1991-03-01

[Stage Direction]
The House resumed from Thursday, February 28, consideration of the motion of Mr. Wilson (Etobicoke Centre) that this House approves in general the budgetary policy of the government; and the amendment of Mr. Gray (Windsor West) (p. 17722).
Mr. Lee Clark (Parliamentary Secretary to Minister of the Environment):: Madam Speaker, I would like to express my pleasure that I have an opportunity to rise today to speak on the hon. Minister of Finance's most recent budget, a budget which comes closer to addressing the needs and expressed desires of Canadians than any other budget which I have seen before this House.
There has been one very clear message which I have received as a politician during the course of the last few years, and particularly during the course of the last 12 months. A frequently expressed desire on the part of my constituents, and I believe other Canadians, is that the Government of Canada must show leadership and take the necessary steps to start to address the problem of the national debt and the annual deficit.
Canada's national debt is now reaching the total of some $400 billion. I suspect that many of us live in a world where the magnitude of $400 billion is not entirely clear to us. When you think in terms of $400 billion meaning a debt of some $13,000 or more per capita, I think that figure becomes more comprehensible for us as Canadians.
When I speak to people of all ages, I find a veiy broad consensus on the fact that that the problem of the debt is one which is starting to worry and, in some cases, starting to almost terrify some Canadians.
When I speak to senior citizens or when I am in discussion with grandparents, they often raise the question of the debt and what the implications will be for their grandchildren. In fact, I find that many senior citizens-and I know that their economic circumstances are somewhat at variance with others-are saying: "We are enjoying many benefits today which we have not previously enjoyed in life."
I have had some senior citizens say to me that they are better off in economic terms than they have ever been before in their life. That is not to suggest for a moment that all senior citizens fall into that category.
What they go on to say is the fact that they are concerned for their children, and particularly for their grandchildren.
To some degree, I suppose, their abhorrence of debt is a reflection of the fact that they lived during the 1930s. They were parents during the 1930s and had the responsibility of trying to raise others at a time when there was immense depression in Canada and elsewhere throughout the world.
One of the by-products of the 1930s for many people who lived through it was the determination that they would never ever again become the victim of being in debt because they realized how vulnerable they were in that situation.
I come from western Canada. Part of the tragedy of the 1930s was not only the loss of jobs but the loss of farmland which occurred. A real crisis developed due to the fact that people who were in debt could not meet their obligations.
Their generation, particularly, is dismayed by the policies of government at all levels, which originated in the 1970s and into the 1980s, where we began to spend money which we did not have.
It is ironic that we began to spend money at a time when we did not need to spend money.

March 1, 1991
The Budget
In any event, we have a legacy today, a legacy of debt which we are leaving to future generations, of almost $400 billion. Each of us in this Chamber understands that that figure must continue to grow because of the interest on the debt. We have a situation today where the interest on the accumulated debt is now some $43 billion.
Although we have been able to make progress as a government, since 1984, in having a balance in our favour, in terms of operating costs, that debt, which is a burden, a millstone around the necks of all Canadians, means that the debt continues to grow each year because of the interest on it.
What I see in this budget is a determined effort by the Minister of Finance and his colleagues to address the question of the annual deficit. When that is addressed we will be in a position to address the issue of the national debt itself.
I sense from the reports which I have had from my constituency and conversations which I have had with my constituents that this budget, quite frankly, is being received better than any other budget that we have brought down since we came to power in 1984. One of the reasons for this is that we are focusing less on spending and more on saving.
One of the ironies of being a politician, when you come to meet with your own newspaper people after a budget, is that veiy frequently the question which they ask is: What is in this budget for this constituency? In this case, what is in this budget for Brandon-Souris?
The interesting thing about that question is that there is an implication that no budget can be relevant to my constituency, or perhaps to any other constituency in Canada, unless it is a spending budget which is bringing them dollars from the Government of Canada, i.e. from the people of Canada. The interesting thing this time is that I did not hear that question being asked as frequently as I have in the past. I think there is a very broad consensus, including among the journalists of Canada, that we are at a crisis point and we must continue to save.
A second theme which I heard frequently throughout this year was that the federal government must show leadership and must begin to get its own act in order. I suggest that we have made some progress in that regard.
For example, there are now 12,000 fewer civil service positions than there were in 1984. There are many people in my constituency who are pleased by that, because they believe that government has grown larger than they, as Canadians, can afford.
They have been saying in the province of Manitoba, and certainly in the constituency of Brandon-Souris, that we must show leadership by ensuring that some caps and restraints are put in place on these huge federal-public expenditure programs, of which we are a part.
I believe the decision of the federal government to ensure, for example, that there will be regulations on spending during the course of the next five years, regulations put in place by law, will be well received. I believe that the decision to cap civil service salary increases by 3 per cent will be well received by the majority of my constituents-not by all of my constituents, of course. I believe the fact that the cabinet will take a freeze in salary for the upcoming year will be well received. I believe the fact that the salaries of members of Parliament and senators are to be more tightly constrained will be well received.
I believe that most Canadians will understand that we are in fact trying to place our own house in order and they will understand, therefore, that we can quite rightly turn to the provinces and to other levels of government and encourage them to accept our leadership as well.
Another issue which I heard a great deal about this year was the GST. I have spoken in the House before about a meeting I had in my constituency at which those present indicated in no uncertain fashion their displeasure with the GST.
Having said that, a second part of their message to me then and later was the fact that they would find the GST to be a more tolerable tax if they were certain the revenues would not be used to fund new government programs. They were afraid that any additional revenue that might be derived from the GST would go to create new programs, which has characterized government spending since the beginning of the 1970s.
The fact that GST revenues will be directed toward a deficit reduction fund will be very well received in my constituency. The fact that the resources from privatization will be directed toward such a fund will be well
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received in my constituency. The fact that Canadians, if they wish, can make direct contributions to such a deficit reduction fund will be well received in my constituency. The fact that there may therefore be, once the economy turns around, more revenue from this particular tax than we might have anticipated will also be more acceptable to my constituents because it will be directed specifically toward deficit reduction.
The question of transfer payments is, of course, important to the province of Manitoba as it is to many other provinces. I would like to spend a few moments looking at that, if I may.
I come from a constituency and a province in which we have depended to a very substantial degree on transfer payments. In fact, some recent research which has come to light indicates that Manitobans on a per capita basis have benefited more significantly from the transfer payments and from the federal government's sharing of moneys than have citizens of other provinces, somewhat to the surprise of my own constituents.
It is important to understand that the transfer payments to the province of Manitoba, as they will to many other provinces, will increase with this budget as they have done with previous budgets. Not to the extent that our friends in the provincial government would wish, because they are obviously anxious to receive as much revenue from outside their own jurisdiction as they can. Transfer payments will increase to the province and the Government of Manitoba, according to my calculations, by 3.1 per cent. I think it is important to stress the fact that there will be an increase because there are so many people who talk in terms of "reductions in".
There is an assumption, therefore, when you read only the headline, as many people are inclined to do, that provincial governments, including the government of Manitoba, will be receiving less money in the future than they received in the past. That is not the case. Indeed, they will receive more money in the coming fiscal year than they received in the current or the previous fiscal year.
According to my calculations, Manitobans will receive $1,720 per person in the form of transfer payments from the Government of Canada and that constitutes a very
The Budget
significant part of their budget, somewhere in the vicinity of 37 or 38 per cent, if I recall correctly.
I also want to make it clear that there has been an immense amount of concern in my province, as in other provinces, with respect to the needs of agriculture, and I represent an agricultural constituency. When I say that, I include the city of Brandon in that definition, because certainly the business community in Brandon is exceedingly dependent upon agriculture. We are living in very, very difficult times in the field of agriculture.
As I stand here, I am proud that I can say to my constituents and to this House that support for agriculture has been and continues to be a very obvious priority for the Government of Canada. In fact, our support has increased-


An hon. member:: Nonsense.


Walter Leland Rutherford (Lee) Clark: My hon. friend say it is nonsense. If he will check his statistics he will understand, perhaps, more clearly than he does now that our support for agriculture has increased by some 500 per cent in terms of direct payments to farmers since we came to power in 1984. My constituents understand that, even if my hon. friend who represents the constituency of Kingston and the Islands does not. In this budget there is an additional $1.3 billion for agriculture. At a time when the government is cutting back in other areas, it is continuing to provide more money for agriculture. It may indeed not be enough. There is money in the reserves within the estimates and I would suspect that we as a government will have to make use of some of those reserves to assist with some sort of additional form of assistance to agriculture.
In the meantime, we in this budget are providing the funds necessary to support two exceedingly important agricultural stabilization programs, the program which we know in the west as GRIP and the program which we know in the west as NISA.
Unfortunately, in the province of Manitoba, the government has not yet decided under what circumstances it will participate in the GRIP program and it has indicated that it unfortunately does not believe that it can financially participate in the NISA program. If indeed that is their decision this year, I will regret it but I would hope

March 1, 1991
The Budget
that the government will be able to participate next year; that it will understand the importance of doing so.
There is also in this budget new financial assistance for the disabled. I would like to mention in passing that I am particularly pleased to see that not only because the disabled of Canada have some very special needs that often go unrecognized, but particularly because as I stand in this House today I am conscious of the fact that I am the successor to the Hon. Walter Dinsdale who served this House for some 31 years and who throughout that entire career demonstrated a very strong commitment to the disabled. I know that if he were here today, he would be very pleased to see the provisions in this budget which would help meet the needs of that particular constituency.
I am also conscious of the fact that in this budget there is additional spending, perhaps more additional spending than some of my constituents would prefer. There is additional spending to assist with the needs of the unemployed. We are conscious of the fact that we are in a recession. The newspapers seem to suggest to some degree that this recession is worse in Ontario and perhaps in Quebec than it is in the west. I personally would differ with that on the grounds that the recession came to the west in my mind before it came to the eastern part of Canada. However, things that happen in the west are not always as well noted by the media of Canada, unfortunately. Nevertheless, the reality of the recession is there and there are some provisions to try to assist with that.
I think that the most important theme within this budget is the theme that suggests that we as a government understand that Canada can go only so far down that very slippery road to massive debt. There is also a theme within this budget that if we are to address the problems of that debt, there are no easy ways of doing so.
I think that is worth noting because I am afraid there is a certain inclination with some of my constituents and undoubtedly with other Canadians to assume that there is some sort of easy solution to the reduction of the deficit and to the abolition of the debt. I dare say that any of us, as members of Parliament, or any of those who are watching, could probably create their own wish list of what could be abolished, what programs could be cancelled and where we could save money. I would think that most of us could identify $1 billion in savings that we would gladly put in place.
With human nature being what it is, that $1 billion saving that we would come forth with would probably not include many programs, perhaps not include any programs, which would impact upon us as individuals because there is obviously a human tendency to want to make savings at the expense of someone else, someone perhaps of a different class, someone who works in a different profession, someone who lives in a different city, someone who lives in a different provinces or a different region. The reality as we well know is the fact that we cannot easily reduce the deficit, which will be some $30 billion this year. We cannot do that in such a way that does not impact upon us as individuals.
I am reminded as I speak of certain reductions and savings which we have made in the past. I am reminded, for example, of the fact that we proposed in a previous budget to reduce the subsidies to VIA by some $300 million over an extended period of time. We did that because the required subsidies for VIA were going out of sight; $600 million with the evidence indicating that the subsidies would eventually reach $1 billion per year.
When we did reduce those subsidies we heard very quickly from those who would be directly impacted by it and even from many who had not made use of VIA for a long, long time. One of my most vociferous critics on the question of the reduction of VIA subsidies mentioned to me once in passing that he had not been on the train for seven years. I guess the message there is that if we are going to reduce subsidies to VIA or if we are going to reduce subsidies in any other given program, it is going to impact upon us wherever we live.
There are no easy ways to reduce the deficit. Surely if we are honest with each other we would understand if there were an easy way to reduce the deficit and reduce the national debt, governments would have found it in the past.
What we are asking now in this budget is that Canadians realize first of all that we are committed to the task of deficit reduction and, second, that we are prepared to provide leadership ourselves and, having done so, we can rightly call upon other Canadians to follow in that example.
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This debate and this budget are about more than just the next fiscal year. This budget is about the directions Canada will follow in the next decade. That is why this budget, in my mind, may well be a bell-wether for budgets to come.
What we are saying to the people of Canada is that we currently must take 35 cents out of every dollar of the tax revenues which we receive in order to service the debt. We can no longer afford to do so and we must ask others to join with us in ensuring that this budget in fact is a beginning of what I hope will be a crusade to attack the deficit and eventually to reduce the national debt.


Mr. Jack Iyerak Anawak (Nunatsiaq):: Madam Speaker, I also represent an area, as does the hon. member, that depends largely on transfer payments. He mentioned that there is no easy way to reduce the deficit and I agree.
I would just like to ask the hon. member for Brandon-Souris some questions in terms of how this government is trying to reduce the deficit. Why is it trying to reduce the deficit on the backs of Canadians who may not necessarily have the resources to succeed as much as other Canadians? I am talking about the $100 million which is what I believe has been cut from the Canadian Jobs Strategy, some cuts in the Canada Assistance Program, some cuts in the native programming, or outright elimination of some native programming, cuts in the CBC programming, and cuts in what I consdier a very important area, the environmental green plan, which would have tried to do something about the pollution that is occurring in the north not because it is our fault, but because international forces are creating pollution in the region.
If we are going to be environmentally conscious in the future, I am wondering why we are cutting back on the environmental spending? Those are the questions I would just like to ask, as well as some others about other services that have been cut such as the Postal Services Assistance Program for the north.


Walter Leland Rutherford (Lee) Clark: Madam Speaker, my thanks to the hon. member for his series of questions, because he has introduced several themes that I think are important to address.
The Budget
Perhaps I might begin by dealing with them in reverse order, if I may. He refers to the environment and, I think, if I heard him correctly, he talked about cuts in spending on the environment. The reality is, as the minister indicated in the House yesterday, this government is providing an additional 20 per cent to 25 per cent to the Department of the Environment to be used during the up-coming fiscal year. There is no reduction in spending for the Department of the Environment, in fact it is just the very opposite.
First of all, in the estimates tabled yesterday, there is an increase of 4.7 per cent to the department itself, and there is an additional $250 million being provided under the green plan.
When the hon. member made his comments, I think he was referring to the fact that the green plan is being extended from some five years to six years. That is true, but what is important to understand is that the entire objective of the green plan remains intact. All of the strategy within the green plan remains intact. We will, for example, still plant 325 million trees, but we will plant 325 million trees over six years instead of over five years.
When speaking of the green plan, I think it is important to remember that this is the only government in Canadian history that has ever developed any long-term strategy for the environment. This is the only government in Canadian history that has ever put in place a long-term-in this case now six years-spending program for the environment.
While we might differ on what should be in that program or how rich it should be, the significance in that accomplishment should not be lost by either the House or Canadians in general.
The hon. member refers to the CBC in terms of reductions and spending for the CBC. One of the things that I sometimes discuss with my constituents is the fact that we, as a government, as a country, must have priorities in spending just as we as families must have priorities in spending. None of us in our own family situation or, I suspect, none of us who are members of Parliament at least, can afford to do everything within the family that we would wish to do, nor can we afford to do everything for the family that we would wish to do. Government is really no different than that.

The Budget
I guess what I would say in return to the hon. member is that when the time comes to establish priorities, we must again make some tough decisions, decisions that will not necessarily be popular in all parts of the country, nor are they necessarily the decisions which would be made by each and every Canadian. I look at this budget and I see certain reductions in place.
The hon. member has mentioned the CBC. Let me mention the proposed cultural research centre for the city of Montreal or the proposed expenditure of $88 million on the ballet centre in Toronto, and the cultural centre that was proposed for Edmonton. I can appreciate that each of these proposed programs has merit, and I can appreciate as well how they are important, particularly to the people who would be directly served by them. However, I would also suggest to the hon. member that the vast majority of my constituents, but not all, would place some of these proposed expenditures on a lower priority. They would give them a lower priority than others would. I think they will understand, therefore, how we cannot provide each and every proposal with the kind of dollars they would wish.
With respect to the Canadian Assistance Program, I think it is important to understand that those provinces, such as the province of Manitoba, which receive transfer payments will be as fully funded under CAP as they were in the past. Yes, transfer payments under the EPF, the Established Programs Funding, are frozen, but not under the Canada Assistance Program.
With respect to the Canadian Jobs Strategy, I, for one, am pleased by the innovation which I have seen in the Canadian Jobs Strategy but there are many who were very sceptical of it, including some in my own community who traditionally provided some of these training programs at community colleges.
I think, by and large, the money which has been spent has been useful. For one thing it has provided more flexibility than we have had in the past. So I like the strategy. I also understand that we have not fully utilized some of the moneys in the past so I gather there is some flexibility in that regard.
Finally, with regard to the ability to pay, the question of transfer payments. This is a major issue in my province. I would like to remind the provinces that the government requires 35 cents of every tax dollar to
service the debt. They, on average, only require 12 cents of their revenue dollar to service their debt. Those figures in themselves suggest to me in terms of ability to pay that we have less manoeuvrability and less flexibility because of the debt and the cost of servicing that debt than do our provincial colleagues.
We are not asking them to do anything more than we are willing to do ourselves. But we are asking them to share in the task of dealing with the burden of the national debt because it is a national problem. It is not just a problem of this government. It is not just a problem of this Parliament. It is a problem for all of Canada, and the implications are real and will be severe for those who come after us.
It is easy for politicians to spend money. Normally when we spend money, the people who receive it are pleased, there is publicity, we are doing something, we are bringing something to them. We are at a sad state of affairs if we have reached the point in Canada when the only criteria for accomplishment, when it comes to measuring the history of a government, is the fact that it spent more money than previous governments.
That is not what is being asked of us. What is being asked of us now is that we accept the task of providing leadership, of making difficult decisions, sometimes even unpopular decisions and clearly we suffer as a result in terms of the public opinion polls. It is important to provide that leadership because the decisions which we are making today are not designed simply for our benefit as politicians or for this generation; they are designed for the benefit of future generations.


Mr. Angus:: Madam Speaker, I rise on a point of order to seek the unanimous consent of the House to allow any member who wishes to do so, and who is prepared to announce it at the commencement of his or her speech, to share the time with another member from his or her caucus. That would allow us a ten-minute speech followed by a five-minute question and answer period followed by another ten-minute speech and a five-minute question and answer period for the full 30 minutes.
There has been some informal discussion among the parties. I am not sure if on the government side word has gotten through from the lobby, but I did consult with the officials there, as well as with the Official Opposition. I think you will find there is agreement to do what we
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normally do in matters like this to allow more members to speak.


Madam Deputy Speaker:: This is something that has been done quite often in the midst of major debates.
The House has heard the suggestion of the hon. member. Is there any objection to the possibility of members sharing their 20-minute time?


Some hon. members:: Agreed.


Madam Deputy Speaker:: Agreed. The Chair would appreciate if the lead member would announce it so it would be easier for the Chair to keep note of the time.


Mr. Vic Althouse (Mackenzie):: Madam Speaker, in compliance with your recent announcement, I will be using ten minutes of the time and sharing with another member of my caucus.
I should remind the House that I represent a rural constituency made up of farms, small towns and small cities. It is the kind of constituency that the Conservative Party has traditionally considered itself as speaking for. But, over the past seven or eight years that tradition has fallen apart very sadly.
Now when I go into small towns to meet with chambers of commerce and councils, I find that they are worried about what is happening to their post offices. One of the few federal profiles in each of these communities is the federal post office, now being closed in many communities, shifted over to being privatized or, in some instances, disappearing altogether.
Usually the second federal profile that occurs in my small communities is the RCMP. The federal government at this very moment is busy trying to push off more of the cost of financing the RCMP on to these local municipalities. While most economic analyses show that 30 per cent of what the RCMP do in those rural communities is looking after federal responsibilities, the federal government is saying that is too much for us to bear, let the provinces and the small towns and small cities look after it.
The end result for some of the small cities is that they are placed in an almost impossible situation. They are in the position of hiring a police force of their own of four or five people at a cheaper rate than what the federal
The Budget
government is asking them to pay for the RCMP. Now these people do not want to give up the national police force. They believe in it. They are proud of it. Yet this last symbol of federalism in rural Canada is being pulled away by an off-loading of costs by the federal government.
Last, the thing that all small communities take some pride in is their local weekly newspapers. Canada Post, through a directive from the federal government to show a profit, has now decided that they are going to increase very dramatically the postal rates on those small community newspapers. All of the weekly papers which ship beyond a 40-mile radius have huge increases in postal costs, 10 times, 11 times the amount that they are paying now is being asked. This puts a further burden on holding small communities together, particularly in the prairies where 40 miles is barely the area which they service with the closure of towns and the thinning out of the population.
This budget, when you listen to the government's side, is a budget that has not raised very many taxes, except for a tobacco tax. They claim that there has been no increase in cost to people, that this is a hold the line budget and that this is an effort to reduce expenditures and get at, if not the national debt, certainly the annual deficit.
When you look at what is being put forward, you can readily see that the deficit is really not being cut. It is still at $30.5 billion. It has been hovering around $30 billion for the last seven years. The national debt has increased to in the neighbourhood of $400 billion, which has more than doubled in the period of time that the Conservative Party has held power. However, when you start looking into the budget, you see that there are a lot of extra costs that taxpayers and ordinary people are going to have to bear with the continuation of the program that this government put in place over previous budgets.
I recall David Suzuki, in a different context, trying to explain how the environment was getting into big trouble. He said we are all like the frog that is put into a pan of water and the heat is put under it. It begins to get warm and the frog sits there and becomes so insensitive to the extra heat that eventually it cooks. That is, to some extent, what is happening to people in rural Canada with this increased and continuous pressure from the federal government to put more costs on to them.

