1991-12-05

Mr. Albert Cooper (Parliamentary Secretary to Minister of State and Leader of the Government in the House of Commons):: Madam Speaker, pursuant to Standing Order 36(8), I have the honour to table, in both official languages, the government's response to 10 petitions.
[Editor's Note: See today's Votes and Proceedings.]


PETITIONS
Mr. Len Hopkins (Renfrew-Nipissing-Pembroke):: Madam Speaker, I have a very lengthy petition here.
The petition is signed by citizens of Canada from Huntsville, Barrys Bay, Ontario, Pembroke, Renfrew, Combermere, Whitney, Highland Grove and many other places throughout Ontario.
This petition is to draw to the attention of the House that mace and tear gas canisters are illegal in Canada because they infringe on the rights of the perpetrator. These canisters can be lifesavers to our female population when rape and murder of these people is on a dramatic increase.
Therefore, your petitioners call upon Parliament to legalize mace and tear gas canisters in Canada for self-protection.


Mr. Ray Funk (Prince Albert-Churchill River):: Madam Speaker, I have the honour to present a petition
signed by about 150 people from southern Saskatchewan, including the communities of Assiniboia and Gravel-bourg.
These people have observed what is happening to the rural way of life and have said enough is enough especially when it comes to the closure of rural post offices.
Therefore, the petitioners are calling on Parliament to support Canada's rural way of life, to support the maintenance of rural post offices and postal services and to reject this government's agenda of cutbacks and closures.


Mr. Nelson A. Riis (Kamloops):: Mr. Speaker, it is my pleasure to present a petition on behalf of a number of constituents from Kamloops, British Columbia.
The petitioners are concerned about the potential of cutbacks in the RCMP. They are asking that the government ensure that proper funding for the RCMP is maintained to enable it to fulfil its mandate and role as the only police force for communities across British Columbia. It is a viable symbol of Canadian unity at this critical time.


Nelson Andrew Riis: Madam Speaker, on another matter, the petitioners who again reside primarily in communities throughout British Columbia point out their concern about an intention to divert one of the British Columbia rivers to service the California area in the United States.
The petitioners are asking that the government not allow this river to be dammed or diverted into the United States.


Mrs. Coline Campbell (South West Nova):: Madam Speaker, I too have the honour to present another petition certified as to form and content by the Clerk. It has been signed by a couple of hundred people in the Middleton, Annapolis and Digby area.

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The petitioners show a concern with the direction the Department of National Defence has taken in terms of its defence policy particularly as it relates to Canadian Forces Base Cornwallis. They want to continue the recruit training but want to see additional jobs kept there in terms of where the policy for national defence is going.
They would like to see a new direction by national defence to increase the use at CFB Cornwallis and particularly perhaps even put a peacekeeping training centre at CFB Cornwallis.


QUESTIONS ON THE ORDER PAPER
Albert Glen Cooper: Madam Speaker, I ask that all questions be allowed to stand.


Madam Deputy Speaker:: Shall all questions stand?


Some hon. members:: Agreed.



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[Stage Direction]
The House proceeded to the consideration of Bill C-18, an act to amend the Income Thx Act, the Canada Pension Plan, the Cultural Property Export and Import Act, the Income Thx Conventions Interpretation Act, the Tax Court of Canada Act, the Unemployment Insurance Act, the Canada-Newfoundland Atlantic Accord Implementation Act, the Canada-Nova Scotia Offshore Petroleum Resources Accord Implementation Act and certain related acts, as reported (with amendments) from the Standing Committee on Finance.
Madam Deputy Speaker:: Do I understand that there is unanimous consent to proceed with report stage of this bill today?


Some hon. members:: Agreed.


Hon. Marcel Danis (for the Minister of Finance) moved: that the bill, as amended, be concurred in.


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


Some hon. members:: Agreed.


[Stage Direction]
Motion agreed to.
Madam Deputy Speaker:: When shall the bill be read the third time? With leave of the House, now?


Some hon. members:: Agreed.


Marcel Danis: that the bill be read the third time and passed.


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


Hon. John McDermid (Minister of State (Finance and Privatization)):: Madam Speaker, I will not take a great deal of the time of the House today for debate on third reading of Bill C-18.
I might point out that my colleague from the New Democratic Party was intending to ask for unanimous consent to introduce an amendment which I can tell the House we would have opposed. This was not because of the amendment but because of its late arrival and not having had the opportunity to examine it.
However I have given him a commitment on behalf of the Minister of Finance that we will look at his proposal very carefully and give it consideration in the next technical bill that comes from finance at a later date.
Before I get into covering the items in the bill I want to thank the finance committee and all those who participated in the consideration of this bill and others.
December 5, 1991

Madam Speaker, in this fall session those involved in the finance committee, as well as legislative committees dealing with finance matters, have done a great deal of work in committee. There has been good discussion and great co-operation among the parties. I think that unfortunately the public from time to time bases its views on the proceedings here in the House of Commons during Question Period. That may not be the best place for people to understand what goes on in this place and in the other place as well. I appeared before the Senate last night. The work that goes on in committee and in debates in this House, other than Question Period, is most productive under most circumstances.
The work that has been done this fall with the finance and legislative committees dealing with financial matters has been tremendous. That is my area of concern as you know, Madam Speaker, so I can only comment on that. I know other work has gone on but the work has been tremendous and I just want to at this time publicly thank all those who have been associated with it.
A fair and efficient tax system plays a very vital role in creating the stability that we require for growth and prosperity. The goals of equity and efficiency are at the heart of the various measures of tax reform the government has introduced as part of the agenda for economic renewal that we set out back in 1984.
Bill C-18 will help to improve the fairness and efficiency of our tax system to the advantage of Canadians in a number of important areas. The scope of the bill alone I believe testifies to that.
This bill includes Bmeasures that were announced in both the 1990 and 1991 budgets and incorporates a number of initiatives that were announced separately from these budgets. It embodies a number of amendments, mainly technical in nature, that are directed to improving administrative fairness of the tax system.
I should also acknowledge the useful guidance we have received on the technical aspects of the bill through consultations with taxpayers and their advisers. Since the measures were announced the Department of Finance has conducted extensive consultations on them and they were improved as a result of this process.
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As I have suggested, Bill C-18 encompasses measures to improve the fairness of the tax system in a number of important areas. I would like to go over them quickly if I may just for a few minutes.
The Canadian tax system has long recognized an obligation to promote equality in its treatment of Canadians with physical and mental disabilities and those who are not disabled. Bill C-18 gives effect to a number of measures to improve and to broaden tax assistance for disabled Canadians. These measures were announced in the February 1991 budget by my colleague the Minister of Industry, Science and Technology and International Trade. He was then the Minister of Finance. I will not go into all of them today but I would like to highlight just a couple.
The disability tax credit will be increased in 1991 by $125 to $700. The criteria for eligibility for this tax credit will be clarified to ensure greater fairness and uniformity in its application. This will increase federal assistance to disabled Canadians by $35 million a year.
The medical tax credit will be broadened for the disabled. The list of medical expenses that are eligible for the credit is expanded and non-working Canadians with disabilities will receive a credit for part-time attendant care.
The owners of buildings who undertake renovations to improve access to the disabled will be able to deduct the cost of such renovations immediately rather than over a number of years. Of course we see these renovations going on. There is more to be done. And we would encourage people whose facilities have not been converted to accommodate the disabled to do so. We believe this tax measure will go a long way in helping that to come about.
Taken together with the other changes, Madam Speaker, these measures represent a significant advance in the way the tax system promotes equal opportunities for Canadians with disabilities. The Minister of Finance and I have been conducting pre-budget consultations across the country. We met just last week in Toronto with members of the Canadian Paraplegic Association who were very quick to draw to our attention that there are further things the federal government can do to improve the lot of the disabled. We accepted their representations. They were articulately presented. Of course we are taking a look on an ongoing basis at these represen-

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tations to see where we can in fact improve the fairness of the system for those with disabilities.
Bill C-18 also includes measures from the 1990 and 1991 budgets which are designed to strengthen Canadian culture. A very, very important part of being a Canadian is our Canadian culture.
This is something the government for a very long time has looked into, to see how we can improve the situation of artists and artisans in our country to assure they are properly recognized and treated fairly within our tax system.
The Income Thx Act encourages gifts of cultural property to certain Canadian institutions or public authorities by providing special tax treatment for such donations. Some artists donate their works and we want to assure that Bill C-18 covers the streamlining of the rules of governing cultural donations by enhancing the role of the Canadian Cultural Property Export Review Board in assessing the value of such property.
There are also measures in this bill that will benefit artists directly. Artists who are employed will now be allowed to claim a deduction for expenses incurred in the exercise of their artistic employment. A self-employed artist who donates certified works to designated institutions or public authorities will be allowed to claim a charitable tax credit without having the value of those works included in income. These all come from representations made over the past number of years by artists in Canada and a commitment by the Prime Minister to assure that changes are made so that our artists are recognized. I do not believe any sector of our economy has played a more important role.
I want to now return to the sector of small business. I think there is no sector in our economy that has played a more vital role in creating growth and new jobs than the small business sector. Bill C-18 includes two measures reflecting the government's commitment to encouraging investment in small business enterprises.
The first is an improvement in the tax treatment of small business share holdings. The reason for it is because a taxpayer who realizes a capital gain on the disposition of shares of a qualifying small business corporation is eligible for an enhanced capital gains
exemption of $500,000. When a successful private corporation wants to expand by having its shares listed on a Canadian stock exchange, it ceases to be a qualifying small business corporation. The result is that the enhanced capital gains exemption will no longer be available to the original shareholders even in respect of gains that accrued while the corporation did qualify for the exemption. The situation penalizes successful businesses.
Bill C-18 remedies this anomaly by allowing a small business to go public without sacrificing its shareholders' enhanced exemption. That makes abundant sense.
A second initiative that will be helpful to small business concerns is new rules relating to national labour sponsored venture capital corporations. These will encourage investment in small and developing businesses. If we have heard anything in the pre-budget representations of a common theme coming from all the associations and groups that we are meeting, it is the problem of venture capital in this country.
Our pre-budget consultations are being done a little differently this year in that we are doing it with groups altogether rather than one on one. We are meeting with groups together and they are talking to one another, which is wonderful. The National Action Committee sat in on meetings with the Canadian Bankers Association and the Retail Council of Canada and the agricultural community. They started talking to one another and understood that they had mutual problems and concerns.
When we got talking about the issue of venture capital, the theme was that we need venture capital in this country, but the solutions of how to handle the venture capital, encourage venture capital, came from three different groups, all with different ideas, all opposing the other person's idea because it would not work for this reason or for that reason.
What transpired out of this meeting was that these groups decided to get together to try and come up with a consistent presentation that they feel would work in this country to encourage venture capital. We believe that these meetings are being successful. They are being well attended, we are getting very good comments on them afterward, and the participation has been phenomenal. I

just spoke to the Minister of Finance who is out west now. He had one just the last day in Winnipeg.
He said it was a great success. There was great conversation, groups were talking to one another and realizing we are all in this together. We all have common interests and we should all work together for the common good.
I am quite excited about the concept. After sitting in on the first two, being a doubting Thomas at the beginning of the process, I have been converted. It has been a great consultative process and one that will bring benefits to our country.
The key element to the government's approach is to ensure that all income in Canada is fairly taxed. A number of initiatives brought together in Bill C-18 are directed toward that goal, including measures relating to taxation of non-residents, life insurers and registered education savings plans. I will touch very briefly on each of these.
In the 1990 budget there were measures announced to ensure that non-residents who deal in Canadian real estate or who create mutual funds to invest in Canadian real estate are taxed appropriately. This bill also extends the tax on financial institutions introduced as part of tax reform to large life insurance companies.
There is also a refinement in rules related to registered educations savings plans. It will limit the total amount that may be contributed in respect to each beneficiary and will allow the payment of benefits to a beneficiary under a new plan only if he or she is a full-time student. These amendments with other related changes will improve control over the plans.
Other important amendments revise the system of tax benefits for residents of Canada's northern and isolated regions, simplify the computation of the investment income tax paid by life insurance companies, and implement what are known as the available for-use rules for the timing of certain expenses and credits.
This bill also touches on pension funds. This measure recognizes the advantages of investment diversification of pension funds. Before 1990 pension funds were subject to a special tax if more than 10 per cent of the assets consisted of foreign property. Bill C-18 includes
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the proposal announced in the 1990 budget to allow pension funds to invest up to 20 per cent of the assets in foreign property by 1994.
From an administrative point of view, from the perspective of the individual taxpayer, Bill C-18 represents a step forward by improving the administrative fairness and responsiveness of the tax system. It gives the Minister of National Revenue a discretion to this end in a number of areas.
For example, if a taxpayer discovers after the normal reassessment period has expired that he or she has inadvertently failed to claim a deduction, the Minister of National Revenue will be able to adjust the amount of tax paid for and refund any overpayment. The minister will also have the discretion to waive penalties in interest where an individual has failed to comply with the law due to extraordinary circumstances such as a natural disaster or a serious illness.
This is another area I run into all the time, especially with small businesses in which the person runs the business, does the books, et cetera. They may have missed a payment to Revenue Canada for a veiy legitimate reason. Automatically they get a late payment penalty, interest charges and so on. There have been extenuating circumstances to waive those. We believe this is very important especially for small businesses. The large businesses have their systems in place, it is not a problem for them. It is usually the little guy who has those problems. This will help him.
I am not encouraging people not to make their payments on time. There have to be legitimate reasons for it and there are.
Finally, this bill contains a number of technical amendments that provide relief for taxpayers in other unanticipated situations in which the existing law would operate inappropriately. Others are intended to ensure the internal consistency of the tax system or clarify ambiguous provisions.
All of these measures reflect the government's continuing concern that the Canadian tax system should be as fair and as efficient as any in the world.
For that reason Bill C-18 deserves the support of this House. Again I want to thank colleagues from all sides of the House for their work on this bill and for their co-operation.

December 5, 1991
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Hon. Roy MacLaren (Etobicoke North):: Madam Speaker, the bill before us today is a complex piece of legislation in line with the complexity of the subject itself.
One only need lift the bill to see the weight of the proposals in it. It numbers some 2,000 pages and it deals, as the minister has just said in his introductory statement for third reading, with a variety of measures.
We in the Official Opposition support most of these measures without reservation. They correct anomalies and unintended results in the tax system.
Certainly the measures benefiting artists, the establishment of tax regulation of international shipping corporations with their headquarters in Canada, the penalty for large corporations and the replacement property rule are areas which we had the opportunity to discuss at some considerable length in committee.
The final results are satisfactory to us. I want to say, however, that when the minister speaks of this bill in some way reflecting tax reform, I find that a rather large claim to make for what is essentially a technical bill.
As my colleague from Broadview-Greenwood will no doubt expand on in a few minutes, this bill does not deal with tax fairness. To claim that this is in some broad sense a measure of the government's commitment to tax fairness is to miss the point altogether.
My colleague from Ottawa South in the House on October 7 had the opportunity to deal at some length with the questions of tax fairness, an issue which has increased among Canadians as they recognize the growing impact of the Tories' tax policies on them and on the corporations of Canada with regard to their international competitiveness.
My colleague from Broadview-Greenwood has brought forward a number of suggestions with regard to tax simplification which are worthy of serious consideration. I am sure he will want to develop some of those ideas in his intervention, and so I will not spend time on that question at the moment.
I do however want to say that the member for Ottawa South in his very able intervention of more than a month ago pointed out the fact that tax reform is obviously a very complex matter. It raises questions of fairness.
The government set a goal when it came to office back in 1984 to establish a greater degree of fairness in the tax system. The result is nothing of the sort. We do not have a fairer tax system in Canada.
We still have a situation in which higher income individuals and profitable corporations are not carrying by any means what would be regarded as a fair proportion of the total tax load.
The fact the tax load is grossly inflated, that is to say far too high, is another question which I will deal with in a moment. In terms of tax fairness, one would wonder about the equity of the system introduced by the Conservative government when the progress of the tax system has been reduced. The resort to sales taxes as opposed to income taxes has inevitably reduced that progressivity in our tax system and imposed yet a higher burden on the individual Canadian.
Let me say in that context too that the tax treatment of families in our society has to be a matter of real concern to all Canadians, and indeed I think to members of this House when they address questions on the tax system.
I would suggest that certainly nothing in this bill and indeed nothing in the government's agenda would indicate fundamental reform of the tax system so as to provide for a more equitable treatment of families, which seems to me an essential element in any reformed tax system. I regret the government did not take this opportunity or any other opportunity-I hope it might in the forthcoming budget but we will see about that-to address itself to the question of the equitable treatment of families in our society with regard to taxation.
I have touched in a few questions with regard to fairness and equity in our tax system, but I would leave it for some of my other colleagues to develop some of those ideas at greater length in response to the minister's statement that this bill introduces a greater measure of fairness into the tax system. Any Canadian would wonder very much about fairness in the tax system when they have experienced constant increases in the levels of taxation in Canada since this government first came to office.

At the root of our economic difficulties and in a sense behind this bill today is the fact that Canadians have consistently consumed more over the past decades than they have invested or even produced. Much of this consumption has been fuelled by the federal government which consistently has failed to follow a counter cyclical fiscal policy.
The minister who just introduced the bill will know very well that when this government came to office in 1984 and in the years following when it benefited from the growing prosperity of our economy as the result of measures introduced by the previous government in 1982-1983, it did not take that occasion to act as it had promised the Canadian people, to restrict government spending, to ensure that government spending was targeted to those it was intended to benefit. Instead it continued throughout a period of unparalleled prosperity in Canada to spend and spend freely, contributing thereby to a constantly growing deficit and a constantly growing debt.
The fact is that after seven years in office this government will leave the Canadian people with a legacy of a yet higher debt and a yet higher deficit. All of us know every well that this year we will see the government has been unable to live up to its forecasts. It will not be able to meet its planned restrictions on deficit spending, and what will the result be?
The fact is that the deficit spending of the government has drained much needed private savings from our economy. There is a sort of crowding out effect. The government is borrowing on the capital markets and seeking the capital which would have otherwise been utilized by private investment, thereby improving productivity in Canada and our international competitiveness instead of being used to finance public overconsumption. One result of this has been that private investors and provincial governments, for that matter, have had to seek capital offshore, thereby driving up through their foreign borrowing, Canada's foreign indebtedness.
At the same time the government, having failed and failed completely-let us not fool ourselves about that- to deal with the question of the deficit and debt, has too engaged in offshore borrowing. Canada's foreign indebtedness now stands at record heights. The fact is that Canadians are building up a problem they will have to deal with in years ahead but deal with in a way that will be painful and difficult.
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I would draw attention to what happens when the government seeks to finance its excessive spending through foreign borrowing. One thing we get is higher interest rates. Higher interest rates do not result only from foreign borrowing but they certainly contribute to foreign borrowing. We drive up interest rates for the purpose of attracting foreign capital. The result is that the Canadian dollar follows along in most instances and the Canadian dollar is then placed at a substantially greater level than its real value and certainly above a level optimal for Canada's exports. As a result Canada is haemorrhaging capital at the same time that our exports are being priced out of world markets
I said a moment ago that the federal government has been living beyond its mean. To be fair, I think one would have to say that Canadians have been living beyond their means. However, instead of making things better, this government has continuously pursued the wrong mix of economic policies. It has unbalanced our economy even further and compounded both our domestic and international debt problems.
The combination of a tight monetary policy, a deliberate overvaluation of the Canadian dollar, the large government deficits which this government has not tackled in any effective manner, and the lack of any industrial strategy, have created the economic mess that Canada is in today.
When I speak of an economic strategy I have no intention of suggesting that this government should have pursued a winner's and loser's policy of attempting massive intervention in the economy to attempt to control every last detail of our economy, but rather that it should pursue those elements of public policy that can contribute to our international competitiveness.
I say that for two reasons. One reason is that Canada in the short run is going to be able to pay off its growing and worrisome foreign indebtedness which this government has incurred by exporting. There is no other way to do it. We must export to pay off our foreign debts. How is this government going to engage in exports? It is only going to be able to do so by helping to render Canadians more competitive.
Underneath that there is yet another issue. The fact is that this government knows very well that international competitiveness for Canada, for Canadians, has become the only way in which we can match and counter the effects of globalization in investment and trade. Globalization is a problem confronting every country. Some of

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course are dealing with the question effectively. Others such as Canada have faltered and been hesitant about how to deal with this growing phenomenon of the mobility of labour, capital and goods across the world. I say "labour" in the sense of being able to manufacture in any jurisdiction.
What has this government done? What we have seen in the past month or so is a proposal for 12 more months of consultation. Twelve months to decide what? After seven years of do-nothing policies, this government has suddenly decided the thing it must do is take another year to ask Canadian people whether they think our education system is adequate.
Is there anyone in Canada who thinks our education system is adequate? Is there any doubt in anyone's mind? Come to my constituency or that of the hon. member for Kingston and the Islands and the people will tell you that they are dissatisfied with their education system. They know they are taxed heavily to pay for it. They know, as does my colleague from High Park who is a teacher and a distinguished school principal, that the system of education in this country is seen not only as lacking substance in itself, but rendering Canadians incapable of competing effectively in the global economy, which I described just a moment ago.
Not only has the government decided to postpone any of the decisions that might contribute in a sense on a micro-economic level to helping Canadians compete and thereby win that higher standard of living which we all see, but on the macro-economic side this government has failed as well. On the macro-economic side we see the government having become preoccupied, to put it kindly, with a monetary policy that uses interest rates as the single weapon in the government's armoury against inflation.
This is a gross distortion of government policy. The government has more tools at its disposal than merely high interest rates. The result is that we get, in the name of fighting inflation, an economy which is incapable of competing effectively abroad. We suffer from very high tax rates. We suffer from the lack of government
involvement in rendering the economy more efficient, in creating a framework for Canadians to help themselves and the result is that we have what I called an economic mess earlier, an unbalanced economy, the wrong mix of economic policies.
If this government had pursued a balanced economic policy, that is one that used fiscal tools, restrained its own spending, as well as a moderate policy of monetary intervention, I think we would be in a much better economic position. Those who are unemployed, those who are at the food banks of Canada and those who see little future for their children would not suffer from the very real concerns that inflict them today.
With that comment on the bill and on the thinking behind the bill, I shall conclude simply by saying that although we intend to support this bill, I want it to be placed on record that the economic policies which this government has followed in part created the circumstances where this bill was necessary. They have been the wrong policies and misguided policies. This government must change them or certainly the next government will.


Mr. Bill Blaikie (Winnipeg Transcona):: Madam Speaker, I will begin by saying that it is always interesting to listen to the hon. member from Etobicoke because he has a history of speaking on behalf of the real Liberal Party as opposed to the Liberal Party that we see represented in the rhetoric of Question Period when the various cuts that the government has made in government spending have been criticized vociferously by the Liberal opposition. The member then gets up and says that one of the things that the government has not done enough of is to cut government spending and be fiscally responsible. It has always been a great mystery to me, and I am sure to a great many other Canadians, just who speaks for the Liberal Party. Perhaps I will have time to deal with that in greater detail later on.
First of all, having to do with what the minister said at the beginning of his remarks, there was an amendment suggested to clause 91 of this bill by the Canadian Association for Community Living, which would have addressed a flaw in Bill C-18 having to do with the mentally handicapped vis-a-vis the disability tax credit.
December 5, 1991

The hon. member for Beaches-Woodbine will, I think, have more to say about that when he rises to participate in this debate, but I want to thank the minister for his commitment to consider this amendment.
This problem was brought to the attention of the committee and to the attention of the House by Mr. Paul Badertscher who appeared before the committee in this respect. He had suggested an amendment which in turn prompted the Canadian Association for Community Living to suggest its own amendment, an amendment for which we had hoped might receive unanimous consent to be put before the House here at report stage, but the government indicated that it did not feel it had had sufficient time to study the amendment. We hope that in the next round of technical amendments, as the minister said, that this problem will be dealt with.
This bill is an omnibus bill and omnibus bills always present problems for the opposition because invariably there are things in the bill that you support. In this case there are a great many things, technical amendments, housekeeping amendments, changes of language for instance to eliminate exclusive language and to use inclusive language, et cetera. A lot of these things are to some extent value-neutral, although many of the housekeeping amendments so-called are housekeeping amendments to tax measures which we have criticized in the past. Then, of course, there are things in the bill to which we take offence. So we will not be able to give our support to the bill in that context.
For instance, just to return to the question of disabled Canadians, the disability tax credit has increased from $575 to $700 per year, which obviously is a welcome change to the tax system. But the claw-back formula indexed to inflation only above 3 per cent per year is being placed on it. Surely the needs of the disabled do not increase by only the amount of inflation above 3 per cent. So we find, even in a good measure, the ambiguity of including a measure which we oppose across the board, whether we find it applied to family allowances or the disability tax credit or any other place where the government seeks to limit its responsibility to make sure that the social policy commitments that it has made in the past keep their value and continue to do so for these targeted groups of Canadians, whether they be families, the disabled or other groups, what the original policy decision intended.
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Instead, we have built into a number of these social policy commitments a recipe for eventual irrelevance, in terms of monetary significance, if this formula having to do with the claw-back continues to be built in to the government's social policy commitments.
Another thing which interested us in this bill was the whole question of northern tax benefits. I think the hon. member for Prince George-Bulkley Valley will be addressing that on behalf of the NDP caucus.
Over all, this bill does not address, as the member before said, tax fairness. Surely anybody who has bothered to read the bill realizes that there is nothing in this bill which so substantially transforms the Canadian income tax system that it could be called an attempt at tax fairness or anything like it. The fact is that those elements of the Canadian income tax system which are unfair have not been addressed in this particular bill. In fact, over the life of this government the tax system in this country has become increasingly unfair.
It was not an absolutely perfect system that the government inherited in 1984 when it took over. Let us not kid ourselves. There were many inequities built into it, many tax shelters, loopholes, et cetera, tax expenditures that had been put in there by the previous Liberal government, a great many of them in the 1970s. Some of these have been eliminated but in our judgment some of the big ones have yet to be touched by this government, while at the same time it has increased the burden on middle class Canadians.
I think the icing on the cake is of course the GST which has been harder on middle class Canadians than on anyone else. I think that what we are seeing in this country is a growing sense of tax aversion, that people are feeling taxed to death. This leads to all kinds of regrettable political and ideological consequences in the sense that people are being conditioned through an increased tax load to accept the notion that some of the social programs that we have in this country need to be scaled down, diminished or cut back in some way, when in fact if we bothered to look at it in an analytical way, we find for instance a study that was done through Statistics Canada which shows that it is not social programs that are causing the deficit. It is tax expenditures, the interest rate being paid on the debt. These kinds of things are-

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Mr. Milliken:: What is Bob Rae doing about it? Tell us about Bob Rae and his silk stockings.


William Alexander (Bill) Blaikie: I am not sure what the hon. member for Kingston and the Islands is saying. I cannot hear him. Is he disagreeing? I take it the Liberals are disagreeing with my claim that it is not social programs that are the cause of the deficit.


Peter Andrew Stewart Milliken: Everything is causing the deficit.


