is not as though it is going to mean an horrendous loss in tax revenue for the federal treasury; the amount it will cost will be infinitesimal compared to the current deficit alone.
My hon. colleague for Papineau and I believe the previous government speaker got into retirement plans and the benefits there are to this. I suggest to those gentlemen that they go into their ridings and see if they can find a farmer who has any money to put into a retirement plan. I don't have any in my riding. They took a 30 per cent cut in their grain prices this year. You won't let them average and you are telling them they have all these benefits of putting money into retirement savings, up to 18 per cent of their income. Hell's bells, 18 per cent of their income is all of the net income they have to pay for their operations.
Madam Speaker, we can do no less than what the Minister of State for Grains and Oilseeds said we should do; that is, all we can. Well, this is one of the smaller items that will contribute to doing all we can for grain producers and fishermen, by restoring the averaging provisions.


A.H. Harry Brightwell: Madam Speaker, I am delighted to have just a few moments to discuss this topic today, introduced by the hon. member for Mackenzie. Indeed, this member seems to have dominated the House, because all day yesterday we debated a motion on farm income that he had introduced.
Madam Speaker, today we have a person with cultural background in the Chair in yourself, and the speaker from Broadview-Greenwood was mentioning the cultural aspects. Indeed in my great riding I have the Stratford Shakespearian Festival. Culture and agriculture seem to go together today, as they always do in my riding.
In this motion that the member for Mackenzie has brought forward he is asking the government to consider the advisability of introducing amendments to the Income Tax Act so that taxpayers whose incomes fluctuate from one year to the next would be able to average their income over five years.
Well, it is a good motion and I can see the rationale for it. But it is similar to the five-year block averaging for
Private Members' Business
farmers and fishermen that was introduced in the Income Tax Act in 1946 and eliminated in 1988 as part of tax reform. Those provisions allowed individuals whose chief source of income was farming or fishing to average income over five year blocks. When income fluctuated significantly from year to year, block averaging reduced the total tax payable over the five-year period. This was particularly applicable to farmers whose income does vary a great deal because of drought, disease, or price fluctuations.
I must say that after the debate yesterday, and in fact after the many discussions we have had across Canada, that the member for Mackenzie, when thinking about averaging income for farmers must be thinking of better times. Because just lately it seems incomes have dropped rather than going up or ever going very high. So perhaps the member's concern is for farmers in the future.
Because I am only going to have a minute and I cannot really talk about the motion too much, I do want to set the record straight on some of the things the member from Regina said. He stood in this House just minutes ago and said how this government had taken away $40 million in benefits from the farmers through the At and East Program, a bill that is still to come before the House.
Well, Madam Speaker, there was a benefit for farmers in the At and East. It was about $8 million as I recall. The other $32 million was filtered off to transportation agencies and other people and not for the farmers- hardly an efficient way to spend government money to help farmers.
He talked as well about the two-price system and how we took $200 million out of the hands of the farmers. We studied that issue, I think, about five years ago. This two-price system, by the way, was first brought in to hurt the farmers because they were getting too much for their wheat and they wanted to have local wheat sold at lower prices. So, over the years it was off and on hurting or helping the farmers. At the end, of course, it was helping farmers but was, in turn, hurting the processing industry who had to compete with pasta made from our wheat shipped back into Canada. So it was helping the farmers, but hurting another sector of the Canadian industiy that really should not be allowed to be hurt.

September 20, 1991
Private Members' Business
Perhaps I could go back to discussing the motion for that minute I have left. I must say that block averaging was used only by 4 per cent of the farmers and fishermen. Hardly crippling, Madam Speaker, which was the way the member for Mackenzie introduced it. I assume it was used by the bigger and better farmers, farmers who would use all of the things associated with registered plans.
I am sure I have now expended my time so thank you for that little bit of time.


Madam Deputy Speaker:: The time provided for the consideration of Private Members' Business has now expired. Pursuant to Standing Order 93, this item is dropped to the bottom of the order of precedence.
It being four o'clock, the House stands adjourned until next Monday at 11 a.m., pursuant to Standing Order 24(1).


[Stage Direction]
The House adjourned at 4 p.m.
[Stage Direction]
Monday, September 23,1991