March 1, 1991
The Budget
The costs that have been added this year, which are not mentioned in the budget but are there, are the increased amounts of taxes which people will have to pay because of a continuation of deindexing.
In the personal income tax system alone this affects people. Adding up the reduced purchasing power of the family allowance because of the continuation of deindexing, the continuation of the clawback on family allowances and old age security, the reduction in the buying power of the child tax credit maximums and the income thresholds, the reduction of the buying power of the income tax brackets that are established, the reductions in the buying power of the value of the tax credits for personal, age and the married and child credits, we can see that the combined measures of this particular program being continued for this year will cost each family in Canada about $300 per year, an increase in tax revenues of about $1 billion.
As well, we have increases to the unemployment insurance accounts. It is not called a tax increase but it is about a 25 per cent increase in the amount of deductions that will come off working peoples' cheques to pay their share of the unemployment insurance program and employers will pay an equivalent percentage increase. This is in spite of the government having just changed that legislation in recent months to make the unemployment insurance fund self-sustaining, meaning no tax dollars go into it directly. We just collect through levies.
We were assured at that time by the government that the levels that were set in that legislation would remain for at least three years. Less than six months later there is a 25 per cent increase. That comes out of peoples' pockets.
As well there is the off-loading of costs from the federal government to the provincial government. My time only allows me to go into a few of them, but in my province the off-loading of health costs and post-secondary education costs through the Established Programs Financing means that Saskatchewan will lose funding from the federal government of $348 million in health care dollars and $140 million in post-secondary education financing over the next five years. That means there is about $100 extra cost per man, woman and child in Saskatchewan this year. Added to the off-loading of
federal responsibility for farm programs on to the provinces and individuals, the result is a tremendous figure.
Saskatchewan will be participating in the GRIP program. That means their annual charges at the provincial taxpayer level will be about $200 million, which almost quadruples the amount that Saskatchewan spends on agriculture. The bill that the farmer is asked to pay, including increased costs for crop insurance and GRIP, will be somewhere between $1 billion over the next five years for the province and between $1.5 billion and $2 billion over the next five years for producers. Just in additional provincial taxes, if the province wants to maintain the barely adequate service that they now have in health care and post-secondary education, it will cost every man, woman and child in Saskatchewan an additional $300 per year, thanks to the actions of this government in this budget. To say it is not a budget that increases taxes is completely false.
The last thing I would like to refer to, because few people have mentioned it, is the government's bogus effort to control spending. The government is proposing to implement legislation that would limit the amount of spending that it can engage in for each of the next few years. If the government is interested in that, it would recognize that the buck stops there. No one on this side of the House can initiate spending.
No backbencher on the government side of the House can initiate spending. Only the Prime Minister and his inner cabinet can initiate spending, by getting a royal recommendation. If the government wants to control spending, it can be controlled right there. The legislation they are proposing has so many provisos for breaking the rules that essentially it remains the same rule that we have followed for 123 years in this country; namely, that the Prime Minister and his inner cabinet decide when expenditures shall take place. And passing a "no spending" law will not change that.


Ms. Joy Langan (Mission-Coquitlam):: Madam Speaker, I rise to speak on this budget with a comment that will I follow up with what I have to say. This budget is mean spirited, vindictive, and Draconian. In fact, this budget reminds me of a book that I read a number of years ago when I was first entering the workforce, a book called The Iron Heel.
March 1, 1991


An hon. member:: In 1986.


Joy Langan: No, it was a
little longer ago than 1986.
When I read The Iron Heel, I could not believe that in the two countries in North America that I was most familiar with in those early days, Canada and the United States, the kinds of things that happened in that book could in fact happen to working people, to the citizens of our countries. And yet looking at this budget, The Iron Heel is in fact coming down on the necks of the men and women who make this country strong through their work.
This budget continues the Tory attack on social services and renews its attack on the workers of this country. The Liberals gave us six-and-five; this government is giving workers three-and-two. If we remember what happened under six-and-five, I suspect that three-and-two will create even further suffering in this country.
This government has singled out public sector workers in its attack. It has used the threat of legislation to renege on its obligations to bargain with its employees in good faith. This government threatens back to work legislation if workers in the public sector exercise their legal right, and legitimate right, to strike. It threatens workers with lay-off if they negotiate a wage increase.
The effect of this budget on public sector workers is that for every 1 per cent increase they negotiate, they will be faced with a lay-off of 2,000 colleagues. What would be the point in accepting a 1 per cent salary increase in one hand and accepting a pink slip in the other hand? What kind of an option is that at the bargaining table? What kind of a pre-emptive strike has the government introduced at a time when this very week it has arrived at the bargaining table with the Public Service Alliance to negotiate the next round?
This legislation has clearly singled out public sector workers for wage restraint. This government has told public sector workers that they, loyal servants or not of the country, of this government, of all of us, will carry the burden for the terrible economic policies that this government has continually introduced since 1984.
The Budget
It is also important to consider that, in addition to the attack on public sector workers, this government has singled out transfer payments to the provinces for further cuts. This means cuts to those on welfare, cuts to hospitals, and cuts to colleges and universities.
These cuts will mean further lay-offs of health-care workers, of social service workers, of education workers. It will mean reduced services. It will mean increased hardship.
The Tory-made recession has already thrown hundreds of thousands of workers on to the unemployment insurance system and into the social service system. This budget ensures that these workers will suffer more and carry the brunt of the costs of this recession. In fact, Mr. McCracken from the right-wing Informetrica estimates that this budget will cost an additional 68,000 jobs.
The finance minister has made much of the fact that there are no new direct taxes in this budget. What he fails to mention is that the GST has cut into the household budget of Canadians already. What he fails to mention is that increased UI premiums will cost workers more, after a promise during the debate on Bill C-21, the changes to the Unemployment Insurance Act, that there would be no increases.
What he fails to mention is that provincial governments will be forced to recoup shortfalls in transfer payments from individual taxpayers, yet again the very people this government is attacking under this budget.
The minister has forecast double-digit unemployment rates, up to 10 per cent this year and 9.8 per cent next year, yet, there is no money for job creation.
Recent Stats Canada data show an additional inflation rate of 6.8 per cent. This will mean family allowance and old age security payments will decrease in real terms as they are only partially indexed to inflation. Families and seniors will suffer. The threshold for the clawback of these payments will rise, capturing more and more needy Canadians in its claws.
Inflation alone will add $300 to the tax bill of average Canadians-this on top of the GST.
We see cuts to labour adjustment programs, especially those aimed at helping older workers. When a worker in this country is laid off between the age of 45 and 65, the chances of being re-employed at a level that will

March 1, 1991
maintain his or her existing lifestyle, is tremendously diminished. This government had the temerity to cut labour adjustment programs.
We see cuts to the Canadian Jobs Strategy, this only months after the minister for employment made much of the new money being directed for training. There is no new money. It is smoke and mirrors. There is a shift and they are shucking and jiving. There is no new money.
Contrary to what the Minister of Finance said, this budget is not about shared responsibility. It is not about sharing the burden for the recession. Sharing the burden does not mean letting the wealthy off the hook. Sharing the burden does not mean letting big business off the hook. Sharing means fairness and this budget is not about fairness. It is about punishing Canadian families for Tory mismanagement.
The most optimistic of us cannot help but see that this budget is an attempt to break the back of organized labour in the public sector. It directly attacks public sector workers.
Yesterday the President of the Treasury Board announced that his government will be legislating contracting out of public sector jobs. This will mean, in fact, violation of the existing collective agreement. Does this mean that the end of free collective bargaining is happening in the Public Service? Is the minister in fact telling Canadians that this government's signature on a contract means nothing? Has this government become so bankrupt that it has abandoned all principles?
In closing, I would like to say that if the finance minister is truly interested in the bottom line, there is no doubt at all that the bottom line would include an investment in Canadian workers and in their families, the very people who labour to pay for government services, people who are unemployed and want to be part of the growth and redevelopment of this country. They need the tools.


Madam Deputy Speaker:: The hon. member's time has now expired. 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
Mr. Robert D. Nault (Kenora-Rainy River):: Madam Speaker, this morning members of the Liberal caucus met with 20 unions, representing more than half a million workers in the federal and provincial public sectors, to discuss the inane measures announced earlier this week by the finance minister.
The Public Service Alliance of Canada has 140,000 employees out of a total of 165,000 members in a negotiating position with Treasury Board. The Professional Institute of the Public Service has 22,000 employees out of 25,000 members who have been without a contract since before September 1990 and 10,000 of those are employees who are in a legal strike position.
It is quite clear from these figures that this government waited for exactly the right moment to introduce wage controls. The government waited until the majority of its employees were in a negotiating position before attacking. The government took advantage of a vulnerable Public Service and is forcing its workers to fight each other.
It is also clear that this government has one goal in mind and one goal only, the complete dismantling of Public Service unions at the federal level.


CANADIAN ARMED FORCES
Mr. Allan Koury (Hochelaga-Maisonneuve):: Madam Speaker, I wish to thank all those who called and wrote, and all the people I met, who expressed their support for our Canadian troops and the government during the gulf crisis.
Thank you Rosemont, thank you Hochelaga-Maisonneuve!
March 1, 1991


ARTS AND CULTURE
Jack Iyerak Anawak: Madam Speaker, yesterday the government cut $18 million from the cultural sector in Canada. This is a terrible loss. This government does not realize how important the arts are in increasing understanding among Canada's different cultures.
Last night I attended the Ottawa premiere of an outstanding aboriginal play, "Dry Lips Oughta Move to Kapuskasing", written by Tomson Highway, a Cree Indian from Manitoba.
The performance last night was in support of the Canadian Native Arts Foundation. This foundation was established by John Kim Bell, a Mohawk Indian, to assist native youth with artistic talent to achieve their dreams.
I commend the Canadian Native Arts Foundation, Tomson Highway, and all the native actors, including Graham Greene, for a superb performance.
Aboriginal artists are emerging as a major cultural force in this country. I encourage everyone to see this play. It is full of deep spiritual meaning. I urge the government to stop cutting and to assist and support aboriginal languages and cultures.


MINES AND MINING
Mr. Guy Saint-Julien (Abitibi):: Madam Speaker, construction will start this year in Quebec on a new CANMET mining research laboratory, at a cost of $15 million over a period of 5 years. The laboratory, which will have access to the Dorval mine in Val-d'Or, will be used to test mining methods, procedures and equipment.
Thanks to the active involvement of representatives from the mining, economic and political community in the Val-d'Or area, and of course the tremendous work done by Benoit Bouchard, Jake Epp, CANMET officials and the Prime Minister of Canada, this laboratory will open its doors very shortly in Val-d'Or, Quebec.
Madam Speaker, since 1984, I have defended the Abitibi region in Ottawa. That is what Quebec Tory members do in Ottawa. Thank you, Michael Wilson!


THE LATE DR. GUILLERMO UNGO
Mr. Dan Heap (Trinity-Spadina):: Madam Speaker, Dr. Guillermo Ungo, Leader of the National Democratic Revolutionary Party of El Salvador, died February 28 while recuperating from brain surgery in Mexico.
Dr. Ungo, lawyer and academic, spent the sixties helping to organize a democratic socialist movement in which he became a leader in 1968 and formed a coalition with other parliamentary parties for peace and democracy.
After many coalition leaders were massacred in 1980, he travelled the world raising international support for peace and democracy in his homeland. In 1978 he was elected a vice-president of the Socialist International.
In 1988 he returned to El Salvador as presidential candidate of the Democratic Convergence in the March 1989 elections.
Since then, he campaigned for freedom of speech for churches, unions and other community groups in a national dialogue for peace. His party is contesting the mid-term elections in El Salvador on March 10,1991. He is remembered for his motto "It is not possible to be a democrat without being a revolutionary, nor to be a revolutionary without being a democrat".


RESTORATION OF PEACE IN PERSIAN GULF
Mr. Jacques Vien (Laurentides):: Madam Speaker, two days ago President Bush announced that operations in the Persian Gulf had been suspended, a moment we were all looking forward to. We can now expect peace to be restored in that part of the world, and we can only hope it will be a lasting peace. We must never forget that during these recent events, peace was always the primary motive in decisions made by this government. Our basic objective was to restore and maintain peace. I think this

reflects honourably on all Canadians. We shall continue to sursue that goal.


THE ECONOMY
Mr. Reginald Belair (Cochrane-Superior):: Madam Speaker, two weeks ago, the Northern Ontario Liberal caucus held meetings to hear presentations on the economy of the region. No one was surprised as each of the 57 witnesses confirmed this government's dismal handling of the economy. The government has created a "made-in-Canada" recession with its high interest rate policy.
The softwood lumber industry has crumbled. Exports to the U.S. are practically nil. The flow-through shares program was cancelled last year. Mineral exploration is down to 15 per cent from what it was five years ago.
In addition, the budget has cut $100 million from the job-training program. This will affect our youth and our laid-off workers.
Furthermore, the high cost of living that has resulted from the GST means that northern residents will not have that extra cash to invest in their RRSPs anymore.
This budget should have been introduced five years ago when the economy was strong. No, this government has chosen to hurt needy people while leaving their corporate friends unscathed.


THE BUDGET
Mr. Rod Murphy (Churchill):: Madam Speaker, this Conservative budget actually threatens to legislate contracting out.
What does this mean? It means that qualified government employees will see their jobs being given to this government's friends. It will become the worst institutionalized abuse of patronage, kickbacks and money laundering in history. These consultants, who often have no expertise and no experience, will receive their rewards through untendered contracts.
Tory bagmen, candidates, election organizers and contributors will charge the government hundreds of dollars
per day for work that could have been done by qualified regular government employees for a mere fraction of that rate.
In the last seven years, Conservatives have hired thousands of their friends through contracting out.
The Liberals were no better. One untendered contract was given in Manitoba to not one, not two but to three Liberal candidates, one of whom is now a member of this House.
Before the government is allowed to institutionalize and expand upon through legislation the abuses of themselves and the Liberals we need a truly independent report of the experiences of the last decade. Who received contracts?


Madam Deputy Speaker:: I am sorry, but the Hon. member's time has expired. The hon. member for Manicouagan.
 * *


ASSOCIATION DES NORD-COTIERS
Mr. Charles A. Langlois (Manicouagan):: Madam Speaker, I would like to pay special tribute today to a group of men and women on the Lower North Shore in the riding of Manicouagan, who worked very hard during the past three years to set up the Association des Nord-Cotiers.

Three years ago, the Coasters Association was a dream in the mind of a few men and women from the Lower North Shore. This dream became reality during the weekend of February 16 and 17 when over 100 people met in La Thbatiere to adopt the by-laws and elect the first board of directors of the Coasters Association.

The association includes residents of all villages between Kegaska and Blanc-Sablon, and all these villages are represented on the new board.

I want to pay tribute to Denis Murray of St. Augustine who had the dream, to Rita Collier and Randy Jones of La Tabatiere and to Cornelia Maurice of St. Augustine who helped make the dream come true.
March 1, 1991

A word of thanks to the Secretary of State for the counselling and financial support. Special congratulations to Mr. Barry Roberts of St. Paul's River who has been elected as the first chairman and to the members of the new Board of Directors of the Coasters Association-


Madam Deputy Speaker:: I am sorry to interrupt the hon. member but his time has expired.
The hon. member for Nepean.


PUBLIC SERVICE
Mrs. Beryl Gaffney (Nepean):: Madam Speaker, the cynical measures in this government's budget to put a 3 per cent cap on all Public Service wage settlements and to threaten workers with job losses if they complain about it is nothing more than a mean-spirited, vicious assault on all Canadian workers.
By its own actions, this government is telling every employer in Canada that it is acceptable to throw away the right to bargain and it is acceptable to hold over the heads of workers the threats of job losses and contracting out.
If this government can be so cavalier at throwing away such basic, hard-won rights and principles of this nation's workers, will pay equity and equal opportunity be the next to go?
Who will be affected the most by this government's actions? The very members of our work force who are the most vulnerable: women, the disabled and visible minorities. Already their quality of life has been severely eroded by so many of this government's policies and now they are again in the direct line of fire.
This is clearly unacceptable and we, on this side of the House, will not stand for it.


NATIONAL ENERGY BOARD
Mrs. Barbara Sparrow (Calgary Southwest):: Madam Speaker, I want to congratulate the federal government on its announcement last Tbesday night to move the
National Energy Board to Calgary. This is a positive step. It contributes to the goal of effective and efficient government decentralization and it recognizes the source of funds used to finance the National Energy Board's operations.
Some 14 to 15 months ago, I tabled a motion urging this government to make the move and we can now see it is a reality. Calgary is the energy capital of Canada and that is where the Board should be.
I want to acknowledge and say thanks to the Calgary Chamber of Commerce for pursuing the issue. It is now a reality.


TASK FORCE ON CANADIAN UNITY
Hon. Jean Lapierre (Shefford):: Madam Speaker, the Prime Minister is ready to release his Canada Geese. Madam Speaker, $8.1 million has been set aside for a task force on Canadian unity. The referendum season is open. Quite an about-face, for a government that at the time was so critical of the Canadian Unity Information Office and which has now resurrected it in the form of the task force on Canadian unity. Welcome back, Paul Tellier, Richard Dicemey, Dan Gagne! The same faces, the same budgets and the same strategy. How come in 1980, 1981, 1982 it was propaganda, at least according to the Tories, and today, it is information? In 1980, according to the Prime Minister it was Jean Chretien's honey pot, but today, it is money well spent. How come in the eighties it was a slush fund-


Madam Deputy Speaker:: The hon. member's time has now expired. The hon. member for Edmonton East.


FUEL ETHANOL
Mr. Ross Harvey (Edmonton East):: Madam Speaker, last week, at a very important conference on fuel ethanol in Lethbridge, people in western Canada caught a glimpse of the future.
Fuel ethanol is good for farmers because it constitutes a whole new market for their grains. It is good for rural towns because local small-scale ethanol plants can employ 10 to 15 people in each of the rural communities

Oral Questions
hosting them, and can be part of the solution to the municipal solid waste disposal problem.
And fuel ethanol is good for the environment because, unlike every other carbon-based fuel, ethanol recycles carbon already in the biosphere rather than dredging up yet more carbon from underground.
Even the Alberta government's representative at the conference, not an ethanol enthusiast, said that with just a 3 per cent Alberta market penetration by ethanol, farmers could sell another 450,000 tonnes of grain and there would be a net benefit to the Alberta economy of about $7 million.
From virtually every point of view, fuel ethanol makes wonderful sense. It is time-


Madam Deputy Speaker:: The hon. member's time has now expired.


TOBACCO INDUSTRY
Mr. Gaby Larrivee (Joliette):: Madam Speaker, the Minister of Finance has shown he understood the message sent by Canadians to reduce and control government spending and improve management of the Public Service. The Budget brought down on Tuesday contains measures that will promote economic recovery, reduce unemployment, control the debt and when in a period of renewed prosperity.
However, although I have no reservation about spending cuts in general, I must say I do not agree with the excessively high tax increases on tobacco products as proposed in this Budget. I realize this is part of the government's national strategy to fight smoking, but I think moderation would be more palatable to the industry.
In view of these increases, I would urge the government to immediately take appropriate action to help producers who will be severely affected by this decision.


Madam Deputy Speaker:: I am sorry, but the hon. member's time has expired.


JOB RETRAINING
Mr. Jesse Flis (Parkdale-High Park):: Madam Speaker, in my riding of Parkdale-High Park, there are more and more people out of work, both from plant closings and layoffs in the wake of the free trade agreement and the effects of the recession.
My constituents remember hearing the promise of retraining for workers who lose their jobs as a result of the free trade agreement. However, when they go to request that retraining, they are put on a waiting list and told it will be a year or more before they can get any training. Madam Speaker, they are out of work right now. They need to upgrade their skills right now if they are to move from jobs in light manufacturing and industry into the age of computers and technology. They are being left behind because the funds promised by this government are not available. Empty promises do not pay mortgages or feed families of Canadians. Empty promises do not prepare people for career changes in this age of technology. It is time to stop cutting training funds and start honouring the promise of retraining so that Canadians can work their way out of this recession and into the 21st century.