William Alexander (Bill) Blaikie: He says everything is the cause of the deficit. To simply say everything is the cause of the deficit is not to be too discriminating in nature. Perhaps that is the line that the Liberals would like to take now after their thinkers' conference. It is almost a contradiction to think about a Liberal thinkers' conference.
Nevertheless, they had a conference at which they came out and finally revealed their true colours, the colours revealed by the hon. member from Etobicoke here when he spoke on behalf of the real Liberal Party: i.e. globalization is something that we have to accept and accommodate ourselves to, protectionism is passe, the Liberal argument against the free trade agreement is now proving to have been as phoney as we thought it was in 1988. They have accepted the North American free trade agreement idea. Just the other day a Liberal member of the legislature in Manitoba proposed a motion having to do with the North American free trade agreement which basically accepted the reality of those negotiations and simply asked that something be done about labour and environmental standards.
We see here the true face of the Liberal Party which is committed to the same corporate world view, to the same corporate agenda as the Conservative Party. Why should we be surprised about that? We know that the Liberal Party and the Conservative Party are funded by the same people. The same piper calls the tune. The Liberal Party is permitted to sound progressive at election time, if that means that somehow progressive Canadians can be tricked into voting Liberal.
When it comes to the tax system, let us remember that most of the unfairness built into the tax system, particularly through tax expenditures, was built into the tax system in the 1970s by Liberal governments. We still do not hear the Liberal Party collectively calling for the elimination of those tax loopholes. There might be the odd individual, like the hon. member for Broadview-
Greenwood, who wants to replace the whole system with a flat tax, or single tax. Fair enough. I do not agree with him but at least he has an idea about what to do with the tax system.
But I very carefully said I have never heard the Liberal Party collectively, because the hon. member for Broadview-Greenwood is not the tax critic for his party, as much as he might like to be. The hon. member for Ottawa South is the tax critic for his party and he has not, on behalf of the Liberal Party, called for the elimination of these loopholes.
The tax system cannot solve the deficit problem by itself without changes in monetary and fiscal policy like lower interest rates. But much could be done if there was the political will to eliminate significant tax expenditures.
For example, the present tax system allows business people to deduct 80 per cent of the cost of all their business meals and entertainment, including GST. This cost the federal government over $1 billion in tax revenue, exactly the amount that was withdrawn from federal support for medicare in the 1991 budget.
When asked about this bias in favour of lunches over nurses, the finance minister talks about competitiveness with the United States. This is the famous level playing field we were promised. We level our health care system down-some would say level it completely-and are unable to make the tough-minded tax choices that we should be making in the current situation. If Canadian business depends on this tax expenditure for its very survival, we are indeed in sorry shape.
While Canadians are lining up at food banks, taxpayers should not be financing and encouraging the over-consumption of entertainment at the expense of productive investment through this particular business tax deduction.
The manufacturing and processing tax credit was introduced in the early 1970s to combat a subsidy that the U.S. provided for American exporters. In 1986 the American government repealed the tax subsidy but Canada did not repeal the manufacturing and tax processing credit. This tax credit's continued existence was justified as a way of off-setting the despised manufacturers' sales tax.
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The MST has now been replaced by the GST, but this $1 billion annual tax expenditure survived the budget and in the House of Commons on February 27, the then Minister of Finance, the Minister for International Trade, defended it as if no changes had occurred in Canada or the United States.
The lifetime capital gains exemption when it was established at $500,000 in the 1985 budget brought the entire Tory caucus to its feet in one of the longest and most ecstatic standing ovations ever seen in the middle of a budget speech. I was there, Madam Speaker, and I remember it well.
In 1987 this cheering was no doubt echoed by the wealthiest 10 per cent of Canadians who received over 80 per cent of this non-taxed form of income. This provision has since been moderated. It continues to cost the Treasury about $1.7 billion a year, revenue forgone that must be replaced by sacrifices on the part of lower and middle income Canadians.
The dividend tax credit cost the government about $1 billion each year. The original justification for this measure was to avoid double taxation by compensating shareholders for part of the corporate tax paid and to encourage Canadians to invest in Canadian shares.
Given the number of corporations that manage to pay no taxes at all, this attempt to prevent double taxation often amounts to a guarantee of no taxation. At the same time there is scant evidence that the other economic goals of this tax expenditure are being realized at all.
Other tax expenditures like the subsidies given to real estate developers by which they claim depreciation on property that is actually increasing in value, the subsidy given to the corporate world through deductions for advocacy advertising, the endless deferral of corporate taxes by exaggerated depreciation of capital assets, the abuse of the interest deductibility rule for purposes other than stimulating small businesses, all add up to a truly astounding amount of money that can be called nothing other than a hidden form of government spending.
The billions of dollars spent through tax expenditures is the hidden reality behind the big lie that it is social spending. That is the cause of the deficit. It is interest on the debt, aggravated by a self-inflicted policy of high interest rates, in combination with the cumulative effect
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of the tax expenditure spending by successive governments that is the cause of the deficit.
The removal of the tax expenditures in question, complemented by a more progressive income tax system, particularly at the top end where now no distinction exists between the marginal rates for people earning $60,000 and those who make $600,000, and some form of wealth tax would provide billions for the Canadian government to reduce the deficit and spend on the things that would make a country truly competitive.
We are constantly being presented by the Tories with the false dilemma of having to choose between social justice and being competitive. The truth is that taxes are only one factor among many that make a country attractive as a place to invest as well as to live.
The Conservatives are making the fatal mistake of choosing what might be called negative competitiveness, sacrificing social harmony, important infrastructure, research and development and Canada's human and ecological capital, when a truly wise government would collect taxes in a fair and equitable way and invest the revenue in the things that would count for positive competitiveness in the 21st century.
Those who leave such a Canada, who would carry through on their threat to go elsewhere if we were to introduce this kind of fair tax system because they object to fair taxes spent wisely and justly will come back as so many doctors did in the 1970s from the U.S. where they discovered that a high income is not all there is to practising good medicine. Or, are we better off without them? At a time when Canadians are to be united about anything, it should be by a common quest for social justice.
Madam Speaker, if I have any time left, I would like to expand on this notion of positive competitiveness because there is more than one way to be competitive.
The problem with the free trade agreement and with the North American free trade agreement, if that it comes through, is that it will be a beggar thy neighbour kind of competitiveness: who can get down to the lowest wages, the weakest environmental regulations, the most despicable labour standards or whatever the case maybe.

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Now states like Georgia, et cetera are advertising: "Come down and invest here. We do not have any of those horrible kinds of regulations they have up there in Canada where you have to pay people a decent wage and respect the environment". It is not that we respect it all that much up here, Madam Speaker, but perhaps we respect it more than they do in Georgia. It will get even worse under an agreement with Mexico.
The other way to compete, Madam Speaker, is to compete the way that some other countries in the world do it like Germany, Japan, Sweden and many other countries where you say: "We are going to have the kind of research and development, we are going to have the kind of transportation and telecommunications infrastructure, we are going to have the kind of trained work force, et cetera that is going to make this a good place to invest regardless of the fact that we may have higher taxes and expensive social programs".
That is not the way this government is going. It is not the way North America is going. I regret it. It is a kind of vicious cycle that we get into instead of what economist Robert Reich, for instance, has suggested is the kind of virtuous cycle that we should get into, building upon our strengths, building to be competitive rather than dismantling to be competitive which is exactly the kind of competitive atmosphere that we have ourselves into now.


Mr. Dennis Mills (Broadview-Greenwood):: Madam Speaker, first, before I ask my hon. friend from Winnipeg Transcona a question, I would like to clear up some of his assertions.
He made a comment concerning my colleague, the member for Etobicoke North. The hon. member is accurately reflecting the spirit that exists within the Liberal Party right now, that is, one where we are debating all sides of these very complex issues.
We are not too concerned about the fact that he is debating complex issues from time to time. It is natural that we seem to have in the spirit of honest debate slight differences of opinion. I want to clarify his point about the Aylmer Liberal think-tank conference.
The hon. member should know that this was not a Liberal think-tank conference. It was organized through the initiative of a couple of keen Liberals but in fact we had people there speaking to some members of our caucus and other members of our party at large.
The speakers were in fact mostly non-Liberal. We opened our party up to the views of New Democrats who were present there, to Conservatives and to people from all over the world because we were trying to clarify some of the complex issues that we as national politicians are facing today.
The thing that disturbed me a little bit were the member's assertions about our history as Liberals in contributing to the complexity of the tax system. I think we as Liberals have toB accept some of that fault and I believe most would. However, he is being rather unfair because he is forgetting that his New Democratic friend Premier Rae during the last election ran on a campaign of fair taxation in the province of Ontario. I thought he did the right thing by making that a central issue in his campaign.
However, since he has come to power, like the Conservatives, he basically has only set up a fair taxation commission. In the process of his attempt to tiy and do something constructive, he has so frightened the investment community in regard to his approach that the flight of capital, specifically in the province of Ontario, has been reduced in the last year by almost 50 per cent.
My question to the hon. member is quite simple. Does he not realize that attracting foreign capital to this country is essential for job creation? It is absolutely essential for job creation, in my opinion. Does he not realize that attracting foreign capital must be done through the tax system? I would just like to have his remarks on that.


William Alexander (Bill) Blaikie: Madam Speaker, perhaps the member himself or somebody on behalf of the Liberals could say what they mean by attracting foreign capital through the tax systems. If this means making Canada some kind of tax haven where people can come here and make money and not contribute to the country, then I am not interested in that kind of capital attraction policy.
You mentioned the Government of Ontario. Again, with respect, you are trying to have it both ways. It is ludicrous to compare the policies of the Ontario NDP government with the policies of this government. This government has gone to great pains to say how much it is different from and opposed to and against the policies of the Ontario government. The Ontario government is constantly being vilified by this government for following

an entirely different economic policy with respect to the deficit, et cetera.
With respect to taxes the member has said that it has established this fair tax commission. Nothing has happened, because the commission has not reported yet. The member is saying: "How come we have not acted", and at the same time is saying: "The very fact that they even established the notion of fair taxes is driving capital out of the province of Ontario". Which is it? Are you saying that it should have established a fair tax system earlier and, according to your analysis, driven more capital out of Ontario?
The problem is, as the hon. member knows or maybe did not have time to say or is not willing to admit, that the problem in Ontario is not related so much to the NDP government or to anything happening with respect to domestic policy. It is related to the free trade agreement.
It is the awful misfortune of the NDP government to be elected just at the time when the effects of the FTA are kicking in, in Ontario. If the Liberals are telling me that they do not think it is the FTA that is wrecking the Ontario economy, I wish they would get up and say so. If that is an analysis they reject, I would like to know it and I would like to see it on the record. The fact is that it is the FTA.
When I hear members of the provincial Government of Ontario talking about the recession, I say it is not just the recession. It is not like any other recession. It is the North American continental economy kicking in, in a way that Ontario will never recover from regardless of whatever policies any provincial government ever has, unless we find a way to extricate ourselves from the free trade agreement and from the upcoming North American free trade agreement.


Mr. Nic Leblanc (Longueuil):: Madam Speaker, I have a few questions for the hon. member of the New Democratic Party.
It is said that capital is leaving Canada, that business people are moving to the United States and that there is a brain drain toward the United States. It is said that about 50 per cent of our university graduates and qualified technicians are moving to the United States. This means we are training them for the benefit of the
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U.S. The main reason is, of course, that in the United States they pay 25 per cent less income tax than we pay here in Canada.
Unfortunately people move to the United States because they will have 25 per cent more disposable income. Some people say the socialist system is efficient and satisfactory, but I think we are going bankrupt with all this, and the statistics are there to prove it. Two weeks ago the statistics were right there in the media to prove it.
So the reason is clear. A study prepared by a consulting firm in Montreal said that in the United States a person who earns $100,000 and pays for exactly the same services we get in Canada or Quebec-and especially in Quebec, because the study was made for Quebec- whether we are talking about medical care or anything else, that person has $25,000 more left in disposable income. That is how the system works, and if the government is asked to control practically everything, you have a socialist system, a system I do not favour because it always costs the government two or three times as much to run something people could run themselves.
It means that if the private sector is given a chance to offer those services, they are likely to be cheaper. We have the proof right here: it costs 25 per cent more in Canada than in the United States.
My question is this: If individuals and companies move to the United States because taxes are too high in this country, isn't it obvious that these services are costing us too much in terms of the way we are taxed in this country?


William Alexander (Bill) Blaikie: Madam Speaker, I am shocked to hear that comment by the hon. member from the Bloc Quebecois. I hope Quebecers come to know about this view that the health care system in Canada is a form of socialism which the hon. member rejects.
If you take the analysis that the hon. member has offered, that someone making $100,000 a year is able to get the same kind of health care in the United States and still have 25 per cent more disposable income I do not know whether that is true but let us say for the sake of argument that it is. The fact of the matter is that one of the reasons Canadians who are making $100,000 a year have less disposable income in this country is because

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they are kicking in to a health care system through the tax system that provides health care for all Canadians in such a way that the person making $100,000 in the United States is not contributing to a health care system that would look after the 35 million Americans who do not have any health care insurance whatsoever.
From the perspective of somebody who makes $100,000 a year, the United States looks pretty good. That is to look at things only through the eyes of individuals and not to look at the common good or any notion of social justice or any notion of a country or anything else. It is this kind of small / liberal, individualistic analysis of reality that is getting us into all this trouble. I cannot get it through my thick head, as some would say, why people would decide to move to the United States simply because they could have a little more money. If that is all being a Canadian means to them, then good riddance.


Mr, Dennis Mills (Broadview-Greenwood):: Madam Speaker, my colleague from Eglinton-Lawrence and I have agreed to switch.
Before I came in this morning to speak on this bill, I had the occasion to talk to one of my friends on the Hill about a couple of mutual friends, Colin Sparling, a horse trainer from Sydney, Nova Scotia and Peter Berringer, a horse trainer from Aurora. We were talking about the lives of horse trainers in this country, people who get up every morning at five o'clock and have to muck out stalls and work in the cold. What relevance does this bill today have to the kind of life these people lead?
When one sees a document like this of nearly 2,000 pages one wonders how one begins to judge whether fairness exists. Before even judging fairness, one has to have the ability to understand. Like most people in this country, I cannot begin to ascertain truly whether this bill is fair.
We end up having blind faith in the bureaucrats who designed the words in this paper and hope that it achieves its end. That is why for the last two years I have been fighting hard in this House. We are getting more and more members realizing this. This week the Auditor General in his report said that the tax system, the tax designs and the tax forms of this country are not serving the clients.
We have to get back to simplicity because from simplicity we are going to begin the process of participation in a judgmental way as to what is happening in our tax system. Ultimately that is going to make all of us more accountable as politicians in this country for the taxes that we impose on our constituents from coast to coast to coast. I continue to flag that as a concern.
I want to go back to a remark made by the member for Winnipeg Transcona earlier today in answer to my question, when I asked him about the importance of using the tax system of this country to attract foreign capital. I happen to believe one of the most central problems we have in this country today is the flight of capital. The number of people fleeing this country with their capital because of the tax designs, whether individuals or corporations, is becoming a serious problem.
The New Democratic Party member for Winnipeg Transcona treated this issue rather lightly. I think he was being a little bit too defensive about the actions taken by the New Democratic government in the province of Ontario. I do not think it is linking the importance of capital to job creation.
The member said he did not want to make Canada a tax haven. I never said we should make Canada a tax haven, but I would not mind having international investors, local businessmen or local individuals who have accumulated wealth feeling this was a tax haven. I would not mind if every wealthy person in the world wanted to park their money in financial institutions in this country. I would much rather have the money here in financial institutions than in the islands or in Switzerland or in California where we have over one million Canadians right now. Many of them will say they are there because of our current tax act.
What is the importance of attracting that foreign capital to this country? Financial institutions only make money when they rent capital out. That is how our financial institutions make their money. When we have our financial institutions loaded with capital they compete with one another. The only way they can compete is through lower interest rates. That is what ultimately leads to job creation. When entrepreneurs can borrow money at 4 and 5 per cent and when banks have so much
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capital that they want to push money out, that is when the entrepreneurial spirit of this country gets revitalized.
When the 900,000 entrepreneurs in this country have access to capital so that their creativity and their productivity can be exploited to the fullest, it creates jobs. That is how we lower the draw on our unemployment insurance fund. That is how we lower the draw on our welfare fund and that is how we attack the deficit and debt of this country.
I cannot understand why the government cannot see this issue. I cannot understand why it is not altering the tax designs of this country to attract foreign capital. The current tax designs are a disincentive to entrepreneurship. They are disincentives to productivity. I hear this from my constituents. I hear this from Canadians day in and day out. When is the Government of Canada going to do something to radically reform the tax system of this country so that it is fair? In order to get fairness, in order to judge fairness, you need simplicity and ultimately it will lead to efficiency.
Once again we have some minor amendments to the tax act of this country by Bill C-18. These minor amendments are close to 2,000 pages. As my colleague for Ottawa South and my colleague for Etobicoke North and many other colleagues in the Liberal Party are going to say throughout this debate, we must start giving Canadians some hope that we are going to finally change the tax act so that it is more simple and that it is more fair.
I want to go back to the capital flows that are so important in this country. For the last two to three weeks the Minister of Finance has been standing up and saying: "Interest rates have come down 5 to 6 per cent in the last eight months. Look at the way we are operating this economy".
Ask any entrepreneur in this country right now if it is easy to get capital to either maintain a business or to expand a business. Ask him if he can go to a bank and find out how it is treating its lines of credit. Ask how the banks in this country are treating new starters. Madam Speaker, if you can find more than 10 serious projects then I take my words back. I only hear from entrepreneurs. Whether they are people employing five or five thousand people, they say there is a serious shortage of credit in this country right now even though we have
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interest rates that are the lowest they have been in 10 to 12 years. The reason why we have that problem is because we have a shortage of capital in this country. We have to do things to attract capital. We have to do things to stop the capital outflow from this country.
Someone could be making a million dollars a year. Someone could be an actor who makes $10 million a year. Why do we not change that tax design to keep that capital here so that capital can be used and rented out by financial institutions to entrepreneurs to do anything and everything from restaurants to auto parts, to service industries, to tourism, to whatever?
Why can we not do that? We can do that, Madam Speaker, if the government would just have the political will and listen to the people. The minister of trade just four weeks ago talked about consultation, consultation and consultation for competitiveness. If this government were serious about competitiveness-and I cannot believe it is not serious-it would listen to the person who is working on the shop floor and the person who is working in the office. They will tell you. They are not just telling me. I know other colleagues-even members of the government-are hearing people asking for some fairness in the tax designs of this country. That is the single most dramatic way to increase the productivity in this country. Productivity is ultimately what investors look for. That will attract foreign capital.
There has been a lack of political will to come up with a comprehensive approach to tax reform. I can remember the member for Welland-Grey-Dufferin-Simcoe heading up a task force on tax reform when he was in opposition. It was a good task force that went coast to coast listening to Canadians. And the government did say when it came in: "Phase I is tax reform". Madam Speaker, the government did not get into it deeply enough. It was amendments on top of amendments.
What Canadians are saying is to stop running the economy of Canada through the Department of Finance or through the tax system. There are so many rules, regulations, exceptions and exceptions to exceptions that we no longer understand how this tax act works. Use the tax instrument to collect revenue. When you want to do things in terms of social policy or in terms of aiding a specific sector, do it through direct program delivery through department by department. Do it in a way that

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the people's money in this country can be accounted for rather than burying it in a 15,000-page tax act.
Madam Speaker, I believe that we are at a critical point in this country's future. The will of this country is fragile right now.


[Stage Direction]
SUSPENSION OF SITTING
Madam Deputy Speaker:: Is it the wish of the House to suspend the sitting for a few minutes to the call of the Chair?


Some hon. members:: Agreed.
The sitting of the House was suspended at 11.37 a.m.


SITTING RESUMED
[Stage Direction]
The House resumed at 11.46 p.m.
Madam Deputy Speaker:: I thank hon. members for their understanding of the situation. I know it must be difficult for the hon. member for Broadview-Greenwood. There are five minutes remaining in his intervention.


Dennis Joseph Mills: Madam Speaker, we all wish our friend a speedy recovery.
As I was saying earlier I am trying to make this tax amendment, Bill C-18, relevant to my friends Colin Sparling and Peter Berringer.
I know and believe that if this government were to address comprehensive tax reform, if it were to send out a signal not only to the people of Canada but also to people around the world that we were going to come up with a tax design that met the test of efficiency and simplicity and fairness, just sending out that signal could change the spirit that exists within this economy. It could change that spirit almost overnight. It could just say it was going to do it in the February-March budget. If it just announced that now, I believe the recovery would begin.
This government must do something concrete to motivate Canadians, to turn on Canadians who at this time are in a state of almost chronic depression. They do not look to the provinces to do this. They look to their national government. They look to their national politicians.
When we have an opportunity like today in the House of Commons where we are talking about amendments to the tax act of this country, I think it is incumbent upon all of us to ask how this relates to the people in this country who are not tax lawyers and tax accountants and senior officials in the Department of Finance or the Department of National Revenue. How does the action we are taking today relate to the men and women of this country who are on the shop floor, who are in the back stretch, who are working in the restaurants, who are working in the hour-by-hour jobs? What will this act do to make their tax life more fair, more simple, more efficient?
This does not pass that test. Yes, there are some elements of modification in this bill that will improve fairness. However, it is tinkering; it is tampering. I was part of a government that did this as well. I am not exempting our track record on this, but it is time now for all of us to say that comprehensive tax reform is needed. The people of Canada are crying out for it, and we beg this Minister of Finance and this government to have the political will to do something by the next budget.


Nic Leblanc: Madam Speaker, I have a few questions for the hon. member for Broadview- Greenwood. He says he was appalled at how much capital was leaving the country. He also said that we needed a better tax system or a complete overhaul of our tax structure. But I have yet to hear him say how he intends to improve our present tax system. My point is that Canada has a cumulative debt of $430 billion. That is not exactly peanuts. We have a cumulative debt of $430 million, with a population of not quite 27 million. The big problem facing us is that there are 11 political powers in Canada which are contradicting each other day after day. We have a striking example of what is going on now and driving up the debt.
We have a socialist government in Ontario now, in that province which accounts for 42 per cent of Canada's Gross Domestic Product, and its policies are completely opposite to those of the federal government. This inconsistency between these 11 governments leads to inefficiency, which is bankrupting us. Let us not try to find formulas. I think that the only formula that will help us understand, the only intelligent formula, is power to
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the provinces. Most provinces should have almost all the powers, as Quebec is asking for.
Madam Speaker, it is quite important because we are talking about the future of a country which is going broke. We must talk about it a little. The problem is that Quebec is rightly asking for at least 22 or 23 powers to be able to develop. On the other hand, the federal government wants to have all the powers. How much longer will this confrontation go on? Ten years, fifteen years, twenty years? This problem must be solved damn soon. Even if we came up with the best tax system in the world, we are still going broke day by day. For the past 20 years we have not been able to get the annual deficit below $30 billion. Something is not working there. The solution is a very high level of decentralization. We go even further than that, because English Canada does not understand. We say that we want Quebec to be a sovereign state. Maybe after that they will understand that we are right. Ontario will become sovereign, so will the west and the east, and then they may associate in some way. But the problem lies there.


Mr. Boudria:: Sovereignty for Longueuil.


Nic Leblanc: No, no. That is the problem, Madam Speaker, and that is what I want to say to the hon. member. There are 11 governments in this country and that is why it does not work. You must understand that once and for all. That is reality.


Dennis Joseph Mills: Madam Speaker, the hon. member for Longueuil asked a good question. I will comment on the flat tax system a little later.

Madam Speaker, I want to say to the member from the Bloc Quebecois that his course, in my humble opinion, is doing more harm to fracture the economy of this country than any measure the Government of Canada is taking. If you support my view that we must attract foreign capital here in order to create jobs, I say with care and respect that when foreign investors hear that in the nation's boardroom-and this is the nation's boardroom-there are members here who want to split this country up, they will say: "How and why should I invest in a country where there is such talk?" Therefore I hope that in time we can convince him and his party that his thought process is not the right way to go. I believe the member is right that we have too many layers of
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government. But to throw the whole thing up and say that we should just throw this country away would be like me saying that I wanted to create my own country in Broadview-Greenwood.
I say to the hon. member that is a little bit too impractical for me to declare my own country in Broadview-Greenwood and then to have a country in Eglin-ton North.
I want to go back, seriously, to the hon. member because he has care and compassion for his constituents the same way that I have for mine.
I believe that if your constituents were fully employed, competitive, fully respected, with dignity, the idea of wanting to leave this country would probably be the last thing on their minds. I see the President of the Treasury Board sitting in this House today, one of the smartest members on that side of the House in the cabinet. He must use his influence to tell his friends in the province of Quebec that we are going to reform the tax system, we are going to put everybody in this country back to work including his own section, so that the ideas of the Bloc Quebecois can be squelched.
It is incumbent upon those members from the province of Quebec who are on the government side, as well as on our side, to say that we are going to reconstruct some ideas here that are related to creating wealth and quality of life and not just with the emotional frustration that always has existed and from time to time will always exist because of our cultural differences.
For years we have always been able to get over those cultural differences. They exist. I do not deny that. That is fine. But, if we really want to galvanize the will of the country, the quickest way is to make sure that the economy of this country is working correctly, and that ultimately will defeat the arguments of the Bloc Quebecois.


Mr. Joseph Volpe (Eglinton-Lawrence):: Madam Speaker, I want to compliment first of all my colleague from Broadview-Greenwood for raising some extremely good points. One that is of great importance to all of us is to finally define for all Canadians and for members of this House the relevancy of some of the legislation that is passed.