ORAL QUESTION PERIOD


Ms. Sheila Copps (Hamilton East):: Madam Speaker, in the absence of the Prime Minister, my question is directed to the Minister of Finance.
Given his heartless budget this week, what does the minister have to say to the woman who is lined up today at the welfare office because she has no hope? What does he have to say to the child who this very noon will be eating lunch in a soup kitchen? What does the minister have to say to the grandmother whose operation is on hold because the hospital is too crowded? What does he have to say to the young person who will be sleeping in the street tonight because there is no more room at emergency shelters? What do the minister and the Prime Minister have to say to all those Canadians other than "Sorry, we have to fight the recession on your back"?
March 1, 1991


Hon. Michael Wilson (Minister of Finance):: Madam Speaker, I do not think there is anybody in this House who is at all comfortable or happy to hear of the people who are at food banks or who are homeless, who are unemployed, who have lost their jobs or lost their homes. These are things that none of us like to contemplate at all and we are trying to do everything we can to deal with the difficulties that these people have in a variety of programs that are delivered at the federal, the provincial, and in many cases the municipal levels.
I think that my colleague, when she asks a question, is trying to deflect totally the concern of Canadians from the very, very real problem that we have of the debt in this country, and that each one of those Canadians whom my hon. friend refers to has indirectly, through the federal government, a debt of $15,000 that if we do not get under control, we are going to be able to help much less than we can now, because as that debt has mounted over the years, so has the cost of servicing that debt to the point now that 35 cents out of every revenue dollar goes simply to pay the interest on that debt. Those revenues cannot be used to help the homeless, to help the people who are unemployed or to help the people who are losing their jobs or a business.


An hon. member:: You are making it worse.


Michael Holcombe Wilson: My hon. friend says I am making it worse. Where he is quite wrong is that what this budget is precisely designed to do is to get interest rates down to ensure that we get a healthy economy to put those people back to work and to help the businesses create the jobs and the opportunities that will get them back to work.


Sheila Maureen Copps: Madam Speaker, the Minister of Finance referred to the real problem. The real problem is that 200,000 children have to go to food banks to get something to eat. The real problem is that 1.5 million Canadians will not be able to find jobs when the government cuts its job-creation programs. The real problem is that tens of thousands of Canadians have no decent accommodation, and the government has decided to cut funding for subsidized housing. The real problem is that we are facing a crisis in our universal health care system, and the government goes and cuts $1 billion in this area.
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Does the minister realize that by abdicating his responsibility for dealing with the problems the provinces are facing, he is playing right into the hands of people who want to destroy our country? When will he understand the real problem?


Michael Holcombe Wilson: Madam Speaker, I am sure the hon. member would be reluctant to say something she knows is wrong. During Question Period yesterday, in the House of Commons, I explained why the hon. member's statement is wrong.
My hon. friend referred to Tuesday's Budget. I would like to quote from page 89 of the English version, under the heading Cash and tax transfers to other levels of government. These transfers will increase from last year's $36.3 billion to $36.9 billion this year.
So my hon. friend knows perfectly well she is wrong, and the result is to mislead the Canadian people.
She knows that she has a responsibility as acting leader of her party to speak responsibly and honestly to Canadians.


Sheila Maureen Copps: Madam Speaker, the figures speak for themselves. The minister's own estimates tabled yesterday show a cut of more than $1 billion in federal payments for universal health care.
This budget is a separatist's dream. It is a federalist's nightmare.
At a time in the history of our country when the role of the federal government is under attack, the Conservatives are feeding the argument of those who want to tear this country apart. The Tories are doing the job by dismantling our national programs, bit by bit by bit.
Does the minister not understand that Canadians expect a national government to take care of the sick, the homeless and the jobless? Does the minister not understand that while John A. Macdonald was the Father of Confederation, his own Prime Minister has become the father of de-Confederation?


Hon. Perrin Beatty (Minister of National Health and Welfare):: Madam Speaker, the hon. member asks to be taken seriously by Canadians when she demonstrates that she cannot even read the estimates. Transfers to the

Oral Questions
provinces for health care this year will increase by about 1 per cent.
What the hon. member seeks to do is to confuse Canadians by completely ignoring the fact that transfers of tax points at exactly the same cost to the federal government as cash and at exactly the same benefit to the provinces as cash are increasing. She seeks deliberately to ignore that fact.
She talks about the effect on national unity. Yesterday she cited approvingly the comments that were made by her former chief organizer in Quebec, Mr. Cote. As she well knows, Mr. Cote advocates the dismantling of medicare and the destruction of our national health care system. Is that the policy of the national Liberal Party?


Mr. Paul Martin (LaSalle-Emard):: Madam Speaker, in the absence of the Prime Minister my question is directed to the Minister of Finance.
When it signed its recent agreement on immigration with the Province of Quebec, the government said that from now on, constitutional negotiations would be approached as a single unit. In Tuesday's Budget, the government abandoned social policy to the provinces. It started its constitutional negotiations without public consultation. It ignored the advice of its experts.
My question is this: Why? Why do this with a single stroke of the arbitrary pen of the Minister of Finance?


Michael Holcombe Wilson: Madam Speaker, I have had consultations with the provincial finance ministers on an ongoing basis. I indicated to them in both December and January the very serious nature of the fiscal problems of the federal government, and I gave them every indication that there would have to be changes to the transfers to the provinces in this budget. They understand that. They got that message very clearly back in the meeting in January.
My response to the hon. member is that we have had these discussions. We are going to have ongoing discussions with the provinces on the major transfers. We have discussions under way now and have had for about a year now on the changes to the equalization program.
We have also indicated to them our intention of bringing forward specific proposals on changes to the tax arrangements between the federal and provincial levels of government. There has been very, very extensive consultation.


Paul Edgar Philippe Martin: Madam Speaker, this is not simply a financial debate; it is a constitutional debate. It is the same taxpayer. You have not changed the national deficit. You have simply transferred it from one level of government to another, and you have not done a thing.
What this government has done is that it has made exactly the same mistake in the constitutional debate that it made in the free trade agreement. There, desperate for a deal, the government made all kinds of concessions before the real negotiations even started. As a result, this government went to the negotiations with the Americans without any clothes on and got skinned.
Now, here, in the opening shots of the constitutional negotiations, the government has made the same cowardly mistake. It has given up all of the bargaining chips and, in doing so, has fundamentally altered the nature of the country.
My question is: How could this government play so fast and loose with the country? How could it so prejudice the nation without any kind of national consultation, without even the slightest hint of a national debate?


Michael Holcombe Wilson: Madam Speaker, I think my hon. friend has this all wrong. He has to realize that what we are doing in the discussions that we are having with the provinces is not deciding on what powers the provinces should have or what powers the federal government should have. We are addressing a serious fiscal problem which I think, if he had the honesty to address himself, he would agree with me that we do have a serious fiscal problem and must deal with it.
He is saying we have a fiscal problem because of it. If he would be honest with himself and if he would be honest with the Canadian people, he would realize that in the 10 years leading up to 1984, when this government came into office, program spending increased by 13.8 per cent per annum. Since then it is 3.7 per cent per annum. The momentum that was created by that runaway spending of 13.8 per cent per annum created the problems that we are having to deal with today. That runaway spending at that time is taking away the choices that we have today
March 1, 1991

as a government, as Canadian people, and if we do not get the-


Some hon. members:: Order, order.


Hon. Audrey McLaughlin (Yukon):: Madam Speaker, my question is for the Minister of Finance.
Increasingly, as people have had a chance to analyse this budget, they see that it is a budget designed to increase the recession, to deepen the recession, rather than to get people working, to get the poor back to earning a decent standard of living. This budget is clearly on the backs of the poor, the unemployed, and those in our society who have not had a chance. This finance minister is not giving them a chance.
The minister has said that this is a budget about choices. While others have said this will clearly deepen the recession, the choices the minister has chosen to make is to increase funding for Canada's spy agency by $24 million, to increase funding for the Senate by over $5 million, and to increase defence spending by almost a billion dollars. And yet he chose to cut jobs, cut medicare, cut social programs.
I want to ask the Minister of Finance: Will he stop cutting away at the things that help people in this country? Will he do something real for national unity and get Canadians back to work?


Michael Holcombe Wilson: Madam Speaker, the hon. Leader of the New Democratic Party referred to three programs. One of them increased, I think she said, by $20 million, the other by $5 million, and she knows that changing the funding in those programs would have had essentially no impact on the $35 billion deficit that we are looking at.
On the question of funding for defence, yes, we did have a choice.
Our choice was to assist and participate in the fight for freedom. If the hon. Leader of the New Democratic Party is against fighting for freedom then she is in a different camp than we are on this side of the House, and let her stay in that camp because it is a camp that we do not want to be in.


Some hon. members:: Hear, hear.
Oral Questions


Michael Holcombe Wilson: We did have choices. It is three days since the budget, and what I have heard from the New Democratic Party is that the New Democratic Party wants to spend additional amounts of money. As I said to her yesterday, when we open the books on the budget planning for 1991-1992 we are faced with a deficit of $35 billion. What I am hearing from her is that she would be quite comfortable to see that go up to $36 billion, $37 billion, or $38 billion.
Time and again she sat in this House and said: "Get interest rates down". Would she explain to me how moving the deficit from $35 billion up to $37 billion or $38 billion would get interest rates down? Or, would she admit, as I think she should know, that that would cause an increase in interest rates?


Audrey Marlene McLaughlin: Madam Speaker, I have a supplementary question.
There are people who say that there are a lot of dream projections in this budget. The minister is saying that the New Democratic Party has said we want to increase the deficit, that is absolutely wrong.
We are talking about priorities. He says $24 million for the spy agency, no money for the unemployed, and we say that is wrong.

Madam Speaker, my supplementary is directed to the Minister of Finance. About a million and a half Canadians are now unemployed, and analysts say that the Budget will help push this figure even higher. The Canadian Conference of Catholic Bishops commented that some thought should have been given to an approach that would have promoted job creation and a better distribution of wealth.
Why did the government decide against putting anything in the Budget to create jobs?


Michael Holcombe Wilson: Madam Speaker, I believe that my hon. friend, Shirley Carr, the head of the Canadian Labour Congress, and the Catholic bishops have all said that we should get interest rates down.
The Leader of the New Democratic Party has said let us hope that interest rates come down. Hope will not bring interest rates down, but what will bring interest

March 1, 1991
Oral Questions
rates down are actions taken in this budget, which is precisely designed to bring interest rates down.
The limits on spending, the reductions in the deficit, and the inflation targets are all designed to bring down interest rates. If my hon. friend is looking for a way to help the unemployed, if she is looking for ways to help people get off the unemployed list, the best way that we can stimulate the economy is to bring down interest rates, and the fundamental design of this budget is to bring down interest rates, to stimulate the economy, and to generate employment.


Audrey Marlene McLaughlin: Madam Speaker, day after day the minister stands in this House and says that he has to get inflation down to bring interest rates down. Maybe we do not disagree with that.
Then, why, I have to ask the minister, is he bringing in inflationary measures by introducing the GST that he knows caused the inflation rate to go up. He brings in a tax on cigarettes that he knows is inflationary. He increases unemployment insurance premiums that he knows is inflationary for small business and workers who have to pay that extra expense.
In addition and at the same time this finance minister says that he is not destroying the national medicare system. I want to say to him that we know he did not start that destruction-


Madam Deputy Speaker:: I am sure the hon. member will put her question.


Audrey Marlene McLaughlin: Madam Speaker, I want to ask the minister who has said-and the minister of health-that the medicare system is not being destroyed and that the reduction in transfer payments started by the Liberals is not destroying medicare if they will not listen to their own National Council on Welfare that says this federal government's budget can mean the end of medicare. If they will not listen to the people of Canada, will they listen to their own advisory council?


Henry Perrin Beatty: Madam Speaker, I almost could not believe my own ears. Is the hon. member saying on behalf of her party that she opposes the measures taken by the Minister of Finance to reduce by 100,000 the number of teenage smokers in Canada? If that is her policy, let her say so explicitly.
I strongly support that policy, a policy that will save thousands of lives in this country, that will save tens of millions of dollars in our health care budgets. If the NDP believes that taxes should not be increased to discourage young smokers, let it say so.
In so far as the National Council on Welfare is concerned, its responsibility is to argue for more spending on behalf of social programs, and it does that job well.
In this House of Commons, the responsibility of the hon. member and of members on this side is not only to say where we would favour more spending but also where we would get the money from. It is time to come clean with Canadians and for the Leader of the NDP to spell it out.


CITIZENS' FORUM ON CANADA'S FUTURE
Mr. Brian Tobin (Humber-St. Barbe-Baie Verte):: Madam Speaker, my question for to the Minister of Finance.
Regrettably, yesterday the Prime Minister was unable to answer questions regarding allegations that have been made by Mr. Robert Normand, a member of the Spicer Commission.
Given that the Prime Minister and the government have both a moral and legal obligation for the proper operation of the commission, will the Minister of Finance tell the House of Commons today, and through the House the people of Canada, whether or not there is any substance to Mr. Normand's allegation that some commission members may be collecting up to $18,000 a month, improperly?


Hon. Kim Campbell (Minister of Justice and Attorney General of Canada):: Madam Speaker, I think it is veiy important to reiterate that Mr. Normand at no time has suggested that anyone is doing anything fraudulent on the commission. He stated that quite unequivocally.
The hon. member knows very well, as we stated in the House yesterday, that a commission such as the Spicer commission operates independently.
Although it was announced at the beginning of November, the financial requirements for 1991-92 are still under consideration and will be included in the Supplementary Estimates for 1991-92. The financial requirements for this year, 1990-91, will be part of the final
March 1, 1991

Oral Questions
Supplementary Estimates that will be tabled in Parliament shortly, so there will be an opportunity for parliamentary overview.
But I would remind the hon. member that although the commission is independent, it does come under the purview of the Auditor General.


Brian Vincent Tobin: Madam Speaker, the commission was appointed by the Prime Minister and cabinet to do important work; that is, to deal with the question of national unity. This is an important question for Canada. It cannot operate under a cloud raised by an eminent member of the commission, not by the opposition, not by outside parties.
I again ask the Minister of Justice whether or not she understands the importance of clearing the air of this dark cloud that has been raised and put above the commission by a member of the commission. Will she make a full report to Parliament and to Canadians that indeed no member of this commission is being paid $18,000 a month, supposedly picking the brains of Canadians to solve the problem of national unity?
Canadians want to know that these commissioners are doing their job: picking our brains, not picking our pockets.


A. Kim Campbell: Madam Speaker, once again I repeat: the hon. member knows that this is an independent commission. I am sure that if I or any of my colleagues sought to interfere in its activities, the hon. member would be the first on his feet in this House to complain.
I think that if the hon. member wishes to contribute to the clarity of the process and the ability of the commission to make a contribution, he will avoid making statements that put the commission under a cloud. Although the commission is independent, it does not operate at large; it does not operate without any constraints.
We have a process of auditing all of the commissions of Parliament precisely to avoid the kind of thing that the hon. member is talking about. Those proper agencies will do their job to assure the Canadian people that then-money is being properly spent, and that is how it ought to be.


CANADA POST
Mr. Bob Speller (Haldimand-Norfolk):: Madam Speaker, my question is for the minister responsible for Canada Post. As of today postal rates for many weekly newspapers will jump dramatically, some over 1,000 per cent. The minister has made the situation even worse by giving half the papers a three-month reprieve yesterday while throwing the rest to the wolves today. This will wipe out many valuable weekly farming community publications right across this country.
Will the minister assure us in this House today that these ludicrous rate increases will be stopped in their tracks?


Hon. Harvie Andre (Minister of State and Leader of the Government in the House of Commons):: What is ludicrous are the comments made by the hon. member about what is happening.
As was announced some two years ago, the subsidies for publications are being reduced as part of the fiscal management of the government. What was announced yesterday were the rates which will apply for weekly newspapers. There is a 90-day delay for the small town weekly newspapers in terms of its implementation.
There was also, at the same time, an announcement that there would be an additional $2 million of subsidy available for these broader regional weeklies to which I think the hon. member was referring.
The matter is being dealt with sensitively, properly and in an expeditious manner, as is usually the case with this government.


Robert (Bob) Speller: Madam Speaker, half of them are being driven out on the street today. The minister has not addressed the problem.
Does the minister not realize that these weeklies operate on a paper-thin profit margin and any increase in postal rates would close many of them down? The minister has attacked rural post offices and he is now laying siege to rural communication lines. Will the minister tell Canada Post that it can no longer add to its fat profits on the backs of rural Canadians?

Oral Questions


Harvie Andre: The hon. member's use of hyperbole is quite astounding. He is following the example of the deputy leader of his party, I guess.
The continuous program, administered by the Department of Communications for quite a number of years, long before this government came into office, is a program of subsidy to publications in this country. Weekly newspapers, small town newspapers for towns under 10,000 population will continue to have the first 2,500 copies delivered by Canada Post free of charge.
As a result of the adjustments, on average across the country, these small town weekly newspapers will pay in the order of eight or nine cents a copy for delivery. When you compare that to the 40 cents which it costs to deliver a first class letter or a smaller package, I think he will realize that in fact the program is still quite generous, in recognition of the important role of the small town newspapers.
What is needed is understanding by everybody involved. It is not aided by the wild hyperbole, exaggeration and mistruths of the hon. member.


THE BUDGET
Mr. Bill Blaikie (Winnipeg TVanscona):: Madam Speaker, my question is for the Minister of Finance, who continues today to talk about the serious fiscal problems facing the Government of Canada and the need for everybody to contribute.
I want to ask the Minister of Finance why he has not changed the interest deductibility rule. Is he aware that at a recent tax conference in New Zealand, a New Zealand multinational by the name of Fletcher Challenge bragged about setting up in Canada, because Canada was a tax haven, which enabled it to make $128 million in 1989 and pay absolutely no taxes at all, because Canada is a place where it can borrow money to finance its global operations and at the same time avoid taxes. If the Minister of Finance is interested in reducing the deficit, why did he not do something about that and why did he extend that rule in December 1990, rather than getting rid of it?


Michael Holcombe Wilson: Madam Speaker, on the question of interest deductibility, interest is deductible if it is used in borrowing money, if it is paid on borrowed money designed to earn profits for the company that is incurring that deduction. The Fletcher people are taking advantage of a particular tax provision, which is available in many other countries of the world today. It is designed to generate profits here in Canada. Those profits will be fully taxable.


William Alexander (Bill) Blaikie: Madam Speaker, the fact is that it helps them to generate profits all over the world which are not generated in Canada. The only people who are affected are the Canadian taxpayers who end up financing Fletcher Challenge to the tune of millions of dollars.
I want to ask the Minister of Finance, who talks so soberly about sharing the burden, why he refuses to do anything about that kind of rule. Why does he allow the Canadian taxpayers to continue to be pillaged by these multinational corporations. Why, for instance, he is not willing to do anything about the business and entertainment tax loophole, the free lunch loophole which is worth $1 billion in free lunches to the business community-
Why did he not have the nerve to ask them to contribute to reducing the deficit? Why do they continue to get a free lunch?


Michael Holcombe Wilson: Madam Speaker, we did change the business entertainment expense. We brought it into line with what the provision is in other countries, in particular in the United States. My hon. friend can rail away as much as he wants about the provisions in the corporate income tax system.
If he would study the corporate income tax system, he would realize that it is just on the margin of competitiveness in relation to our major trading partner, the United States.
We could raise our taxes. We could eliminate a number of the provisions in the corporate income tax system, but the result would be that companies like Flyer Industries in his riding would move down to Minneapolis. He might feel very good about the change in the income tax system, but he would be the first up on his hind legs in this House saying: "Why are you doing things that are causing companies to leave Canada and move to the United States?"
March 1, 1991

That is precisely why we have to maintain a corporate income tax system that is competitive in this country.


UNEMPLOYMENT INSURANCE
Hon. Warren Allmand (Notre-Dame-de-Grace):: Madam Speaker, my question is for the Minister of Finance.
Last year in passing Bill C-21, the government made a legislative commitment to freeze unemployment insurance premiums for three years. In announcing this freeze, the minister said: "The government will continue to finance any deficits in the unemployment insurance account in difficult times when it may not be appropriate to allow premiums to rise."
That is what the minister said. Why then is the minister now increasing unemployment insurance premiums by $2 billion when we are in a serious recession? He himself says that we are in difficult times. Why is he breaking his word of last year?


Hon. Barbara McDougall (Minister of Employment and Immigration):: Mr. Speaker, the hon. member well knows that under the Unemployment Insurance Act there is a requirement that premiums be established to keep returning the fund to a balanced position.
In other words, if there is a deficit, there is a requirement in the law that premiums increase, and, if there is a surplus, that they go down. When the premiums were established in the last budget, it was done in the expectation and the forecast of what the economy would look like at the time.
Those circumstances have changed. The government will continue to fund the deficit throughout the period. The fund will be in deficit and the government will cany it. In order to bring it back to balance, otherwise premiums will have to increase faster. If we did not increase premiums now, they would have to go to $4 or $5 at the end of the period to cover that deficit.


William Warren Allmand: Madam Speaker, the fact is that in 1990 the Minister of Finance made a commitment to freeze unemployment insurance premiums for three years.
Oral Questions
The minister said in his budget that in hard times, he would cover deficits out of general revenue. That is what he said, and now he is making a $2 billion flip-flop.
Let me have this answer, Madam Speaker. Was the minister totally incompetent when he made that legislative commitment last year, or was he simply lying to the Canadian people?


Barbara Jean McDougall: Mr. Speaker, I certainly think that the question is an offensive one.
It is certainly offensive because we are continuing to carry the fund while it is in deficit. I would remind the hon. member that it was his party which delayed this whole project well beyond where it might have been providing some better use during the recession.
He also knows that we are going to continue to carry the fund while it is in deficit.


THE BUDGET
Ms. Mary Clancy (Halifax):: Madam Speaker, Canada's cultural community is already singing the "Bye Bye Blues" with the Wilson budget cuts and delays of $197 million.
Will the Minister of Communications walk over to his friend, the Minister of Finance, as he carves up grants and contributions, and tell him that at a time of strained national unity, this government should be strengthening the ties that bind us rather than following a search and destroy mission against Canadian culture.


Hon. Marcel Masse (Minister of Communications):: Madam Speaker, the government is very much aware of the importance of cultural activities in Canada, and that is why it has made available to government agencies and the Department of Communications the kind of funding we need-which compares favourably with other activity sectors-to define policy and be present in all cultural areas in this country.

March 1, 1991
Oral Questions


Mary Catherine Clancy: Madam Speaker, it is a sad day when the Minister of Communications becomes the minister of vacation and is not around to defend Canada's cultural community.
In the same vein, funding to women's research groups has not been restored and small group funding has sustained a $75 million cut this year alone.
Will the Minister of Finance admit that research and community development is at least half of the equality battle-if he cares-and refuse to strangle these groups and their work for women any longer?


Marcel Masse: Madam Speaker, the government has added $8 million this year to the Canada Council, for the arts.
Furthermore, the government is also actively involved in our cultural industries because the market situation in Canada is a difficult one. In addition to investing in these agencies, the govemement must also ensure that our cultural industries develop as they should, in order to support our cultural market. It is with this in mind, Madam Speaker, that the government has tried to provide for a fair distribution of programs and grants between these agencies and the Department of Communications.



Mr. Steven W. Langdon (Essex-Windsor):: Madam Speaker, my question is directed to the Minister of Finance. He has just responded to my colleague from Winnipeg by suggesting that we have to keep our tax system in this country somehow competitive with other countries and that justifies the very gross loopholes which exist in our tax system.
Let me ask the Minister of Finance this. The United States, which is our major trading partner, has a minimum corporate tax. It has just put into effect a luxury tax. It has an inheritance tax. All of these are things which we do not have in this country. Let me ask this minister why he is not prepared to put these kinds of fair
measures into the tax system to help Canadians and to give the ordinary person a tax break?


Michael Holcombe Wilson: Madam Speaker, I want to ask my hon. friend whether the United States has a large corporations tax. I want to ask my friend whether the United States has as high a capital gains tax rate in that country as we do? We have a higher burden on corporations than the United States. What one has to look at is the bottom line on the corporate tax system.
As I said to his colleague from Winnipeg, we can have a good time feeling warm all over by hammering the corporations and raising the tax rates, but the people who live in his community would find that the jobs would not be there. They would have to go across the border to Detroit and get jobs in Detroit because the businesses would not be able to support the same type of activity in Windsor as they could working across the way in Detroit.
His community is fortunate because people can go across the river, but people who live in other communities are not be so fortunate. It is for that reason we must have a corporate income tax system which is not just somehow competitive but actually competitive, to ensure that we retain jobs here in Canada and not export them to the United States.


Steven W. Langdon: Madam Speaker, the Minister of Finance cannot have it both ways. He cannot say we have to be competitive and so we have to keep our tax system in line with other countries and, when we point out to him the tax system in the United States has these various mechanisms which in fact hit higher income people and large corporations, he says: "Oh well, we cannot do that".
Why is the Minister of Finance prepared to use the excuse of the United States when it is to his benefit? Why is he not prepared to use the example of the United States to put fairness into our tax system as it should be?


Michael Holcombe Wilson: Madam Speaker, the only point that I was making is that the United States has a very complex corporate minimum tax and, rather than have that corporate minimum tax which adds a lot of complexity to the tax system, we have the large corporations tax which is very simple and has the same sort of impact. That was the only point that I was making.
March 1, 1991

Now the hon. member refers to fairness in taxation on individuals. If he would refer to a study that has been recently completed by the Organization of Economic Co-operation, the OECD in Paris, it shows that the Canadian tax system for the average worker is a fair tax system, that the take home pay after taxes for Canadian workers is on the high end of the range.
He will also be aware, I am sure, of a study that was done by Price Waterhouse comparing the tax system for upper income people in Canada and the United States. It indicates that the tax burden on upper income people in Canada is considerably greater than the tax system in the United States.


FORESTRY
Guy St-Julien: My question is directed to the Minister of Forestry. For many months, the Canadian government has tried to conclude a Canada-Quebec agreement on the forestry sector, and we all know that the federal Department of Forestry is prepared to inject $100 million to help forestry workers in Quebec this year. The question is this: Could the minister inform the House today whether he is pursuing his talks with Quebec for the purpose of concluding an agreement on the Quebec forestry sector, because forestry workers in Abitibi-Temiscamingue are sick and tired of waiting for the province to make up its mind?


Hon. Frank Oberle (Minister of Forestry):: Madam Speaker, my discussions with my counterpart in the province of Quebec are ongoing. They are progressing toward a new agreement that would respect both the objectives of the province of Quebec as well as certain legitimate national objectives.
Keeping in mind that the provinces, of course, own and have the principal responsibility for the management of the resource, we have a number of serious national objectives which we are attempting to pursue. A few of those are the stabilization of private woodlots in the provinces, research, environmental questions and general labour and manpower questions.
I made an offer to the province of Quebec on August 24 and I am hoping to have an agreement completed within the not too distant future.
Oral Questions PUBLIC SERVICE


Mr. Eugene Bellemare (Carleton-Gloucester):: Madam Speaker, at a time when the unemployment rate and the welfare rolls are skyrocketing, the Minister of Finance, who has predicted a 10 per cent unemployment rate, has now frozen public servant wages, including those of the armed services whom the government has just congratulated for a job well done.
This government has declared open season on public servants across Canada, be they federal, provincial, municipal or school board employees. All public servants will be affected by this Tory budget. How can the Minister of Finance stand in this House and say that by gouging one group, the public servants of Canada, he is correcting the economic difficulties caused by his own incompetence.


Harvie Andre: Does Sheila write everybody's question?


Michael Holcombe Wilson: In this budget we are not attempting to gouge anybody. What we are putting forward in a very clear way is an assessment of the problems of this country. We have a serious fiscal problem. We are asking the employees as well as members of Parliament and ministers to participate in the solution of this major fiscal problem. We have asked the public servants to be a part of that and recognize that their position in the country as a group which provides some leadership, some direction for the over all country can help in getting the costs of the Public Service down.
What I hear time and again from private sector people is the costs of government are getting too high. Provincial governments and municipal governments have been entering into wage settlements in the past couple of years two and three percentage points higher than the rate of inflation. If what we do in Ottawa can help them bring their level of increase down to a level that is more consistent with what the private sector can afford, then the economy of this country is going to be better off for it. We will become more competitive. There will be more job opportunities or more business opportunities, and that is going to be a very important element in getting the economy going again and creating the revenues that pay our public servants.

Tributes


Mr. Speaker:: It is my unhappy duty to advise the House that we will be hearing tributes to a former colleague.
I will call first on the hon. member for Calgary Southwest.


THE LATE PETER C. BAWDEN
Barbara Jane (Bobbie) Sparrow: Mr. Speaker, I rise today to pay a very special tribute to a long time friend, a colleague of this House who passed away last evening, Peter C. Bawden.
Peter was bom and raised in Toronto and moved to Alberta in the very early 1950s where he pioneered the oil well drilling business. Bawden Drilling was formed about 1952, and as the company grew and expanded and became more specialized, its drilling rigs could be found operating in Alberta, British Columbia, Saskatchewan, Manitoba, Sable Island, the far northern Arctic, Winter Harbour on Melville Island, the United States, California, Central and South America, Australia, Indonesia, Iran, and the North Sea, all operating with onshore and offshore facilities.
Safety was always one of Peter's goals; to make sure the men who operated the equipment were well informed, well protected and well trained. He started in the very beginning always having a drilling safety supervisor who worked the rigs, ensuring that peoples lives came first.
He loved sports. He was involved in the aviation industry. Peter was everywhere. He served on many boards, various charities and at the University of Calgary. He gave so much of his life to his community of Calgary, to the province of Alberta and, indeed, to all of Canada.
Peter Bawden served in this House as a Conservative member of Parliament from 1972 to 1979, working in so many ways, always for a better Canada. It was just over a year ago when Peter received the Order of Canada, recognizing his givings, his talents, his accomplishments and his contributions.
All of us here today regret the loss of a dear colleague and extend our very deepest sympathy to his wife Margaret and to his children; Jennifer, David, John, Valerie, Kate and Louise.
I thank you, and God bless Peter.


Mr. Marcel Prud'homme (Saint-Denis):: Mr. Speaker, we are all very saddened to hear of the untimely passing of Peter Colwell Bawden, internationally known in the petroleum industry, a very highly successful businessman. Those of us who served with him saw how well he represented his constituents.
I was surprised when he decided to retire in 1979, having been elected in 1972 and successfully re-elected in 1974. I had the privilege of knowing him very well. I repeat again, we were all very surprised when he decided not to run in 1979. May I say we were all disappointed when he announced his decision that he would rather concentrate all his activity on his highly well known business enterprise where he was so successful.
What we remember of him is that he always conducted himself as a perfect gentleman, a very highly sensitive person. These are times to reflect on these great qualities that Peter Colwell Bawden represented so well.
Our leader has asked me, on behalf of our party, to extend our very sincere sympathy to his wife, whom some of us knew very well, and to his children.


Mr. Lome Nystrom (Yorkton-Melville):: Mr. Speaker, it is a real shock to hear of the passing of Peter Bawden. I knew Peter very, very well. Peter was one of those members of Parliament who was well liked on all sides of the House, who was well known on all sides of the House.
One of the things that struck me about Peter was that after he left this place, he still kept in touch with a number of us who were his friends during the days that he was a member of Parliament representing the city of Calgary.
Peter brought to the House of Commons expert knowledge in the field of energy, in the field of business and a real concern for his community of Calgary, a concern about sports and a concern about education. He was recognized by his country, as my friend from Calgary has just said, when he received the Order of Canada just a short while ago.
He will be missed by all of us. On behalf of my party and myself, I want to extend our sincere condolences to his wife, to his family and to his many, many friends not just in the city of Calgary, but indeed right across this country.
March 1, 1991


Harvie Andre: Mr. Speaker, I just want to add on behalf of the government a couple of words about Peter Bawden who, as the member for Yorkton-Melville has just commented, even though he left this House in 1979 to devote full time to his business, did keep in touch. I can say personally, as a good, close friend of Peter and Margaret, that of all the friends and associates he had around the world-and he had them around the world because of his business interests-and across the country, none he valued more than the associations he made here in this House. It was for that reason he kept in such close touch.
It is tragic that he died at this very early age. My wife and I had the pleasure of spending a couple of days with Peter and Margaret just after the new year. Even then, in the late stages of his illness he had that tremendous interest in what was going on, constantly probing, asking and suggesting. It was part of his character to be terrifically interested in what was happening to this country, what was happening on the political scene, to be vitally concerned about it and doing what he could right up to the very end to try to make things better. We will all miss him.


Hon. Jake Epp (Minister of Energy, Mines and Resources):: Mr. Speaker, just a word or two for those of us who are involved in the energy portfolio. Peter Bawden not only was a pioneer in that industry, but remained an adviser to me almost to the end.
Peter had a very great sense of life. I remember not only being elected in 1972 with Peter, but in 1973 the government convened the Western Economic Opportunities Conference in Calgary. Peter had just been newly elected and I remember our attendance at that conference. Peter saw us on one of the major access roads into Calgary. He stopped his vehicle, backed up the wrong way in traffic and invited us to the conference. That was Peter in a very direct and human way. While we were partisans here, he was a friend to all of us outside of the House.
Just a last point, Peter exemplified in the oil industry possibly the very pioneering spirit that has marked that industry. He came from a background that was not at all the derring-do of the industry and the men and women who were its pioneers. Peter exemplified that. When I became minister of energy, he only had words of support
Routine Proceedings
and advice and it is that advice that all of us will miss.


POINT OF ORDER
Jean-C. Lapierre: Mr. Speaker, I have to rise on a point of order because I am under the impression that circumstances in the House are such that my colleagues and I cannot properly discharge our responsibilities.
We had a number of issues to raise this week. For instance I see the Secretary of State and I can think of a number of questions about his new Canadian unity information centre. We had questions to ask about the Spicer Commission. Mr. Speaker, this week we were recognized for only one question. That is not fair and equitable distribution, and I draw that to your attention because, quite frankly, it prevents us from properly performing our duties. I would suggest that the purpose of the House is not to prevent members from asking questions. Our members have been in attendance throughout the week, quite prepared to work, but unfortunately we have not been recognized in accordance with our numerical representation.


Mr. Speaker:: I have listened carefully to the hon. member and I will consider his remarks. I would hope that on balance over the past and even to the present a statistical examination of questions of members recognized and questions asked would show that all members of the House are being fairly treated.
I will consider the hon. member's comments.



ROUTINE PROCEEDINGS


A. Kim Campbell: Madam Speaker, according to Standing Order 109, I have the honour of tabling the governmental response, in both official languages, to the

March 1, 1991
Routine Proceedings
fourth report of the Standing Committee on Justice and the Solicitor General on prostitution and soliciting.


JUSTICE
A. Kim Campbell: Madam Speaker, I would also like to table according to Standing Order 32(2) the annual report of the Department of Justice for 1989-90, in both official languages.


CANADIAN MULTICULTURALISM ACT
Hon. Gerry Weiner (Secretary of State of Canada and Minister of State (Multiculturalism and Citizenship)):: Madam Speaker, I am very pleased to table today, in both official languages, the second annual report to Parliament on the operation of the Canadian Multiculturalism Act.

The report I am tabling pursuant to section 8 of the Canadian Multiculturalism Act relates to the 1989-90 fiscal year.
[Editor's note: For above report see today's Votes and Proceedings.]


RECYCLING ACT
Mr. Peter Milliken (Kingston and the Islands) moved: for leave to introduce Bill C-348, an act respecting the recycling of refillable containers.
He said: Madam Speaker, I am pleased to introduce this recycling bill. I am sure the Minister of Transport will want to support the bill. I see him chuckling on the other side.
This is an important matter because it concerns the environment of Canada, which we all want to clean up. This bill provides that a person selling or offering for sale any beverage that is in a container made of glass, plastic or metal will be required to charge a deposit on the sale
of such a receptacle. The rates for the deposit are set out in the bill, and they vary depending on the size of the container.
The purpose of the bill is to ensure that such containers will be returned so that the deposit can be repaid to the purchaser. I believe that the institution of such a practice will lead to a tremendous clean-up of Canada's environment because fewer bottles, cans and plastic containers will be discarded at the roadside.
I am optimistic that that will be the case. I hope all hon. members will support the bill if it should be selected for debate.


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

Charles A. Langlois: Madam Speaker, I have the honour to present two petitions today. The first comes from a group of residents of Riviere Saint-Jean and Magpie in the riding of Manicouagan who ask that Parliament make representations to the CBC management and take all measures required to re-open and maintain services at the CBST television station on the North Shore.


Charles A. Langlois: Madam Speaker, the second petition originates from a group of citizens of the Montreal region, specifically from the West Island, who urge the government to pass legislation or regulations to amend the food and drugs regulations with a view to making it mandatory for restaurant operators, manufacturers and retail merchants to list ingredients and other additives in prepackaged food.


QUESTIONS ON THE ORDER PAPER
Mr. Ross Reid (Parliamentary Secretary to Minister of Fisheries and Oceans):: Madam Speaker, I ask that all questions be allowed to stand.


Peter Andrew Stewart Milliken: On a point of order, Madam Speaker.
March 1, 1991


Ian Angus Ross Reid: Oh God, don't do this to me.


Peter Andrew Stewart Milliken: I sympathize with the parliamentary secretary and his appeals to the Almighty.
I am not trying to badger him particularly, but I have had a question on the Order Paper since November 26, 1990. I asked that the answer be given both orally and within 45 days.
This is now March 1. The government has had all of December, January and February. I realize February is a short month, but three months and four or five days are enough for very simple questions which ask about the cost of three royal commissions is a lot of time.
It cannot be a difficult question for the government to answer. I sympathize with the hon. member for St. John's East who I realize is filling in for the usual channels today, but perhaps he could raise it with his colleagues on bended knee and see if he could not solicit some kind of answer from the government so that I could receive a response to this very important question that Canadians are most interested in.


Ian Angus Ross Reid: Madam Speaker, I would like to assure my colleague that if my plea for assistance is answered, his will be also. I will pursue the matter with my colleagues. I know that they are anxious to co-operate with our friends across the way, as I know they are fully anxious to co-operate with us. I will raise it with my colleague, the parliamentary secretary.


Madam Deputy Speaker:: After these words, I am sure that all will agree that all questions will stand.


Some hon. members:: Agreed.



GOVERNMENT ORDERS


[Stage Direction]
The House resumed consideration of the motion of Mr. Wilson (Etobicoke Centre) that this House approves in general the budgetary polity of the government; and the amendment of Mr. Gray (p. 17722).
The Budget
Madam Deputy Speaker:: We are now starting the five-minute period of questions and comments following the speech by the hon. member for Mission-Coquitlam.


Rodney Edward Murphy: Madam Speaker, on questions and comments, the member who spoke on behalf of the New Democratic Party is the labour critic of our caucus.
I was spokesperson of our caucus when the Liberals introduced their legislation in the mid-1980s when they broke the collective agreements that the government itself had signed with the Public Service of Canada.
I know the hardship and the bad feelings that existed among the Public Service at that time, the time of the six and five legislation. I wonder how our critic views the threats that were in the throne speech where the government said, for example, that it was going to negotiate the right to contract out with the Public Service, but, in the very next sentence of the throne speech: "-and if we do not get our way we are going to legislate our way".
The whole idea of collective bargaining is that the two sides come together and try to resolve their differences. I wonder how our member feels about the threat that the government makes when the government says that it does not matter whether it negotiates or not because it is going to get its way through legislation. This is just like the Liberals who actually broke the collective agreements that they themselves had signed with the Public Service.
We now have a new government, the Conservative government, saying it will negotiate but if it does not get its way it is going to legislate. I wonder how the member feels about that.


Joy Langan: Madam Speaker, one of the hon. members across the way said "disappointed". Outraged, I think, would be a more appropriate term.
This government has not just threatened the public sector with legislation, this government has guaranteed in its budget that it will legislate the public sector workers. In doing that, it has threatened private sector workers that they will be next. Because what will automatically happen is that pressure will be on to

March 1, 1991
The Budget
reduce and tighten the screws on workers in other sectors while profits continue not to be controlled.
We will then have our well-educated, dedicated, hard-working Canadian workers creating a Maquiladora north with the low wages and poverty, and the rich collecting large profits.
This is is not short-term. This is a long-term plan to ensure that Canadian workers and their families suffer under the kind of government this government is offering us.


Mr. Brian L. Gardiner (Prince George-Bulkley Valley):: Madam Speaker, I would like to ask a question of the member for Mission-Coquitlam about her excellent comments about this government's budget and, in particular, the reference in her speech to the concerns across the country now, particularly in our home province of British Columbia, about transfer payments to the provinces.
The member will know well that when the Liberals were in office part of their six and five program was the lifting of the requirement that federal funds for post-secondary education and health were required to be spent in that area.
We have the premier of British Columbia, Mr. Vander Zalm, a former Liberal himself, and the Liberal Party now and we are not sure if that is still their position.
My question to the member is, what does she think about that proposal? Would she support a measure that would ensure that federal funds on health and education are, in fact, spent on health and education in the provinces?


Joy Langan: Madam Speaker, I would like to thank my colleague who asked the question.
One of the serious flaws in this government's policy of cutting back on transfer payments is that while the national standards that the government sets and this Parliament sets regarding how health care and education should be delivered in the provinces is already being eroded under this kind of budgetary plan. With fewer and fewer dollars going to the provinces, there will be less and less control on maintenance of national standards.
In my constituency of Mission-Coquitlam, nurses have been laid off just recently and health care workers in the hospital there cannot keep up with the numbers of
people who are seeking health care. Nurses are being laid off, and that was before the budget.
This government, if it indeed takes its responsibilities for health care and education seriously, has to maintain the position that it imposed and ensured that national standards are maintained. This government must, very much, rethink its policies.