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My colleague from Broadview-Greenwood refers to some constituents who said: "Dennis, what in heaven's name is in this document that is an inch and a half thick? What will it do for each one of us on a day-to-day basis? How is it going to impact on the way that we pay taxes? How is it going to impact on the way that those taxes are redistributed? In fact, is there fairness in the way the taxes are imposed? And finally, how is that going to help to ensure that my own enterprise, my job, what I work for for my family, is going to be able to translate into something tangible, something material, something toward which we can work, and something which can act as a lighthouse when we come to define the objectives of this country?"
I am afraid that when I looked at the bill I could not answer his question. I am going to address some seven points to illustrate the problems that I think are inherent in something like Bill C-18 and the activities that lead up to its implementation. I could not say it any better than a constituent, Mr. Gabriel Petricca of Claudia Avenue in Woodbridge, who sent me a copy of a letter addressed to the Prime Minister. It is a three-page letter. I am not going to impose it on the House, but there are a few paragraphs that are worthy of being read simply because they illustrate the kinds of temperament, the psychological environment in which we find ourselves, a psychological environment that my colleague from Broadview-Greenwood has so lucidly put forward.
We cannot be in an environment in which we are debating for the sake of filling up air time and talking about esoteric legislation that is of absolutely no relevance to the constituents of this nation.
I quote: "I'm fed up with the empty promises and committees reviewing these promises. We are in serious trouble and help is expected now. The next election is too late".
"It is totally ridiculous to have members of Parliament sit in their daily routine of so-called debates while 26 million Canadians wait for what always seems to be the result of less than juvenile decisions and totally unacceptable solutions". As an aside, perhaps we are talking about Bill C-18. "We need jobs. We need foreign investment, greater export of our products, more professional and skilled people, et cetera. I am not telling you anything you do not already know. When will some positive solutions be initiated?"
This is a direct quote from a letter to the Prime Minister, and I continue:
"Why are we selling government assets? Why are corporations relocating to the United States? Why were interest rates increased which in turn provoked a chain reaction to a downward economy? Why did we negotiate a free trade agreement without benefiting the majority of our enterprises? Why is it becoming more attractive to stay home and collect money from UIC, from welfare, from WCB, et cetera? I could go on forever, but will it make a difference?"
I am going to refer to that letter once again. We can see, just from those few lines, that there is an air of despair among many in our community of Canada. What are we doing to address that despair? If anything, all members of Parliament and all politicians should be dealers in hope. We should be offering ideas that suggest there is an opportunity to move forward.
The gentleman who wrote this letter was born, raised and educated in Canada. He engaged in an entrepreneurial environment for the longest time with some success. He was responsible for 15 people working directly as a result of his initiative and responsible for an additional 100 to 150 other jobs which indirectly flowed from his activity. He is virtually bankrupt. I guess when he looks at Bill C-18 he will say: "So is this Parliament".
We would take a look at it and we would ask: "What is the scope of this legislation?" The minister says: "It is designed to introduce fairness in the system". My colleague from Broadview-Greenwood says: "Okay, let us talk fairness, but let us talk results as well".
If we introduce a sense of fairness, is it going to produce more jobs? Is it going to change the psychological environment which reconstructs the Canadian desire to invent, to engage in commerce, trade and manufacturing? Are we addressing what this country needs desperately today? It needs a revitalization of the economy, a revitalization of the kind of commerce in and among provinces that will give each and every Canadian a stake in this country.
Bill C-18 professes to address a fairness package in which the revenue minister, for example, would allow all Canadians to go back five years instead of three to claim additional tax refunds and credits and in which the minister would waive interest charges and penalties in meritorious cases. This is another example of the kind of tinkering that suggests a lack of scope and a lack of
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vision. We do not see the larger picture. We are looking at the trees without seeing the forest.
The government has been saying that it wants to be fair to taxpayers for an enormous length of time and yet just the other day in the Auditor General's report we find that 37 per cent of all adult Canadians, 6.5 million Canadians, cannot read the income tax form because it is too complicated. Fairness comes with simplicity. Twenty per cent of all people who called Revenue Canada for assistance with their income tax got no response or were misinformed, which is worse, on the implications of their tax on their tax form. Sixty-eight per cent of all people who phoned for tax information kept getting busy signals. That has to tell us that if we want to introduce some fairness in the system we must simplify the system in terms of imposition of tax, tax forms, that we make access to the appropriate departments readily available.
Forty-two per cent of taxpayers in 1987 needed help to fill out their income tax forms. We cannot speak about fairness in an esoteric term, throw out another document this size and say: "We've solved the problem of unfairness in the tax system". That is just garbage. There is nothing in here that is going to decrease the kinds of statistics that I have just given.
I know my colleague from Longueuil was talking about sovereignty in all provinces of the country. I have not heard so much hogwash in all of my life. There is no one where I come from who does not think of himself or herself as an integral component of Canadian society and regards everybody else, all other 27 million who live in this country, as being one and the same in terms of equality, in terms of the way they are to be treated and in terms of accessibility to their government; the government which resides presumably in this House.
Eighty per cent of the people in a York University study indicated that the tax system is grossly unfair. I know my colleague from Broadview-Greenwood would identify with that. He has proposed a system that would make it much more fair, a single tax system. It is worthy of study. Eighty per cent of Canadians would agree with him.
The people who have sought tax reassessment are not given any explanations under current legislation as to
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why the department changes its original assessment. There is too much, if you will, discretion on the part of the department.
That is just one of the components. I want to refer back to what we were talking about earlier. One component is fairness in tax; another one is what we do with a tax and why we implement tax.
Before I go on to that second point, I think it is worth reflecting on finance department statistics. They are dated October 25. The fact that we got them only last week in our offices-and they refer to statistics of August 1991-suggests that information is slow. I have to assume that there is a conspiracy about it all that works against members being current on all information.
Here is some of that information. For this year personal income taxes so far have gone up. We are in the midst of a recession. Somebody in this House and others throughout this country suggest we are in a double dip. This is a recession on top of a recession. Personal income taxes went up in the first eight months of this year.
For the first eight months of this year, while we are in a recession, personal income taxes go up. Unemployment went up. Where is the government getting this additional revenue? It certainly is not getting it from people who are working because we have more and more unemployed. It has to be through squeezing the tax system because obviously people are paying more in personal income taxes. It is a ridiculous situation.
Second, the bill proposes to exempt Canadian based shipping companies from paying taxes on international earnings because it says this might create an additional
1,000	jobs per annum over the course of the next 10 years. Members on both sides of this House and in particular in the opposition have been more than gracious, more than patient, more than civil in giving the government the benefit of the doubt on most of its projections.
The projections for the free trade agreement said it was supposed to create jobs. We are faced with a 13 per cent decline in the manufacturing sector. We are faced with 226,000 jobs lost in Ontario alone over the course of this last year thanks to, in large measure, the free trade agreement. We are faced with a severe problem among

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older workers because of a lack of adjustment training programs for them and the piddling little amount that the government threw out in its last package of $15 million.
When you work out how many people are going to be relying on that, it is less than a piddling amount, it is an absolute insult. It does not all have to do with money, but it reflects the government's lack of conscience in having prepared its citizens for a tremendous change, a structural change, economically and socially. Fifteen million dollars is about the same amount as Judas Iscariot got about 2,000 years ago.
I remind the House that while we are talking about producing little trinkets and little adjustments to the act in order to promote international trade, for the first time since 1976 we have a deficit in foreign trade. This is a country that makes its living from trade. This is a government whose livelihood depends on foreign trade. Regarding all of the government's estimates and all the government's projections and all the government's initiatives, as my constituent said, we do not know where they are going. Where are they taking us?
Let us stop fooling around and tinkering with legislation and let us do as my colleague for Broadview- Greenwood says. Let us be definitive. Let us say we are going to turn this country around and engage in a significant initiative, instead of setting up another commission to find out whether we are going to be competitive. We can darned well be competitive, but let us see what the government is going to do.
The third item under this legislation is going to extend capital taxed insurance companies. This tax has been applied since 1988 to trust companies and banks that have assets in excess of $200 million. The capital tax is intended to be an alternative income tax in lieu of appropriate income tax. Again this is further tinkering.
It will be instructive for the appropriate minister to understand that the finance committee chairman has already noted that between 1988 and 1990: "The life insurance industry was making a billion dollars a year in profits and was paying essentially nothing in income tax". Can you believe that? It is no wonder that Canadians get disheartened when a government, which wants its citizenry to make sacrifices left, right and centre, is not addressing some of the basic inequities of our system.
Corporate taxes as a proportion of over-all tax revenues have decreased from 15 per cent of the total in 1984, when this government came into power, to a mere
8.7	per cent in 1990. The proportion of personal income tax has increased from 49 per cent of total revenues in 1984 to 56 per cent last year. Again I refer to finance department statistics of this year. Revenues from corporate taxes dropped in the month of August by more than 50 per cent. They are down year over year, from last year until this year in August, by a full 26 per cent. A large measure of that is due to the fact that the economy is on the skids thanks again to our own government. A good deal of that is due to a lot of bankruptcies as a result of government initiatives. At the same time, personal income taxes have increased.
If this bill is going to address some of the inequities- and remember the government says it is going to be a fairness package-I would like to point to a fifth item, and this is one that really grates on everybody's sense of justice. Changes are going to be made to the disability tax credit of $575 to $700 annually, an increase that is supposed to result in about $35 million to a total of $200 million and extend a medical expenses tax credit of $5,000 to non-working disabled.
My colleague who sat on the committee on the disabled with me is going to be absolutely upset when he gets up to speak. This is crazy. It is just absolutely shocking.
It is another pittance thrown in the direction of the people who need it most. These people are Canadians who have been working for Canada for all of their lives and want an opportunity to access entrepreneurialism and their government in a way that everybody else does. What do we do? We come across with a gift, just a little something to keep them quiet. It does not even meet the level of inflation.
What else is this bill going to do? The bill will allow shareholders in small businesses to go public with their shares and to still benefit from the $500,000 capital gains tax exemption.

My colleague says: "This is good". It is good. Do you know why it is good? Because if anything is required for small businesses today it is cash flow. What all businesses need is access to money. My colleague for Broadview- Greenwood indicated that there is no money. You cannot get any. It does not matter if the interest rates are low, you will not get any money. Part of the reason is because a lot of the equity is being devalued and you cannot raise money on equity that is not there. This is just a small part of the government's high tax policy, high dollar policy and high interest rate policy of the last year and a half. It is almost like Paul's conversion on the way to Damascus. Finally we see the light. We are going to do something. Let us tinker instead of changing the whole bloody system.
How much longer are we going to wait and for how long are we going to tinker as the economy collapses around us? That makes me an interventionist. I would rather be accused of intervening on behalf of all Canadians than sit here twiddling my thumbs saying: I cannot do this, I cannot do that. When I look at this item of legislation I see that if I change a comma, a semi-colon or a word, that could have severe implications. Give us a break.
If this government is going to be serious then let us put Canadians back to work. Let us give Canadians an opportunity to look forward to a life that is at least as good as the one they enjoyed a few years ago and one that they can promise to their own children and to their own families.
Bill C-18 is not doing that. In fact when I speak about families, one of the things this bill addresses is the registered education saving plan limits. It wants to ensure that people do not avoid too much taxation. Are we ready for this? This is after I pointed out that the government already says that taxation of personal income has increased. In a year of recession the limit is set at $1,500 annually per child. When I think of someone who has four children I find this offensive.
Since 1986-87 federal spending on education and training has increased by a mere 6.5 per cent. Inflation over the same period has gone up 25.5 per cent. That means there has been a negative contribution by the federal government on education. This is the same
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government that is talking about increasing R and D and doing something else in order to establish our competitiveness. How are you going to establish competitiveness if you do not have any faith in your own population?
This kind of contribution is the lowest since 1983. This is pouring salt on the wound. The government then imposes a 3 per cent tax on university student loans attacking those who are obviously most in need and those who are most in a position to do something about our competitiveness. It does not mention the GST on textbooks at all.
There are so many inherent contradictions that one boils into a rage when thinking about this kind of legislation. I would like to read more of that letter from a constituent. The letter is more apropos the kind of discussion we have in this House than virtually anything that any member can say here in defence of government policy or initiatives on a partisan basis. I will defer to your request to stop and answer any questions that might come up. But I thank you for listening.


Mr. Jesse Flis (Parkdale-High Park):: Madam Speaker, I want to thank the hon. member for his intervention. As a former educator I know how interested he is in making sure that students who have the ability and want to complete their education will be allowed to do so.
This year my daughter began her studies at Carleton University. Some of her friends from the secondary school she came from could not attend university because one of the spouses lost a job or the family income was just too low to allow them to go to university. Students with even higher abilities than my daughter and students who could complete post-secondary education did not go. They had to go to work because they could not afford to go to university.
This week my daughter tells me that already at Carleton the professors and the administrators are announcing that the tuition fees for next year will go up by 20 or 30 per cent. What impact will this have on the secondary school students who want to go on to university next year?


Giuseppe (Joseph) Volpe: Madam Speaker, I thank my colleague for the question. As I mentioned a moment ago I am also a parent so I am not talking as a politician. We are accused today of speaking only in our own self-interests and out of partisanship.

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Any parent has to be worried about what is happening in our system. My own case is much like that of my colleagues. I am going to be faced with trying to budget for my children. Do I want to give them the same opportunity that my parents gave me? Of course I do. So does everybody else. But will I be able to afford it?
My colleague has given a rhetorical answer to a rhetorical question. No, we will not be able to afford it without enormous sacrifices. If we are looking at a 25 to 30 per cent increase in tuition costs alone, assuming that a student lives at home, then obviously he or she will not be able to go elsewhere because the costs will increase for education. First, they are going to be tied to home. Second, because of those cost increases in tuition, books and other appended costs-


An hon. member:: With GST on top of that.


Giuseppe (Joseph) Volpe: With GST on top of that. My colleague is absolutely right.
We are going to have a body of our citizeniy which is currently able to improve itself intellectually and able to improve by extrapolation the pool of intellectual resources for this country that is best able to adapt to the needs of the post-technological era.
In Canada we are already in that era. Our population is not meeting the challenges. How many times have we heard in this House that we have the highest illiteracy rate among adults in the western world? We have the highest high school dropout rate in the western world.
My colleague asks in a very sincere fashion: "What is going to happen to our population in the high schools when they see that tuition rates are going to increase as a result of this government's initiatives?" I can only suggest that the government is either being mischievous in building in disincentives or Canadians are going to respond to the market initiatives the government has created. The market initiatives say: "Kids, do not go to school. Try to get a dead end job because you cannot go to school". This is no way to develop a competitive society. It is no way to meet the challenges of a post-technological period. It is no way to build a future for our families. It is not the way my colleague from
Broadview-Greenwood and I would like to see it happen for our families and all Canadians.


Nic Leblanc: Madam Speaker, two Liberal members spoke earlier and they particularly mentioned capital flight to the United States and tax reform. But at the same time the hon. member for Winnipeg North tells us that businesses are not taxed enough. I do not see the logic in all that. Our businesses are leaving because they are overtaxed. You can always tax business more, but if you do that you are likely to raise prices. And who is the consumer? The wage earners. It is always the consumer who pays in the end. Let us try to be honest and speak frankly and say that it is always the consumer who pays.
Obviously there must be a good balance in a tax system. We can arouse interest here and there with what we believe are better approaches. The big problem is not so much the tax system but debt reduction. That is the big problem. How do we achieve that? As I said earlier, we must decentralize. That is the big problem. I have been dealing with it since I got here seven years ago. For six years now I have been travelling across Canada with committees on the economy, and all the top specialists say the same thing: We have to be able to get together, unions, management, research centres and universities, on manpower training and other things. Unfortunately that co-ordinated effort is not possible when 11 governments in this countiy contradict each other, leading to inconsistency. That is where the problem lies. Therefore, if we want to pay off the debt we must decentralize. Unfortunately jurisdictions other than Quebec want the opposite; they want an economic union so strong and so centralized that they are even willing to legislate that. English Canada wants to centralize.
Well, it does not work. That will lead to bankruptcy. Even with the best tax system in the world, if we do not improve our efficiency, if we do not create wealth, how can we share it? We must first create it; we must decentralize. But since you do not want to decentralize, we want sovereignty for Quebec. And perhaps you will understand that we are right. Otherwise, we are going to sink in the same boat with you. Since we do not want to sink in the same boat, we have decided to look after our
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own business. That is what we are doing, since you do not want to understand that decentralization will save Canada. But you do not understand that. Yet, that is what all the experts say. Madam Speaker, that is why I say you can talk about taxation as much as you want, but first create wealth. And to do that you must decentralize economic activity.


Giuseppe (Joseph) Volpe: Madam Speaker, I believe that all members of this House are just as confused as I am. Here is a member from Quebec, from the Bloc Quebecois, who talks like a Conservative, like a member of the government that he deserted. He deserted the government. He deserted the principles, programs and policies of the Conservative government, but he still uses the same words, the same vocabulary, and he displays, once again, the same mentality that was shown to be unfair and does not reflect today's reality.

If we are going to listen to a member such as this who says that there is a basic incoherency, Madam Speaker, I submit that the incoherency of the philosophy and program to create wealth for our country and give new hope to the citizens of Canada, Quebec, Ontario and all the other regions in the country is scary. I would suggest to my friend that the problem lies in the programs of the government of which he was a member, which proposed a very high interest rate, the highest level for the last eight years.

It is 14.75 per cent over the course of the last year, a differential between us, the United States and the world market that is in excess of what this economy can support. The kinds of taxation policies that he would have proposed are not going to be solved by decentralization. It is going to increase it.
The hon. member should be honest.

The hon. member should have the honesty to admit to Quebecers and to all Canadians that decentralizing economic programs in a global world, on a global market, makes no sense at all.


Mr. Neil Young (Beaches-Woodbine):: Madam Speaker, I do not intend to speak too long on Bill C-18 since I spoke about the area I am immediately concerned with at some length at second reading. Also, the hon. member for Winnipeg Transcona, the critic for our party, has addressed the more general concerns that we have about this piece of legislation.
At the beginning of the debate today, the Minister of State for Finance referred to the fact that my colleague, the hon. member for Winnipeg Transcona, had spoken to him about the possibility of receiving unanimous consent from the House to introduce a few very important amendments. By the time a number of individuals had managed to work out the technical language for the amendments last night, it was too late to submit them before the 6 p.m. deadline of yesterday for introduction to the House today.
Those amendments, which I consider to be very important, would come under clause 91 of this rather thick, weighty piece of legislation that we have before us. The amendments originated primarily from the Canadian Association for Community Living which on November 8 had faxed a copy of its concerns, which are spelled out in some detail, to the chairman of the Standing Committee on Finance for consideration by that committee.
It would appear that that fax was either inadvertently misplaced or was not received by the chair because that particular fax was not circulated to members of the committee who, it would be reasonable to assume, therefore were not aware of these concerns. If they had been aware of those concerns, of course we might have been facing a different type of debate today than we are.
Even as late as yesterday the Canadian Association for Community Living faxed another letter, this time to the Minister of Finance, asking that consideration be given to these concerns even at this late date. If I have your approval, Madam Speaker, I will read this letter into the record because I think it is very important. It is from Dr. Raffath Sayeed, an executive member of the Canadian Association for Community Living. The pertinent points, Madam Speaker, which I think you will find of interest begin with:

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On November 8, 1991, you should have received a fax of the CACL brief on Bill C-18 submitted to the Finance Committee sent to you by Dulcie McCallum of the CACL office. We understand this Bill is before the House of Commons tomorrow with the vote deferred until Monday next. A second copy of the brief is attached to this letter and faxed for your convenience.
It is critical that the amendments to the Income Tax Act be inclusive of people with mental disabilities without showing any disrespect in the process. Our submission to the committee could have guided a possible amendment to the definition section. This does not appear to have happened. This may simply be due to the fact that our brief appears to have been inadvertently misplaced or not received by the office of the chair. It has not yet been circulated to the committee.
It is important that, at the very least, at this stage, the definition of daily living be amended. This definition defines which persons with disabilities will qualify for the tax benefit.
Attached for your immediate consideration is a proposed amendment to section 91 of the Bill. We invite you to move this amendment.
They were asking the government even at that late hour yesterday to give consideration to these concerns which, through no fault of their own, were misplaced rather than discussed and considered by the finance committee when it had this legislation before it.
For the record, I think the House deserves to hear these concerns. Since the finance committee did not have an opportunity for one reason or another to consider these, I am going to take this opportunity while I am on my feet to read these concerns into the record.
These concerns are with respect to the definition of severe and prolonged impairment as it can be and probably will be interpreted under this act to the detriment of many thousands of people in this country who have a developmental handicap.
This is what the Canadian Association for Community Living said in that fax sent through the chair of that committee by Dulcie McCallum:
We understand that the purpose behind the change in definition of "severe and prolonged impairment" is to reduce the number of potential claimants of the disability tax credit and other disability related expenses. We respect the legislative intent of ensuring that claimants are indeed bona fide recipients of the benefits granted by the credit. We believe, however, that this proposed change will not
accomplish that goal, nor will it ensure that all those who ought to receive the benefit of the credit, will.
2.	The primary change is to give functional expression in the legislation to what presumably has been the criteria applied by physicians in certifying that a person is "markedly restricted to his activities of daily living". The amendment seems to restrict what was apparently a broad interpretation being given to those words by physicians. We applaud the move away from a model that bases a finding of disability within the discretion of professional medical experts. Unfortunately, very little that is listed makes sense in the context of people with mental handicaps. There appears to be an emphasis placed on physical disability and a fundamental misunderstanding of what it means to have a mental handicap. There is considerable work being done at the present time in a number of jurisdictions (B.C., Yukon, Manitoba, Ontario, New Brunswick) on the question of how you properly determine when an individual with a mental disability requires support in making decisions. The traditional form of assessment has been called into question throughout these reviews. We question whether or not the definition as is proposed will not force people to rely on traditional medical assessments which in the case of people with mental handicaps is wholly inappropriate.
3.	It is unlikely that most people with mental handicaps would consider themselves as being "markedly restricted" in "perceiving, thinking, and remembering" and yet little else in the "basic activity of daily living" shopping lists relates to their situation. What it means to have a mental handicap, for the purpose of your definition, must be distinguished from having a mental illness. People with a mental handicap historically referred to as "retarded", perceive, think, and remember in the same manner as all of us. The only difference may be in how quickly they are able to think and make decisions. The negative consequences of the proposed amendment is that people with mental handicaps will, in order to receive the benefit of the disability tax credit, be forced into conceding that their ability to perceive, think, or remember is markedly restricted which in the great majority of cases is not true.
4.	The result is that a significant number of individuals with mental handicaps who, by an appropriate test, ought to qualify but who are not prepared to concede that their ability to perceive, think or remember is markedly restricted will be excluded. Further, since any restriction on the ability to perceive, think and remember can only be measured in a purely contextual and individual way, it is essentially meaningless. On this basis, this definition ought not to go forward.
5.	The fact that the definition includes a subsection designed for "greater certainty", which excludes all other activities causes us considerable concern about how the bill protects the interests of people with mental handicaps. Because of the nature of the mental handicap, some people may only require support in employment and house management. The intent of the legislation could not have been to disentitle a taxpayer from the disability tax credit when that person has a mental handicap and is working and living semi-independently with support. That, however, is our reading of the legislation for the individual who can perform the basic activities of daily living listed in section 118.4(l)(c) of the bill.
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On another matter, attendant care, I quote:
One cautionary note regarding attendant care. As an association dedicated to promoting communities where families and friends provide natural supports to people with mental handicaps, we respect the principle that families ought not to be paid for doing what is considered to be their duty. However, as we have seen in the case of parents who have chosen to remain in their home to care for their children, their work is often devalued because it is unpaid. We continue to seek means by which the tax and other systems can acknowledge the value of that work. Similarly, for spouses of people who require attendant care, their work needs to be valued. We must focus on the reality of such situations. Is it not preferable to financially support a couple to stay together and permit the required attendant care to be provided by a loved one, rather than forcing the spouse to seek work outside the home in order to avoid financial peril? I would propose that this be considered and resolved in your deliberations.
It goes on to urge the government to take that into consideration even at this late date.
As I pointed out at second reading of this bill, I am extremely disappointed, to say the least, that for the last 10 or 11 years or so this House has had a standing committee with a mandate to increase awareness around issues affecting Canada's disabled population. That committee has tabled countless reports in this House which have been agreed to by members on all sides of the House. These reports have not only been agreed to, but agreed to with great enthusiasm as it were, and yet we are faced with this kind of legislation that is totally contrary, if not offensive, to a huge chunk of Canada's population who happen to be developmentally disabled.
If the bureaucrats are not prepared to listen to what committees have to say, I have to wonder whether the politicians are even listening to what these people have to say. We are their political masters. This kind of language which is, as I said earlier, offensive, is going to deprive a whole number of Canadians who are presently in receipt of a benefit under our tax laws for very good reasons. They will in the future be denied that tax benefit.
We are in a situation where rather than going forward, as we should be going, we are taking steps backward. I have to say again: Why is that happening?
I also want to say that it is not too late simply because the committee did not receive the brief that it should have received. It did not have an opportunity to consider not only the concerns, but the very good arguments that
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were presented by the Canadian Association for Community Living.
Since the House cannot receive these amendments based on purely technical reasons, even though our critic, the hon. member for Winnipeg Transcona attempted to get the minister's agreement for unanimous consent to proceed with it in the House today, what could happen if the minister were open to this suggestion is that in the instructional bulletins that interpret this act which will come after the bill is passed, the minister could, if he had the political will, make sure that the interpretations being given to this act by people within the income tax department follow the principles included in that letter to the Minister of Finance.
It is not too late to do something about it. I would simply urge the Minister of Finance to do just that.


Dennis Joseph Mills: Madam Speaker, I want to congratulate the member who continues to show his caring and compassion for the disabled community of this country.
He has articulated well the problem of having a complex tax design. One of the reasons we should take the disabled factor out of the tax design is because there is so much variation from disabled person to disabled person.
We have over two million disabled in this country. I think rather than to try to lump people into a complicated section of the tax design, it would be better to deal with disabled people through direct program funding in which every case could be treated with individual design.
I was just wondering if the hon. member for Beaches- Woodbine would care to elaborate on program funding. It does cost the taxpayer in a direct way but very few Canadians realize that even in the form of a tax credit it is still a cost to the Treasury. We do not seem to be able to deal with the individuality of every case this way. If we did it in a direct way, I think it would be much more fair.
I would like to have the hon. member's comments on that.


Neil Young: Madam Speaker, I want to thank the hon. member for Broadview-Greenwood for his question. There are a number of approaches taken, not only in this jurisdiction but in other jurisdic-

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tions, which would allow disabled persons to participate fully in the mainstream of society.
Some people I have talked to over the years say: "It is okay for you guys to talk about ending discrimination against someone who happens to be disabled, but you never want to talk about the amount of money that may cost". There are two arguments against that approach. The first I think is beneficial not only to the individual who is disabled but beneficial to society as a whole, and that is to have people who happened to be disabled in one capacity or another live a full life within society. I also think there is a cost benefit in that.
Finally about a year or so ago the United States introduced and passed with support from all segments of society legislation called "The Americans with Disabilities Act". One of the big motivators in having legislators in the United States bring forward that legislation, which is fairly progressive in terms of American society, is the huge cost to the American economy of not integrating the disabled into society.
I forget what the exact figure was but our committee went to Washington to talk to some people about that. It was estimated that the cost to society of not integrating the disabled into the community ran in the billions and billions of dollars.
The hon. member for Eglinton-Lawrence was with me at the time, and he can attest to that. It is not only what may be a cost to the taxpayer through the tax system that allows someone to live within a Canadian society. It is the cost if it was not done.
I think the Income Ihx Act is a tool that can be used under some circumstances. It does not come near the point of addressing the problems that the disabled individual has in living in Canadian society. They will only be addressed once we have finally recognized that a disabled person has the right to a job, the right to transportation, the right to recreation, the right to every right that an able-bodied Canadian has.
Unless we are prepared to face that and make some decisions in a very clear way, the concerns that Canada's disabled population has will never be addressed. You cannot tinker with the Income Thx Act to address that. It is a part of the tinkering. It is certainly not the solution.


Mr. Champagne (Champlain):: Madam Speaker, on a point of order I would like to know whether there is
unanimous consent for continuing the debate during lunch time.


Don Boudria: Madam Speaker, our party has been consulted. We agree to that, providing there will be no quorum call or any other such motion utilized during that period.
We also only agree for the duration of this bill, and not to start any new legislation. Providing that is the case, we agree.


William Alexander (Bill) Blaikie: Madam Speaker, we also have been consulted and would agree to the request made by the hon. member with the conditions outlined by the hon. member for Glengarry-Prescott-Russell.


Michel Champagne: That is exactly what we had in mind, Madam Speaker.


Nic Leblanc: Madam Speaker, on behalf of the Bloc Quebecois, I agree because I think this is a very important matter, especially for the future of Quebec.


Mr. Howard Crosby (Halifax West):: Madam Speaker, I will be very brief.
I am not in any way in any disagreement with the remarks made by the hon. member about disabled persons and the method of taxation that may be applied to them.
I just want to make a general comment about the whole taxation system in Canada. Throughout this debate members have been calling for a simpler taxation system for the kinds of reforms that would make the taxation system more understandable and they are giving the impression that this can be done.
The fact of the matter is that we have a simple taxation system in Canada. We simply take a percentage of a person's income. There are three levels of percentages taken from income. The approximately 300 pages of this act on top of all the other pages of taxation legislation are related to the interpretation of what constitutes a person's income.

We have a simple system. What we have grafted on to the simple system is a whole lot of rules. At this very moment the member is asking for yet another variation on the system which is the method by which we tax disabled persons.
It will mean more rules and more ramifications in the tax system and I do not deny that is a necessary and desirable goal. The point is that it will add more and more to the system.
I would just ask members, when they are talking about our tax system and the tax legislation before the House, to recognize and remember that the system itself is simple.


Dennis Joseph Mills: Oh.


Howard Edward Crosby: That is exactly my point. The remark of the member for Broadview-Greenwood is exactly my complaint. He wants to pretend that there can be a simple system in which you take a percentage of a person's income. That is what this system does. We take a percentage of income.
We get into all kinds of arguments and discussions and ramifications about what constitutes a person's income for the purpose of that percentage. Perhaps he knows a way around it and knows a way to tax disabled persons that would be fair to them, that would allow them to fill out their income tax and say: "That's fair, that's what I should be paying and I'll go along with that".
There is not a Canadian, I believe, who is ever going to fill out their income tax form and at the end of it say: "That's fair; I don't mind paying that tax. That will help support government services and it is my contribution". No matter what tax Canadians pay, they are going to consider it an unfair tax. There is no such thing as a fair tax, and members who try to pretend there is, in speeches in the House and elsewhere, are just trying to delude the public.


Neil Young: Very briefly, Madam Speaker, I hope the hon. member is not correct because the minister as he addressed the House this morning indicated that he saw some merit in the argument I just
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presented, and he will ask his officials to consider these arguments when they next review these regulations.


Leonard Donald Hopkins: Madam Speaker, I listened with interest to my hon. colleague across the way as he spoke about fair taxes and the tax system. I can well remember many, many times in this House when he sat over on this side of the House in the opposition. We heard cries every day of "simplify the tax forms", "why do you make them so complicated", "it is all part of the tax system". Today we are in the same debate and tax forms are not simple today either. Nor is the scheme of taxation.
We look at this bill this morning, some 400 pages of legal language presented in this House covering subjects like an an act to amend the Income Tax Act, the Canada Pension Plan, the Cultural Property Export and Import Act, the Income Tax Conventions Interpretation Act, the Tax Court of Canada Act, the Unemployment Insurance Act, the Canada-Newfoundland Atlantic Accord Implementation Act, the Canada-Nova Scotia Offshore Petroleum Resources Accord Implementation Act and certain related acts. You have all that in this one bill.
I can remember debates in this House when people used to go into tirades because there were so many things in one bill. We see here today that the very people who used to go into those tirades are presenting this 400-page bill to the House of Commons dealing with all those taxation items. It also deals with the Canada Pension Plan, unemployment insurance program and regional development programs. They are all in one bill.
I did that to show how complicated things can really get in this place. When people start talking about simplification, I wonder. I wonder how many hidden intricacies there are in this bill that have not been identified. We have seen legislation introduced in this House in the past in which after the legislation was put into practice it was found that it was quite different than some people thought it was going to be in the first instance.
My point is that on the important issue of taxation, which is a very complicated subject, legislative members in this House are at a great disadvantage to know everything in a bill like this. To read it from cover to

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cover would be a nightmare because of the legal jargon in which it is written.
It has been stated in this House many times before that it is time that we modernized Parliament by producing something in layman's language to accompany the bills. Then members would not have to stay up all night or read for a half a day or a day before they could get up and talk on a complicated subject. There must be some method of simplification.
People talk about complicated tax bills and complicated tax forms. In this House we have not corrected our problem of knowing precisely what the language of these bills means.
For example, this morning the minister talked about many things in what was one of his more informative speeches. I compliment him on the many things he discussed. He talked about such things as venture capital. He discussed some other technicalities of the bill. Ihx bills and customs act bills and the rest of them are written in such legal, technical language that things get by without people noticing.
For example, there is a point in the free trade act that would relate to a customs and tax issue. Eddy Match Limited of Canada took two truck loads of matches to the Buffalo Customs Port about 10 days ago. They were stopped at the border. Why? Because the statement "Made in Canada" was not in the right place on each little package of matches. That is a non-tariff barrier.
Imagine, if the company had wanted to take those matches across the border for sale it was actually required to put "Made in Canada" right under the name of the restaurant or hotel to which those matches were to go. "Made in Canada" had to be printed in the same sized lettering as the name of the hotel immediately above it. If there was a chain of restaurants or hotels mentioned on that package of matches "Made in Canada" had to be put after each one, even though the chain may exist in Phoenix, Arizona, Tacoma, Washington, or Boston, Massachusetts, et cetera. The statement "Made in Canada" had to accompany each one in each different place in the United States.
This was just an excuse to put in place a non-tariff barrier to prevent that Canadian product from getting into the United States. Why? Because there is a match company in Texas in serious financial straits. Therefore,
you use non-tariff barriers on what is supposed to be a free trade border to help out your own industry in the United States despite the fact that you have a free trade agreement with Canada.
That shows a lack of credibility with that act. What concerns me greatly about a bill this size is that I am told that our officials raised this issue during the free trade talks and the Americans raised the issue. Neither one of them could come to any agreement on it, so they walked away from it and left it as it was. As a result, Canada is being penalized today because we do not have the same tax laws or customs laws with regard to the Americans bringing the same product into Canada. All they have to do is put "Made in the United States" in one line on it and it is across the border. That is on all their products.
However, U.S. customs wants "Made in Canada", and even if there are five hotels named on the package of matches "Made in Canada" must be on that package of matches five times. That demonstrates a total lack of sincerity in any free trade agreement. It is absolutely ludicrous. The Eddy Match company is now on what is called the "watch item" by the American customs and packaging regulation people. That is just one example.
This morning the minister mentioned something that is very dear to my heart and certainly very dear to small business in this country. That is venture capital. If there is any sector in which we are failing today, it is our inability to date to provide a proper source of the venture capital required for small business to operate. Until we get that problem solved we are not going to be helping small businesses to develop and expand in the way they should. Most of them are not looking for handouts. All they want is a fair deal. Give them the money and they will make money to pay it back.


An hon. member:: And create jobs.


Leonard Donald Hopkins: And create jobs, as my hon. friend says. Not only that, but solving this problem would help us to retain our natural resources in this country.
I will give you an example of what I mean by that. There is a company in the Ottawa Valley called Two Island Marble. It is a huge deposit and is one of the best quality marbles in the world. The family who has the property and is trying to develop it is looking for venture capital. The company can increase its business. It has all
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kinds of orders for material from other companies but it needs that venture capital.
What will happen if this Canada does not provide our small business people, our entrepreneurs, with a source of venture capital? I will tell you. Italy wants to buy this marble deposit. Italian business people will come in, buy it up and operate in Canada. We are sitting here with the resource on our doorstep. There are people who want to develop the company and help it to grow, who are willing to work long hours to make it go. However, while we are revamping our tax system-and these 400 pages are just a small portion of it-we cannot come up with a system of financial venture capital to help out this very important company.


An hon. member:: We are tinkering.


Leonard Donald Hopkins: We are tinkering, as my hon. friend says.
The minister mentioned that the government had three very cogent presentations about how it should handle venture capital, where it should get it, where it should source it and so on. He said that all three presented different views and one sometimes counteracted the other.
When that situation arises surely it is up to the Government of Canada to take a lead. That is why the Conservatives were elected to office. They were the ones who were going to help business. What is happening today? It is tough being a small business person out there today because there is going to be another 24.4 per cent increase in unemployment insurance levies. It has to be paid. It is there. The government is not going to pay its share. The government is not going to pay one cent toward the need for increasing the amount of money in the UI fund or help to overcome the $6 billion deficit in the fund itself. It is going to leave it up to the workers of today and the business people to pay. That is an added burden.
In addition to that, small businesses have been inundated with other plans ranging from the office work of handling medical plans, filling out endless taxation forms, filling out endless forms for StatsCanada and everything else under the sun.
They are actually running a small office for governments, whether it be Ontario, the federal government or
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any province in Canada and the federal government combined. Then they have their dealings with the municipality in which they exist.
They spend so much of their time and energy on paperwork that it lessens their ability to develop and enlarge their businesses, which would allow them to employ people.
We have a real challenge before us today with regard to the regional development program, the unemployment insurance plan and the Canada Assistance Plan. CAP is a tremendous plan and we have to ensure that it is in place for years to come. We have to ensure that medicare is in place for years to come and it will be much cheaper if we pay for it through taxation than through private medical plans. The Americans found that out. They pay about $350 to $400 a month for medicare coverage for their families under the private enterprise system.
Here in Canada we are very fortunate but we have to protect it. That is one area for which we should never really complain about paying taxes because the alternative is many times worse than the taxes to support medicare and the Canada pension system in this country.
I am not going to go into the details of the Canada Pension Plan requirements in this legislation. I do want to say that I note the Canada-Nova Scotia Offshore Petroleum Resources Accord Implementation Act. We had a Canada-Nova Scotia offshore resources agreement. I tabled that legislation in the House back in 1984.
Under this regional development plan I had occasion as chairman of the public accounts committee in the House of Commons to have the Auditor General's report before us. He was highly critical of the way money was spent under that plan.
No matter how you look at it, the more money you spend, the more tax money you have to raise. The old theory that a penny saved is a penny earned is not recognized very much today. However, it certainly is as valid today as it was 100 years ago. Do you know what that money was used for? It was used for the promotion of offshore development resources under Premier Buchanan, who is now over in the other place. They put up street lights, built streets, built bridges and all kinds of little things that were just fantastic. They built a harbour

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that was not used very much. All this money went into this infrastructure and very little materialized out of it.
We can never neglect the idea that regional development policies on the part of the federal government are very important to the regions of this country. At the same time, as a federal government we have an obligation to ensure that the money we hand over to somebody else is going to be spent on the things it was meant for.
How are we going to be able to say that the money that is collected should go to the Canada Pension Plan? We have a special fund for that. It is allocated there. Much of the money goes into the general taxation fund which provides a lot of flexibility in how the money is spent. Also, if an agreement is drawn up very loosely it allows the recipients of that money to be very flexible.
I remember Premier Buchanan of Nova Scotia blasting forth at me in The Halifax Chronicle Herald because I did not know what I was doing and so on.
If I did not know what I was doing then neither did the Auditor General of Canada. I would suggest that the Auditor General of Canada and the chairman of the public accounts committee knew more about what was going on than Premier Buchanan wanted to admit. This debate went on.
The point I want to make is this. If we are going to collect tax money in Canada to the extent that we are today, let us first make sure that the money is properly labelled and let us have some review to make sure that that money is being spent for the purpose for which it was meant in the first place. Only if we are very careful in the spending of tax dollars in all areas of government will we be able to have a firm, solid, valid and a long-term medicare plan in Canada and a Canada Pension Plan.
My hon. friend to my left who spoke on the Canada Pension Plan and some of the technicalities of it a while ago brought out some of the very specific needs in that plan. My bottom line is simply this. We have an obligation to make sure that those tax dollars are used properly and specifically. If there is any adverse spending or anyone getting great ideas that they are going to do something else with it then they should be reprimanded and brought to task for it.
I want to say to my colleague on my left here, the hon. member for Vanier, that I hope as the new chairman of the public accounts committee he will be very much on the job to see to it that the Auditor General's report is followed up on and that any inequities or any bad spending practices are looked at by that committee and recommendations are made to this House.
One good thing about the public accounts committee is that it can make some very strong reports and recommendations to this House of Commons. The government must respond to them within a certain number of days or within a certain number of months. The committee puts the deadline on that.
It is very important that we have these programs in place. Let us be good tax spenders. This is in addition to being good tax collectors as this government is certainly proving to be. Over the years it has been far beyond our means.


Dennis Joseph Mills: Madam Speaker, as I was listening to my colleague from Renfrew-Nipissing-Pembroke I began to think how much more productive these debates can be. Sometimes they are even better than Question Period.
We can deal with issues in a more substantive way. Here today he described well a condition that exists for a major employer in his community, Eddy Match, which through the legalese of a particular act has been frustrated in executing his job.
The member has been in this House for over 26 years. He has seen thousands of different bills come and go. I would like to ask the member if he thinks that maybe the spirit of these laws is dwindling away and the letter of the law or the bureaucracy of the law is taking precedence over the fact that these bills are basically there and ultimately there to provide a public good.
I do not say that public servants do this with ill will but sometimes I think they may lose a sense or a focus of what the Public Service is really supposed to be.
Rather than provide maximum administrative delay on a particular issue they are there to facilitate. They should be looking more at the spirit of the law rather than the letter.


Leonard Donald Hopkins: Madam Speaker, the hon. member raises some very good points. He talked about the spirit of the laws. I would say that the spirit of the free trade law, for example, goes down the drain when you have such
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non-tariff barriers entering in to prevent a Canadian product from crossing the American border. Imagine this vast open market that we were promised. You go up to the border and you are stopped. You cannot take your product across the border to sell into that great open market that we debated for so long in this House of Commons.
The hon. member probably brought out a point indirectly that he did not realize. We must remember that the person who negotiated that deal and walked away from it was a long-term bureaucrat in governments in Canada. He should be ashamed of himself for having just thrown up his arms and walked away, not having looked after that part of the task.
The letter of the law. I think the letter of the law is important. I spoke about the way we should handle our finances and be very strict about that. I do not think the letter of the law should bypass common sense. I think what the hon. member was suggesting was that the bureaucracy of the law should not be a hindrance to the Canadian citizen in his or her efforts to be a successful business person or to move ahead in a venture in this country.
The hon. member talked about getting back to the basics. I think that is extremely important. I would just like to wind up my answers to him by saying that the spirit of the law has been a long-time tradition of this House. I think when you go back to try and nit-pick over the letter of the law, you are destroying the very spirit of Parliament itself. That is serious.
The hon. member talks about the bureaucracy producing a 400-page bill here dealing with about seven or eight different acts all in the same package. That really does destroy the spirit of Parliament itself. Members are sent here by their constituents to be legislators. You need to have layman's language as a guideline for a bill like this or any other legislation in this House. I am serious about this. I think there is nothing greater that could happen to the spirit of Parliament itself than to have bills written out in layman's language. They should not be allowed to be tabled in the House until that accompaniment of layman's language is with the bill.
If you do not do that then many people in this House will be voting on bills without fully knowing what is in them. With our strict parliamentary discipline system
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here, members get up and vote the party line. I think we are going to have to loosen that up a bit in the years to come. There is no question in my mind about that, Madam Speaker. There are going to have to be rules brought in whereby governments can only be defeated under certain conditions and the members released to vote for the regions of this country. That is a very important unity question in my mind.
If members are not well informed about legislation that is going through the House, what you really end up with is executive type government in Canada. An executive type government means that cabinet governs. It lays down the regulations. It brings in the legislation. It gets the troops out to make sure they are here to pass that legislation, and the Canadian people are saddled with the work that we do within that legislation and the carrying out of the rules that go out accompanying it. My big concern is that as society gets more and more complicated and as tax systems get more and more complicated, then we are simply going to have a lot of members in this House who do not have the privilege of having a layman's statement at hand to read the bill and know what is in it. They could then get up and give a very intelligent speech.
I think there would be better speeches in this House of Commons if that type of work was going on. It is very important that people understand. It is very important that the legislators fully understand what is going on so that cabinet does not become the executive of the country by bringing in their legislation and bringing in the troops to pass it. The Canadian public is saddled with that legislation and members of this House are not really informed about what is happening right here in this House.
If there is anything we can do for the spirit of Parliament and the spirit of real democracy in this country, that is one thing that will produce it.
I want to thank my hon. friend from Broadview- Greenwood for that question.


Mr. Brian L. Gardiner (Prince George-Bulkley Valley):: Madam Speaker, I am pleased to have an opportunity to enter into the debate on one particular section of this large piece of legislation. It has been

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referred to by other members in the House today as a large piece-some 400 pages-of legislation.
I am particularly interested in just putting some comments on the record as they relate to questions around the northern tax allowance which is referred to in this bill. Essentially sections of this bill are implementing measures introduced by the government on the northern tax allowance in response primarily to a great deal of public debate throughout northern Canada and northern British Columbia in my area. This is basically in response to a report prepared for the then Minister of Finance in October 1989. There was a resulting announcement by the government in February of this year in regard to amendments to the legislation on northern benefits.
The end result of all of that is in Bill C-18 which we are debating today. Other members have talked about different aspects of the legislation. My colleague who is the member for Beaches-Woodbine spoke about the disabled. As I mentioned, I would like to enter some comments on the record about the northern tax allowance and what this bill is doing. It is such an important program as it relates to taxation for those people who reside in the northern parts of British Columbia and northern Canada.
Why is such a program so important? First, one must get a sense of how many of us live in northern and remote areas such as in my home town of Prince George and in my riding. Parts of it are remote and isolated. Of course there are may other communities in the country that are a great deal more northern and remote.
Generally speaking, what kind of services do we not have that people in large urban centres have come to take for granted? Some communities in my riding such as Grand Isle have a real problem getting adequate medical service provided. A community like Valemount has to advertise in international publications to try and get doctors to locate in that community to provide health care. Could you imagine people in a community like Toronto, Montreal, Vancouver or Regina not being able to have adequate medical care? Could you imagine simple things like banking services that do not exist in a number of those areas?
Education, for example. We are very pleased in northern B.C. now that we will be getting the University of
Northern British Columbia, but sometimes it makes you feel that when you live in some of the remote areas that you have to crawl across crushed glass to convince governments of your needs. It is not that we are asking for a lot. In fact, in many cases I think the people in many northern communities are likely more patient than they really should be with their governments, regardless of which party is in office.
I think we have a great deal to do both from a federal perspective and obviously from a provincial perspective to provide that kind of balance and that level playing field, if you like, for people who live in these communities.
In British Columbia, if you can sell a case a beer for the same price in Vancouver as you can sell it elsewhere in the province then I think governments have an obligation to take a look at providing the kind of services that are needed throughout northern communities.
What we are doing through this bill that is being presented today for us is implementing a number of the follow-ups, as I mentioned, from the government in terms of administering the northern tax allowance. I want to focus on what I think is one particularly important approach to take on this tax, an approach unfortunately not taken by this report and certainly not being followed by the government.
In looking at the report which was conducted with a number of hearings in communities just prior, if I am not mistaken, to the last federal election, the government knew it was in some trouble on this issue. It was an attempt to try and really assuage a great deal of discontent in many northern ridings over this issue and so off we go with a study to take a look at the issue.
The study into the Northern Tax Allowance Program heard from Canadians and people throughout northern communities and talked about how you implement a northern tax allowance. They provided some interesting information as to why you need a northern tax allowance to provide that fairness in the tax system that we are always talking about.
For people who have a copy of the report, I refer them to page 12 where it basically gives a scenario of a community in the north and a community in the south, taking into account that often wages are higher in
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northern communities, often but not always, and it takes into account the cost of living and other costs.
Madam Speaker, you would be interested to know that as a result of this particular study that was done, it showed that people living in northern communities end up in fact with less purchasing power than people living in a southern community. I think this lends to my argument that the government was taking a look at this problem in its rejection of a community-by-community approach. That is in fact a mechanism and a program that we should try to follow.
The report talked about how there were many problems related to the community-by-community administration of the northern tax allowance. Indeed, every member of Parliament who has probably dealt with this issue has had some examples to give and that we have pursued with Revenue Canada and others on this program that have just been absolutely ridiculous. In my riding alone the department confused McBride Lake, which is a lake south of Houston in the western end of my riding, with McBride, B.C. which is in the eastern part of my riding. So there was a great deal of confusion over the program. There were also problems with this program in terms of its administration on simple things like on one side of the road you were eligible, on the other side of the road you were not. This report goes into some of the concerns and problems with that administration. They are acknowledged.
I think it is pretty clear that many of the problems that were identified in fact can be rectified and can be corrected with diligence by the department and with the provision of adequate information from the various agencies and ministries often that have to provide that information.
Perhaps in the rejection of that community-by-community approach by the task force and by the government, the government will eventually set up basically a unilateral line of latitude rejecting most communities that had really legitimately looked at having the northern tax allowance. I suspect they went into that with that in mind to really come up with the report that right off
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the top rejected the community-by-community approach in determining the northern tax allowance.
In my travels in my riding and meeting with constituents on this particular issue, I had an opportunity to meet with an accountant friend in Bums Lake who has handled for his clients a large number of the appeals that people were making on this program and he made a very interesting observation.
About a year or so ago, or longer than that, he acknowledged that there were many problems in the administration of the then existing community-by-community approach taken by Revenue Canada, but he said that they were solving the problems and that they were being handled because the department was starting to understand how to administer that program.
I thought that was an interesting observation. I followed it up with the minister and there seemed to be some indication that the number of appeals or difficulties with the program had been reduced.
In the Auditor General's report that was just released, while there are ample pages here to criticize this government for its flagrant abuse of public funds, it is interesting to see the response from the Department of National Revenue on a question that the Auditor General put essentially on determining whether in fact people were eligible for this program or not.
Of course the perspective of the Auditor General is, and of course a very important one, that the department, if you like, is not improperly assessing these claims so that we are providing providing a benefit where none should be provided.
I guess it is not very often you find people congratulating the Department of National Revenue for its work, but if we were to take its word in the report of the Auditor General and my interpretation of its response to the Auditor General, in fact a computer check by the department of 1988 and 1989 returns of people using or applying for this northern tax allowance in fact indicated and I quote "a reduced risk of non-compliance", i.e. you are cheating, in this area in 1989. As a result enforcement resources were deployed to other activities.
I think that gives some weight and some evidence to the comments from my constituents, in particular the

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accountant I referred to, that in fact the department was getting a handle on how to deal with this community-bycommunity approach. That shows clearly in my mind the commitment I have to developing this community-bycommunity approach, and that in fact it can work. I think that is a more logical and more consistent way to administer a program like this as opposed to the very arbitrary line of latitude that the government has in the end adopted.
In fact, I am doing my homework and work on this and have asked for a report to be written on developing a proper community-by-community approach that can be dealt with under this program so that communities such as Valemount, Vanderhoof, Fort St. James, Houston and other communities can in fact fit into this system. I think there is a good reason for that, and the good reason is this: If it is the government's goal, federal or provincial, to provide a degree of services to all of its citizens that we have come to expect-and in many cases I think we should demand-then how is it that we discipline ourselves and our own governments to see that that is in fact done? I think there is reason to develop a grading system, depending on the remoteness of a community. If it does not have a lot of the services, then develop a scale. If the government takes the initiative and ends up providing that school or that hospital or that medicare or an entrepreneur or a bank comes in and provides another service, fair enough, drop down the scale. Then we have a way to measure the quality of services that I think all of us deserve whether we live in Vancouver, Regina, Vanderhoof, Penny, Bums Lake or Fraser Lake. That is the kind of system I see being developed here. Unfortunately this government in this legislation is taking a step backward in providing that. Eventually I think we will see basically the complete elimination of this program. That would be bad news obviously for many of the residents of northern Canada.
It is going to take some additional work for those communities that have been successful in the boundaries provided by the government. We also have a new opponent on this, the Reform Party, which is now opposed completely to any kind of northern tax allowance. I think that will come as quite a surprise to many of the former Conservatives mostly who are taking a look at the Reform Party. I think they will be quite surprised by
this backward step, which of course we have come to expect from the Reform Party, that is being taken by that party. It is my view, of course, that in the rush to really be Conservatives in drag, if you like, or their concern that the Conservative Party, and even this party, has not been right wing enough in its application of its economic policies, they are trying to outdo even the Conservative Party, and in some cases obviously they have been doing very well. So, the Reform Party and the Conservative Party are united on this. It is another opponent that people who live in northern and remote communities will have in order to try and guarantee the kind of services that we need and I think deserve to have in this country.
It is an important part of a very substantial piece of legislation that I think residents of northern communities should be aware of. I will certainly be informing my constituents in those areas about this legislation, about the changes that are being brought in. I am certainly open if members opposite or in the House are interested in seeing some alternative proposals that my research eventually comes up with. I would of course be pleased to pass it on to them because I think all members of this House who represent rural and northern communities know how important that program is. We have got to fight to keep what little we have left now and we have got to do more work where possible to expand that to include those communities that do need it.


Madam Deputy Speaker:: Is the House ready for the question?


Some hon. members:: Question.


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


Some hon. members:: Agreed.


[Stage Direction]
Motion agreed to, bill read the third time and passed.
Madam Deputy Speaker:: I will now leave the chair until 2 p.m.
The House took recess at 1:47 p.m.


[Stage Direction]
AFTER RECESS

The House resumed 2 p.m.
December 5, 1991

Mr. Jean-Pierre Hogue (Outremont):: Mr. Speaker, earlier today the Canada-Armenia Parliamentary Friendship Group's founding organizational committee meeting was held. This is an historic day in the relations between Canada and the newly independent Armenia.
On September 21, 1991 a referendum on independence was held in Armenia. Over 99 per cent of Armenians voted for independence.
On November 15, 1991 the newly elected President of Armenia, Levon Ter-Petrosian, visited Canada. He met with a group of MPs and with our Prime Minister.
With a free and independent Armenia, parliamentarians from Canada and Armenia will be working together to build a truly democratic and financially strong Armenia.

Mr. Speaker, today we wish to pay tribute to the people of Armenia and its representatives and assure them of our support.


PUBLIC SERVICE SUPERANNUATION FUND
Mr. Eugene Bellemare (Carleton-Gloucester):: Mr. Speaker, the 1991 Auditor General's report criticizes the government for mishandling its employee pension funds because it uses the money from these funds to finance government projects. Eighteen per cent of today's public debt is money owing to the Public Service Superannuation Fund.
Had these moneys been invested in the Canadian securities market rather than used for the government's own borrowing needs, an extra 2 per cent could have been added to the rate of return. This would translate into an extra $1.5 billion for the employee pension fund.
A healthier fund would help eliminate an increase in the public debt which Canadians would have to make up through higher taxes.

It is high time the government stopped taking undue advantage of employee pension funds. The government should develop a better investment strategy to ensure the best possible return for its employees and for Canadian taxpayers.


VIOLENCE AGAINST WOMEN
Mr. Bill Attewell (Markham-Whitchurch-Stouff-ville):: Mr. Speaker, two years ago tomorrow 14 bright, young and innocent women were murdered because of their gender by a misogynist named Marc Lepine.
December 6 has been set aside to mark the widespread problem of violence against women and remember the horror that took place two years ago.
We must mark the day that will forever remind us of the women who were murdered. Yet the reality that the pervasive evil of violence against women leaves few Canadians untouched horrifies me.
Tomorrow at a candle-light vigil in Markham I will be lighting a candle for the 14 women who were murdered. I will also be honouring their sisters throughout the world who continue to be abused each day of the year.


ROYAL CANADIAN MINT
Ms. Joy Langan (Mission-Coquitlam):: Mr. Speaker, yesterday my colleague, the member for Winnipeg Trans-cona, asked the government why it has not intervened in the almost seven-week old strike at the Mint in Winnipeg-
The response from the government side was:
- there is no reason for the Minister of Labour to appoint a mediator unless at least one of the sides indicates it has an interest in that.
This was the response despite the fact that section 105 of the labour code provides for the minister to act on his own initiative.
Today in Ottawa 350 Mint workers joined the strike. I have met with these workers and their demands are not unreasonable.

A decent wage for these workers is not out of the question given the profitable situation the Mint enjoys. An increase that reflects the cost of living is not unreasonable, given the bonuses paid to senior management.
The Mint has already spent on this strike alone more than a just wage settlement would have cost. I call on the Minister of Labour to take immediate steps to see a quick and fair settlement to this dispute. He has the authority to act and he should do so without delay.


MANUFACTURING INDUSTRY
Mrs. Christine Stewart (Northumberland):: Mr. Speaker, I wish to speak again to the distress being felt by Canadian manufacturers in my riding of Northumberland and across Canada.
The GST, increased employer contributions to the Canada pension and Unemployment Insurance Programs, other burdensome government regulations, and the high cost of the Canadian dollar make sales in Canada and abroad next to impossible. What is more, the government is now suggesting a new payroll tax to finance wage protection for employees of bankrupt companies.
The Hudson's Bay Company chief executive officer is quoted as telling U.S. manufacturers that right now tariffs and value added taxes in Canada drive the cost of doing business in Canada 30 per cent higher than the U.S. rates.
Vagden Industries of Trenton, Ontario, a manufacturer of fine hosiery and a client of The Bay writes:
How in the world are we going to compete?
Does the government not understand the difficulties of this and thousands of other Canadian manufacturers? No new taxes, fairer taxes and recession time assistance programs are vital to the survival of Canadian business. The government must act now.


MIDDLE EAST PEACE CONFERENCE
Mr. Bob Corbett (Fundy-Royal):: Mr. Speaker, I am sure all members will join me in wishing success to the peace conference on the Middle East which convened in Washington, D. C. yesterday.
After years of turmoil and much suffering there is hope for peace in the region and we commend the parties which are actively participating to achieve this.
Having recently visited the area, I can assure the House there is considerable optimism and hope that the problems of the region can be resolved through dialogue and that a number of issues can be resolved, including a homeland for the Palestinians.
In this regard one recognizes the patient and persistent efforts of U. S. President George Bush and Secretary of State James Baker to initiate and ensure the success of the peace process.
At this season when we reflect on the message of peace on earth, there is no better example than the Washington conference. We welcome the chance for diminishing tensions and confrontations.


RURAL DIGNITY
Raymond John Funk: Mr. Speaker, December 14 is an important anniversary in Canada. Rural Canadians from coast to coast to coast will recognize the determined efforts of the organization Rural Dignity, which has now been alive and fighting for five years.
Rural Dignity is a network of committed people who have rallied around issues such as the closure of rural post offices, cutbacks to VIA Rail and the struggle to maintain viable rural communities.
In the face of tough odds, a government determined to decimate the infrastructure of rural Canada, benign neglect by the big city media and the challenges of isolation, Rural Dignity has won some big victories. These victories are symbolized by the fact that while Canada Post has managed to close 1,200 rural post offices, there are also 1,200 rural post offices still open which Canada Post had planned to close by now.