Hon. Doug Lewis (Minister of TVansport):: Madam Speaker, I am quite pleased to have an opportunity to join today in this budget debate. Before I get started, I would like to congratulate the Minister of Finance who has done a masterful job of steering the economy in the right direction despite the constraints he is faced with as a result of years of mismanagement by the previous administration-17 years at least.
I am not the only one who says this. The Hon. Frank McKenna, the premier of New Brunswick, pointed it out in a speech last week. He said: "The Liberal governments of the 1960s and the 1970s and up to 1984 had abandoned their principles by spending beyond their limits and creating a massive deficit, in effect a mortgage on the future of Canada".
The policies of the Liberals in the 1960s and 1970s undermined our long-term ability to be productive and in 1984 we decided to change the course.
In our first year of government, we established an agenda for economic renewal which outlined the competitive challenge which was faced by Canada. Subsequently we have worked to provide a better framework for restoring productivity growth.
I think it is fair to say that Canadians are increasingly concerned about our ability to compete. What we have tried to do in this budget is re-establish once again the foundation to enable us to compete through the 1990s.
We feel that governments have a responsibility to create an environment that encourages the growth of competitive enterprise. What we have done in the 1991 budget is set out a plan for economic recovery, actions which will restore our fiscal balance and move toward price stability.
There is a great deal more that has to be done to ensure our future prosperity, but if we can boost our productivity growth then our prosperity will be ensured for forthcoming generations.
March 1, 1991

This is not something that can be done just by governments. We need the assistance of the private sector. We have to create an atmosphere and opportunities for the private sector and we have to try to maximize our productivity growth.
We need to examine the quality of our investments in infrastructure, machinery, and equipment, training, education, research and development, and private sector spending on training and research. That is not just an issue for government. It is an issue for business and for labour as well.
All of us can help to strengthen our competitive ability by identifying problems and developing solutions. We intend as a government to launch a national effort to build a partnership for prosperity that draws fully on the talents and efforts of Canadians in every sector of economic life.
In my capacity as Minister of Transport, I would like to take a minute within the context of the budget debate to describe some of the initiatives which we are taking at Transport Canada to face the challenges of tomorrow.
We are working in partnership with the private sector, in communities across Canada, to try and find those solutions. First, in airport devolution. We have taken some firm steps toward the management of Canada's auports. Our policy on the transfer of airports to local airport authorities allows the communities to have a greater say in the business of their airports.
What we are trying to do through the creation of these local airport authorities is serve the interests of the communities, enhance regional economic development potential, and permit our national airport system to operate in a more cost-effective and commercial manner. It will create, we feel, a new spirit of competition among airports and thus the communities of Canada.
When I was in the United States a couple of weeks ago talking with some financial analysts, they told us that over the past ten years they have gotten away from the airport, non-aviation side, being run by engineers and accountants and more and more they are run by people with marketing experience. I think we are going to see in Canada, through the devolution of these airports, economic opportunities open up for us.
The Budget
We have reached an agreement in principle with the Edmonton Regional Airport Authority. We are negotiating with Vancouver, Calgary and Montreal and we expect that in the course of this year we will finalize those negotiations. As well, there are several other communities that have expressed interest in this type of airport operation.
This, I would suggest, is an indication of the government's commitment to provide for sound and representative economic management, as well as ensure competitiveness in the transportation system.
When I got this job the Prime Minister said to me: "Lewis, I want you to fix Pearson". I set about trying to continue the work done by previous Ministers of Transport to expand this wonderful facility as much as possible. As everybody knows, Pearson is the cornerstone of our aviation system and as a result of years of neglect, the infrastructure at Lester B. Pearson International Airport is showing. We have made a commitment to fix Pearson and to make it a world class facility. As the House knows, it is the hub of Canada's aviation system, the third largest gateway to North America. It is big business.
It is big business in this way: I do not think Canadians realize what an economic engine Pearson and other airports can be. Pearson directly and indirectly employs
60,000	people; 14,000 people go to work at Pearson every day. It brings in $630 million in taxes to three levels of government and $4 billion in business revenue. The economic impact of Pearson and other airports across the country is tremendous.
But at Pearson we had a difficulty. We had a facility built for eight million passengers a year accommodating 21 million passengers a year. We went to the private sector with Terminal 3. We opened it last week, increasing our capacity by 40 per cent. We feel this is a milestone in Canada's aviation system, because it was built at no cost to the taxpayer. It is owned by the private sector. It is proof that we can have a partnership between government and the private sector that can bring benefits to the country.
I would suggest that Canadians are going to be boasting about Pearson International Airport around the world and visitors from around the world are going to be envious.

March 1, 1991
The Budget
At the same time, we are improving Terminals 1 and 2. A $40 million extension to the international wing of Terminal 2 was opened in December; which provides new gates for wide-body aircraft. We have increased the customs capacity at the terminal. We opened the first phase of a $52 million package of improvements to Terminal 2's domestic wing in January. The second phase we expect will be finished later this year. We have opened it up with windows, skylights and moving sidewalks, and have improved the baggage handling facility.


An hon. member:: State of the art.


Philip Derek Lewis: I think it is. It is state of the art now and we have more improvements we want to make.
As well, we have announced that we intend to go to the private sector to participate in the further modernization of the two terminals.
We have an Environmental Assessment Review Panel under way to see what new runway capacity we can add to Pearson. That work is well under way and we expect the results of that sometime later this year.
People might ask, why am I emphasizing Pearson? I am emphasizing it because 60 per cent of our aviation traffic travels through Pearson one way or another, is affected by Pearson in any one day. Modem facilities at Pearson are essential to the economic and social development of metro Toronto, the surrounding communities in southern Ontario and, in fact, all of Canada.
On the international scene, we are working to improve an air agreement with the United States that, quite frankly, is archaic and restrictive. We want an air agreement that will bring to Canadians the benefits of a competitive air transportation network that is responsive to market demands and new opportunities. We want an agreement that will enable our business people to do business in the United States. We want an agreement that is going to get Canadians out of the airport lounges and into their customers' boardrooms to sell the products and the services which Canadians provide so well.
When I became Minister of Transport, as I travelled around this country, community after community-Halifax, Kelowna, Moncton, Calgary, Montreal, Thunder Bay-all said: "Look, we need a new agreement", and they know that if we are going to put this recession
behind us, we have to get into the United States to sell our products.
We realize that these are difficult times for Canadian airlines, but that is no different than anywhere else in the world. Carriers all around the world are encountering difficulties. But we have confidence in the Canadian airline industry and are confident that, given the right environment, given a level playing field, Canadians can compete with anybody. We are looking for an agreement that responds to market forces and demands which allow the carriers of both countries to take advantage of new market opportunities and a regime that is as expansive as possible.
We want better services for the communities of Canada, better services for the consumers of Canada and better opportunities for Canadian airlines. We are under way on that and I am quite optimistic that we can negotiate a better deal, a better deal for our Canadian carriers, consumers and communities.
I should not spend all my time on the aviation side of things. I have come to realize, although it might be said I am an individual with not much maritime exposure, the importance of shipping to all Canadians. I thought I might get some applause from that. That is a bit of a conflict of interest there.
But I realize that the financial stability of the marine industry is important to us. I realize that marine issues are just as important if you are trying to ship grain out of Saskatchewan as if you are in one of the ports. We are spending time on that because our ships move wheat from Saskatchewan. They move iron ore from Quebec, potash from Saskatchewan, steel from Ontario and petrochemicals from Alberta, and so we have paid some attention to marine policy.
There are two things I would like to talk about today, one of which is our efforts to try to achieve greater delegation of authority for the port system of Canada. Ports Canada, as the House will know, administers the major commercial ports and some local port corporations. This is a Crown corporation which has been quite profitable over the past four years and it has returned some $250 million worth of dividends to the Government of Canada.
We want to enable the ports to mature and be competitive. We are going to delegate it more authority
March 1, 1991

so that they have the opportunity to expand their operations and be competitive within the marine system.
I also would point out that the government recently announced an initiative to make us better able to compete as a maritime nation.
We have the international maritime centres legislation, which will enable international shipping companies to locate in Canada. We think that this legislation, which was announced last week, will bring shipping executives, maritime law experts, marine architects and a host of other shipping professionals to Canada to develop an enhanced marine sector that we do not now have. As well, we are looking at our ability to get containers in and out of the ports more efficiently. I am expecting to receive a study on container competitiveness very soon so that we can see what we can do as a government to facilitate an improvement in that system.
Last summer I became involved in trying to sort out some difficulties in the trucking industry. I want to report to the House that we commissioned some studies through Transport Canada, because I was quite frankly fed up with having 14 different theories on what the tax system was in Canada and the United States, whether I got them from the trucking industry, from Finance, or wherever. We have formed a steering committee of all the stakeholders, and when we get these studies done, we will know exactly what the situation is and try to take some corrective measures.
One aspect of transport that was touched on, not so much in the budget, but as affecting transport was the legislation for disabled Canadians. I was quite pleased with the efforts of the finance minister to assist disabled Canadians. What I have tried to do is to put a focus on the disabled in transport. The House will know that the disability tax credit is going to be increased from $575 to $700 as of the 1991 taxation year. Perhaps more important, the definition of expenses eligible for that tax credit is going to be broadened and will include the cost of part-time attendants in the home. Costs incurred by employers in modifying their premises to accommodate disabled persons will become fully deductible in the year in which they are incurred. Benefits provided by employers to disabled persons to enable or assist them to work will no longer be taxable.
The Budget
I dealt with this when I was Minister of Justice, and I am pleased to tell the House that, as Minister of Transport, we have carried the focus into transport. The House will know that the government provided some $3 million over the last five years to 130 communities across Canada for the Accessible Vehicle Acquisition Program.
We have an advisory committee on the disabled, which is comprised of some 17 representatives of consumer groups and six industry representatives. We have had some meetings and we have been able to achieve some improvements. Last fall I announced that there had been an agreement between the Air Transport Association of Canada and Transport Canada to provide Braille and large print safety cards on commercial airlines for a one-year demonstration period. If that is successful, it will be carried on.
I think we have been able to do some things in transport which co-ordinate with what the minister has done in his budget, and I can assure the House that we will continue to do so.
I want to touch on something in the budget as an employer.
The Minister of Transport has, under his jurisdiction in transport, some 20,000 public servants. I found in my travels that they work pretty hard for the government. Some of them, as the House knows, do not always have the safest jobs in the world; I am talking about search and rescue jobs. The public servants employed by the Ministry of Transport-and I think it is fair to say at all levels of the federal government, in all ministries-I have found by and large work very hard for the government. I appreciate that there is a 3 per cent cap on increases, and I appreciate that this is probably going to be difficult. But I think we all have to try to play a part in the difficulties that we are facing. I know that the public servants who are very loyal to the government and to the country understand what we are going through. I just wanted to recognize the contribution the public servants make in Transport Canada, especially, and in other areas. I am sure the measures that have to be taken will be taken with some sensitivity by all departments. Especially, we will try to do that in Transport.
In closing my remarks, I would say that we have demonstrated in this government leadership in terms of our financial difficulties. We have had to take some hard choices. It would be much more pleasant to be doing

The Budget
some nice things with money but we do not have it. We do not have the money to throw at problems. Canadians realize that running a government is just like running their daily lives. They are not stupid. We have a situation on our hands and they realize, just as though it were their household budget, that we have to get it under control. They are looking for fiscal responsibility and other responsibilities from government.
I say that we have given fiscal responsibility the people of Canada since 1984-that may be a measure of debate for my friends across the way-and we will continue to do that for the rest of our mandate.


Mr. Douglas Young (Acadie-Bathurst):: Madam Speaker, I have a couple of questions on two particular items for the minister. First of all, up front, I want to thank the minister for his co-operation on the development of Bathurst Municipal Airport. I know he has talked about Pearson airport and its importance to millions of travellers, but we have smaller airports in the country and I want to take the opportunity to thank him for his assistance with the Bathurst municipal airport. We know it is a complicated situation with airports of that size across the country.
I would ask him if he has any plans to get involved, because we have seen mention of user fees in the budget, in some sharing of administrative costs. He will be aware that we have been in touch on this matter. It is an unusual situation so I would like to have him comment on if he feels there is any way the government can participate in some of the operating costs of the smaller airports on a shared basis or whatever because there have been reports through the Minister of Fisheries and Oceans in New Brunswick that there may be some assistance forthcoming.
The only other point I would like to have the minister comment on, because I know a number of my colleagues want to chat with him also, is the Trans-Canada Highway in New Brunswick. As he will know, Nova Scotia, Prince Edward Island, New Brunswick and Newfoundland are interested in the Trans-Canada Highway because there is so much land transport across that area now. The budget and the estimates did not have anything specific with respect to the Trans-Canada that I could find. So I wonder if he would comment on those two issues.


Philip Derek Lewis: Madam Speaker, I would like to thank my hon. friend for his comments. There has been a fair amount of activity in the smaller airports in New Brunswick. I think actually if I were to guess it would probably run Ontario, B.C., New Brunswick in terms of what we have been trying to do for smaller airports. I certainly am paying attention to my hon. friend's comments and to those of the Minister of Fisheries and Oceans with respect to what we can do at Bathurst.
With respect to the Trans-Canada Highway this has been the subject of much discussion and much study. I would hope that this year we can take a look at our national roads policy and decide whether or not we should take a run at a comprehensive national roads policy which would involve some 23,000 or 24,000 kilometres of our national highway system in order to upgrade it. I especially appreciate the problems in New Brunswick. They are being attended to now I believe by the province and if there is a way we can become involved in that we will certainly try to.
The problem is once again cost and how we are going to finance it.


Iain Francis Angus: Madam Speaker, I want to thank the House for this opportunity to raise some questions with the minister. I will make a series of points and questions I would like the minister to respond to. I will try to do it very quickly.
One of the difficulties we have, as the House knows and the minister knows, is that the Standing Committee on Transport is unable to meet because of an impasse between the government and the opposition. The chief government whip is not allowing the committee to continue its work.
Normally after estimates are tabled all standing committees invite the minister they work with to come before them to discuss, as we are trying to do today, what do these figures mean, and what are the ramifications.
I wonder if the minister would be prepared to attend an unofficial meeting of the transport committee that my colleague from the Liberal Party and I will be arranging some time in the next couple of weeks. If the minister is agreeable, at his convenience, to come before all members, not just the opposition, but the government as well,
March 1, 1991

to talk to the minister about the matters in the estimates.
I have specific questions I want to put to the minister today. One of the big questions is about terminal 3. What is the Government of Canada gaining financially? I realize the minister may not have a specific dollar amount, but no one has been prepared to tell us what the deal is. Is it a percentage of gross revenue? Is it a percentage of net revenue, somewhere in between, or is it a fixed amount?
I think the people of Canada need to know, that in order to evaluate whether or not the principle of privatization, of private participation in a development and operation of airports is appropriate, irrespective of the philosophical differences that we may have in this House.
The other question ties into that, in terms of the devolution of airports. Can the minister indicate the department's projections as to what that is going to mean to the revenue side of the balance sheet for Transport Canada. If these airports are turned over, whether it is a private sector or a community or what have you, there obviously has to be some kind of new financial mechanism. What is it going to cost the system as a whole because, quite frankly, Pearson and Vancouver have been helping to cross-subsidize the operation at the other airports.
The one final question I would like to put at this point relates to the estimates. There seems to be an underlying erosion of the minister's tools for safety. For example, under surface and railway safety there is a decline of $3.2 million last year to this year. The Transportation Accident Investigation and Safety Board is getting less than a 1 per cent increase. Third, Marine Search and Rescue shows a $12.9 million decrease. I realize on this last one that it may be because of some kind of shuffle and perhaps the minister could indicate that.
But it seems to me that at a time when we are seeing higher instances of rail accidents, that we have an excellent working commission dealing with the Dryden inquiry that will report later this year and, in fact, its report may have some impact on the operation of the board, that one would assume that there needs to be dollars there to do the work.
The Budget
Madam Speaker, I know you are anxious to hear from the minister and so am I, so let me sit down and hear him.


Madam Deputy Speaker:: I was just wondering how the minister would find time to answer all the hon. member's questions considering the time that was being taken to put the question.


Philip Derek Lewis: That is easy, Madam Speaker, I will just answer the easiest questions.
I do not want to interfere with the government whip's work on committees, so I think that both the government whip and the opposition whip-and my hon. friend is an opposition whip- can settle their differences quickly. I am always glad to come to committee and field the questions.
Let me just say this. Presently, Pearson produces financial statements so the hon. member can see the asset base. The operating statement is available to everybody. I would suggest to you that when the revenue from T-3 kicks in, it will show in the financial statements.
We have an agreement with the developer. It was part of the deal that the contract would be private between the government and the developer, but the money we get from T-3 will be shown in the financial statements of Pearson. So I think that will take care of that.
As far as the devolution of airports is concerned, what we intend to do and what we have been doing is saying that is the asset base, the taxpayers of Canada will get a return on their investment and then we want a cut of the action. We want a cut of the terminal development, the coffee shop and the land rentals. So the taxpayer is going to get out of the business of running airports. The government should not be in the business of running airports. We do not need the Minister of Transport and public servants to decide whether a room this size should be a coffee shop or a duty free shop. Some days it would make a good hangar. But it is not necessary for the government to do that. That is why we are transferring it. We are getting a percentage of the action on it. We have that bill before committee next week, and I will be glad to come to committee and answer any questions on that.
The last question was about safety. Safety is an absolute priority of Transport Canada. Any rearrangements of person-years and funding always bears in mind

The Budget
the fact that safety is a top priority. It will continue to be a top priority.


Paul Edgar Philippe Martin: Madam Speaker, we are here supposedly to deal with the Budget. But the fact is that we are here to deal with the government's ability-or total lack of it-to provide Canadian men and women with a sound and effective management of the economy.
On TUesday, the Minister of Finance presented the Seventh Budget of his government. For sure, it was not a lucky seven for Canadians.
Early in 1991, Canada's economic outlook is rather gloomy. I quote:
"We foresee that the Gross National Product will be down 0.3 per cent. Unemployment will reach 10 per cent. The economy will grow at a rate of about 0.9 per cent, its lowest level in the last decade. Our economy is sinking into a recession. For the past two years, the Minister of Finance has been telling us that the only way to fight inflation is to create unemployment. In this Budget, he is telling Canadians that they can expect one more year of the same. There is not one atom of a comprehensive economic strategy in this Budget. There is no overall vision, no indication that the government knows to where it is headed."
Madam Speaker, the reason our country's economy is ailing is that the government just does not know how to manage the shop. Over the past six years, the government could have used a number of positive factors to cure the economy.
The world economic growth-Six years of tax increases, six years of program cuts.


Eugène Bellemare: Shame!


Paul Edgar Philippe Martin: You are perfectly right to say shame.
In spite of that, the country is overburdened with debts as well as an enormous deficit. It is a shameful performance.


Eugène Bellemare: Indeed!


Paul Edgar Philippe Martin: A shameful performance which is likely to continue if we accept this Budget. In short, Mr. Speaker, the Minister of Finance has lost his bearings.

When this government came to power, it had one goal: deficit reduction. It has failed miserably. Why? Because of its failure to understand that deficit reduction does not only come from cutting; it comes from growth, and growth comes from investment.
This government has consistently under-invested while other countries in the world, such as Germany and Japan, have invested. Those countries now prosper while Michael Wilson has brought this country to its knees. How? Let me count the ways.
Cutbacks in education. There is an inherent contradiction between this government's constant rattling on about its advocating competitiveness on the one hand and promoting policies on the other which must inevitably lead to cutbacks in education.
Twenty-five per cent of Canadians are functionally illiterate. We have, among the industrialized countries, one of the lowest rates of high school attainment. What is this government's answer to this? It is to make sure that every student who wants to go to university next year will have to pay up to $1,000 more.
It is about to cut out the support systems for single parent families who want to send their children to school. It is a failure to understand that the sinews of the nation are built on the nation's youth.
Cutbacks in social programs. This government's failure to invest in people perpetuates a cycle of poverty. The government fails to understand that a dollar invested in Canadians today will make you $5 later on.
Indeed, when I see this particular Speaker in the chair, it gives me some pleasure to raise the cutbacks in the environment. This government has just trashed the green plan. The green plan was not very good. It did not have much vision. There was not much of a message. There was not much in it, but it was the best this lamentable government could come up with and what it has now done is thrown it in the wastebasket.
The minister stood opposite me and told us how he was going to spend $3 billion over five years. He told us it had not only been approved but that it was committed. He virtually told us that it was a sacred trust. He has now announced a one third cut in the first year alone-$600 million over the next five years.
March 1, 1991

The government will tell us it is a deferment. That is guff. The green plan as presented by the minister was a rolling plan. More moneys were to be spent in the sixth year and in the seventh year. This is an absolute cutback of one third, $125 million in the first year alone.
Yesterday it was reported that the Minister of the Environment in scrum outside here said that industrial development was more important than the environment. Well, that is a statement which is as dated as the Edsel. It is an incredible statement. It is incredibly discouraging for those who believe in the environment to think that the Minister of the Environment would say it. It arises from a failure to understand that the environment is a moral value. It arises out of the failure of this government to understand that in the new economics you cannot have a sound economy in an unsound environment.


An hon. member:: Absolutely. Bravo.


Some hon. members:: Hear, hear.


Paul Edgar Philippe Martin: I thank my colleagues. It arises out of a failure to understand that a nation is not growing because of its failure to invest in research and development. The environment and the development of environmental technologies represent one of the great growth industries of the future. This nation is now in a position where if it does not develop those technologies, in 10 years it will be buying them from the Germans and the Japanese, as it buys VCRs and record players today. But if this nation develops them today, then maybe it will develop a new industrial base. The environment is not a cost. It is a phenomenal opportunity for us to build a new economy.
This government's problem is that it fails to understand that the environmental deficit is an economic deficit. It fails to understand that the social deficit is an economic deficit. If there is any doubt about this, simply look at this Minister of Finance's record over the last seven years. In his time there has been a doubling of the deficit and it has arisen out of one thing: this government's failure to understand the necessity of investing in the future.
This budget contains many facets, all of them bad. I began by saying that we are not here to debate the budget. Indeed, we are here to debate this government's competence. I should have said we are also here to
The Budget
debate national unity. This budget represents the opening shot in the government's battle to hold the country together and it could not have been more inept. It could not have been more self-defeating.


An hon. member:: Right on.


Paul Edgar Philippe Martin: How anyone could think that reneging on our commitments to the nation builds a nation is beyond me. The Tories will say that cutting payments for health and education improves the nation's finances. Well, that is garbage. The national debt is not only the federal debt, it is the federal debt in combination with the provincial and municipal debts. Shifting the debt burden does not solve our financial problems. In the end it is the same taxpayer who pays. But the way in which this government is going about it is weakening the sinews of the nation. Even more to the point, this government is repeating the mistakes it has made many times in the past, mistakes that have had a devastating effect on this nation.
In the free trade agreement this government, so desperate for a success even if it was only paper thin, and so afraid of failure, sat down cowardly with the Americans and gave up the ghost before the negotiations started.


An hon. member:: Shame.


Paul Edgar Philippe Martin: It made every single concession. Every point it thought the Americans would raise at the table, it gave up before it got there, because this indeed is a craven government.
Then what happened with the Americans and the Canadians? John Crosbie stood up and said: "We have a great victory." It reminds me of peace in our time in 1938.


An hon. member:: Right on.


An hon. member:: Shame. Yes.


Paul Edgar Philippe Martin: Well, it has just done the same thing. Now, as it prepares to sit down with a multitude of provinces across this country, this government is in the process of dismantling the nation so that there is nothing left to discuss, no bargaining chips on the table, and for those of us on this side of the House, those of us who believe in this country, it is beyond belief to stand here and watch what this government is doing with one of the nations that God put on this earth to fulfil great things.

March 1, 1991
The Budget
There is one man who must love this budget, and that is Jacques Parizeau, sitting there in his intellectual grey. He must be laughing all the way to the bank.
Well, there are other lessons that this government has not learned. In the course of the Meech debate, Canadians on either side of the debate said they wanted a public debate, they wanted to be consulted. But we sort of thought that the government would come to that conclusion itself with the formation of the Spicer commission. And yet, now before Spicer has returned, now before Gordon Smith and the federal bureaucrats have gone through their papers and presented them to the nation, this government blunders ahead with constitutional reform.
We do need a restructuring. It may well be that we are in 1865 and that great foresight is required. But, it will not be shown by this government.
There can be a no more manifest attack on national unity than the discriminating attack on certain parts of our country. My colleague from Newfoundland has spoken eloquently about this, as indeed have my other colleagues from the maritime provinces.
Let me speak a little bit about another part of the country that is suffering as a result of this budget. Quebec, Montreal, and you will forgive me but my own riding of LaSalle-Emard-
[Translation}
Ever since this government came into office, the economic situation in the Montreal area has been deteriorating. There is only one message in the Minister's Budget: Your are on your own! Good luck! With its fiscal policies, the government clearly indicates that it could not care less about Montreal's economic development.
All the same, my city is certainly the Mecca of Quebec entrepreneurship. It holds an enormous potential which could help Canada improves its competitive position. Unfortunately, the government stands idly by and allows a potential which a great many envy us to be wasted.
In Quebec, over the past 12 months, the number of personal bankruptcies has increased by 67 per cent and the number of business bankruptcies by 26 per cent. It is scandalous!
Last month, Montreal was the city which recorded the highest unemployment rate in Canada: 13.4 per cent.
The rate in Montreal East was over 20 per cent. The Tory government has abandoned Montreal and Quebec. Its policies have ruined one of the finest economic areas in the country.

I can see the clock is winding down, so just let me make one last remark in conclusion: Our country is in the throes of a national unity debate unseen before in our history. We are in the midst of a massive economic decline, permanent job loss and fundamental change far deeper than any of us ever anticipated, certainly far deeper than this government anticipated when only six months ago it failed to understand what everybody else in the world knew: Canadians were suffering deeply and the recession was biting hard.
This budget makes a bad situation worse. The continuation of high interest rate policies, the lack of decent adjustment programs, the continued strengthening of the Canadian dollar, all of which have crippled the nation, show on the part of this government a lack of economic and national understanding which is simply unforgivable.


An hon. member:: Absolutely.


Paul Edgar Philippe Martin: A nation needs national purpose. This budget represents national defeat. Let us in this House at this critical juncture of our country's history give the nation hope.


Steven W. Langdon: Mr. Speaker, I have to say I am always one to carefully follow the speeches of my hon. friend because his father, of course, was previously the member of Parliament for the area which I now have the honour to represent.
I do want to ask the member two or three questions. As I look back to the period of the last Liberal government that we had in this country, I see first an attack on the Public Service not much different from the attack that took place in this budget, the six and five program. I see, second, an approach to the tax system which built into that tax system a great many of the problems which we continue to attack the finance minister for today, such as the capacity for companies to borrow money here in Canada for activities any place throughout the world and to be able to deduct the interest costs of those funds from their taxes that they would otherwise have to pay
March 1, 1991

here in Canada, something which costs the ordinary taxpayer in this country a great deal.
I see as well a reduction, which the Liberals started, in the rates of income tax for higher income earners in this country-the 1983 budget of Marc Lalonde which brought tax rates for upper income earners from 42 per cent down to 34 per cent. Conservatives have taken that down to 29 per cent, which I am sure we both agree is unfortunate in terms of fairness in this country and in terms of a sense of national unity in this country.
What seems to me to have been the case in these three areas that I have cited, and I could cite many more, is that the Liberal Party started in the direction which the Conservative Party has followed. I want to ask the member whether he is, in making his strong plea for national unity in this country, saying that he will renounce and that his party renounces this past record of serving the privileged, of helping the wealthy, and of assisting the large-scare corporate sector in this country. Has there really been a case of the leopard changing its spots?


Paul Edgar Philippe Martin: I would like to thank the member for his references to my father, who I believe in fact is probably watching this particular debate. I hope he is not watching the debate because if indeed he is, he, who loves this House and who certainly loves his city of Windsor, would feel quite badly about the shallowness of the intervention made by the member for Windsor.
I grew up in a family where the Public Service was something to be very proud of, with great names around our diningroom table-the O.D. Skeltons-the great names that one reads about today. How any member could think that the Liberal Party, which effectively built the structure of this nation and made the Canadian civil service what it was, could engage in an attack on the civil service or would reduce it, is really base partisanship that is unworthy of this member who has an otherwise impeccable record in this House-occasionally.
There are a couple of other things that I would like to say.
At the time the Liberal government brought in wage and price controls, inflation was triple, almost quadruple what it is today. The world was a far different world, and
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I am glad to say that it was Liberal policies-a far greater preference to absurd high interest rates that we have now-that brought the country back.
I would also like to say to this member that as I sit there watching the activities of Bob Rae in Ontario and I see as he reneges on election promise after election promise, when I see Bob Rae begin to retreat into a narrow little shell and that all the rhetoric that the NDP has stood for suddenly finds itself to be empty and worthless as he tries to grapple with the realities of government, I begin to understand what hypocrisy really is.


Some hon. members:: Hear, hear.


Paul Edgar Philippe Martin: I would also like to say to this particular member, as he asks the question "why should the Canadian government support Canadian companies that operate around the world ?", that he is indeed giving us an indication of how narrow the NDP thinking is. Let the member understand that great companies are the instruments of state and they are the agents which provide young Canadians with value-added jobs. I want to be in a country who's companies are operating in Malaysia, South America, and around the world. This member may think that the world ends at our borders, but it does not. We Canadians are prepared to take on anybody. I think it is disgraceful that the NDP, so rooted in the orthodoxy of the 1930s, fails to understand that this country can compete with anybody. We can take on anybody. This country can win.


Mr. Bill Attewell (Markham-Whitchurch-Stouff-ville):: I would like to direct a question to the hon. member for LaSalle-Emard. He is a gentleman with a tremendous business background and brings a very astute mind to this Chamber. But I would like to ask him if he would agree on what has really been the record of control in the last 20 years. Let me remind him that it is factual that, for 15 years prior to 1984-85, the Liberal government spent, on average, an increase of 13.8 per cent a year. That literally doubles, as he knows, every six or seven years. The record should also show that when we assumed office, the national debt of this country was around $200 billion. Again, with his business background, he would understand compound interest. We have been running deficits, but lower, for the first four years. The

March 1, 1991
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compound interest on that debt amounts to approximately $120 billion.
The legacy that the Liberal government has left Canadians is a burden something in the order of $320 billion.
Now, he just spoke of hypocrisy in the other opposition party here. I would like him to comment on the scandalous out of control spending for 15 years. That is what Canadians are going to remember. That is what is going to be in the history books. Would he like to dispute that factual account of the disastrous control by the Liberals.


Paul Edgar Philippe Martin: Mr. Speaker, the member talks quite eloquently about compounding interest. What he really ought to understand is that what this government understands is compounding problems.
It is very clear how this country got into the soup. Following the free trade agreement-again, whether you were for the agreement or against the agreement-this government made a series of fundamental mistakes. I have been told by the Speaker that I must move quickly. Number one, no adjustment policies; number two, the government drove the dollar to 86 cents; number three, it drove interest rates up five points higher than the Americans and we were not able to compete, and you took us into this recession eight months ahead of the Americans, eight months. It is the first time and we are going to come out of it a year later.
We are in this because of the deliberate decisions of this government. The member knows it. Unfortunately, I am out of time.


Some hon. members:: Hear, hear.


Hon. Bob Layton (Lachine-Lac-Saint-Louis):: Mr. Speaker, Canada has one of the highest standards of living in the world and a quality of life second to none.

We are indeed fortunate to be Canadians and to live here, Mr. Speaker.

But there is a battle that we have been fighting since 1984, a battle to restore health to our economy and to pull ourselves out of the hole the debt has dragged us
into. We are paying the price now over and over again for too many years of consuming more government services than we were willing to pay for and borrowing to make up the difference.
In 1984 the previous government handed out $1.33 in programs and services for every dollar it collected in taxes. Today our public debt is forecast to reach $400 billion by mid year, about $15,000 for every man, woman and child in Canada. The interest alone on the debt will eat up more than $43 billion, more than we spend on old age security, unemployment insurance and family allowances combined.
This cannot continue. As trustees for Canada's future, we must keep it strong and free for our children and all who follow.

Yet, Mr. Speaker, the 1991 Budget puts forward a plan for economic recovery. The Federal government wants to make the recession something of the past.

This budget will rebuild consumer and investor confidence and lead us into the environment of continuing growth and renewed prosperity. How can this be achieved? By creating the essential conditions for recovery. Increased spending will not create these conditions. Lower interest rates will. Lower interest rates will bring direct economic benefits to Canadian homeowners struggling to make their mortgage payments. At the current rate of about 12 per cent, a $100,000 mortgage with a 25-year amortization requires monthly payments of about $1,030. But the same mortgage at a rate of 9.5 per cent would require payments of about $850 a month, representing a savings of $180 a month or nearly $2,200 each year.
It is clear that for my constituents, living at the west end of Montreal, and for all new Canadian homeowners, our commitment, this government's commitment to lower interest rates, will be a direct economic benefit.
The plan for economic recovery is going to bring down interest rates by lowering inflation and by setting the government on course to balance its budget and reduce its borrowing.
The answer is not more spending. More spending would drive the interest rates up. The answer is lower spending and lower interest rates.
March 1, 1991

The new budget is quite simply an all-out assault on the deficit. All GST revenues will be used to service the debt. Grants to business and special interest groups will be cut by $75 million this year and $125 million next year.
The increase in cigarette taxes by three cents a cigarette will help keep the deficit down and, at the same time, discourage teenage smoking.
There will be no new income taxes, but unemployment insurance premiums will be increased to make sure this program pays its own way as required by law.
It is a tough plan. It is directed at the government, too. Ministerial salaries for the Prime Minister and all cabinet ministers will be frozen for a year. Members' and senators' salaries will again be increased by less than the cost of living. Senior management positions in the Public Service will be cut by 10 per cent.
Operating budgets will be frozen at current levels, and the government will legislate mandatory program spending limits.
This new budget plan will be tough on all governments, but we are not asking the provinces to do anything more than what we are doing ourselves. The 5 per cent growth limit on Canada Assistance Plan transfers to the wealthier provinces will be extended to 1994-95.
But, CAP contributions, these same contributions and equalization payments to less wealthy provinces, will continue to be exempt from budgetary controls.
The per capita freeze on established program funding announced last year will continue, but EPF transfers in total will continue to grow with the increase in population of each province.
Limits to the growth of transfers under EPF has raised concerns about the federal government's ability to continue enforcing Canadian national standards, particularly in medicare, under the Canada Health Act.
This has been addressed. Legislation will be introduced to ensure that the federal government continues to have the means to enforce these principles and standards. The commitment to medicare in Canada will not be compromised.
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Our battle is not only to restore Canada's economy, to bring about short term economic recovery, but to set the stage for a long term recovery assuring a stable and competitive economy, providing job opportunities for all who are ready to work.
All Canadians are in this battle. As the Minister of Finance stated in the House this week, there is too much at stake for anything less than a full national effort.
Yes, Canadians enjoy a quality of life second to none and we want to ensure that it stays that way.


Mr. John Manley (Ottawa South):: Mr. Speaker, I do enjoy listening to hon. members from the government side talking about the burden of the national debt. It seems they always like to go back to 1984 and talk about the deficit at that time.
I would like to remind the hon. member who has just spoken of a couple of things. First of all, his government came into office in September 1984. Shortly after that, the Minister of Finance projected in an economic statement in November the deficit for the year in which the government was elected, 1984-85.
By the end of March, he had exceeded his own forecast because he put every possible expenditure he could find and shoved it through the books of the country in that fiscal year. He still cites that as being the Liberal deficit.
Not only was that the case, but when he looks at the numbers, he will discover that more than half of the current national debt has been run up by the current government and the current Minister of Finance, almost $400 billion of debt, more than double what it was when he took office. That is from a government that was elected to bring down the debt.
I want to ask him to comment on two quotations that I am going to read to him. I would like him to say what he thinks about these views, which were expressed with respect to an economic statement at a time when the country was coming out of recession.
The first one is this, and I quote: "In this budget that the minister has just presented unemployment insurance premiums are going to increase by 40 per cent. That is purely and simply a tax increase. It is a tax increase when it can be least afforded and it is another colossal error".

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The second quotation is: "The minister announced a $500 million job-creation program. I guess we have to say, Mr. Speaker, it is a step in the right direction. They have addressed the problem of unemployment in this budget, but it is a very small step. Five hundred million dollars sounds like a lot of money, but it is $300 per unemployed worker and amounts to some one-quarter of one per cent of the total size of our economy today".


An hon. member:: It sounds like Wilson.


John Paul Manley: Those two quotations are from the present Minister of Finance.
Does the member agree with the Minister of Finance in 1982, or does he agree with him today?


The Acting Speaker (Mr. Clark (Brandon-Souris)):: Just before recognizing the hon. member and giving him a chance to reply, may I inquire as to whether or not he is planning to use his full 20 minutes and a 10-minute question period, or is he sharing his time with someone else in light of the fact that he did not speak for the full 20 minutes?


Robert E.J. Layton: No, I will be happy to provide that time to the other members.
My hon. colleague from the opposition has raised the question of the national debt. There is no question, as we spent and spent in the 1970s and early 1980s and came into a period of recession in the early 1980s, that the ability of the government to tax at the rate it was spending became impossible. It was totally non-political to consider taxing, but it was very political to consider spending.
Buying our way out of trouble was the in thing. The community that we are all part of in Canada became a me, me, me society. "Look after me". "Not in my backyard" was another expression we used to hear.
The real truth was that we became convinced we could afford anything. Suddenly, it became loud and clear that we were going into debt at such a rate that the debt would decide what we could do in the future. The size of the debt and the interest on it were the determining forces on whether or not we could include day care centres or service of all kinds of programs.
To not reflect on those years when we used to increase spending, on average I think the estimate was 13.4 per
cent per year, and brought it down to where in these last six years since our government was elected with an obligation to the voters of this country that we would attack the deficit and control the debt and manage the economy, we actually have increased our government expenditures at less than the cost of living, meaning we are constantly reducing the fat in government.
The fat can be overlap; it can be duplication. All of us know that between this level of government, the provincial level of government and the municipal level of government there are sometimes three agencies looking after the same service. The answer is that we must come together as a country and eliminate this kind of waste.
One way of promoting that kind of dialogue and that kind of resolution will surely be when we stop providing the money to be spent. The open-ended "you give away the service and we will pay for it" has to end. This government in these last two budgets has made it very clear that we are no longer going to spend for excess.
Let us get together. Somebody raised the question, I think it was the hon. member for LaSalle-Emard in his remarks earlier, that this kind of activity is going to break up Canadian unity. It is the one thing that gives our country the chance not to blow our opportunity through waste, duplication and overlap. Let us start bringing all provincial governments and all municipal governments into the same harness that says there are only so many dollars in the kitty, in the taxpayer's pocket. We cannot charge it to our grandchildren or their children.
I might answer the second question which was in the area of UIC. It is now becoming accepted that it needs to and, by law, must meet its obligations.
We are going through a period of recession. There are demands on those funds. They have to be met by law. But, there are already indications and forecasts from all kinds of sources that with the way in which this country is being governed, in comparison with our big neighbour to the south and all our other trading nations, we will be into a recovery before mid-year, or certainly into the early part of the second half of the year.
With those job opportunities, we will be back on the cycle we began in 1984, since when there have been
1,600,000	new jobs created, many of them out in the west end of Montreal.


Eugène Bellemare: Mr. Speaker, I thought that what the hon. member for Lachine-Lac-Saint-Louis, in Quebec, had to say was very interesting. During his speech on the Budget, he mentioned cigarettes. If I remember correctly, one of the major companies in the province of Quebec is Imperial Tobacco. Canada's heaviest smokers are probably in Quebec.
That being said, I want to get back to the cigarette issue. He seemed proud of the fact that the Conservatives were now going to take 3 cents more per cigarette from young people in Quebec and across Canada, every time they smoke a cigarette, which means 75 cents more per package.
He seemed to be proud of taking money from young people, because it hits them where it hurts. It takes two or three kicks to teach them how to do things properly. I can inform the hon. member that is not the way to explain cancer-related problems to children. If you are really interested in dealing with smoking, you should do a lot more research on cancer related problems. You should spend a lot more money on research and on publicizing the negative effects of cigarette smoking. You should spend more money on public education, to help people quit smoking gradually.
I repeat, kicking people in the pocketbook or in the face is not the way to correct their vices, if it is a vice.


The Acting Speaker (Mr. Clark (Brandon-Souris)):: Please keep your answer brief.


Robert E.J. Layton: Mr. Speaker, in response to the concern raised by the hon. member regarding the introduction of youngsters to the hazards of smoking, it is certainly primarily incumbant on parents or grandparents like me to promote caution.
In my youth, smoking was considered harmless. Today, its dangers are well known, as are the costs involved for every citizen once the habit is firmly rooted and the demands on our health care system to treat, patch up or save the smokers' organs. All that is known. By charging 75 cents more on each pack of cigarettes, we are giving a clear indication to our young people who have some financial means, yet limited, that we, in this country, want them to take a good hard look at that habit.
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I hope that this obstacle, this reservation expressed nation-wide, will make our young people across the country think of their health before becoming smokers.


Mr. Rey Pagtakhan (Winnipeg North):: Madam Speaker, I rise before the House as the member for Winnipeg North and also as the Official Opposition critic for National Health and Welfare. I will therefore focus my debate on the budget in this area.
With this portfolio comes a responsibility to warn this government that its new budget will provoke the destruction of health care as we know it today. I am surprised the members of government need to be warned. The signs are all around them.
For months I have been watching the steam build on the issue of medicare. It started with the budget of last year, and then I saw Bill C-69, the complicated government expenditures legislation, slipped past this House and into the Senate and given Royal assent sadly early last month.
This Bill C-69 launched a critical government assault on medicare. As the social and health care groups across the country can attest, Bill C-69 is a deadly bill for health care and other social programs. It freezes and caps transfer payments, the amount transferred by the federal government to the provinces to aid medicare and post-secondary education.
With this freeze we will cripple medicare, we will cripple post-secondary education, and we will cripple other social programs.
And so the steam builds. Adding to the pressure was a particular meeting in the autumn of last year when western finance ministers grouped in Winnipeg, in my home city of Winnipeg. Something very significant happened at that meeting, something that will bear on Mr. Wilson's budget, on this government's budget.
The western ministers agreed the federal government should deliver transfer payments while relinquishing control over national standards of health care. They want a disentangling of federal funding and autonomy for health care policy in the provinces.
The steam builds under medicare.