Rural Dignity is a prime example of the vitality and spirit of grass roots Canada. I am sure all members would want to join me in congratulating the people in Rural Dignity and in wishing them total victory in their fight to revitalize rural Canada.


DARYL BEAN
Mr. Felix Holtmann (Portage-Interlake):: Mr. Speaker, democratic elected leaders around the world and Canada must set examples of dignity, honesty and civility.
You Canadians who are associated with national women's organizations such as YWCA, National Action Committee on the Status of Women, Elizabeth Fry Society, Disabled Women's Network, National Organization of Immigrant and Visible Minority Women, REAL Women and countless other women's organizations including specifically such women as Shirley Carr and women who lead New Democratic Parties should all demand Daryl Bean's resignation for his despicable leadership.


SUPPLY MANAGEMENT
Ms. Catherine Callbeck (Malpeque):: Mr. Speaker, it appears Canada's supply management system may be in danger of being used as a bargaining chip at the ongoing GATT negotiations.
The replacement of supply management with a system of tariffication would create unfair competition for producers because of the lack of a level playing field.
It would certainly force many dairy, poultry and egg farmers out of business and inflict much hardship in an already struggling Prince Edward Island economy.
Prince Edward Island's agricultural sector accounts for the largest percentage of Gross Provincial Product out of all other provinces except Saskatchewan.
The economic health of Prince Edward Island will be severely threatened should the Government of Canada fail to protect, clarify and strengthen article XI.
I urge the federal government to take every reasonable measure to ensure that supply management in Canada is maintained and enhanced.


CROATIA
Mr. Ken Monteith (Elgin-Norfolk):: Mr. Speaker, yesterday Canadians of Croatian descent demonstrated on Parliament Hill seeking Canada's recognition of Croatia as an independent country.
The Secretary of State for External Affairs has stated four principles must be met before Canada can recognize Croatia. First, the violence must end. Second, minorities must be protected. Third, borders must be established. The fourth point is respect for human rights.
Croatia has passed legislation that will entrench human and minority rights in the Constitution and criminal law. Croatian borders were established before the violence began.
Finally, Croatia is not the aggressor in this situation. I urge the Secretary of State for External Affairs to work with the United Nations in establishing an end to the violence so that Canada can recognize Croatia's independence.


Mr. Jim Jordan (Leeds-Grenville):: Mr. Speaker, the importance of food security to a nation puts agricultural policy in a much different position than any other topic now under discussion at GATT.
That explains the Japanese government's staunch defence of its highly protective rice market regime which it considers essential to its national food security system.
Those negotiating for maintenance of our Canadian marketing boards at GATT need to appreciate fully that a nation's food supply is not just another commodity. They should not be swayed by the American attitude toward marketing boards, an attitude which even the Americans themselves admit is their defence against domestic problems and pressures at home.
Without the marketing board system many Canadian farmers will be driven out of business by competition from the giant U.S. agribusiness, thus putting the one area of the agricultural industry in this country at risk.

We have had some stability in that area of farming and we will put that area of farming in a position not unlike that of our grain farmers in western Canada.


ATTIRE OF MEMBERS
Mrs. Edna Anderson (Simcoe Centre):: Mr. Speaker, it must have been a slow news day at The Globe and Mail yesterday. It seems that the powers that be found it newsworthy to report that the Minister of Justice and the Associate Minister of National Defence attended an event in Vancouver wearing the same outfits, distinguishable only by slight variations, mercifully salvaging the ministers from the fashion faux pas.
I find it remarkable that this would be commented on at all when male members of Parliament present themselves in monotonous uniformity on a daily basis, and on special occasions they appear somewhat like a bunch of penguins, black tie and all.


Some hon. members:: Hear, hear.


Mr. Speaker:: I want to say to the hon. member that I am one of the offenders of the monotonously same set of clothes.


CROSS-BORDER SHOPPING
Giuseppe (Joseph) Volpe: Mr. Speaker, for months I and other opposition colleagues have been pointing out the correlation between the GST and the increase in cross-border shopping.
The government has pooh-poohed everything including the view that this would result in decreased government revenues. All the while the minister was tinkering with customs procedures in order to dispel protests.
Here is what the Auditor General said to the Minister of National Revenue regarding his efforts. First, no analysis was done to assess the effect of express lanes on cross-border shopping and revenue collection. Second, contrary to government claims data for 1990-91 showed an upward trend in cross-border shopping. Third, the congestion at crossing points would increase the risk of compromising enforcement efforts, including revenue collection. Fourth, inadequate border facilities undermine facilitation and enforcement efforts, including revenue collection.
Yet the minister continues to claim that cutbacks in government services and resources will not affect its revenue generation abilities.
I am asking the minister now: Will he admit the error of his assumptions and take appropriate steps to safeguard Canadian revenues and the integrity of the Canadian Customs system?


CANADIAN BROADCASTING CORPORATION
Mr. Rene Soetens (Ontario):: Mr. Speaker, I rise today out of disgust at what CBC Newsworld thinks is newsworthy.
We have an absolutely desperate situation in Croatia. We have a new Auditor General's report. We have numerous good news events occurring across Canada. We even have a great choir singing in the rotunda of our Parliament Buildings.
But what does CBC Newsworld choose for its program content? The rape trial currently under way in Florida. Rape under any circumstance is despicable. The CBC does not need to sensationalize it. The National News Service of the CBC should be admonished and told to find some good Canadian news on which to concentrate its efforts.


WHITE RIBBON CAMPAIGN
Ms. Dawn Black (New Westminster-Burnaby):: Mr. Speaker, tomorrow is a national day of remembrance and action on violence against women. Many men across Canada, including members of Parliament, have chosen to show their concern and solidarity with women and their desire to end violence against women by wearing a white ribbon this week.
However, military personnel are not allowed to wear a white ribbon on their uniforms. There are many examples of other national days for which accessories are permitted. If the military can wear a leek on St. David's Day and a thistle on St. Andrew's Day, why not a white ribbon this week?
I ask the minister to exercise her good sense and rectify this ludicrous situation today.
December 5, 1991



ORAL QUESTION PERIOD


Hon. Jean Chretien (Leader of the Opposition):: Mr. Speaker, yesterday in Calgary the Prime Minister announced, and I was glad to hear it, that he intended to consult Canadians on this country's constitutional future, something we have wanted for a long time. He dismissed the election option, but obviously the other option is a referendum, an option we support. We would like to know from the Acting Prime Minister whether the entire cabinet agrees with the Prime Minister's new position that we should consult Canadians, presumably through some kind of referendum.
Does my friend the Minister of National Health and Welfare agree? Does my friend the President of the Treasury Board agree? Does my friend the Minister of National Defence agree with the Prime Minister on the subject of a Canadian referendum?


Hon. Perrin Beatty (Minister of Communications):: Mr. Speaker, the position of the government has been quite clear. It was expressed both by the Prime Minister and by my colleague responsible for constitutional affairs.
The government leaves its options open. We are determined to ensure that Canadians are plugged into the process because we recognize that the Constitution belongs to them. We want to do so in a way that is constructive for Canadians, that does not polarize Canadians and pit one region of Canada against another. All options are open in doing that.
The Liberal Party has shut the door. It has said that the only option that is acceptable to it is a referendum. Our goal is to ensure, in consulting with Canadians and ensuring that Canadians feel as if they have had the chance to participate in the remaking of their Constitution, that we do so in ways that are constructive, healing and unifying in Canada.


Joseph Jacques Jean Chrétien: Mr. Speaker, I am very pleased with the answer of the minister when he said that the Constitution belongs to the people of Canada. There is only one way to have the
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consent of the people of Canada from all parts of Canada. We want an end to confusion.
Two weeks ago the Minister responsible for Constitutional Affairs was for a referendum. Last week when six Pequistes who are members of the Tory caucus objected, he was against it; he was afraid of it. The Prime Minister was not afraid of it yesterday in Calgary.
We want to know from the Acting Prime Minister when the confusion will stop in this government and when the people of Canada will clearly know that they will be consulted on the future of this country.


Henry Perrin Beatty: Mr. Speaker, what a very interesting concept. The Leader of the Opposition says that the only way in which Canadians can express themselves, in which they can be consulted, is through a referendum on the Constitution. That is his present position.
I was a member in 1982 of the special committee on the Constitution. The hon. gentleman was responsible in 1981 for the government's position. If the only way in which we can have legitimacy' for constitutional reform is a referendum, why didn't he do it?


Mr. David Dingwall (Cape Breton-East Richmond):: Mr. Speaker, my question is for the same minister.
Yesterday, speaking in Calgary, the Prime Minister ruled out the possibility of a general election on the Constitution. He said that the government is considering at least four options.
I want to ask the minister: If one of the four options currently under consideration is a national referendum, why will the government not introduce legislation that would make that possible? Why does it want to hide its intentions from members of Parliament and from the people of Canada?


Henry Perrin Beatty: Mr. Speaker, far from hiding our intentions from the people of Canada and from Parliament, the government has been abundantly clear in indicating that all options are open.
We have one goal, and that is a united Canada with a renewed Constitution. What we want to do in terms of choosing a methodology to get there is to choose methods of plugging the people in and having them involved which are unifying and which bring Canadians together.

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All options are open in doing that. The difference between us and the members of the Liberal Party is that the members of the Liberal Party have only one option.


David Charles Dingwall: Mr. Speaker, my supplementary question is for the same minister.
Either a national referendum is one of the four options of the government or it is not. If it is, I would like to ask the minister: Why is the government stalling on introducing legislation to allow for a referendum? If it is not stalling, I want to know why the government is repudiating the promise of the constitutional affairs minister who said that the government would introduce legislation for a national referendum?
I ask the minister to explain what is obviously a real discrepancy.


Henry Perrin Beatty: Mr. Speaker, if a discrepancy exists it is in the hon. gentleman's mind.
The government has been abundantly clear and I repeat again: all options are open. What we want to do in all of our efforts on the Constitution is to bring in measures which include Canadians and bind them together instead of pitting region against region, group against group.
If a referendum on the Constitution will be helpful in terms of unifying Canada, we are certainly prepared to consider that. But members of Parliament on all sides of the House have a responsibility to put partisan considerations to one side and put the unity of Canada first.


Mr. Vic Althouse (Mackenzie):: Mr. Speaker, my question is for whoever is speaking for the government on trade today.
With the GATT negotiations approaching a panic situation like we saw prior to the acceptance of the Canada-U.S. trade agreement, Canadian consumers, taxpayers and workers in Canada's generic drug industry and in the provincial drug plans are fearful that our
negotiators are accepting the U.S. proposals covering intellectual property rights without reservation.
Is the government negotiating for a continuation of our right to produce generic drugs by Canadian companies, or will it be accepting the U.S. proposition that will destroy the generic industry and substantially increase the already $8.5 billion now spent on drugs in Canada each year?


Hon. Tom Hockin (Minister of State (Small Businesses and Tourism)):: Of course we are not doing that, Mr. Speaker. It would be absolutely ridiculous to do so when we take a look at the reality. Since the government legislated some four years ago patent protection for pharmaceutical companies, that industry has responded with unprecedented R and D activities in Canada into the millions of dollars.
Price rises have also been kept below the Consumer Price Index. The government continues to make it clear that it is committed to making sure that prices are reasonable for consumers. The government continues to take into account the concerns of the brand name and generic drug producers as well as those of consumers. Why would we change such an effective policy?


Victor Fredrich (Vic) Althouse: Mr. Speaker, I think the minister should review the statistics. Prices have gone up 36 per cent in the last four years, a higher rate of increase than occurred before.
With regard to article XI, has the government submitted to American pressure to move everything to tariffication as reports indicate and as our negotiators report back? Will they give up on supply management farmers that are producing poultry and dairy products now, supplying Canadian consumers with extremely efficient low cost products? Why are negotiators taking an American position at the GATT? Why is tariffication being considered by our negotiating team?


Thomas Hockin: Mr. Speaker, if I can answer on behalf of the Minister of Agriculture, the tariffication proposals are of course before the MTN, but the Minister of Agriculture and the Minister for International Trade last week in Geneva made very clear our position on article XI and our position on supply management. We continue to stand by that.


Victor Fredrich (Vic) Althouse: Mr. Speaker, it is pretty clear to observers that our fallback position needs to go to tariffication.
Since the final negotiations are likely to conclude after this Parliament recesses and perhaps before Christmas, will there be any recourse to Parliament on behalf of the government once an agreement or proposal is forthcoming from the GATT? Will Parliament be consulted? Will the provinces be consulted? Or, will anything signed at Geneva be a done deal which will simply come back to a majority House for approval?


Thomas Hockin: Mr. Speaker, it is clear the hon. member and his party are now unhappy with the GATT. They seem to be unhappy with the MTN. It will be very interesting to see what his party says when a new GATT agreement is brought before the House. Of course Parliament will be consulted. Parliament has always been consulted on multinational questions of trade, tariffs, supply management and will continue to be.


GOVERNMENT EXPENDITURES
Mr. Jim Peterson (Willowdale):: Mr. Speaker, just five weeks ago the cost of this government's prosperity exercise was set at $15 million plus $4.5 million for so-called ads.
Yesterday the industry minister said that the cost was now up over $21 million, plus an amount that he could not even estimate for advertising.
Will the government table today a detailed budget showing all moneys to be spent out of public funds for this prosperity exercise including the full cost of his "let's feel happy" Tory propaganda?


Thomas Hockin: Mr. Speaker, my hon. friend likes to read the headlines in the newspaper and stop right there. If he would read the Canadian Press story further, he would have got the answer to the very question that he asked.
I will be very happy to give him the answer. First of all, it is not $21 million for advertising. The expenditures for communication activities which include printing and
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distribution of discussion papers and other reports, public opinion research and media analysis will be $5.1 million, not $21 million.


Mr. David Berger (Saint-Henri-Westmount):: Mr. Speaker, I have a supplementary for the same minister. Where are this government's priorities? It says there is no money for university or industrial research or for export development. Aren't these priorities? Could the minister explain to Canadians how he managed to find an extra $5 million for government propaganda, when he can't even find the money to help Canadians invest in research and develop their export markets?


Thomas Hockin: Mr. Speaker, if the hon. member had attended any of the community consultations under the prosperity consultations, he would have seen that there was an unprecedented desire for information across Canada on how we can become more competitive and how we can become more prosperous. That is what this exercise is about and that is why there has to be a limited amount of communications in order to encourage people to get involved in the process.
It is working and it is working very well. When Canadians work together we can take on the world and win. That is our message. We want to involve Canadians in that process, and that is what this program does.


NATURAL GAS INDUSTRY
Mr. David Kilgour (Edmonton Southeast):: Mr. Speaker, my question is for the energy minister.
Western Canada's natural gas producers rely on exports to markets in the United States in a very large measure. The California Public Utilities Commission has ordered the largest utility in northern California to dump its long-term contracts with western Canadian gas producers, clearly violating article 905 of the Canada-U.S. Free Trade Agreement.
The Independent Petroleum Association of Canada has asked our National Energy Board to convene a hearing on this matter as quickly as possible. Will the

December 5, 1991
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minister today give a clear undertaking of support for IPAC in this initiative?


Hon. Jake Epp (Minister of Energy, Mines and Resources):: Mr. Speaker, I want to remind the hon. member that there was a joint press conference in Calgary two days ago with the minister of energy for Alberta. We also had very close consultations with the minister of energy for the province of British Columbia.
We came forward with a three-part plan, strongly co-ordinated. I am pleased that unlike many experiences of the past the producers, the Government of Canada and the producing provinces are all in agreement on this energy policy. I think that is very important. We have sent a very strong message.
In respect to the National Energy Board the member asked me a very direct question. He would recognize that the CPA has made a second application to the NEB. I as minister am cognizant of my responsibilities, namely that the NEB remain independent. Obviously there are discussions taking place within the NEB on that issue and I will leave it at that point.
I will just make my last point, that the energy consultative mechanism, which is a meeting that takes place twice a year, once in Ottawa and once in Washington, is meeting today and tomorrow here in Ottawa. We have invited California, Alberta and B.C. to that meeting. That meeting is going on right now.


David Kilgour: Mr. Speaker, the minister is not giving an undertaking. He will know that the reaction to the press conference yesterday in Alberta was very negative.
The situation affects not only exports but also pipeline development, transportation upgrading, exploration activities and indeed the future of a vital western Canadian industry.
Will the minister undertake in this House today to initiate as quickly as can be done an appeal to the Canada-U.S. free trade tribunal on this extremely important issue?


Arthur Jacob (Jake) Epp: Mr. Speaker, the hon. member and I have been in this House for some period of time. I understand partisan shots.
Seriously, the hon. member should take a look at what the response from the industry has been to the press conference. It has been positive, in fact as recently as eleven o'clock last night in Calgary when I spoke to them personally.
I mean I don't know where the guy is, except that he just wants to make a point in the House. The point of the matter is-


Mr. Speaker:: The hon. member for Windsor-St. Clair.


NATIONAL RESEARCH COUNCIL
Mr. Howard McCurdy (Windsor-St. Clair):: Mr. Speaker, my question is directed to the Minister of Industry, Science and Technology or the minister of science and technology or whoever speaks for either of them.
Given the continuing reports of intimidation and retaliation against employees and former employees at NRC who have dared to question the decisions of management, given the retaliation against Chandler Grover for having made a racial discrimination complaint which is under investigation by the RCMP, and given retaliation against the IRAP board for its members having appeared before a committee of this House, is this government not now a bit concerned about the vindictively feudal style of management at NRC and what action does it plan to take?


An hon. member:: Daryl Bean will answer that one.


Thomas Hockin: As my hon. colleague says, Daryl Bean can answer that one, Mr. Speaker.
The hon. member characterizes a board of an arm's length agency as feudal. Therefore he would interfere with an arm's length agency. Arm's length agencies in this country are allowed to run their own affairs. In this particular case the board made its decision about how to handle that program. We respect its right to make that decision.
We would also like to remind my hon. friend that the whole IRAP program and the relationship to it by the NRC will be looked at in the new year. They are putting their house in order so that they can look at it objectively. We as a government stand behind the very effective

December 5, 1991

program which the IRAP program has been over the years.


Howard Douglas McCurdy: Mr. Speaker, I am sure you noticed, as most of Canada will notice, that Daryl Bean is not on the board of the NRC.
Mr. Speaker, you will have noticed that the council of NRC does not fire employees. It is not the council of NRC against which there is a complaint of racial discrimination. It is not the council of NRC that is under investigation by the Royal Canadian Mounted Police for retaliation.
Again I ask this government: Is it not concerned about the actions of the president that it chose at NRC, and is it not time for it to do something about it?


Thomas Hockin: Mr. Speaker, it is clear that the NDP approach to any arm's length agency is to interfere in every little piece of minutia. That is the NDP view.
We have an IRAP program that we are very proud of. We want to see it strengthened. We want to see it improved. And the NRC is undertaking to make sure that happens.


ENVIRONMENT
Mrs. Marlene Catterall (Ottawa West):: Mr. Speaker, my question is directed to the Acting Prime Minister.
Last year and again this year the Auditor General identified, and I quote: "serious deficiencies in the way federal departments account for their efforts to protect the environment".
Three departments alone spent $120 million on water, energy, paper and then on garbage disposal. Why does the government still refuse to live up to its green plan commitment to be accountable for the environment?


Hon. Pauline Browes (Minister of State (Environment)):: Mr. Speaker, we are moving out of the first year of the green plan, a $3 billion commitment over six years to clean up Canada's environment. We have now completed one year.
I think Canadians can be truly proud of what we have been able to accomplish as citizens of Canada to clean up the water, the air and our soil. In terms of the initiatives,
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some 35 initiatives have been announced of over $1 billion of Canadian taxpayers' money, money well spent.


Mr. Stan Keyes (Hamilton West):: Mr. Speaker, my question is for the minister or the deputy if he would care to answer.
The Auditor General has criticized the minister's department for mishandling the clean-up of the Great Lakes, including Hamilton harbour. Specifically he said that the absence of plans and goals constituted: "a lack of due regard in managing Canada's contribution to the Great Lakes Water Quality Agreement".
When will the minister develop specific goals and a timeframe to clean up the Great Lakes?


Pauline Browes: Mr. Speaker, the five lakes that constitute the Great Lakes are probably one of the most magnificent resources Canada has. I think all of us understand the problems we have had over many years with the amount of chemicals that have been put into the Great Lakes.
Some $125 million have been set aside for the Great Lakes clean-up. We have 17 hot spots on the Canadian side, and we are now working on the remedial action plans that have been set up of consultation with the communities in order that the communities can identify the problems and the solutions.
We are very pleased with how some of those RAPs have been constituted and moved ahead. Some of them definitely need further work and we look forward to completing those RAPs.


Ms. Mary Clancy (Halifax):: Mr. Speaker, in the absence of the minister responsible for ACOA, I will put my question to the minister of employment.
Yesterday a spokesman for ACOA said that they were reviewing their procedures in light of the Auditor General's report. Would the minister of employment tell this House today what his government is doing to ensure that these procedures, perhaps for the first time in this government's history, start acting to the benefit of Atlantic Canadians?

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Hon. Bernard Valcourt (Minister of Employment and Immigration):: Mr. Speaker, I take it that the hon. member is suggesting that the expenditures of the Atlantic Canada Opportunities Agency is not serving Atlantic Canada. If that is her position, let her tell that to the thousands of business people in Atlantic Canada who see ACOA as an important tool of economic development.
Of course we are living in a very imperfect world. I think ACOA officials acknowledged yesterday that the system had to be improved as per the recommendations of the Auditor General, and they will do so accordingly.


Mary Catherine Clancy: Mr. Speaker, yes, it is a very imperfect world. It is pretty imperfect in Atlantic Canada where the region is not getting the advantages under regional development programs that it so richly deserves.
Consequently I ask this minister whether his government will order ACOA officials to meet as soon as possible with officials in the city of Halifax and the county of Halifax where social assistance rates are going through the ceiling to put together some form of economic recovery plan so that the people of Halifax can see some future, some light at the end of the tunnel.


Bernard Valcourt: Mr. Speaker, I think the experience of the Atlantic Canada Opportunities Agency has always been to consult and work with the people of Atlantic Canada. The people of Halifax have not been treated any differently.


Mary Catherine Clancy: No, we have all been treated badly.


Bernard Valcourt: Of course the political position of the hon. member is important to her. I think that Atlantic Canadians know that the programs of the Atlantic Canada Opportunities Agency are serving Atlantic Canada well.


INDONESIA
Mr. Svend J. Robinson (Burnaby-Kingsway):: Mr. Speaker, my question is for the Secretary of State for External Affairs.
Three weeks ago, following the massacre of over 100 innocent civilians mourning at a funeral in East Timor, the minister promised to review Canada's policy on aid to Indonesia.
Will the minister now advise the House when this government will not only suspend government to government non-humanitarian aid to Indonesia but will also impose a total embargo on the sale of arms to the repressive Indonesian government?


Hon. Barbara McDougall (Secretary of State for External Affairs):: Mr. Speaker, our review of aid to Indonesia is just about complete. I have had a preliminary report on it and I will be reporting publicly, probably next week.


Svend Johannes Robinson: Mr. Speaker, I asked the minister about an arms embargo as well and I trust she will deal with that in her response to my supplementary question to the same minister.
December 7 marks the 16th anniversary of the Indonesian invasion of East Timor and in those 16 genocidal years over 200,000 people have died.
Will the minister now drop her insistence that Indonesian sovereignty over East Timor is a fait accompli. Instead, will this minister clearly support UN Security Council resolutions 384 and 389 condemning the invasion and unequivocally reaffirming the self-determination of the people of East Timor? Will she act on behalf of the people of East Timor?


Barbara Jean McDougall: Mr. Speaker, we have acted on behalf of the people of East Timor first of all because I raised this personally within hours with the Indonesian foreign minister. We are reviewing our aid program. Our ambassador in Jakarta has been very active herself in investigating the situation in East Timor. I am looking at reports from her in my aid review.
We will do everything we can to bring an end to the violence..



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SOLICITOR GENERAL
Mrs. Lise Bourgault (Argenteuil-Papineau):: Mr. Speaker, my question is directed to the Solicitor General. Recent events and today's reports in the media have proved beyond a doubt that the Canadian Security Information Service was right to fear the increasing influence of the Warriors, who don't want the RCMP or the QPP around so they can go about their illegal business and smuggle goods without further ado.
Could the minister confirm that he had a meeting last Sunday with his provincial counterpart, Mr. Ryan, and could he tell the House what they intend to do about the current explosive situation in this region?


Hon. Doug Lewis (Solicitor General of Canada):: Mr. Speaker, I know that my colleague has an interest in this matter and is doing her best to represent her constituents. I can assure her and the House that the government places a very high priority on trying to find a peaceful solution.
Last Sunday I met with Mr. Ryan and we discussed the matter. I was on the phone with him this morning. I believe that we are making progress. We believe that continued discussions and negotiations are the only way to do it. I would hope that we can report something in the very near future.


ROUGE VALLEY PARK
Bill Attewell: Mr. Speaker, my question is for the Minister of State for the Environment.
It has been over two years since this government promised $10 million to help in the establishment of an urban park in the Rouge Valley which is on the east of metro.
I would like to ask the minister: Why the delay? Why the hold-up? Who is dragging their feet? This is a very important project on a national basis. I would like the minister's comments. Can we get this solved?


Pauline Browes: Mr. Speaker, the interest, the commitment and the work by the hon. member and other members in the House are really to be commended on this magnificent Rouge area to be saved as a park.
The advisory committee that was established and constituted by the province of Ontario-and the federal government is a member-has put forth a management plan. The first report I have in hand here today. This is a comprehensive and an envisionary document. The first public meeting on this is scheduled for tonight.
I would like to say the final report is expected in the spring of 1992. The Federal Historic Sites and Momu-ments Board is also looking at the archaeological aspects of the Rouge, and indeed the $10 million federal commitment stands ready to be set forth as soon as this park is established as the largest urban park in North America.


TAXATION
Mrs. Sheila Finestone (Mount Royal):: Mr. Speaker, this government has a healthy appetite for our tax money. It has levied a total of 33 tax increases since it was elected. It has added a tax on unemployment, on pension funds, a proposed tax on bankruptcies, and now another tax on cable. Enough is enough. When will the government take its hands out of our pockets, and when will the minister say no to a tax levy on cable?


Henry Perrin Beatty: Mr. Speaker, my hon. friend may have missed the news, but several weeks ago the government announced that it was providing direct funding to the CBC without looking to a levy on cable in order to raise the funds for that.
It is a very interesting proposition that the hon. member raises. She is absolutely right that Canadians do feel as if they are paying too many taxes. That is why it is incumbent on members on all sides of the House, when they make suggestions for new spending, to explain precisely where the money would come from.

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Sheila Finestone: Mr. Speaker, the taxpayers have had quite enough of your mismanagement, thank you very much.


Some hon. members:: Hear, hear.


Sheila Finestone: Telecommunications and broadcasting ought to be players in this government's prosperity agenda. Landmark telecommunications decisions and key broadcast hearings are being delayed by this government's ongoing poor management. Business opportunities are being missed because this government has left over half the seats or almost half the seats at the CRTC empty.
Could the minister please tell us what is holding up these nominations while the work plans of these major institutions of this country are being put on hold?


Henry Perrin Beatty: Mr. Speaker, the government is continuing to make nominations to all government boards and commissions, certainly to the CRTC and other bodies as well.
When the hon. member raises the importance of for example the broadcasting industry in Canada, she should be aware of the fact that on Monday and Tuesday of next week in Montreal I will be convening the first ever summit on television broadcasting in Canada. I will be working together with representatives of all sides of the industry, with the CRTC, with the public broadcasters and others in order to do what we can to ensure the health of the Canadian broadcasting industry.