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On December 7 last year came an announcement from the Minister of Health from Quebec that he planned to revamp his province's existing health care system. This included a $5 disincentive fee, which I prefer to call a user fee for non-essential visits to the emergency wards.
I do not blame Quebec. Provinces are being forced to take initiatives like this one because the federal government has been limiting its proper financial share of the implementation of medicare.
There you have it all. All the signs are before you, Mr. Speaker: the budget of 1990, Bill C-69, the threats by the provincial finance ministers, the flagrant disregard for the Canada Health Act, and failure on the part of this federal government to enforce that Health Act. All the signs, all this steam building under medicare-pressure, pressure, and more pressure.
Then three days ago the government delivered the fatal blow and this is not exaggeration. The fatal blow to universal health care came when Mr. Wilson skimmed an additional $2.3 billion from transfer payments to the provinces.
Did he not see the signs? Was he not forewarned of the volatile situation of health care? Why did he not move to protect the health care system instead of pummelling it with further cuts?
I cannot understand it. Our health care system is one of our most prized possessions of citizenship and now it is slipping from our grasp. Or should I say medicare is being tom from our grasp by this government?
I shake my head in wonder as I hear the government rationalize its decision. As the government says, and I quote:
Legislation will be introduced to ensure the federal government
continues to have means to enforce these national medicare
principles. The principles of the Canada Health Act will not be
compromised.
I believe the compromise took place long ago when in a Centre Block boardroom in this building, Mr. Mulro-ney and his ministers decided to whittle transfer payments down to the quick. Now they promise the new legislation, and I quote: "The principles of the Canada Health Act will not be compromised".
But I ask: Why is new legislation necessary? The current legislation enables the government to enforce the five cardinal principles of medicare: accessibility,
portability, universality, comprehensiveness and nonprofit public administration.
The key enforcement tool is the ability to cut transfer payments. That is in the Canada Health Act. How ironic that the government is bartering away its enforcement power. In the words of my colleague, my deputy leader: "He who pays the piper calls the tune".
Who will be calling the tune? Will it be the federal government or the provinces? Who will be dancing to it? The poor, the elderly, the children of poverty and the struggling middle class.
The weakness lies not in the Canada Health Act; the weakness lies in this Conservative government.
How can the Canadian people trust the word of this government as they are being asked to do? How can this government protect medicare?
Let me give you two examples of the deep concern the government holds for the principles of the Canada Health Act.
For years the citizens of Quebec have been denied portability, often paying out of their own pockets for health care received in other provinces. Has the federal government interceded on their behalf? No, instead, a blind eye has been turned to the situation. Quebec is forced to do this because the federal government is not doing its share.
Has the government intervened when Alberta and British Columbia charged all citizens, regardless of income, the same premium for health care?
No, it has not and it does not. People from those provinces who cannot afford their premiums are disallowed from visiting doctors and medical care must be received from the emergency wards.
The federal government has set the stage for a showdown between provinces and the Canada Health Act, and what a fight it will be. In one comer are the provinces, determined to win autonomy over health care. In the other comer, Mr. Mulroney, Mr. Wilson, Mr. Beatty, seemingly championing the cause of universal medicare.
Honestly, who do you believe will be victorious in this battle? If I were a betting man, I would not put my money on the triumph of medicare.
March 1, 1991

The provinces will undoubtedly win and leave that ring flanked by an entourage of extra billing and user fees. And medicare, which was promised by that great Liberal Prime Minister, Mackenzie King in 1919, would suffer defeat.
How long will it be before the provinces call the bluff of the federal government?
What have they to fear?
The minister of health for Quebec no longer believes the federal government will protect national health care standards. He stated that Ottawa has been reducing transfer payments to provinces, proving that the federal government can no longer afford universality of health care. This would suggest Mr. Cote believes that reduced transfer payments have exacerbated the stress to the health care system. He believes Quebec should make its own way and avoid federal government bungling.
Quebec's Intergovernmental Affairs Minister has said that government has no business dictating health care standards for his province and, to do so, is unconstitutional.
The Minister of Health for that province also said: "Certain provinces-''-and he was alluding to Alberta and British Columbia-"-have shown an interest in debating with the federal government the relevancy of some provisions of the Canada Health Act. We are one of the provinces and we will open the debate."
In 1946, another great Canadian, Tommy Douglas, introduced the Saskatchewan Hospitalization Act providing public insurance coverage for hospital care. Later, in 1966, the National Medical Care Insurance Act succeeded this legislation.
Eventually, posed by threats of extra billing and user fees, the Liberal government introduced the Canada Health Act. It was ushered in Parliament and passed in April, 1984 with the approval of all political parties and all Canadians. It has been a source of national pride. It is a solid piece of legislation and one that has the respect of the world. Our health care system is second to none. It belongs to all Canadians regardless of race, culture, place of residence or earnings. It should be protected and must be preserved.
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Instead, this federal government is eroding medicare away to nothing. The government will explain this away and patronize Canadians with the quotation: "You simply do not understand", and, "Let me explain one more time". But make no mistake about it, medicare is in danger.
Continually, the government points to the national debt as the reason for all the hardship in this new budget. I heard it today, I heard it yesterday and I have heard it many times. I am equally concerned about the national debt, but the total national debt is not the equivalent of per-person debt as this government would like all Canadians to believe. It is not. Eighty per cent of that money is owed to municipalities, provinces, other Canadian citizens and the Bank of Canada, and therefore as revenues to the government. Please remember that the debt has doubled since this government came into power. You cannot criticize the past when your own past is not as good.
The government also says the rising public debt is a growing concern, a cause for concern. I, too, believe the increasing public debt is a grave situation, but I must point out that the Tory government caused this recession which led to drastically increased bankruptcies which fed into the public debt and neither the public debt or deficit should be used as an excuse to deny funding to medicare.
The detractors point to our health care system and criticize. They say we already have too much, that we must learn to expect less from medicare and from the government. Well I have this response for them. It is easy to speak against medicare while you are healthy and wealthy. Not everyone, like members of Parliament, can be treated at the exclusive National Defence Medical Health Centre clinic, but if they had to join a queue for life-saving surgery or seek treatment in an overcrowded, understaffed health care facility their thinking might change.
Indeed, sometimes health care can mean the difference between poverty and prosperity. This morning, at the Canadian Medical Association Leadership Conference, a distinguished Canadian, a former member of this Parliament, the hon. Mitchell Sharp said:
I was saved from personal bankruptcy by a universal system of
health care.

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For most, the case is different. They will not miss medicare until it is gone.
Here in Canada, even before the newest funding cuts, people were dying while on waiting lists for surgery. This is shameful.
I ask the government to turn its attention to the hospitals closing beds due to lack of funds. Explain to patients and staff that transfer payment cuts are not a problem, that direct taxation by the provinces will fill the breach.
Meanwhile, our nurses and doctors are flocking to practice in the United States. American companies hand out glossy brochures displaying sunshine and smiles. Money is not an object, the way it is in our country, despite the fact that more of their Gross National Product goes to health care than any other country.
As our shortage of nurses becomes critical in Canada, we will see them disappear, beckoned south by higher wages and salaries that are commensurate with the respect they deserve.
Look south again for the services Canada has not the funds to provide: the state-of-the art cancer treatment centres; centres for rehabilitating victims of drug and alcohol abuse; facilities for children suffering from psychiatric illnesses.
These are just some of the services Canada cannot or does not provide its citizens fully.
There are other things as well. Treatment facilities for new diseases and for the elderly. We lack new technology and laboratory equipment, and its purchase is becoming an impossibility.
These are the problems with health care now, today: beds closing, inadequate care and stressed health care professionals. How can funding cuts be justified?
There is an old saying that goes like this: "If you have not got your health, you have not got much." How true.
Unfortunately, medicare will collapse into a state of extra billing and user fees. A two-tier system of health care will develop. The rich will be segregated from the poor by expense and privacy, while the poor languish in over-crowded, sub-standard hospitals and clinics where health care professionals struggle to accommodate them.
This is not fear-mongering. This is the reality we face if health care is not made a top priority by government.
Yes, we have the verbal reassurances, the confident answers that seem to rise with ease from this government in trying to quell the fears of Canadians.
On December 3, the Minister of Finance said: "We have no intention of relinquishing any sense of responsibility we have for the National Health Act. We have every intention of continuing to assist provinces and in particular, assist those provinces that are low-income provinces to assure that they can continue to provide the services that are available in the wealthier provinces of the country."
That same day, the Minister of Health said that no changes to the Canada Health Act were being contemplated.
Yesterday afternoon in this House, under question by my colleague, the Liberal finance critic, the Minister of Health in reply declared that Canadians had a choice between "debts, higher taxes and cuts". He said what threatens Medicare is "the interest being paid on the national debt".
In a recent interview on nursing published today, Mr. Beatty denied there is a crisis in nursing and said: "The strain on the health care system is a symptom of our success. The birth rate is low and the elderly are living longer".
I guarantee you, 1.5 million unemployed and more than 1 million children living in poverty are not the hallmarks of success.
We have been reassured again and again and again by the Prime Minister and the Minister of Finance that health care is not in danger. Now, we are assured freezing transfer payments is the lesser of three evils: cuts, debt and higher taxes.
In fact, the Liberal Party has been accused by this government of scare-mongering and of misrepresenting the facts for pointing out that health care is being disassembled piece by piece. Well, in the remaining minute, no matter how you analyze the issue, these cuts and freezes and caps are hurting medicare. Not only are they destroying medicare, but they are crippling Established Programs Financing.
March 1, 1991

Did you know, Madam Speaker, that within the budget there was no mention of child poverty or day care? And $100 million were taken from the job creation fund.
The poor are met with cuts or contempt, enclosed in a thundering silence from this government that does not care for them and does not care at all.
Yesterday, I had a call from Joanne Oberg of the Canadian Day Care Advocacy Association. She asked my staff if they knew of cuts being made to her program, which is partially funded by the Minister of State. The government's promised universal day care program was a fleeting election fantasy, now replaced by an impending threat that even day care organizations will be cut off. Again, who will be hurt by this? Those who have the least.
I must again reiterate the fact that there was no mention, not one word, in the budget of a strategy for child poverty and how to solve it. When will the government move on this issue? Why does the government not take revenue from the GST, which we oppose, if the revenues will be there and apply it to our future, our children? Children cannot eat line graphs on inflation and promises of decreased debt. All the talk and rhetoric from this government will not make them grow strong and healthy. They need immediate help now. It is deeds, not words, on which this government will be judged by all Canadians.


Mr. Felix Holtmann (Portage-Interlake):: Madam Speaker, I just happened to hear from the hon. member from Edmonton that there are a few pigs out there. The hon. member for pigs. I do not know what this man is really referring to, but he may want to get up and make a speech on it.
I would just like to make a comment and ask the hon. member from Winnipeg who spoke of the dire straits that the Liberal Party finds now in this country since the Conservatives have been in government. Apparently, listening to what the gentleman said, the country has deteriorated in its ability to deal with health problems because of the finance minister's budget. There is, he said, some indication that we have nothing but poverty among our children of Canada, as if you go down the street and they are all holding out a little can for food aid.
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If you listened to the member from Winnipeg, he painted a picture of this country just being in total despair as a result of this government. Yet, he also believes that if the Liberals were in power, they would address the dire needs of this country. He made no mention at all of the tremendous growth in the economy and in the way government dealt with a severe deficit when we took power in 1984. He does not even wish to consider that as an area of concern by the party of which he is a member.
I would like to ask the member from Winnipeg, just what does he see as the answer to this severe problem of poverty in children and homelessness? Is it to spend $1 billion, $2 billion or $3 billion or $5 billion at this time, to borrow the money to overcome that problem? Is that his party's answer today, to spend more money? And, by doing that, would his finance critic stand up in the House six months from now and say: "This government has allowed the deficit to grow", and criticize the very government that he would ask to spend the money? These are the questions that he has not answered in his condemnation of the finance minister's budget, and I would like to hear what he has to say in that regard right now.


Rey D. Pagtakhan: Madam Speaker, it is regrettable that the hon. member was late in coming in because I did indicate and I tell this government that you cannot equate the total national debt as the equivalent of a person-to-person debt, because only about 20 per cent of the total national debt is owed to foreign people in foreign currency.
When you pay interest and principal to the Bank of Canada, that is revenue for the government of this country, so do not mislead all Canadians. They are more intelligent than you think.
I am very serious. If they would care to go to the Library of Parliament and research, read some excellent works on economics by a professor at the University of Manitoba, they would have no basis asking and commenting this way.
Second, the hon. member from Portage asked if I would borrow money, as though borrowing money for a good cause is bad. When children are sick, would you let them go and die and be hungry in their stomachs only because we would like to allocate money for military arms, for CF-18s, the nuclear submarine program that

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we asked be scrapped, and it was scrapped because once you listened to us.
Borrowing and investing in the future of our country is not deficit, it is investment. How can you say that you would like to be competitive and then reduce transfer payments for education, and then make it difficult for our young people to learn? They may even die and you want them to be competitive. You want them to develop expertise. I cannot understand this member's understanding of health care at all.
What would I do? I would establish a policy of full employment for this country. I would increase the minimum wage for federal civil servants. That is how you solve poverty.
I would end my answer to the hon. gentleman by saying that denying that problems exist is not the way to solve the problem. Denying that poverty exists is not the solution to the problem of poverty. Denying that there is a crisis in the health care system is not the way to solve the crisis in the health care system. I am reminded due to my medical background that denial on the part of a patient is not the way to participate in treatment.


Mr. Jim KarpofF (Surrey North):: I think all Canadians know that the New Democratic Party is the party that was responsible for the birth of medicare in Canada with Tommy Douglas taking the leadership in Saskatchewan against tremendous opposition, including the opposition of doctors who went on strike, like my colleague who just spoke, against medicare.
When national medicare was brought in, it was a partnership between the federal and provincial governments, a 50-50 partnership, and that partnership carried on until it was smashed by the Liberal government. In 1977, when the established program funding was introduced, it was to get away from the cost-sharing of a 50-50 partnership.
I would like my hon. colleague to say how come it was the Liberals who started backing away from the 50-50 partnership. First of all in 1982, when Allan MacEachen, that famous person in that other place, ended the revenue guarantee. It cost the provinces $1.2 billion in lost revenue by 1984, $1.2 billion that the Liberals took out of national medicare by 1984. In addition, the six and five program took another $250 million out of post-secondary education.
The precedents for the smashing of the partnership between the provinces and the federal government were put in place by the Liberals. The foundation for the devastation of medicare that the Tories are now going forward with was developed by the Liberals.
I would like the hon. member to explain how he can now stand up and criticize the Tories for doing exactly what the Liberals did.


Rey D. Pagtakhan: Madam Speaker, had the New Democratic Party introduced this budget, I would criticize the New Democratic Party. You have to know who introduced the budget.
Second, when one has only a selective memory, it is bias. In my speech I gave credit to Tommy Douglas, but this member who posed the question refused to acknowledge the lesson of history. It was the great Liberal Prime Minister, Mackenzie King, who in fact promised medicare for this country. And that also, incidentally, can be researched in the Library of Parliament.
Madam Speaker, if a member would like to ask a question and receive an answer, he must listen. Since he refuses to listen, I will end my answer.


Mr. Blaine A. Thacker (Parliamentary Secretary to Minister of Consumer and Corporate Affairs):: Madam Speaker, it is a privilege to rise in this House and address a few comments to the budget and to the overall fiscal situation of the country.
As you know, I have recently been away and have had a lot of time to do reading from a broader scale of material than we read when we are actively day-to-day fighting the battles here in the House of Commons. I also had a chance to travel across the country and speak to people as Canadians, without them knowing that I was a member of Parliament or in public life at all. I have found out some interesting things.


Madam Deputy Speaker:: A point of order from the hon. member for Winnipeg North.


Rey D. Pagtakhan: Madam Speaker, I missed a crucial fact, and I must apologize.
I would like to say that I resigned from the medical association when it tried to fight medicare.


Madam Deputy Speaker:: That was not a point of order, according to our rules. But I see that the hon. member wanted to set the record straight.
The hon. member from Lethbridge has the floor.


Blaine Allen Thacker: Madam Speaker, one of the points that came home to me very strongly as I talked to people, without them knowing that I was a member of Parliament, was the fact that they think that what we get into in this House is really a bunch of silliness. People are truly fed up with the way the minute the television camera hits us, we all start to act as if we were Clark Gable. It really is a tendency, and I am not criticizing anyone else any more than myself, because that is the reality of what we do. The minute television hit the House of Commons, we all became actors and the power had to leave. The decisions are now made in committees, where we do not have television, because we cannot seem to address the issues in a sensible way.
What I would like to try to do today is to say a few words about the reality of the situation. If I had any goal, it would be to try and face the world as it is today and have Canadians who might be listening this afternoon realize that the budget has to be seen in a broader Canadian context and, indeed, in a global context.
The opposition parties, of course, will adopt the strategy that we used in opposition. It is a strategy of trying to pick out little parts of the budget and blow it up as if it were the most important part of the budget, rather than seeing everything in a broader context. That is a very clever debating strategy, and we all do it. But I think the citizens out there often forget that that is the debating strategy and the tactic that the opposition parties use, and quite properly use.
I think Canadians are beginning to realize, too, the awesome power that special interest groups have come to hold in our country. I can say as an elected person over the last 12 years that the growth of the special interest groups and their power to virtually force us to make decisions in their favour rather than in the common good of the nation as a whole is very disturbing. I honestly do not know what the answer is. It is much worse in the United States of America, where individual congressmen are virtually captured by what they call PAC groups-personal action committees-which pay them a lot of money and get them re-elected. We do not
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have that problem to the same extent here because we use financing through the tax system. I think that is an excellent system and we want to keep that up because it puts more distance between us and the special interest groups. Nonetheless, the combination of a powerful special interest group and the national media, as we all know as members, here in Ottawa is totally isolated from the reality of Canadians who live in each of our individual ridings.
We are all very happy with our regional media who try to give some balance and are much better in giving both sides of the story than the national media. The national media seems intent on bringing down a Prime Minister or a government of whatever stripe is here. It is as if the national media believe that they are the opposition of the country and have a credibility or have the right to destroy people. They will destroy anybody in this House if they can get anything on you with absolute immunity. That is not right, but again with this concept of freedom of the press, I myself do not know how we can control it. I know that it is at the point where we have got to do something to bring that into a better system of balance.
What is the context of this budget and the government policy in general? I think again we have to understand the world as it is. There have been enormous changes in the world in the last 5, 10, 15 years. For example, in the European Economic Community we find this veiy powerful grouping of the European nations. It will be a common market by next year and they will have fewer barriers regarding the transfer of goods, capital and labour between sovereign nations than we have between our 10 provinces in this country.
Just think about it. Less than 50 years ago they were at war with each other and killed millions of themselves in that Second World War. Yet today they have fewer barriers regarding the transfer of goods, capital and labour, between the sovereign nations than we do here in Canada.
The think tanks, or the economic groups, tell us that there are some 1,600 barriers between the free transfer of goods within this country. In agriculture alone there are something like 160 barriers to the so-called Canadian common market. What that means is that as a nation we have not been able to compete with the other countries in the world.

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Then look at Asia. Look at that ASEAN group with Thailand, Brunei, Singapore and Malaysia. They again are into a common market that is very big; over 300 million people and the free transfer of goods, capital and labour.
We had to do something in this country because we are 24 million people. We are not isolated in the world. It is true that our dairy industry operates only for the Canadian market. It is true that the poultry industry and the feathered industry operate only for the Canadian market. But virtually every other aspect of agriculture-beef and grain, our forestry industry, our mining industry- creates wealth for us and has to compete in the world. Therefore, we have to meet that global situation. Whether it is with our tax system, whether it is with our free trade agreements, or whether it is with the tariff system, we have to be able to get on and compete in the world. That competition is fierce.
Privatizations; countries around the world of whatever political stripe, New Democratic, Liberal, Conservatives have all moved to privatizations. Why have they done that? Simply because it has been shown by just hard day-to-day evidence that nationalized companies cannot keep up in the marketplace. They cannot make those competitive decisions fast enough. They cannot deliver the goods. Partially, the reason is that when they are controlled politically, when they get into trouble, rather than making the proper decisions within their corporate context, they come to governments and governments bail them out. Again, as a special interest group, when they come in and say to us "If you do not give us this money, we are going to lay off 10,000 employees", of course we give them the money. Other countries have done that around the world. The solution has been to privatize, get the company out where politics cannot play a role in it and distort it.
What is the marketplace? It really is simply the sum total of all the individual decisions that Canadians make and people in other countries make.
That amounts to the marketplace and we believe fundamentally, or certainly I do, that millions and millions of individual decisions taken in the best interests of individuals themselves will lead to a far wiser result over all than if a government cabinet of whatever political stripe-it does not matter to me whether it is
Conservative, Liberal, or NDP-makes them. I just know from my life experience that governments cannot make those decisions to replace the millions of individual decisions that people make in their own interest.
The Liberal Party once believed that, and then under Prime Minister Trudeau it got off on a different track where it was much more socialist. The NDP is still, at the national level anyway-they are much more realistic at the provincial level where they have actually have had to exercise power-locked into the ideology of centralization. The NDP still wants to nationalize banks, to nationalize the CPR, and to nationalize the distribution of farm products.
I think the NDP will gradually get away from that. I hope they will in their next national policy conference. The fact of the matter is that social democratic countries across Europe are getting rid of their manufacturers' sales tax which we finally have, they are recognizing the rights of intellectual property.
Just think of the battle we had over the patent legislation on drugs. No doubt some years ago the drug companies were increasing the prices higher than they ought to have and so nations reacted. Other countries put in price review boards. What did Canada do? We took away their patent rights. So why would a company do any research and development in Canada? Of course, it would not. It would do its research in Germany, in Britain, in Switzerland, the United States where it could get a patent right.
When we tried to give patent rights here and instead substitute a prices review board we had an awesome fight. The NDP was instrumental in opposing that and held it up for many months.
It was the same with plant breeders' rights for agriculture. Other countries moved to plant breeders' rights 15 years ago. I can remember Eugene Whelan bringing in plant breeders' rights. We were in favour of it but the NDP and a number of church groups were opposed. They actually held up that bill for 15 years. By the time we brought the bill through, Canada and its young researchers are 15 years behind.
Fortunately, I have to say, they learned their lesson because when we came to the Integrated Circuits Intellectual Property Bill, to give patent rights to the people who design these chips and the way these microchips work, both opposition parties were in favour of that. But
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they delayed the drug patent bill, they delayed plant breeders' rights.
Yet social democratic countries around the world adopted them years ago, 15 years ago. Why is it that Canada has to be so far behind? That is what has hurt us. We are behind. As a developed country we should be ahead. We should be leading the charge, not following along behind.
I have mentioned a number of things, for example, the GST. That fundamental move to replace a tax on our manufacturers, again other countries around the world had a manufacturers' sales tax and abandoned it years ago, but not Canada. We hung on to it and hung on to it, partially because this House has become stymied in being able to act quickly enough. Finally it has been replaced and we are joining the world community of nations in having a consumption tax. It is far better to tax consumption-people who consume more pay more-rather than taxing savings because it is the savings in a nation that are used to build its plants. It is savings that are used to refurbish plants, to move into new industries.
We have even got away from that. We were spending our savings on consumption. We were spending our savings by giving it to provinces, for example, the Canada Pension Plan. There is a contrast between the Quebec Pension Plan, where those premiums are taken and put into investments to build their province, and as a result Quebec today has a very dynamic small business industry, and the Canada Pension Plan, which was given to provinces at a very low rate of interest and they spent it on operating programs. As a result we have had to borrow money. We have a national debt of $400 billion of which half is owed offshore. We are totally captured by the capital markets of the world.
The new budget-the reality of 1984.
I want Canadians to appreciate the significance of 1984 and that budget deficit of $38 billion because it had two components to it. One component was the operating deficit and that was some $16 billion. What that meant was that Canadians were receiving $1.33 worth of programs. They were only being taxed $1 and the government was borrowing the rest under the table.
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Now for the individual it looked good. They had these wonderful programs. We love them. We were only taxed a dollar so we still had lots of money in our pockets. What did we do? We went out and paid too much for our houses, we paid too much for our farms, we paid too much for our businesses. So that in the area where I come from, land that was valued at about $100 per acre, based on its productivity, suddenly went up to $600. Of course, it could not continue on that basis because $600 land cannot be paid for with the produce it produces.
So, naturally, those are the farmers today who are in trouble, the people who bought that land for $600 an acre in my hometown, when it was really worth $100. That was all a result of receiving $1.33 in benefit programs and being taxed only $1 and the government borrowing the difference on the side, so to speak, or practically under the table. So the national debt started to grow.
When we came to power, we had a $38 billion deficit; $16 billion on the operating and $22 billion already for interest on that national debt.
Could the government change that around in one year? Well, anyone with any common sense knows that it cannot do that. It cannot increase taxes by $16 billion in one year and cut programs by $16 billion. We had to come up with a staged program. The first goal was to balance the operating budget, and our Minister of Finance did that in five years. It went from a deficit of $16 billion to, today, a surplus of $12 billion.
What that tells us is, if past governments had not built up the national debt, we could, this year in this budget, reduce taxes by $12 billion. Every cent of the deficit today is interest on the national debt. It was unnecessary because when Mr. Trudeau came in, indeed, Mr. Turner was the Minister of Finance who had a surplus budget. He started us into that routine of deficits and every year for 15 years the operating budget went up by 14 per cent. The Liberals did not have the honesty, I think, to turn to Canadians and say "look, you want this program, fine, here is a corresponding tax to pay for it".
If we could just put an amendment in our Constitution that governments had to say "for this program there is the tax, what is your choice", that would force a lot of

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restraint on governments and save people from getting into this long-term trap.
The people who should be really annoyed are the young Canadians. It is the young Canadians who see in this budget, for the first time, some hope. First of all, we are going to start to pay. Our generation is going to have to pay for these programs that we are using today. We are going to have to pay the taxes to not only cover our programs today, and we do, but we have an extra $12 billion in taxes to go toward interest on the national debt.
With the GST, by 1994, if everything works out, and nobody can guarantee that it will-but it is a reasonable plan and the past plan, to take the $16 billion deficit on operating to a $12 billion surplus, worked-we hope that by 1994 we will be equal. We will not have to borrow in the markets. Would that not be marvellous, that the federal government would not have to go out and borrow new money from Canadians. Then that money could be available for developing the economy and doing what Canadians want.
Then, what also happens is, as we pay a dollar down on the national debt at that time, we do not have to pay interest on that dollar the year after and we can get it going in an upward spiral so the more we pay on the debt, the more interest we have, we can then pay more on the national debt. It will be marvellous, but it is going to take 15 to 20 years because you cannot get yourselves into trouble over 15 years and get out of it in one or two years. It will probably take 15 years before we are out of it, but hopefully the national government will stick to that plan so we do not back off.
What I thought I would do with my remaining time is talk to Canadians who might be listening today about some of our programs. The Established Programs Financing transfers from the federal government some $20 billion to the provincial governments. When the opposition says that medicare is being destroyed, that is that tactic of trying to take one thing and trying to put some fear into Canadians, but it is not really based on reality. Twenty billion dollars a year is still being transferred to the provinces for medicare.
The reason medicare is in trouble goes back to that original program where the federal government was transferring money to the provinces, and the provinces were using it without being accountable. That is the fundamental problem that we have to solve. The people who spend the money should also have to tax for it, because they were getting the money, using it, but not giving any credit. We were taking on the national debt but they were spending the money.
In my home city of Lethbridge we have two huge hospitals. When you go out and look at all the little surrounding towns, you see every surrounding town has a hospital. We have not applied our medical capital well. We could have done it better and should have done it better. It is clear to us now but we have all these buildings. We have people working in all the buildings. How do you get rid of them?
It is the same with post-secondary education. The federal government pays an enormous percentage of the post-secondary education operating costs across the country. We get absolutely no credit as members of Parliament, nor do we get any say. At least in health care we have these five comprehensive conditions that we can hold up to a greater or lesser degree. In post-secondary education we have nothing. The federal government should have much more say in post-secondary education because it could then direct it in the national interest of Canada in order to compete with the other countries of the world.
I see my time has expired. I would love to go on for another half hour because I have many things I would like to put out by way of my point of view.


Jesse Philip Flis: Madam Speaker, I enjoyed the words of the hon. member opposite. I know he has been here for quite a while and I thought he would be getting educated each year, but he seems to be going in the reverse direction.
He talked about our party being honest with the people and, if we did not have the money to spend for the programs, we should have told Canadians that. I was wondering if he could explain to the House and to Canadians why his party, in the first year of office, spent $34 billion over revenues that it took in? Why were they not honest and why did they not Canadian people: "Sorry, this is $34 billion we do not have and we cannot spend"? It would have been at that time, six years ago,
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that the annual deficit and the public debt would have started going downhill and have not gone from $177 billion to $400 billion. I would like his explanation on that.
I would also like his explanation about the hospitals and post-secondary education. I do not know what he is recommending. Is he recommending that we eliminate the hospitals from small towns? Is that what he is suggesting? Yes, maybe the hospitals should be more efficient. I guess that is the Tory philosophy, yes. They are closing post offices so they want to close hospitals too.
He also mentioned that the federal government does not get any credit for post-secondary education. I disagree with him. The more students we graduate and at a higher level, the more we all get credit: the entire country, the nation. And we become more competitive.
I do not know what kind of credit he is talking about, that this x number of dollars came from the federal government and so that is our credit. Is he not forgetting that there is only one taxpayer in Canada? And, regardless of whether it is the federal, the provincial or the municipal government which takes it out of the taxpayer's pocket, it is still the same taxpayer that has to pay for that post-secondary education and for the hospitals. Are they trying to deceive the public by cutting the transfer payments to the provinces, making the provinces the fall guys and they are going to be the good guys saying "look how we have reduced the deficit", but not looking at the number of students who now cannot finish university or the number of people who cannot get hospital care because they have to wait and wait?
I used to enjoy the hon. member's speeches when he first arrived here, but something is happening to him and I do not like the change.


Blaine Allen Thacker: Madam Speaker, I am delighted to respond, because in my comments I gave the answer to his question. He would have liked us to balance the budget in one year, in 1984. That is what he is saying.
The Minister of Finance was honest with Canadians. He said: "Look, we have this $38 billion deficit. There is $16 billion on the operating program and $22 billion in interest on the debt". We did not believe we could turn that around in a year, but we do have an economic recovery plan that he set out very carefully, an agenda
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for economic recovery that had over a period of years the solution to it. We have taken that operating deficit of $16 billion and turned it into a surplus of $12 billion. That is a major step ahead.
In another two or three fiscal years, we will have it so that we will not even have to borrow for the interest on the debt. That will be another milestone in this nation.
It is true that we will have basically a balanced budget in terms of financial requirements, but we will have a national debt perhaps even as high as $500 billion. It is only from that time that we can start to pay down the national debt.


Mrs. Edna Anderson (Simcoe Centre):: Madam Speaker, I keep hearing from the opposition side about cuts in the transfer payments.
I would like to hear from the member for Lethbridge if he has a list of figures to substantiate or refute the accusation of how badly we have kept to our transfer payments.
Does he have something to say, for instance, on the elderly? Does he have an idea or figures that could show from 1984 to the present time how the elderly have fared through the transfer payments? Does he have any kind of a list?


Blaine Allen Thacker: Yes, I do, Madam Speaker.


An hon. member:: A well researched manual.


Blaine Allen Thacker: My colleague knows that I speak out on other occasions and she agrees with me that it is a good point to make.
If you listen to the opposition you would think there had been cuts to everything. When I look at the figures for 1984, compared to 1991,1 do not see that at all. Look at the transfers to individuals. Elderly benefits in 1984-1985 were some $11 billion. This year it is $19 billion. That is not a cut; that is a massive increase of $8 billion.
I will move to another one: equalization. In 1984-1985 the equalization payments were $5.3 billion. This year they are $8.4 billion. That is an increase; that is not a cut. TUming to Canada Assistance, $3.7 billion then; now it is $5.6 billion.
If we look at natives, they received $1.2 billion in 1984, and this year it is $2.8. Of course it is being wisely spent.

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There are now over 18,000 natives in post-secondary education. It was not anywhere near that back in 1984.
I came to town here with all of the prejudices and the myths that we learned at our grandfather's knee. One of those realities was that regional spending was not as high then. This is the transfers on regional and science, $1.4 billion. This year it is $2.6 billion. I am immensely proud when I go home to able to say to my neighbours: "Look, here is what it was in 1984 and here is what it is today". While we have increased the program spending to seniors, we have been able to decrease the federal budget, the deficit, and the national debt that will be on the heads of our children.
Turning to agriculture, which is critical for many of us including the member for Essex-Windsor, the amount the federal government spent on agriculture in 1984 was $707 million. This year it is $2.8 billion. That is not a cut; that is an increase of enormous proportions. I thank my colleague for giving me the opportunity to express that view.
The last one would be just even as a percentage of program spending. In 1984 the transfer payments to individuals were some 29 per cent. This year it is 35 per cent. So we have made some very fundamental shifts. We are transferring more federal dollars to individuals.
If I had my way, we would not spend one cent on a province. We would give all of our hospital dollars to people. We would give all of our post-secondary education dollars to students and let them make the choices as to what university they went to. That is what I would do.


James Capsey (Jim) Karpoff: Madam Speaker, one of the things I hear the Tories talking about is that they really support medicare; they think it is a national program, but the problem is the financial position of the country.
I have heard the Liberals say that they really supported the birth of medicare. I would like to read what the Liberal resolution was when they first talked about it back in 1921. It said-


Some hon. members:: Oh, oh.


James Capsey (Jim) Karpoff: Listen very carefully because I cannot distinguish between what the Liberals said and the Tories
say now. It said that "Insofar as may be practical, having regard for Canada's financial position-". The same argument that the Tories are now using to kill medicare is the argument that the Liberals used back in 1921. I would like the member's comments on that.


Blaine Allen Thacker: Madam Speaker, I don't think I should get involved in this lovers' spat across the way.


James Capsey (Jim) Karpoff: Madam Speaker, I am very happy to be able to rise this afternoon and speak on the budget on behalf of the New Democratic Party. Because I am the critic for health I wish this afternoon to focus mainly on medicare as it is outlined in this budget.
I think that initially we have to take our minds back to how medicare was bom in Canada. First of all, of course, medicare came out of Saskatchewan with Tommy Douglas and the CCF. They fought against tremendous odds, tremendous power groups, including a doctors' strike, to bring in medicare. Without that determination and philosophical commitment to a universal, free and accessible medicare by Tommy Douglas and the CCF, we would not have medicare in Canada.
The whole question of the national medicare program was developed on the basis of a 50 per cent partnership between the federal government and the provinces. It came out of the Hall commission in 1964.
One of the things I do not understand about the Tories is that they appointed Emmett Hall. He was their person and he came across with the concept of a partnership in medicare, a partnership between the provinces and the federal government. He decided there would be a 50-50 partnership in financing, in responsibility for ensuring the health of Canadians, for innovation in terms of delivery of our health care and in research.
Medicare has been one of the national programs that has held this country together. It is based on a partnership, an equal commitment by the federal government and the provinces. That has held and has been a unifying force in this country.
What we have now is a unilateral decision by this government and by the preceding Liberal governments to dissolve the partnership, to simply say, "We are not going to meet our end of the bargain. We are not going to assume our responsibility. We are simply going to walk away from this partnership".
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It is clear that Canadians realize what is happening to our medicare system. I would like to quote from the Canadian Medical Association. It said that it is alarmed at the decision to dismantle Canada's national medicare program. The Government of Canada is financially strangling medicare. This is from the same people who initially fought medicare.
We have the National Council of Welfare saying that it has grave concerns about the future of medicare. The freeze on Established Program Financing could mean the death of medicare as a national program by 1996.
What we have is a systematic erosion of our medicare system starting with the Liberals and being accelerated by the Tories since 1984, reductions of projected transfer payments in 1986, in last year's budget and now. What does this mean in terms of loss of revenue to the provinces?
The accumulated loss of revenue to the provinces is now $29.4 billion until the year 1994-95-that is $29.4 billion. It is not to the wealthy provinces alone. It is to some of the provinces that right now cannot afford to provide health care. Provinces like Newfoundland are going to lose $900 million.
British Columbia, my own home province, is going to lose $5 billion. I come from the riding of Surrey North where we have a dramatic shortage of hospital beds, one third the number that is necessary. This government has strangled our ability to develop new hospital beds.
Saskatchewan is going to lose $1.5 billion. By removing the ability to finance medicare, this cut is the strangulation, there will be an end of the cash.
The Tories have been trying to tell us for the last several months that that is not true. Last fall when I asked these questions the health minister and the finance minister denied it was going to happen. Now they are admitting it is going to happen.
It is going to happen as early as 1994 to 1995 for the large provinces. Of course, what does the Minister of Finance do in his budget? He says: "Don't worry. We will insist on national standards although the money will not be there to be transferred. We will bring in new legislation under the Fiscal Arrangements Act to ensure that the provinces comply with the Canada Health Act."
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I would like to inform them that Alberta, British Columbia and Ontario receive no money under equalization payments. How are you going to insist that B.C. comply with the act when they do not? The only other large chunks of transfer money that the government has is under the Canada Assistance Plan. Can you tell me on that side that if a province is not complying with the Canada Health Act, which you have never enforced before, you are going to stand up and take away moneys for child abuse, foster care from the Canada Assistance Plan because they are not complying with the Canada Health Act?
We have a national unity crisis right now. If the government does that with one of the provinces, taking money away from children because there is no compliance with the Canada Health Act, there would be a total disintegration.
One of the real problems with this budget is that it is a budget which destroys some of the programs that hold this country together, particularly our national medicare program.
The federal government cannot say: "We will call the tune but we will not pay the piper". That is what this budget says: we will stop cash transfers within four to five years, but we are still going to call the tune. That is just not going to happen within the framework of Canada. I think this type of legislation which destroys our national program-that is universally looked upon as one of the best health care systems in the world-is not the way to build national unity.
What is the excuse? The excuse that Tories give is the deficit. I agree that we have a deficit problem.


Mr. Sobeski:: But you want to ignore it.


James Capsey (Jim) Karpoff: No, I do not want to ignore it; I am not like the Tories. What we have had in ten years is a bungling Liberal administration which drove this country into one recession in 1982-83, and a bungling Conservative administration which drove this country into a recession in 1990 and 1991.
Yes, there is a deficit, and the deficit is caused by the Tories high interest rate policy, which is costing us $16 billion extra this year in interest payments alone, because our interest rate should be four percentage points lower-$16 billion because the Tories refused to tax their friends fairly. They gave tax concessions to the large

March 1, 1991
The Budget
multinational corporations, tax concessions to the wealthy, those people earning $100,000 or more. They will not bring in fair taxation.
Those two things have caused the deficit. They are the main reasons this country is in this position now. If they had brought in fair taxation in 1984, the day they arrived, if they had brought in proper interest rates, we would not be running a deficit of $30 billion this year.
I am beginning to wonder what is behind it. And I think it is that the Tories are philosophically against universal social programs.


An hon. member:: Absolutely.


James Capsey (Jim) Karpoff: Absolutely. They want an Americanized system. They want this harmony with the United States that they keep talking about in the free trade deals, harmony with the American medical system, where 57 million Americans either have no medical insurance or are under insured.
Walter Cronkite has done a comparison between the two medical care systems. If you watched the program, you saw the difference. What is going to happen with this approach to our national medicare is that we are going to abandon it as a national program; instead of a blanket, we are going to get ten patchwork quilts. The provinces are going to start, under financial pressure, bringing in user fees, extra billings, a two-tiered health care system.
We already have people in British Columbia, such as the premier of B.C.-that great and fantastic thinker, and I say that a bit facetiously-who was talking about perhaps establishing private-for-pay health care for the people who can afford it. Maybe we should have the Americanization. That is what is going to happen if the federal government abandons its partnership.
In closing, Madam Speaker-I think my ten minutes are up. Are they not?


Madam Deputy Speaker:: I realize now that the hon. member was expecting to speak for ten minutes. I think there was an understanding that members who wished to do that would advise the Speaker. The Speaker cannot guess at who will be sharing time.


James Capsey (Jim) Karpoff: Madam Speaker, I will be speaking for 20 minutes. I am glad there is a consensus in the House that I will now speak for 20 minutes.
The program that Walter Cronkite narrated was a very well documented and thoughtful program. He documented the problem of the American health care system, and some of the problems of the Canadian health medicare system. One of the things we have to realize is that there are problems within our Canadian health care system. There is no doubt we have problems we must address. They are the problems of escalating costs and a lack of distribution of health care across this country by region. There are problems that relate to access, and I want to spend a few minutes on each of those areas.
One of the things we have to start looking at is the federal government's role in looking at alternatives within our health care system.
The federal government has had a major responsibility for promotion and research in health care. It is the level of government that has supposedly been responsible for doing the research that is necessary to innovate within our health care system. It is the level of government that is supposed to be looking at health promotion, such things as anti-smoking campaigns, campaigns for promoting fitness and activity, campaigns which relate to abuse of drugs.
What has the government done in this budget? It slashed its expenditures in these areas, even in areas such as health services and promotion. Grants to voluntary health organizations have been held even, no increase. Grants to support health promotion at the community level have been cut by over 20 per cent.
This is the government's commitment to health promotion. It is the area that we need most. The government is refusing to deal with such issues as the promotion of adequate drug abuse programs, the whole promotion of the health problems of tobacco. The tobacco lobbyists are still preventing this government from bringing in realistic warning legislation dealing with smoking. It is simply because of the financial clout that some of the tobacco lobbyists have with this government.
The other area I want to address does not deal specifically with the question of medicare but with the budget is the reduction in the Canada Assistance Plan.
There is a tremendous tie-in because we in this country know that there is a dramatic correlation between poverty and demand for health care and the lack of health of individuals. We know that as the level of

poverty goes down, the higher the infant mortality rate is, the higher the rate of respiratory disease, the higher the rate of hospital admissions which cost us tremendous amounts in terms of health care. One of the things that this government has to realize is that if they are going to deal with the health status of Canadians, they must deal with the question of poverty.
Yet this budget slashes expenditures under the Canada Assistance Plan that are designed to deal with poverty and child welfare.
The Budget


Madam Deputy Speaker:: The hon. member may want to use the few minutes that are left when the Houses resumes.

It being three o'clock, the House stands adjourned until next Monday, at one o'clock, pursuant to Standing Order 24(1).


[Stage Direction]
The House adjourned at 3 p.m.
[Stage Direction]
Monday, March 4,1991