CANADA POST
Don Boudria: Mr. Speaker, my question is for the Acting Prime Minister.
Canada Post is saying that in spite of the announced investigation of the Minister of National Revenue yesterday it will continue its policy to encourage employees to work overtime using someone else's name and social insurance number against the laws of Canada.
I ask the minister: When the government will put its foot down and tell Canada Post to obey the law like everyone else?


Hon. Otto Jelinek (Minister of National Revenue):: Mr. Speaker, I have looked into this thing in detail. The investigation, as the hon. member knows, continues both by Revenue Canada and Canada Post in co-ordination and co-operation.
However, I would like to take this opportunity to correct the hon. member's alleged misinformation on this matter because Canada Post-


An hon. member:: Alleged misinformation?


Otto John Jelinek: English is not my mother tongue, Mr. Speaker.


Some hon. members:: Oh, oh.


Otto John Jelinek: Canada Post policy is to contract out only to contractors or owner-drivers and not their employees. That is the policy of Canada Post. Therefore when there are statements by Canada Post officials saying that there will be no change in policy', it is because the policy does not condone the type of things that the hon. member is representing in the House today.


Don Boudria: Mr. Speaker, the minister has missed the whole point. Canada Post officials have been instructing their employees to do this.

Mr. Speaker, will the minister take action today, under section 49 of the Financial Administration Act or before the courts, to obtain an injunction and force the Canada Post Corporation to obey the law? At this very moment, Canada Post employees are being told to use someone else's social insurance number, and that is illegal.


Otto John Jelinek: Mr. Speaker, the hon. member is exaggerating. After having talked to Don Lander this morning, I can assure this House and Canadians that Canada Post is not advising its employees in the way the hon. member is suggesting, not at all.
It does not condone that practice. It is co-operating. He is pointing to The Toronto Star, Mr. Speaker. I am not quite sure what that means. I am telling him the facts. The facts as presented by the hon. member on this floor today are wrong, wrong, wrong.
December 5,1991	COMMONS
I have every confidence in Canada Post, that it is doing everything according to its policy in a legal and proper fashion.


CANADIAN BROADCASTING CORPORATION
René John Soetens: Mr. Speaker, this week there is a positive awareness campaign concerning violence against women, yet at the same time CBC News-world carries live coverage of a rape trial in Florida.
My question is for the Minister of Communications. In light of the fact that we have an excellent constitution committee meeting going on right now, today in Ottawa, would he instruct the CBC to carry that program rather than the rape trial in Florida?


Henry Perrin Beatty: Mr. Speaker, I am sure there are times when all of us in the House of Commons would like to write the scripts for CBC or to suggest what it might cover and what it might not cover. The government complies with the principle of an arm's length relationship between the corporation and the government.
I know members of the CBC watch with Question Period fascination each day and will be aware of the hon. member's concerns.


CANADIAN NATIONAL RAILWAYS
Mr. Iain Angus (Thunder Bay-Atikokan):: Mr. Speaker, my question is for the Minister of State for Transport.
Yesterday in the House, in response to a question I put regarding a CN plan to reroute traffic through the U.S., the minister said:
CN has already advised the port officials at Thunder Bay that it
has no plans to do this so there is no need for me to order it.
Today we find out that CN has a new subsidiary headquartered in Detroit, Michigan called CN North America with full intentions of maximizing the use of the three railways it owns in the United States.
Has the minister used the authority she has under section 89(1) of the Financial Administration Act to order CN not to use this set-up to move Canadian goods

Oral Questions
from one part of Canada to another part of Canada via the United States? Has she done that?


Hon. Shirley Martin (Minister of State (TVansport)):: Mr. Speaker, the question raised yesterday was about the shipping of grain through the U.S. rather than through Canada. That was what the port manager had been advised that CN was not going to do.
As far as the new company that CN has formed, CN is a corporation that has a mandate to provide service to shippers in Canada, that is to enable them to ship goods into the U.S. as we have a much larger market there than we ever had before under the free trade agreement.
That is what they are going to be doing with shipping by Canadians into the U.S.


Iain Francis Angus: Mr. Speaker, I have a supplementary question.
I want to remind the minister that my question yesterday dealt with grain, potash and other commodities. We see today in the Thunder Bay Times News the minister is quoted as saying: "CN has to look to the future and plan to be a viable rail link in this country. If some of that happens to go through the U.S. that might be one of the decisions that they make".
I want to go back to the minister. Will she use her powers to make sure that CN does not divert any traffic or any repair work into or through the United States? Will she use her power to protect Canadian jobs, Canadian communities and the seaway?


Shirley Martin: Mr. Speaker, if we are going to serve the market in the U.S. we are going to have to ship into the U.S. I prefer that done by a Canadian carrier rather than an American carrier.


Mr. Paul Martin (LaSalle-Emard):: Mr. Speaker, my question is for the acting minister of trade.
My question arises out of a panel discussion this morning on the consequences of North American free trade between representatives of the three countries that are involved.
Will the minister assure this House that Canadian jobs will not be lost or put into jeopardy under the agreement

December 5, 1991
Oral Questions
because either of the other two countries, that is to say Mexico or the United States, do not enforce environmental standards that are as high as ours?


Thomas Hockin: Mr. Speaker, of course the American situation differs from region to region. I would suggest that the hon. member look at that carefully and also look at the plans that Mexico has put in place.
In terms of his general suggestion about the panel conference this morning, the truth is that we are going to negotiate an arrangement with the United States and Mexico which will protect our industries and will help to remove our Mexican tariffs against Canada which right now are much higher than our tariffs against theirs.
It is also very important for us on the environmental front to have Mexico in a NAFTA context in which we can have further influence on environmental standards.


Paul Edgar Philippe Martin: Mr. Speaker, I am afraid the minister is a little mixed up. It was a Liberal panel conference.
Let me ask a supplementary question. Let it be noted that the minister did not respond to the question and that he did not say Canadian jobs would not be lost.
Will the minister assure us that under the agreement the Canadian ability to protect the Canadian environment will not be jeopardized in any way, shape or form? Quite specifically, will the minister assure this House that attempts to protect the environment will not be deemed a restraint in trade?


Thomas Hockin: Mr. Speaker, not only is the answer yes to his request but, what is more, we are going to open a context for selling Canadian environmental technologies into Mexico.



Mr. Sergio Marchi (York West):: Mr. Speaker, my question is for the Minister of State for Transport.
Here we have a government that just finished undermining passenger rail by gutting VIA Rail. Now it is prepared to undermine the whole industry of cargo trade via the rails.
How can this minister permit a Crown corporation to short-haul east or west through the United States rail lines? Will the minister do the honourable thing, put a stop to it, use Canadian lines and urge the issuance of Canadian jobs rather than help her friends in America all the time?


Shirley Martin: Mr. Speaker, this government made a very conscious decision as far as VIA Rail is concerned to ensure that taxpayers' money was used properly.
When it comes to the shipping of goods, the new company that CN has formed is to go after new business, not to change existing business, within the U.S. in order to ship Canadians goods into the U.S. market.


Sergio Marchi: Mr. Speaker, I return again to the minister who seems to be condoning the creation of jobs in the United States, the multiplier in the United States, and supporting American rail lines at the detriment of Canadian lines, Canadian jobs and Canadian workers.
On behalf of Canadians I ask minister and her government to put Canada first, to put our priority first. Will she put an end to this? It is not hauling south, but it is a short haul east and west via the United States of America.


Shirley Martin: Mr. Speaker, this government is putting Canada first by making sure that we have a strong national railway that can compete on the North American continent, not just on the Canadian part of the continent. A strong Canadian railway will mean future jobs in Canada.


William Alexander (Bill) Blaikie: Mr. Speaker, I have a question for the Minister of State for Transport.
The questions have been about the transportation of Canadian goods to Canadian destinations along American lines, not about Canadian goods into American markets.
I ask the minister: At what point would the government refuse to accept a complete marginalization of the
December 5, 1991

Canadian transportation system, particularly as it exists through Manitoba and Ontario?
Is there no point at which the public interest or the national interest would prevail over the marketplace?


Shirley Martin: Mr. Speaker, the public and national interests are both best served by a strong national Canadian railway.


POINTS OF ORDER
Pauline Browes: Mr. Speaker, as a result of a question from the member for Markham-Whitchurch-Stouffville, I would like to table a document that I referred to.
This document is called Rouge Valley Park Planning Project: Phase I Report, Background, Principles and Options. This summary of the report is filed in both official languages.


CORRECTION OF COMMENTS
Mr. Lee Clark (Parliamentary Secretary to Minister of the Environment):: On a brief point of order, Mr. Speaker, I would like to correct some information provided to the House yesterday, December 4, as reported at page 5773 of Hansard.
The Minister of the Environment properly indicated to the House that there would be a net reduction of 600,000 tonnes of organo-chlorines by the end of year 1993, but he should have indicated that would be from 1988 levels rather than from 1980 levels.


BUSINESS OF THE HOUSE
David Charles Dingwall: Mr. Speaker, in the absence of the government House leader, perhaps I could direct my question to the acting House leader and see if he could provide to the House what the business will be for the remainder of today,
Business of the House
Friday, Monday and all next week including Thursday and Friday and if need be on Saturday.


Hon. Pierre H. Cadieux (Minister of State (Youth), Minister of State (Fitness and Amateur Sport) and Deputy Leader of the Government in the House of Commons):: It will be a pleasure, Madam Speaker, to try and respond to the hon. member's customary question. As far as today is concerned, this afternoon we will call the financial institution bills on third reading: C-4, C-19, C-28 and C-34.
Tomorrow, Madam Speaker, we hope to continue and complete the debate on third reading of these bills. We also wish to complete report stage and third reading of Bill C-5, which deals with the Aeronautics Act.
On Monday, December 9, we will call Bill C-32, the Canada Assistance Plan, for debate at the report stage, and possibly for debate on third reading, Madam Speaker.
Tuesday will be the last allotted day.
On Wednesday, we will call Bill C-38, the privatization of Telesat, for debate at the report stage, and we hope to finish both report stage and third reading the same day.
As for Thursday, Friday, Saturday and, if need be, Sunday, Madam Speaker, the usual discussions will proceed.


David Charles Dingwall: Madam Speaker, I am wondering if the minister could perhaps check with the parliamentary secretary to the government House leader. It was my understanding that since Tuesday is an allotted day, on Monday we would be just commencing on Bill C-32. On Friday, it was my understanding that we would be proceeding with report and third reading of Bill C-5 and thereafter in the afternoon we had hoped to be able to proceed with a concurrence motion of my colleague for Ottawa-Vanier with regard to the second report.
I am wondering if perhaps the minister, who has now had an opportunity, could clarify that. I think it is just the renaming of certain bills from 32 to 38 and perhaps he could change that.

Government Orders


Pierre H. Cadieux: Madam Speaker, something may have been lost in the translation, but the numbers I gave were correct.

With respect to the concurrence motion, obviously if time remains on Friday we will deal with it.


David Charles Dingwall: Madam Speaker, since that has been clarified or is clear as mud, I want to indicate to the deputy House leader that there were discussions, as I am sure he is aware, with regard to the financial package. We would be prepared on this side to extend the hours this evening to complete that legislation in order to proceed on Friday with both Bill C-5 and with the concurrence motion of my colleague, the member for Ottawa-Vanier, with regard to the second report of the public accounts.


Pierre H. Cadieux: Madam Speaker, I hope the hon. member was not referring to the translation when he said it was clear as mud, because it was quite the opposite.
As for extending the hours this evening, we have no objection in principle. Appropriately, there should some discussion about the evenings proceedings.


Madam Deputy Speaker:: I think it is an excellent idea to have the usual discussion and then have someone advise the House so we will know exactly how to proceed for the remainder of the day.



GOVERNMENT ORDERS


[Stage Direction]
The House resumed from Wednesday, November 27, consideration of the motion of Mr. Loiselle that Bill C-4, an act to revise and amend the law governing federal trust and loan companies and to provide for
related and consequential matters, be read the third time and passed.

[Stage Direction]
The House resumed from Wednesday, November 27, consideration of the motion of Mr. Mazankowski that Bill C-19, an act respecting banks and banking, be read the third time and passed.

[Stage Direction]
The House resumed from Wednesday, November 27, consideration of the motion of Mr. Loiselle that Bill C-28, an act respecting insurance companies and fraternal benefit societies, be read the third time and passed.

[Stage Direction]
The House resumed from Wednesday, November 27, consideration of the motion of Mr. Loiselle that Bill C-34, an act to revise and amend the law governing co-operative credit associations and to provide for related and consequential matters, be read the third time and passed.
Catherine S. Callbeck: Madam Speaker, it is certainly a pleasure to rise today and speak on the financial institution legislation.
We are debating four bills: the Bank Act, trust and loan legislation, insurance, and the co-operative legislation.
Last week we spent three days debating the many amendments to these pieces of legislation and today I am pleased to have the opportunity to take part in third reading. This has been a very long process. We have spent over a year studying the government proposals. Many of them have been complicated and technical in nature, but it is extremely important legislation.
In fact, experts have called this legislation the largest single reform to financial institutions in Canadian history-
December 5, 1991

During this entire process, and as I said, Madam Speaker, it certainly has been a long process, the Liberal members of the finance committee studying the bills have had several objectives.
First, we wanted to be sure that we were going to better serve consumers. We wanted to be sure that once this legislation was passed that the depositors, policyholders, all the users of financial institutions would be better served by this new legislation.
Our second objective was to ensure that we would have sound and safe financial institutions. Certainly we are all aware of what has been happening south of the border, and there is no way that we want to see this ever occur in Canada.
Our third objective was to ensure that financial institutions would become more competitive internationally, which is extremely important in this day and age.
As I indicated, the process certainly was very long and detailed. But that is to be expected when you are studying four bills that contain more than 2,400 clauses and over 1,300 pages. Since we began the trust and loan legislation study which started last October, we have heard over 100 witnesses.
Witnesses came from all sectors. We had consumers who were concerned about various aspects of the legislation. We had academics who had studied in great detail various parts of the legislation. We had regulators, bankers, insurance people, representatives from co-operatives, as well as trust representatives.
They pointed out to us the pros and cons of various issues that this legislation dealt with and over all they helped to make this legislation that we have before us today stronger legislation. I want to take the opportunity, Madam Speaker, to thank all the people who took the time to come before the committee and present their views, and also the people who sent letters, briefs, and other material which helped us in studying the four pieces of legislation that we have before us this afternoon.
Let me say at the outset that I believe that the members of the committee tried their best. I honestly believe that we all made a sincere effort to come up with the best legislation under'the circumstances.
I know at times that the committee chairman, the hon. member from Mississauga, certainly tried to move faster than we would have liked and that is sort of ironic
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because the government has really been dragging its feet for many years in this whole area of financial institution reform.
Nevertheless, we Liberal members on the committee tried our best to co-operate with the government and to pass this much-needed legislation while at the same time meeting our objectives.
We had, as I mentioned earlier, basically three objectives.
We wanted this legislation to better serve consumers. We wanted to be sure we are providing for safe and sound financial institutions. Also, we wanted to be sure that our financial institutions are going to be able to compete better internationally.
We believe we struck a balance between these three objectives. That is why we are supporting the legislation today. These new bank, trust and loan, insurance and co-operative bills represent a major improvement over the old legislation.
In some cases we are talking about legislation that has not been updated for decades. The Trust and Loan Companies Act, for example, has really not been substantially revised since it was brought in by Mackenzie King approximately 60 years ago. A lot has happened in the field of financial legislation in that 60 years. What we have had really are outdated laws. This has imposed significant burdens on companies and on institutions trying to meet the modern marketplace.
To look at an example, the Trust Act that trust companies are operating under at the present time requires that 93 per cent of their lending activity must be in mortgages. By confining the trust companies to this whole mortgage area, the old act may have put their safety at risk because a value of a mortgage asset can change dramatically with the price swings in real estate.
That left only 7 per cent of the trust company's investment for consumer and commercial loans. Under the new legislation that we have before us today, that stipulation will be removed, giving the trust and insurance companies a wider range of options, enabling them to better meet the demands of the marketplace.
This afternoon I am going to confine my remarks to the Bank Act, the Trust and Loan Companies Act and the Insurance Act because my colleague from Moncton, who is the critic for co-operatives, will deal with Bill C-34, the co-operative legislation.

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One of the major items contained in the three bills is the natural person powers. In other words, banks, insurance and trust companies will be able to do anything in their line of business that is not clearly prohibited by legislation.
That certainly is a switch from what we have under the present legislation. What this means is that they will be able to do anything in their line of business unless it is stipulated in legislation that they cannot do it.
For example, in the trust and loan legislation, there are 11 business powers that trust companies will not be able to have. One of those is the ability to retail all types of insurance.
Another important element in the new legislation is to protect in a better way the soundness of financial institutions in Canada. For example, these institutions will be required to have one-third of their directors who are unaffiliated with the company.
The question is what is affiliated and what is not affiliated. As far as the legislation is concerned, the act says that a director is affiliated if he or she is an officer, an employee or a major customer of the institution.
What that really means is that one-third of the directors of financial institutions from now on cannot be an officer, an employee or a major customer.
Also, to continue talking about making institutions safer and more sound, it will be necessary to have procedures dealing with conflict of interests. Two more committees will have to be established: an audit committee and a conduct review committee.
It will be the job of the audit committee to deal with any problems the Auditor General points out in his report. The conduct review committee will review possible self-dealing situations.
That is a situation in which a director of a company may use his influence on the institution in a way that would benefit him personally.
All these measures which I have mentioned will make financial institutions more sound and safer for the Canadian public.
There is another new aspect to this legislation. There is a whole new ownership regime. Under this legislation
banks, insurance and trust companies will be able to own one another. As well, they will all be able to own corporations within the financial services family.
This legislation will also give trust companies and insurance companies full commercial and consumer lending powers. Trust companies will no longer be restricted as they were under under the old legislation, under which they could only put 7 per cent of their lending into consumer and commercial loans. As well, insurance companies will be able to lend money not only to policy holders but to the general public.
Those are some of the changes that will come about under this new legislation. There are some aspects of the old legislation that will not be changed. One is that banks and trust companies will not be able to sell all types of insurance.
There are many important elements in this legislation. As I said, some of it is new and some of it is simply carried over from the old legislation.
The most controversial issue which the committee had to deal with was the retailing of insurance by banks and trust companies. I do not think that any other issue produced more studies, more phone calls, more meetings or more debate in the committee room. We in the Liberal Party heard arguments from various groups and individuals on both sides of the issue. We heard arguments that banks should be able to sell insurance because it would be cheaper and more convenient for the customer. We were told there would be no risk of tied selling. That happens when a bank tries to pressure a customer into buying insurance from that bank by threatening to deny him the mortgage.
We were told that around the world, and even in parts of Canada, deposit taking institutions sell insurance with no consumer problems and at very competitive prices.
On the other side of the coin, we also heard many arguments that banks should not be able to sell insurance. First, we were told there is no evidence that banks could sell life insurance any cheaper than the insurance companies are doing now. I mean over the long term. It is argued that maybe in the short term banks may undercut the prices of insurance companies to gain market share. That would mean that the consumer could benefit in the short run.
December 5, 1991

However, in the long term, which is what we really must be concerned about, it is still far from certain that banks would offer life insurance at super competitive prices.
We heard a lot of contradictory evidence on this whole issue. For example, in 1989 the Public Interest Research Centre did a study claiming that if banks sold insurance consumers would save millions of dollars. However, in 1991, this year, there was a study completed by Eckler Partners discrediting that previous study.
That is what I mean by saying that there was a lot of contradictory evidence to sort through to make decisions.
We also heard a lot of arguments that the banks would provide very unfair competition. That is because of the size of the banks. With assets of $126 billion, one bank, the Royal Bank, would be larger than the total insurance industry in Canada. Together the six major banks account for almost 90 per cent of the $584 billion in Canadian banking assets.
Therefore, it has been argued that there is a possibility of very unequal competition between the banks and the insurance companies simply because of the size of the assets of the six chartered banks.
It is possible that if the banks and trust companies sold insurance we might have a short but very intense battle between the huge chartered banks and the smaller life insurance companies. We could have massive dislocations in the insurance industry, which is made up of 170 companies and 35,000 agents.
Possibly a lot of insurance people could lose their jobs and a very successful Canadian insurance industry, which serves both rural and urban Canadians, would be permanently damaged by such a battle between unequals.
There is also some evidence to suggest that there could be some tied selling, which I described earlier. A survey in the United States by the insurance industry indicated that regulators found significant evidence of tied selling there. Therefore, you might ask: "Well, does that mean that it would happen in Canada?" Not necessarily, but it is certainly one of the arguments or factors we had to consider very seriously.
As I indicated earlier we heard a lot of conflicting views on whether banks and trust companies should be
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able to sell all types of insurance. We have studied this in great detail and given the potential enormous cost to the insurance industry. We in the Liberal Party have decided that banks and trust companies should not be able to sell all types of insurance.
Another issue that took up a lot of time in committee and which we examined in detail concerned the kind of foreign institutions that should be able to own Canadian Schedule II banks. This new Bank Act before us today adds financial institutions to the list of those which can apply for a Canadian Schedule II bank. That is really the same as it is in Canada.
We think that it is fair that foreign financial institutions should be able to apply for a Schedule II bank as long as we have confidence in the quality of the applicants.
The first draft that the government presented to the committee said that anyone in the business of financial services should be able to apply for a Schedule II bank. We had concerns about that and there was a lot of concern expressed about the potential destabilizing effects of the entry of unregulated companies like General Electric Finance Corporation and others. That could create a serious problem in Canada.
The original draft of this section was also very vague. As I said, anyone in the business of financial services could apply in Canada to become a bank. We felt that this left the door open for a whole host of undesirable applicants and that it would possibly undermine the soundness and safety of financial institutions in Canada.
As I mentioned earlier, that was a main objective that we in the Liberal Party kept in mind when we were reviewing this legislation. Foreign non-banks like GE Finance do many things that Canadian banks do. They raise money by making short-term loans known as commercial paper. This sounds like banking even though these institutions are unregulated and they are commercially linked. If they came into Canada they would obviously be regulated.
However, the question of allowing such commercially linked companies into Canada raises concerns about the fairness to Canadian banks and about the soundness of the Canadian financial industry.

Government Orders
One can therefore legitimately ask whether the government was putting our banks at a disadvantage with its original draft of the Bank Act. The new draft and the new legislation before us today restrict the applicants to foreign banks and foreign financial institutions. That includes co-operatives, trust companies, insurance companies, and security dealers.
The act goes further. It also requires that the Superintendent of Financial Institutions must satisfy himself about the adequacy of the foreign applicant. In other words, the superintendent has many questions to pose to anyone who wants to come into Canada and set up a Schedule II bank. That superintendent must find that the applicant responded to those questions satisfactorily and that the applicant will enhance financial institutions in Canada.
This new foreign bank section is the result of a compromise hammered out in the finance committee. It is not a compromise that was satisfactory to everyone. However it does express the concerns that were expressed and is a typical example of the give and take required in making workable legislation.
I know there are those who still argue that only banks should be allowed to apply for a Schedule II bank licence. They talk about the Bank of Credit and Commerce Canada and this year's scandal as a reason this whole area should be tightened up. It is a misleading example because the Bank of Credit and Commerce Canada would fit the criteria of being a bank and being regulated. It is really not an example that makes any sense whatsoever in this argument.
The Superintendent of Financial Institutions feels that this legislation we have before us today as far as the foreign applicants applying for a licence for Schedule II banks does not present a danger to the soundness of the Canadian financial institutions.
As I mentioned before, that was one of the major objectives of the members of the Liberal Party when we were studying this legislation.
A third important area I want to mention briefly here today is consumer issues. That was a main objective. We wanted to be sure that this legislation would help consumers and improve services to consumers from financial institutions. Of course, our party was extremely pleased when an amendment was passed in committee and eventually included in the bank and insurance bills as well.
Our amendment was to give customers the legal right to place complaints to financial institutions if there were charge fees they felt were extremely too high. There is going to be a mechanism there. First, they can go to the institution where they borrowed the money or whatever the fee happened to be for. If they do not get satisfaction there, they can go right to the top to the Superintendent of Financial Institutions.
In the annual report, the superintendent has to have a section on these complaints. That will have the number and types of complaints and how they have been dealt with.
As I said, we were extremely pleased that our amendment was passed in committee. We feel this will be very beneficial for consumers.
I want to mention a couple of other amendments. Another amendment we proposed last week when we were discussing this legislation in this House was an amendment dealing with the flow of information to auditors. I am happy to say that all members of the House saw fit to support this amendment. This is one which will go a long way toward helping produce better statements and will probably keep our financial institutions on a more sound basis.
It really prevents lawsuits against anyone who gives information in good faith to an auditor of a financial institution. We feel that protection is important. That information may go a long way toward providing more correct or more accurate financial statements.
In the failures of the two western banks that we had in 1985 and this year's failure of Standard Trust, the questionable accounting practices were in part blamed for these failures. In fact, the Superintendent of Financial Institutions told the finance committee last November that approved accounting practices might have made a difference in Standard Trust.
Here is what this amendment which we put forward really means. Consider an employee, for example, of a trust company who has information that he knows the auditor really needs to perform an accurate audit. The employee knows there is no way the trust company is going to give the auditor that information.
Under the present circumstances he might be reluctant to come forward because he would be afraid of a lawsuit.

With this amendment, that employee can come forward and give the information without any fear of being sued. I think that this amendment will result in a better audit. It could mean better financial statements and a better chance also for the superintendent to catch small problems. If they are not caught at the beginning, these could mushroom into huge problems and might eventually in the end cause a bankruptcy in that institution.
Another amendment that we in the Liberal Party propose is what you call a plain language amendment. We are extremely disappointed that the government did not see fit to support us in this amendment. It would require trust companies and other financial institutions to put into plain language various documents signed by customers.
I think it is extremely important that customers understand what they are signing. I know that we have all seen documents whether they are from an insurance company or a trust company or a bank that generally are very difficult to read. They have small print and very long sentences and they also have a lot of legal jargon in them.
This amendment that I proposed and which the government defeated involved using shorter sentences and everyday words. It was to make the document as easy to follow as possible.
I want to acknowledge though that certainly there has been some progress in this whole area. The financial institution industry itself has looked at this. It realizes that a lot of its documents are difficult. It is practically impossible for the average person to understand some of them.
There has been a trend by the financial industry itself to put a lot of its documents into plain, everyday language and I certainly commend them for this.
When I brought this up last week the member for Mississauga said that it was too difficult to do. This has been done. In the United States there are 10 states that have passed this legislation. New York was the first in 1978 and the results have been very impressive.
We also have a province in Canada that has passed this legislation. Alberta put plain language into law in 1990. It was an amendment that was reasonable because it gave the insurance companies and the trust companies and the banks two years to get these documents into everyday language.
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Also it was not for everybody. This plain language amendment did not apply to large customers who would be borrowing over $250,000. As I mentioned, the government did not see fit to support it. It said it was too difficult. That is not an answer. That is an answer, but it is not a proper answer because this has already been done. It has already been accomplished in 10 states and one province.
I think it would go a long way toward improving the services of financial institutions to consumers. I was very displeased that the government would not support this amendment. I think it is an amendment which would help immensely consumers of financial institutions.
In looking over all at this legislation the banks, the trusts and the insurance people tell us that generally they are pleased with the content of the new legislation. We certainly feel that the consumer is going to benefit in many ways. As I said, that was one of our main objectives. We wanted consumers to benefit and we are confident they will.
The industries have said they are generally happy. They want to end the wrangling over specific powers and they want to get on with it. That is exactly what we in the Liberal Party are prepared to do.
There will be a five-year review of these bills. At that time there will be a lot of issues that will have to be revisited. These are issues that we were unable to resolve to the satisfaction of people concerned during our year's study of this whole area of financial institutions.
That review is extremely important. The whole financial institution industry is moving so quickly. We proposed in committee that that review should take place in three years but the government turned it down. As I said it will be five years as is in the legislation that we are giving third reading today.
One issue that no doubt will take a lot of debate the next time around, as it did this time, is whether banks and trust companies should sell insurance. Certainly I want to note that the world is changing in this area. If we look at Europe in 1995 I understand that banks will control about 20 per cent of the life insurance market. In Spain banks are said to distribute 74 per cent of the life and pension types of insurance. That is a whole issue which I am sure the committee will spend a great deal of time on five years down the road.

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Another important issue that I want to talk about for a couple of minutes today is one with which we have to deal. It is the harmonization of provincial and federal rules for trust and insurance companies. Unlike banks, which are federally regulated, trust and insurance companies are regulated both federally and provincially. In some cases that means 11 different sets of rules.
That is a lot of rules. It is very costly and time consuming and in the end who really pays the cost? It is the user of the financial institution, whether it is the insurance company or whether it is the trust company.
I know that you told me that I only have one more minute. I would just like to sum up my remarks that today we are in third reading of this bill and the final phase of the role of the House of Commons in what experts are calling the largest single reform of financial institutions ever to take place in Canadian history.
I am pleased to support the legislation because we feel it meets our objectives. It is going to be better as far as customers are concerned. It is going to ensure sound and safer financial institutions. It is going to make Canadian financial institutions more competitive internationally.
I want to remind the government of one thing. Our financial institutions cannot achieve their international potential until the government succeeds in harmonizing their regulations at home.
I encourage the government to take action and I have been encouraging the minister for the past year to do this. I encourage him now that this legislation is going to be passed to get on with the job because really he has no excuse now that these four bills have gone before committee, have been scrutinized, and the legislation has come to the House of Commons to be passed. Once this goes through the Senate and becomes law, I encourage the minister to get on with the job of harmonizing the rules in Canada.


Mr. Rodriguez:: I rise on a point of order, Madam Speaker.
My colleague from the Liberal Party from the riding of Moncton asked if he could, since he has to leave at 4.15, go ahead of me for 10 minutes and I have agreed to that in order to facilitate him.


Madam Deputy Speaker:: I thank the hon. member. I had not been made aware of that arrangement. I am delighted to recognize the hon. member for Moncton.


Mr. George S. Rideout (Moncton):: Madam Speaker, we were busy negotiating as the member for Malpeque was concluding her address, so that is why we did not have a chance to consult with you beforehand.
It is a pleasure to speak to this particular bill and to have been part of the process. I want to start first by complimenting the member for Malpeque, our official critic for financial institutions, for doing an absolutely fantastic job. As can be seen from her address this afternoon, she has dealt with this legislation with a great deal of interest. She got into the details and dealt with those critical things that a lot of parliamentarians, myself included, have a tendency to brush aside and not deal with.
She has taken the time and effort and worked extremely hard in order to represent our party in what is really, without exaggeration, the biggest pile of boring legislation that I have seen in a long time. That is no aspersion to any of the institutions or to the chairman of the committee or anyone. It is just boring, boring material, but very critical to our country and to our financial institutions, and, to use the new buzzword that is in play these'days, to competitiveness.
I would have to say that there is the old view that it is a curse to live in interesting times and I believe we are. Changes are taking place in the world today. Political changes are occurring in the Soviet Union, in Eastern Europe and all around the world. The global marketplace is evolving and there are interesting things happening such as the European common market is now looking at a single currency, the Eurodollar. It is looking at perhaps a global, single unit of currency rather than the different yen, mark, Canadian dollar, American dollar and those things. There are some major fundamental changes taking place in our financial institutions and in our economic institutions.
The question then becomes whether we have done a proper job with the legislation that is before this House. I think it has been a process of exhaustion rather than actually dealing with a lot of the issues. The legislation has been around for a long time. The review has taken a long time. I think all of the financial institutions have finally said: "Enough. We will take what you give us and

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we will get on with our lives". I think all members of the	financial institution, there is a run on that institution. It
committee were of the same opinion.	is almost like a sledgehammer killing a fly in some cases.
However, we have to try to prepare these financial institutions for the year 2000 and beyond. I and our party feel that at this particular stage we have prepared them for the 1990s, but not for the year 2000. There is still more work to be done. We must make our institutions far more competitive and far more aware and involved in what is going on in the global economy.
The impression that we are left with is that this is an in between measure and that we will be back and working on these institutions and trying to make them more competitive in the future.
I must say as well that when we look at the information age and the things that are happening, such as the fact that you can be in Tokyo today and put your bank card in a machine and have yen taken out of your account, banking institutions are soon going to be processing a lot of their material and work in the part of the world that is asleep while they are awake. In other words, the banks in Canada and the United States will probably have a lot of their data processed in Hong Kong, Taiwan or Japan because while we are asleep they are awake and vice versa.
There are going to be some major changes and we have to be concerned about what is going to happen to our institutions. We cannot allow ourselves to lose the competitive edge, nor can we allow ourselves to have our technology and our knowledge systems broken into and utilized by other organizations and other countries.
We have to maintain the safeguards and the integrity of our system and the privacy of our information as this is going to be dealt with in other countries.
I look as well at the challenges we face. The goals of the Liberal Party were fairly simple at this stage. They were to try to protect the Canadian consumer, to have sound financial institutions and at the same time to make our financial institutions more competitive.
I think we have achieved to a degree the idea of serving our Canadian consumers better. I am not sure whether we have yet the full safety nets around the financial institutions. I am not sure whether OSFI in its present make-up can actually do the job it is intended to do. It seems that as soon as OSFI is interested in a
We have seen in a couple of our financial institutions in the past that it is necessary that we have a strong OSFI organization. We have to give it some of the tools to better protect our financial institutions. We cannot let OSFI become the institution that puts our financial institutions out of work.
There is also the issue of competitiveness which we have talked about. Our financial institutions have lost their competitive edge over the last number of years. Our banks have slipped from being major players in the world economy to minor players in the world economy and we have to do what we can to strengthen our financial institutions.
I also want to talk about the co-op movement, the co-operatives and credit unions because they are going to become more critical in years ahead. As we embark on a global economy and our institutions start to compete world-wide and become larger, there will be a tendency to forget about the individual.
We need those organizations that are going to be people oriented, that are going to accommodate the individuals on the farms, in the fishing villages, in the towns and municipalities in our country, and not deal with those large impersonal organizations. The credit unions, the caisses populates and those organizations will be able to give our Canadian consumers the type of financial service they need and deserve. At the same time, by utilizing those organizations I believe that ultimately we will see the co-op movement become a major player on the world stage as well.
We can see what the caisse populaire has done and the credit union movement in Quebec has done as far as fuelling economic development in that province. I believe that organization and the concepts it espouses can do a tremendous job as far as the economic well-being of our country is concerned.
I appreciate the opportunity to have a short, quick, rushed comment on this legislation, having worked in the committee. It was a pleasure to serve on the committee and work with the chairman and the member for Mississauga who taught me a lot about the railroad industry as the bills were going through. He managed to railroad a number of clauses through very well.

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It was nice to see that VIA Rail and CN were back in business in the Standing Committee on Finance at least. It was a pleasure to work on and study the legislation and to watch a good chairman pilot the legislation through the committee. It will be a pleasure, I am sure, to hear the comments of my friend from Nickel Belt who will be talking about caging animals and all the rest of that as we move to discuss financial institutions.
The only admonition I would give is that when you start caging animals and keeping a financial zoo, somebody eventually has to feed those animals and it could become a very expensive proposition. I thank the member for Nickel Belt for the opportunity to precede him. I regret that I will not be able to hear all that he has to say, although I will stay for a portion of his address.


Mr. Whittaker:: Madam Speaker, a point of order. Before us today there are by agreement four bills being dealt with in one debate. Given that my friend from Nickel Belt would normally have 20, 40, 60, 80 minutes of debate, I am wondering in the spirit of Christmas if we can seek unanimous consent of the House to allow the member to speak a little longer than his 20 minutes, up to a maximum of 40 minutes. I know the House will not only be entertained, but my friend, having looked at some of his notes, has a lot to offer the House and the people of Canada in his speech.


Madam Deputy Speaker:: Is there unanimous consent for the hon. member to get the same amount of time as the first speaker for the government and for the Liberal Party?


Mrs. Marleau:: I am certainly happy to agree to the 40 minutes for my neighbouring colleague, but I would want to specify that there will be no 10 minutes for questions and comments. Is that understood?


Madam Deputy Speaker:: That is the normal procedure when there is a 40-minute speech. It is not followed by a period of questions and comments.


Some hon. members:: Agreed.


John R. Rodriguez: Madam Speaker,
I want to thank my colleagues for that kind consideration.
These are not ordinary bills that we see here. These bills speak to the question of money, Canadians' money. That is what these bills speak to.
The lengthy process involving these bills seems to have begun with Bill C-83 in the previous Parliament. However, it began even before that. It began with the McDou-gall green paper in 1985, the Hockin blue paper in 1986, the draft trust bill in 1987, the Senate report in 1990. All these bills contain 2,428 clauses.
You have to imagine the way the structure was. Financial institutions were regulated by the Superintendent of Financial Institutions, Michael Mackenzie. He could best be described as an orchestra conductor. He would make sure that all of the players in the orchestra were in concert, each complementing the other; the wind section, the string section, the brass section-all of them. Mr. Mackenzie was playing away as the Superintendent of Financial Institutions.
I want to tell you that the whole future of financial institutions is being redesigned and it deals with the savings of the Canadian people.
In fact we now have a new vision of the Superintendent of Financial Institutions. We have abandoned the concept of the orchestra pit. The imagery of an orchestra conductor conducting the symphony is gone, just gone. With the passage of these bills at the end of third reading the Superintendent of Financial Institutions is now a matchmaker or a shadchan, as the Jewish culture would call it. That is somebody who makes a match. You have a daughter and you have a son; I am the matchmaker. This new picture of the Superintendent of Financial Institutions as a matchmaker is very well described in today's business paper.
It is deal making, as described in an article by Brian Milner. The headline is: "Spumed suitor left perplexed". The article continues: "It seemed like the perfect marriage. A Quebec based trust company with deep pockets and big ambitions teams up with a slightly larger but straggling competitor that still owns a valuable set of family jewels". See the picture. There is somebody in trouble, but they have some family jewels, and there is somebody with deep pockets.

Who has the deep pockets? Montreal Trust Co., which is owned by Bell Canada Enterprises. Have you got that picture? The one it is vying for is Central Guaranty. What happens? They both go and see a matchmaker. Central Guaranty wants to be bailed out. Montreal Trust wants to bail them out. Therefore, they go to the matchmaker, Michael Mackenzie, no longer the orchestra conductor but the matchmaker. He tries to make a match but something happens and it falls through. Why?
These are the words of Central Guaranty officials: "Central Guaranty officials say that the no quarter given bargaining tactics of Montreal Trust Co. left their board with no alternative". They found somebody else. You will see in a minute who they found.
"They were incredibly greedy. They wanted to steal the company", a Central official said. They bet that they were the only guys bidding and they lost. The article says: "Mr. Mackenzie is believed to have played a large behind the scenes role in the dealing that led up to Central Guaranty's branch sale". Guess who sneaked into the bedroom in the dark, grabbed the family jewels and took off? The National Bank of Canada. It took off with $3.5 billion in healthy loans and deposits and left all of the junk behind. I wonder who will pick that up. The bad loans, the non-performing loans, all the other things you cannot get a return on are left behind. I wonder who will pick it up.
These bills now see the Superintendent of Financial Institutions in a new role, not as orchestra conductor but actually as a matchmaker, trying to merge the weak with the strong.
It even gets to the point where all of these activities are very secretive. One would think that the Superintendent of Financial Institutions is really performing a job for the Canadian taxpayer. However, when the Superintendent of Financial Institutions claims the fifth amendment and refuses to testify before the OSC hearings you have to wonder what is going on. This is not a transparent system any more. These bills being passed into law will make it all the more ravenous.
What was the government's view of this reform? Why is it bringing it in? What were its goals with this? An information sheet on September 27, 1990 said that the
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purpose of this legislation was to benefit consumers by increasing competition and the spectrum of services offered by financial institutions.
Reading between the lines it says that you have to build bigger financial institutions, sumo wrestlers of financial institutions, that can compete abroad.
The second purpose of the legislation was to enhance protection for the depositors and policy holders. What does that mean? The translation is knock down the pillars, deregulate.
The third purpose was to strengthen the ability of Canadian financial institutions to compete at home and abroad by giving them new opportunities for growth.
We just saw that in the Royal Bank's latest statement on earnings. Take a look at it. Take a very good hard look at it. The Royal Bank has about $27 billion of assets internationally, and receives a return on assets of 1.52 per cent. It has $102 billion in domestic assets and receives a return of .55 per cent. Their return on equity on their foreign assets is 1.52 per cent and on their domestic assets is .55 per cent.
That is very important when you think about it. They want to become sumo wrestlers because there is more to be earned, and of course we do all the processing here at home. That is what we read between the lines.
The fourth purpose is to lay the groundwork for discussion with the provinces on harmonizing the regulations on supervision of financial institutions.
Read between the lines. That translates into relaxing business powers and ownership rules to the lowest common denominator. There is nothing to beef up the rules and say to the provinces: "Now you conform to the federal rules. Go up to the highest common factor". The government said: "No, we'll go down to the lowest common denominator". In these bills we have watered down our wine. We have not shown any leadership in Canada on the whole question of trying to get the provinces to harmonize with the tougher regulatory powers that should be at the federal level.
How do we New Democrats view reform of financial institutions? We have two aims and objectives in mind. First, the solvency of our financial firms and, second, the

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availability of credit at a reasonable price, in every region, every city and every town and to every citizen.
Oh boy, did we have experts come before the committee during the whole process. We were inundated with bankers, auditors, and experts of all types. We had the most exotic array of flora from the financial jungles of Canada.


Mr.   de Jong@: And fauna.


John R. Rodriguez: I like to use the flora; it is not so cruel. They were there in full colours. They were there at all stages. Never before in history have members of Parliament been so inundated with lobbyists of all stripes. There we were in the committee. We were led by the grand wizard and he was churning away. He chanted incantations as he peered at us: "Return on equity, capital base, demutualization, leverage, corporate governance, technical amendments, poor loss linkages".


An hon. member:: Who's the wizard?


John R. Rodriguez: The wizard is the member for Mississauga South in full regalia. "Cross pillar synergies". He reminded me of the witches from Macbeth. How does it go: "Boil and toil, oil and troubles, witches brew, cauldron bubble". There he was. That is the image of what he was.
Then he put his hand in and he pulled out Bill C-34. Everybody agreed that it was pretty harmless. It dealt with the co-operatives and my friend who will speak later will deal with that. He put it over on his side. Then he went on and pulled out some other things: "Prudential corporate governments". I bet you do not know what that is, Madam Speaker. "Prudential corporate governments, conduct at audit committees, independence from executive management". We had no problem with these first emanations from the cauldron.
However, in the images cast by the smoke emanating from the cauldron we saw the dark side. It is characterized by its mediocrity because it relaxes the rules on ownership, the rules on relationship between commercial and financial. This is a victory of mediocrity over excellence. By relaxing the ownership rules and broadening the powers both in-house and out-house we have also dropped the traditional opposition we had to close commercial ownership of financial institutions.
We thought that the wizard wanted to ensure the wide ownership which he had often espoused before he put
his wizard's hat on, that what he had foreseen in 1987 he was prepared to do now. However, when he had done churning and chanting he put a cowl over the cauldron and said: "This is a done deal". Nobody else could put anything in the cauldron.
I wanted to put some garlic in the cauldron. I wanted to keep the evil spirits out. He would not let me put anything in the cauldron, no garlic. I could not even make a cross by the cauldron because he chanted: "This is a done deal. This is a done deal".
There is nothing on this earth in Canada that you, Madam Speaker, or I could do that could change it one iota. One jot or tittle could not be changed because it was a done deal.
These bills, in our view, do not address our very serious concerns, the concerns of wide ownership of financial institutions. They do not deal with the whole question of keeping commercial and financial arrangements separate. You cannot mix the two up.
I am not the only one saying this. Henry Kaufman, one of America's best known economists, testified to Congress this month that countries in which banking and commerce are close, such as Japan and western Germany, tend to end up with an elitist corporate state.
Gerald Corrigan, the influential chairman of the New York Federal Reserve voiced the central bank's objections that the deposit insurance safety net could be stretched too far, and some industries are too alien to central bankers for the proper supervision of banking subsidiaries. For the same reason monetary policy will be hard to run.
Corrigan warned of the same thing. He has been warning the American government and American regulators that when you start mixing up the commercial with the financial, it is a recipe for disaster. We have that in this cauldron. It was cooked up and it was churned up by my colleague, the member for Mississauga South.
These bills fail to address the question of harmonization. We called on the government to show some leadership. We said: "Why do you not call a meeting of regulatory authorities and provinces to deal with the number one problem in financial Canada, harmonization of financial institutions?"

There are things that you are allowed to do provincially that you are not allowed to do federally. What the government does is simply incorporate provincially where it is a little bit more loosey goosey.
We pass rules here that contradict things that are happening at the provincial level and it does not make any sense. Each jurisdiction has its own rules which contravene or duplicate federal rules. These bills, to a large extent, it seems to me are pitching to the mythical average province.
It brings us down to the lowest common denominator and not the highest common factor.


Dennis Joseph Mills: No national standards.


John R. Rodriguez: That is right. My colleague and friend from Broadview-Greenwood is absolutely correct.
Financial harmonization is not so much a question of technical complexity but rather one of political will. Does the government have the political will to do it? This government has never shown any national leadership, especially in the area of financial institutions harmonization.
What we end up with is the tail wagging the dog. That is what we have here. In the whole process, I am sorry to say that my Liberal colleagues showed absolutely no leadership in the committee. They showed no leadership whatsoever.
There were occasions when they actually watered it down even further by jumping and saying to the grand wizard: "You are putting too much of that in there. Take it out". We wanted to put two auditors in the cauldron. They said: "No, you only need one. Thke one out". We ended up with only one auditor for financial institutions.
Read the papers. Read what is going on. There is a feeding frenzy out there. They are involved in all kinds of real estate things. The trust and loans companies are capital hungry.


Madam Deputy Speaker:: I am sorry I must interrupt the hon. member.


MESSAGE FROM THE SENATE
Madam Deputy Speaker:: I have the honour to inform the House that a message has been received from the
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Senate informing this House that the Senate has passed the following bills, without amendment: Bill C-17, an act to amend the Criminal Code and the Customs Tariff in consequence thereof, and Bill C-27, an act respecting the privileges and immunities of foreign missions and international organizations.



THE ROYAL ASSENT

["The hon. member may want to reread Standing Order 26(1) which says, if I may paraphrase, that if a member from his seat asks that debate continue after the normal hour, if less than 15 members rise and say they disagree, we do go on. If 15 or more members rise and say they do not agree, the motion is deemed to have been withdrawn, which is what we have just seen in the last few minutes.\nThe Speaker explains the rules. This is all that I try and do.\nIt being five o'clock p.m., pursuant to Standing Order 36, the House will now proceed to the consideration of Private Members' Business as listed on today's Order Paper."]
Madam Deputy Speaker:: I also have the honour to inform the House that a communication has been received as follows:
Rideau Hall Ottawa
December 5, 1991 Sir,
I have the honour to inform you that the Hon. Frank Iacobucci, Puisne Judge of the Supreme Court of Canada, in his capacity as Deputy Governor General, will proceed to the Senate Chamber today, the 5th December, 1991, at 4.20 p.m., for the purpose of giving Royal Assent to certain bills.
Yours sincerely,
Judith A. LaRocque Secretary to the Governor General

A message was delivered by the Gentleman Usher of the Black Rod as follows:
Madam Speaker, the Honourable Deputy to the Governor General desires the immediate attendance of this honourable House in the chamber of the honourable the Senate.
Accordingly, Madam Speaker with the House went up to the Senate chamber.

And being returned:


Madam Deputy Speaker:: I have the honour to inform the House that when the House went up to the Senate chamber, the Governor General was pleased to give, in Her Majesty's name, the Royal Assent to the following bills:
Bill C-44, an act to amend the Canada Labour Code (geographic certification)-Chapter 39.

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Bill C-17, an act to amend the Criminal Code and the Customs Thrift in consequence thereof-Chapter 40.
Bill C-27, an act respecting the privileges and immunities of foreign missions and international organizations-Chapter 41.



[Stage Direction]
The House resumed consideration of the motion of Mr. Loiselle that Bill C-4, an act to revise and amend the law governing federal trust and loan companies and to provide for related and consequential matters, be read the third time and passed.

[Stage Direction]
The House resumed consideration of the motion of Mr. Mazankowski that Bill C-19, an act respecting banks and banking, be read the third time and passed.

[Stage Direction]
The House resumed consideration of the motion of Mr. Loiselle that Bill C-28, an act respecting insurance companies and fraternal benefit societies, be read the third time and passed.

[Stage Direction]
The House resumed consideration of the motion of Mr. Loiselle that Bill C-34, an act to revise and amend the law governing co-operative credit associations and to provide for related and consequential matters, be read the third time and passed.
John R. Rodriguez: Madam Speaker, as I was saying, there is the whole question of overlaps
between the federal rules governing financial institutions and provincial rules. There are overlaps that have not been dealt with. There are such things as conflict of interest, arm's length, self-dealing relationships and capital adequacy. They have not been dealt with in terms of the federal-provincial overlaps.
In terms of soundness and stability of our system, we have developed an extremely sound financial institutional system in this country. It is one of the best in the world when we compare it with what we see south of the border and when we compare it with the European problems and the Japanese problems. I am leaving aside the complaining that we often have from time to time about credit card interest rates and bank service charges and financial institutions serving single industry towns and rural communities. I just want to leave that aside for the moment. Based on soundness and stability, the financial institutional system of this country is one of the best in the world, if not the best in the world.
How did the system get that stability? It took the crash of 1929 to get that. It was not the two main parties that have governed Canada. It was not the two parties that brought this about. It is a direct result of the hard lessons we learned from the crash of 1929. Of course the hard working citizens of this country have contributed to these high marks.
We warned at every stage of the bill that benefits earned by deregulation are not free. There is a price. What is the price for our global warriors? Read the papers. Read what is happening. There is increased concentration of ownership, increased concentration of activity, increased vulnerability of our financial institutions as they move into foreign markets and gradually have a larger share of their earnings determined outside Canada. Consider the forays that were made in the last couple of years where some of our financial institutions went into the United States and started buying real estate and getting into commercial real estate lending, golf courses and apartment buildings. They are ending up as pretty big landowners and landlords in the United States.
I mentioned the fact about their foreign markets. When they get an increasing share of their earnings from their foreign investments, how do you control that? How do you control these activities?
December 5, 1991

We have pointed out the shortfalls of this reform which failed to address the decline in the transparency of the financial system as a whole. Imagine trying to track the financial transactions as they cross borders.
Have we forgotten the BCCI? We did not even know what transactions were going on across the borders between the BCCI in Canada and the United Kingdom. We received the report from the regulator in Great Britain about the BCCI. They could not read it because of all the heavily blacked out information. They had to bring in agent 007 to try and see through the black.
This is the first time I have ever heard of a financial institution going down because of the black ink. They usually go down because of the red ink.
All the information is not even available to our regulator for transactions that cross borders from Canada to others. We cannot track that, yet we are encouraging the development of these sumo wrestlers where you have to reinforce the stage at Albert Hall so they can wrestle each other.
At committee and report stages we proposed amendments and alternatives that would address some of the concerns that we expressed. When the bathtub was heaved out the window, we wanted only the water to go out the window. We wished for the baby to remain.
In view of what took place, we on this side of the House tried, but in vain. We heard the chairman for Mississauga South chanting: "It is a done deal. It is a done deal". There was nothing we could do about it.
The Financial Post of November 29, 1991 did a report on the story. It said that the chairman of the committee who is the member for Mississauga South:
- along with the Minister of State for Finance-shepherded the legislation through long parliamentary hearings
Shepherd they did and that is what he was. He was the good shepherd. He would say: "Shall clauses 400 to 600 carry?" The Tories would say: "Baa". He would say: "Shall clauses 600 to 650 carry?" " Baa". He shepherded all right. He shepherded 2,468 clauses right through into the promised land.
If there was anything in the committee that somebody did not like, it went to the big sheep, the minister, who with nods and winks finally got it through.
There was one more "It is a done deal" and one more "Done deal". With a few more "Done deals" this
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government would have made a complete mockery of Parliament and its role in protecting the future of the country.
Financial institutions knew many months ahead that the walls between banks and insurance and trust companies were coming down. The walls of Jericho were coming down. They knew that and they went out there to become significant players. For the last 12 to 18 months they have been hiring the top guns in real estate and the top guns in insurance. When you have something to be fixed, you go to the top guns. Behind closed doors a deal was struck on these bills. Parliament did not legislate these. We are going through a pro forma exercise here. This was a done deal behind closed doors with the BCNI and the financial bigwigs of this country. They cooked up this deal. They handed it to the government. They said: "You shepherd it through your flock of sheep. You do it". That is what happened. That is what we have here.
That is why we could not move any substantial amendments or change anything substantive in these bills. It was a done deal as the member for Mississauga said. In blunt terms, this is a compromise among the corporate interests of this country. They get what they can and they keep what they have. That is the approach. "What I have got is mine and what is yours is negotiable". That is the approach. That is the Canadian tradition.
I want to say these Tories, this government has speeded up, accelerated and extrapolated what the Liberal governments before them began. If we read the bills, the language of the bills is written in a complex "loopholable" and double sort of language. It is a language which divides society into: "I know and it is up to you to find out", a language that protects the jobs and ever-rising incomes of the myriad lawyers, accountants and experts who thrive on legalism. It protects the private fortunes and the empires of the 40 to 60 families and corporations of this country which control two-thirds of the financial assets of Canada.
We had four pillars. We had a pillar arrangement following the crash of 1929. We had a pillar for banks, for investment brokers, for trust and loan companies, and for insurance companies. We had four pillars. The first thing they did was to collapse that pillar in 1987 to bail out the brokerage houses because they had gone too far out on a limb and they lacked the capital. Today where are those pillars? Where is that pillar? It is in the back

December 5, 1991
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pocket of every bank. They have all got their side-arms. These are the RBC, Dominion and ScotiaMcLeod. They even wear their fancy Scottish tartans. They are identified by their tartans and their little caps like my colleague from Thunder Bay, except theirs is a bright orange. I do not know where they got that from.
Financial deregulation was triggered by the Ronald Reagan administration of the early 1980s. It revolves around letting the market decide so that these systems will become even more efficient in a global market.
The first pillar went down. Bills C-4, C-19 and C-28 further collapsed the pillars. There is going to be no legal distinction or very little legal distinction between banks, trust and insurance companies. It encourages the further breakdown of the pillars. It will erode the pillar structure.
The emergence of a full service financial conglomerate will now come out of the cauldron. That is the ultimate aim of the wizard of Mississauga South. He is now going to draw out of that that there will only be one super financial institution, one financial conglomerate. It will either do it by broadening in-house powers or through the acquisition of subsidiaries including insurance and vice versa.
Canada's laws and regulations supported the pillar concept from a national perspective. They were set to create and regulate institutions which not only held a distinct and well-defined function but also obeyed different ownership rules.
The pillar constraints were designed to make supervision easier. It was designed to protect national markets from concentration and to reduce chain reactions in the case of a failure. Ownership rules were designed to discourage direct accumulation of powers. They were designed to prevent vertical concentration and conflict of interest and self-dealing.
These rules also safeguarded a predominant Canadian content. We all know about the 10 per cent rule for banks and we know about the 25 per cent rule stating that no group of non-residents may hold more than 25 per cent of the shares of a bank. Now they are all history.
As a result, banks, insurance companies and trust companies will virtually be able to own any type of financial institution.
Look at what is to come. Look inside the cauldron, see what is in there, and see what is emerging from the depths of the cauldron that has been stirred up by my colleague from Mississauga South, the wizard of the committee. Look at what is happening. Insurance companies have recently been gobbling up trust companies. Sun Life Trust, the wholly owned subsidiary of Sun Life Assurance Company, bought Coronet Trust from Crown Inc. and Counsel Trust from Counsel Corp., making it the eighth largest trust company in the country with more than $3 billion in assets.
The Confederation Life Insurance Co. has been gobbled up. The sale of Standard Trust to Laurentian Bank; the sale of Cabot Capital Corporation and 50 per cent of Huronia Trust and First-Line Trust to Manulife Financial; the sale of Citizens Trust to Vancouver City Savings Credit Union; the sale of two units of La Financiere cooperants Inc. to La Financiere cooperants credit-bail Inc. Inc.; and Financiere cooperants pret-epargne Inc. to Laurentian Bank.
Central Guaranty Trust Ltd. is waiting for the matchmaker so that marriage can be consummated. It is sitting there in the bedroom waiting.
National Trust and First City Trust are potential merge candidates; more work for the new matchmaker, not the orchestra conductor any more, but the new matchmaker. That is the new reality. That is the new Tory financial institution's outlook.
I have said consistently in committee that financial-commercial linkages will legalize the creation of major private governments and they have adverse effects on our CDIC.
Imagine one of these sumo wrestlers growing and growing with $700 billion in assets walking into any prime minister's office and saying: "Hey, Charlie, this is what you're going to do". Is the Prime Minister going to argue with anybody like that? Is he going to argue with that kind of sumo wrestling power? No. He is going to say: "What do you want, sir, and how much?" That is the danger: increased monopoly and the cost of failure.
December 5, 1991

Imagine what would have happened if we had an Algoma Bank or a Lavalin Bank or a Robert Campeau Bank? Where would we be today? We would be paying for a scream off for God's sake.
In 1989 the CDIC annual report pointed out that; we had since 1970 some 20 trust and loan companies that went down the tube. The value to CDIC was $1,048 billion. We paid that; we picked it up. The situation that I have described encourages more incentives for mergers. It encourages more links between the commercial and the financial. It is not going to be a more regulated system. They have watered it down. There is no harmonization with the provinces. This is part of the neo-conservative view that what is good for the market has to be good for Canada, and it ain't necessarily so.


Albert Glen Cooper: Madam Speaker, I am pleased to have an opportunity to take a few minutes to participate in this debate.
This particular set of bills, the financial institution bills, has in many ways demonstrated Parliament at its best in terms of process. Through the committee stage, through second reading, report and third reading stages of this bill there has been a lot of good will on the part of members from all sides of the House.
As a result I think this legislation has had a veiy complete and thorough review. I think members on all sides of the House should be complimented for their work in this legislation.
Madam Speaker, I know that you are aware of the impact that has had on the House and on the general good will that has built up between members.
When the House leader for the Official Opposition asked the regular Thursday question, there was a strong indication that the opposition was prepared to extend hours this evening to allow us to sit beyond the ordinary hour of adjournment to complete third reading of this bill. I know that there is a desire on the part of all members to see that debate is completed on this bill in time to proceed to the Senate, so that the Senate will have adequate time to review it next week and we can
Government Orders
have the royal assent prior to us adjourning for Christmas.
I do not want to take a great deal of time of the House. Under Standing Order 26(1) I move:
That the House continue to sit beyond the ordinary hour of adjournment for the purpose of continuing consideration of third reading debate on Bill C-4, an act to revise and amend the law governing federal trust and loan companies and to provide for related and consequential matters.


Iain Francis Angus: Madam Speaker, I just wish to advise the House that because a number of our members who are scheduled to speak on this bill are unavailable this evening, we will be unable to support this motion. More important I should point out to the House and to those people watching that regardless of whether the bill is completed today or tomorrow, any vote on it will not happen until Monday next. Therefore there is no need for such speed to get it to the Senate because it will not go to the Senate until after Monday in any case.


Albert Glen Cooper: I am sorry, Madam Speaker, I do not intend to delay your putting of the motion. There has been a great deal of co-operation in the House lately, and the Official Opposition has indicated that tomorrow afternoon it would like to move a concurrence motion which will dramatically affect the amount of time that we in this House have to complete both Bill C-5 and the financial institution bills before us right now.
I am just wondering if I can obtain from him an assurance that it should not be any problem completing those prior to Routine Proceedings tomorrow which would be at the normal time of approximately twelve o'clock.


Iain Francis Angus: Madam Speaker, actually at this point, without having consulted with my colleague, the critic for these bills, I am not sure what time he requires for our speakers to complete it.
I can assure him though in terms of Bill C-5, for which I am responsible, that it is my intention not to give more than a five-minute speech and to allow both report stage and third reading to occur tomorrow, because we would rather get the bill passed and to the Senate.
In any case, as the parliamentary secretary to the government House leader pointed out in a media conference this afternoon, Thursday and Friday of next week

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have not been allocated in terms of the work of this House. He knows he has some flexibility to get the agenda of the government through by next Friday.


Albert Glen Cooper: I do not mean to prolong this, but I want to be very clear. What the hon. member is suggesting is that an agreement that has gone on between the various House leaders did allow for us to complete the stages of both Bill C-5 and the financial institution bills by at the latest tomorrow. He knows our concerns relating to the Senate.
I just want to make sure that no misunderstanding is developing.


Madam Deputy Speaker:: Just one moment. I see the hon. member has left the House. The hon. member for Oshawa rose and seemed rather upset and asked for a point of order, as another member had been recognized on a point of order. He seemed to be rather upset with the Speaker.
I do hope that the hon. Whip will let the hon. member know that I cannot recognize two people at the same time. There has to be one person after the other and someone already had the floor.


Iain Francis Angus: Madam Speaker, I will pass on that information.
I would just like to say to the House that it is my understanding that at no time did we give a commitment to reduce the number of speakers in order that the bill be passed tomorrow. We did not know about the intention of the Official Opposition to move concurrence in that motion tomorrow which has disrupted the schedule that was planned out by the House leaders, I understand that notice was given at the House leaders meeting. That was not part of the mix. It is still our intention to endeavour to meet that agreement but we cannot do so if our members are not given adequate time to make their comments.
I know some members are staying in Ottawa in order to do that, although some of them are not available tonight.


Madam Deputy Speaker:: Will those members who object to the motion please rise in their places.
And more than 15 members having risen'.


Madam Deputy Speaker:: Pursuant to Standing Order 26(2), the motion is deemed to have been withdrawn.
Motion withdrawn.


Madam Deputy Speaker:: It is my duty, pursuant to Standing Order 38, to inform the House that the questions to be raised tonight at the time of adjournment are as follows: the hon. member for Southwest Nova- The Economy; the hon. member for Mission-Coquitlam-Meme Breast Implants; the hon. member for Drummond-Imported Carpeting; the hon. member for York North-Unemployment; the hon. member for St. B oniface-Poverty.


Dennis Joseph Mills: Excuse me, Madam Speaker, I have a point of order.
I just want to seek a clarification from the Chair. If I understand correctly, the member for Thunder Bay earlier today asked for unanimous consent of this House to take an extra 40 minutes so that he could put forward his point of view on this bill. We concurred in the spirit of co-operation in order to get this bill moving.
If I understood correctly, the NDP now is saying we cannot continue to debate this bill in order to get it going.


An hon. member:: Precisely.


Madam Deputy Speaker:: The hon. member may want to reread Standing Order 26(1) which says, if I may paraphrase, that if a member from his seat asks that debate continue after the normal hour, if less than 15 members rise and say they disagree, we do go on. If 15 or more members rise and say they do not agree, the motion is deemed to have been withdrawn, which is what we have just seen in the last few minutes.
The Speaker explains the rules. This is all that I try and do.
It being five o'clock p.m., pursuant to Standing Order 36, the House will now proceed to the consideration of Private Members' Business as listed on today's Order Paper.



PRIVATE MEMBERS' BUSINESS


[Stage Direction]
The House resumed, from October 31, consideration of the motion of Ms. Black (p. 4331).
December 5, 1991
Mr. Jim Karpoff (Surrey North):: Madam Speaker, I am most pleased to be able to rise and speak in favour of the motion that has been put forward by my colleague from New Westminster-Burnaby.
One of the things that is quite striking in our society is that the same situation is one of the greatest causes of joy and one of the greatest causes of sorrow, that is the determination by a woman that she is pregnant.
If a woman is mature, financially well off, and wishes to have a child it is a time for great joy and celebration. If a woman is immature, poor, unemployed, and particularly if she does not wish to have a child it is a time for great anguish, trauma, and sorrow.
Since the government's failed attempt to recriminalize abortion, it has failed to come forward with any concrete positive measures to deal with the question of unwanted pregnancies. I think that this bill goes a long way toward beginning to put forward very concrete, positive steps to deal with this and other problems in Canada related to unwanted pregnancies and the spread of venereal disease.
Sexual ignorance is widespread. Before we look at programs, we have to look at some of the information about the situation in Canada. One in five 14-year-olds and one in two 16-year-olds are sexually active. One in five teenage girls will become pregnant before the age of 20. Sexually transmitted disease affects one in every eight Canadians. One in 10 couples is infertile, partly as a result of sexually transmitted disease.
Although 83 per cent of Canadians believe that sexual education should be taught in schools, only one-half of schools in Canada approve any such program. Forty-six per cent of Canadians feel that they have limited access to contraception and family planning. Nearly 70,000 women in Canada have abortions each year.
When one looks at these statistics in comparison with other countries, particularly other countries in which family planning and sexual education is the norm, it is quite striking. The rate of adolescent pregnancies in Canada is five times as high as in the Netherlands, five times. It is four times as high as in the Scandinavian countries.
We have had some experience with what can happen with even limited family planning programs aimed at adolescents and young women. In Ontario between 1976
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and 1986 there was a 23 per cent reduction in the number of adolescent pregnancies. They declined from 21,000 to
14,000	a year. The rate of abortion in that period of time remained relatively the same. This was as a result of education programs undertaken within the province of Ontario.
In 1975 the Ontario government said that it would fund 100 per cent of education information and contraceptive services through health units. Eighty-one per cent of the units now offer these services. At the same time, it made the opportunity available for education within the school system. This has not been universally done.
The result is that there has been a dramatic drop in the rate of pregnancies and abortions in Ontario, particularly among young teens up to the age of 16. In this age group the rate of pregnancies has dropped 33 per cent, the rate of births has dropped 40 per cent, and the rate of abortions has dropped 28 per cent.
For older teens, those 17 to 19, the rate of pregnancies has dropped 20 per cent and the rate of births has dropped 38 per cent, but abortions have risen.
In the report that studied the question of whether extending access to prevention reduces abortions and births to the unmarried, the conclusions are: "It is a reasonable conclusion that declining pregnancies during the decade are largely as a result of programs reaching the most accessible adolescents: accessible geographically, living close to public and private prevention resources, accessible socially, meaning those with support within their personal network to reinforce prevention messages, and accessible personally, adolescents who did not have some special needs, disability or who were not living in deprived, crisis-ridden environments".
There are clear indications that family planning and education work.
We very much want to take a look at what is happening in Canada with regard to family planning. The federal government was supportive of family planning and the Planned Parenthood Association in Canada. Its funding peaked in 1977 at $627,000 but has taken a dramatic nosedive since then under two governments. The former Liberal government reduced the association's funding from $627,000 to $237,000 by the time it left office in

December 5, 1991
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1984.	It was tragic. Funding was cut not only in half but greater than half.
The Tory government then got in. It was going to show that it could do even better, that it could cut more and cut faster. By 1990 it had taken the $237,000 and reduced it to $146,000, where it has been frozen. There is now no comprehensive program in Canada without that.
The Speaker is indicating that my time is running out. I think it is tragic that there is no program, particularly because of the fact that the cost benefit ratio has been shown to be one to ten.
It is also a personal tragedy. I think this bill would go a long way toward restoring these programs and helping women and other young people deal with it on a very positive basis.


Mrs. Suzanne Duplessis (Parliamentary Secretary to Minister for External Relations and Minister of State (Indian Affairs and Northern Development)):: Madam Speaker, the Department of National Health and Welfare Canada recognizes the need for programs in the area of sexuality education and family planning, especially for young people.
The Health Promotion Contribution Program under the health promotion fund provides funding to community based projects. Since 1983 the Health Promotion Contribution Program has dedicated over $2 million to projects related to reproductive health, including fertility and family planning. One project is the development of a national sexuality information resource centre and clearing-house by Planned Parenthood Federation of Canada.
To assist Planned Parenthood in its endeavour to reach this goal, the Department of National Health and Welfare Canada, through the Health Promotion Contribution Program, was able to direct $314,000 to Planned Parenthood, to conduct a structured needs assessment and to begin the development of the sexuality information resource centre and clearing-house. These funds have allowed Planned Parenthood not only to conduct a needs assessment but to begin the development of the centre.
The purpose of this project is to fill a gap in the information services available and to assist educators who work with individuals in family life education.
The need to co-ordinate quality information about human sexuality has been indicated by many organizations.
Planned Parenthood is now working hard to raise funds from individual, foundation and corporate sources to cover the high start-up costs of the resource centre and the clearing-house function. Many clearing-houses have shared this challenge of finding and maintaining funding sources.
The Department of National Health and Welfare supports the intent of the resource centre and clearinghouse and encourages all sectors to show commitment to this worth-while project. In Canada we are fortunate to have the voluntary sector play such an important role in health care. This is in keeping with our philosophy of fostering public participation and strengthening community response to health needs.
There are many other projects related to reproductive health funded through the Health Promotion Contribution Program. For example, a child abuse prevention training kit for day care workers; a community resource kit on new reproductive technologies; a northern childbirth workshop for women and their families; a needs assessment and plan of action for women in menopause; and a maritime parent sexuality education project.
The health promotion fund manages the AIDS Community Program known as "ACAP". This program funds projects that strengthen community participation, intersectoral co-ordination and evaluation in addressing HIV-AIDS issues.
Within the education and awareness initiatives supported by this progBram, several focus on the enhancement of negotiating skills and behavior change.
Two such projects, "Sex without AIDS today", sponsored by the Faculty of Nursing of the University, of New Brunswick, and "Talking sex on campus", sponsored by the Faculty of Nursing Student Council of the University of Toronto, focus on skill building and the adoption of safer sex behaviour by students.

Another project, "How to talk to your kids about AIDS", sponsored by Planned Parenthood in Hamilton, Ontario, will assist parents to teach their children about sexuality.
These projects and others promote safer sex practices and focus on examining one's own sexual behaviour.
The Department of National Health and Welfare has been involved in an exciting project sponsored by Telefilm Canada, CBC, and Playing with Time Incorporated. The result of this year-long collaboration and consultation with Health and Welfare is Degrassi Talks, a series of six innovative documentaries examining the problems and concerns young people deal with every day. The series will be hosted by cast members of the Degrassi television series and will include talks with teens about tough issued like sexuality, teen sex, depression, abuse, drugs and alcohol.
The government is pleased to be part of this national educational program and is exploring other ways to be involved with the presentation of this CBC television production.
Teenagers and young adults who are school dropouts, unemployed or have no permanent homes are especially vulnerable not only teenage pregnancy, sexually transmitted diseases, and AIDS, but substance abuse as well. Many of the educational strategies used for substance abuse prevention can raise individual self-esteem and can improve decision-making skills. Many of the drug strategy programs have been designed within this comprehensive framework, so they too can have a positive effect on the individual's over-all health including their sexual health.
Canada's drug strategy aims to reduce the harm caused by alcohol and other drugs to individuals, families and communities. Many partners are co-operating in dealing with Canada's drug problem and the Department of National Health and Welfare plays a leading role in this partnership. Grants and contributions support community drug awareness initiatives such as Safe Grad, Students Against Impaired Driving, and other community alcohol abuse programs. Prevention programs, such as the "Really Me" awareness campaign, are designed to change teenagers' attitudes toward peer pressure and to help them feel better and trust their own decisions and choices. "Ready or Not" is an education program that enables parents to help their eight to
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twelve year old children make positive and informed choices about drug use and also enables mothers and fathers to build parenting and communication skills through group discussion and information sessions.
These programs', as well as others within the national drug stategy, promote life-skills that will enable the individual to make better decisions related to a variety of situations and will promote the self-worth of the person. These will, in turn, lead to better choices for lifestyle behaviour.
In conclusion, this government has considered and is trying to help fulfil the needs of many individuals, organizations and communities. We will continue our efforts to provide a co-ordinated and comprehensive approach to sexuality and reproductive health issues within the Department of National Health and Welfare.


MESSAGE FROM THE SENATE
Madam Deputy Speaker:: I have the honour to inform the House that a message has been received from the Senate informing this House that the Senate has passed Bill S-6, an act to amend the act of incorporation of Metropolitan General Insurance Company in order to authorize its continuance under the laws of the province of Quebec, to which the concurrence of this House is desired.


FAMILY PLANNING
[Stage Direction]
The House resumed consideration of the motion of Ms. Black (p. 4331).
Marlene Catterall: Madam Speaker, I am pleased to rise on this private member's motion supporting the development of a number of programs related to the prevention of unwanted pregnancies.
It really is a shame that we even have to put those two words together, that any pregnancy, the potential for any child to be bom, can be an unwanted event in anybody's life, but it can be. There have been a lot of statistics in the speeches I have read and heard on this subject about the number of pregnancies, the transmission of sexual diseases, the ages at which young men and women are

Private Members' Business
becoming sexually active, the numbers of abortions that result, and so on.
I think it is sometimes more effective to talk about real people to whom this happens, rather than about statistics. Therefore, I am going to talk about two young women I know and their stories, which are somewhat different despite their similar backgrounds.
First, I am going to talk about a young woman named Jan who came to see me at my constituency office very recently. She phoned and said: "You said if I ever needed some encouragement to go back to school to give you a call, so I am calling you". We spent about an hour talking one Saturday afternoon.
Jan had grown up in a public housing community. That meant that about two-thirds of the families in that community were living on public assistance. The ones who were not on public assistance were in very low paying jobs. It meant that the vast majority were single parents and the vast majority of the children were living in single parent households. That meant that at least two-thirds of them were living in conditions of extreme poverty.
Jan said to me: "You have known our community for a long time. You have watched a lot of us grow up". She mentioned a few people I would remember. She said: "Of all of us there are only two out of that community of 132 homes who grew up, finished high school and did not get into drugs or did not get in trouble with the law or did not get pregnant". There were only two out of the hundreds of young children who grew up in that community.
Jan is all set to go back to community college now. She has been working two jobs so she can earn the money to do that. If she achieves her dream, she will have a college diploma in a couple of years and may even go on to university. She will have some hope for her life and she will have some prospects. We talked about all the young girls who became pregnant and why they did.
I want to talk about another young girl, Penny, whom I have also seen grow up from a little two-year-old. She grew up in another public housing community, also in poverty, with not enough social services, not enough
support for the families in those communities. She had her dreams too.
Her dream was to be an aeronautical engineer. That may seem an unrealistic dream for a little girl growing up in poverty. In fact she was just about to finish her high school education at a technical school as an auto mechanic, which was a good entry into being an aeronautical mechanic. However, she got pregnant, lost the baby, and then got pregnant again.
We talked about the lack of self-esteem that one develops growing up in poverty and all the reasons that young girls get pregnant rather than dreaming the same dreams as others in society and trying to fulfil them.
I am not saying that only young women growing up in poverty get pregnant, but they do disproportionately. That is one major issue we have to deal with. Why do we have a society, one of the wealthiest countries in the world, in which one million children live in poverty? We know that means they are four times more likely to drop out of school.
They are much less likely to go on to university even if they finish high school. They are more likely to die. They are more likely to get sick. They are more likely to be injured. They are more likely to commit suicide.
If we start talking about programs to prevent unwanted pregnancies, we must start looking at the fundamental reasons that young girls get pregnant. Poverty is certainly one of them. The biggest one, and it arises out of poverty, is a lack of self-esteem.
Until we are able to deal with that problem I am going to continue to see in my community nine, ten and eleven year old girls being sexually approached by young boys and responding, because that is what their sense of self-worth and self-esteem comes from.
Look at the advertising on our airwaves. Look at how we use sexuality to sell products and how that convinces very young girls that only by being sexually active, sexually attractive and sexually aggressive can they have value.
There are a lot of things in our society that tell women they do not have value. There is a lot of money spent telling them that their only value is sexual.

If we are going to address unwanted pregnancies we need to deal with the sexual abuse of young children. What are the results if we do not deal with these things? The results, as we are seeing now, are 66,000 abortions a year. The cost is not only money but tremendous agony.
We are seeing again young women dropping out of school, living lives of poverty, and damaging their health.
It is a straight case of gender discrimination if we do not deal with preventing unwanted pregnancies because boys do not get pregnant. Boys can walk away from an unwanted pregnancy. It is the young women who bear the economic, social and health costs. The cost is their future.
We only repeat that cycle when we have children having children and trying to raise them. It is not surprising that we still have trouble dealing with this as a public policy issue. Believe it or not, it was barely 20 years ago that it became legal in this country to sell or even distribute information on contraception. If we had an AIDS epidemic 22 years ago you would not have been able to walk into a drugstore to buy a condom.
It is not surprising that we still have trouble dealing with what our public policy should be on pregnancy planning and on family planning. Health plans in a number of our provinces do not even cover the cost of contraceptives, yet we wonder why we have unwanted pregnancies.
We need to talk about prevention. Yet, there is a cutback in funding to provincial programs that deal with issues of poverty and issues affecting the young women I have talked about.
We have fiscal restraint in health and welfare resulting in cutbacks in the kinds of programs the hon. member just spoke about. In fact, we are cutting back on preventing drinking and driving. We are cutting back on preventing alcoholism. That is because of cutbacks in both funding and people in that department.
These preventive programs are being sacrificed. We are cutting back on employment programs in the summer, which is one of the reasons some of the young people I talk about are able to return to school in the fall. Without the summer employment programs, they never go back to school.
Private Members' Business
Finally I want to talk briefly about letters I have written to the several Ministers of National Health and Welfare asking: "Why is there not research on contraception?" We set up a Drug Prices Review Board that is supposed to monitor drug prices and how companies that have received new protection for their profits spend their research dollars.
Yet, the Minister of National Health and Welfare is not interested in why that money is not being spent on research into contraception and pregnancy prevention.
We owe our children information. We owe them knowledge. We owe them programs. We owe these especially to our young women to make them feel like worth-while human beings independent of their sexuality. We need to make them independent of the need to become sexually active just to feel like a decent human being.
We need to address those kinds of issues as we talk about programs to prevent unwanted pregnancies.
I hope the House will endorse this motion. Hopefully it will start us on a program to allow more of our young people to lead their lives fully and completely without unwanted pregnancies.


Mr. Stan Darling (Parry Sound-Muskoka):: Madam Speaker, I am pleased to rise and speak briefly on this very important matter.
In the area of teenage pregnancies, the government has taken a comprehensive approach to sexual and reproductive health. We address concerns of this nature through pro grams that promote responsible decision making and responsible sexual behaviour. The government agrees that there is a need for action to reduce the incidence of teenage pregnancies in Canada.
We know that some teenagers begin sexual activity at a young age. According to the Canadian Youth and AIDS study, one in five 14-year-olds and one in two 16-year-olds said they had sexual intercourse at least once.
In 1987, 36,000 Canadian teenagers became pregnant. This is too large a number of teens who have become pregnant before they are socially, economically, physically and emotionally prepared. The negative effects of early parenthood have been well documented and may have serious adverse consequences for the teenagers

December 5, 1991
Private Members' Business
themselves, their babies, their families, their parents and society.
The provincial and territorial governments provide information and education about sexuality to teenagers through various means, including schools, health clinics, family physicians, public health nurses and social service centres. There are myriad other non-governmental organizations involved.
Nonetheless, the federal government must work with non-governmental organizations, other levels of government and individuals to identify barriers to service and to act to remove these barriers.
It is the government's belief that education and access to appropriate resources are critical steps in preventing these difficult problems of teenage pregnancy and sexually transmitted diseases.
I would like to describe some current federal government initiatives that address the prevention of teenage pregnancy. Recently a report on adolescent reproductive health was produced by a federal-provincial-territorial working group and was distributed across Canada. The report examines the problems associated with sexual and reproductive health with an emphasis on teenage pregnancy and sexually transmitted diseases. It also emphasizes the importance of sexual health information and education and makes recommendations. The government is committed to supporting the activities of the provinces, territories and organizations in meeting the recommendations outlined in this report. For example, through its special competition, the National Health Research and Development Program will fund research related to sexual health, education and services.
On a similar theme, many areas within the Department of National Health and Welfare are involved in the review of research related to contraceptive devices and contraceptive services.
The health protection branch has a bureau of radiation and medical devices that reviews the safety and efficacy data of new contraceptive devices and responds to reported problems with existing devices. The sale of
contraceptive devices in Canada is controlled by the Food and Drugs Act and the medical devices regulations.
These regulations ensure that only safe and efficacious products are available to the Canadian public. A review of the research is done on all contraceptive devices which are left in the body for more than 30 days, such as the intrauterine device. These devices undergo a premarket review considering safety and efficacy data prior to being sold in Canada.
Other contraceptive devices are monitored through post-market surveillance, through manufacturer statements of safety and efficacy.
As well, the bureau continues to contribute to the development of international standards for condom testing. This entails collecting data on condom standards, quality, distribution and use.
Under the Food and Drugs Act and regulations the bureau of human prescription drugs of the health protection branch monitors and evaluates all new drugs to be used as contraceptives. Their safety and efficacy is ensured during clinical trials and prior to marketing.
The hon. member for New Westminster-Burnaby during our first hour of debate called for the government to investigate the drug RU-486 which is used to terminate pregnancy. The government has no present intent to clinically investigate RU-486.
Before a drug like RU-486 may be sold in Canada, an acceptable new drug submission would have to be filed with the health protection branch. According to the food and drug regulations, such a submission must contain substantial evidence of the safety and efficacy of the product under the recommended conditions of use.
To date, no such submission and no clinical protocols for investigation of RU-486 have been received. It is important to note that under the Canadian Food and Drugs Act and regulations the decision to file a submission for any drug rests with the manufacturer.
The health protection branch also has a special advisory committee on reproductive physiology which advises it on issues related to contraception.
December 5, 1991

Private Members' Business
For example, the labelling of oral contraceptives is through concerted efforts such as these that we will periodically reviewed by both this body and by the health influence change, protection branch and is updated based on new informat;'on'	[Translation]
The work of the bureau of medical devices and the bureau of human prescription drugs has a direct impact on effective contraceptive use by individuals and on the prevention of teenage pregnancies and sexually transmitted diseases.
The federal government places special emphasis on supporting families in their parenting role, especially teenagers who are raising children. Thus the Department of National Health and Welfare has implemented a national post-partum parent support program. This program not only strengthens the family centred approach to maternity and newborn care in Canadian hospitals and community health settings, but provides parents with information and support through the postpartum period.
For those who experience unplanned pregnancy and who choose to have their babies, the post-partum parent support program will provide assistance by linking mother and babies with appropriate community resources.
The department's commitment to families is also exemplified in the nobody's perfect program. This co-operative effort with the provinces is aimed at young, single, low income parents who feel isolated, who lack support and confidence in their ability to raise their children. This program gives parents accurate information on their children's health, safety, development and behaviour.
Both of these programs include a component on sexuality and family planning to promote the importance of future planning and responsible sexual behaviour.
Because adoption is a necessary option for many parents, a study has been designed to explore means of increasing public understanding and to encourage adoption. The study began in April 1989 and will provide information on current trends and practices in adoption as well as what barriers and supports influence decision making by parents with unplanned pregnancies.
As just described, it is clear that there are many ongoing activities that concern teenage pregnancy. It is


Mr. Jean-Luc Joncas (Matapedia-Matane):: Mr. Speaker, the current patterns of unplanned and unprotected sexual behaviour have resulted in a widespread problem of sexually transmitted diseases. A co-ordinated effort by governments, health promotion, scientific communities, and educators can help achieve primary prevention of these diseases.
In 1988 the Department of National Health and Welfare established a division of sexually transmitted disease control and a national laboratory for sexually transmitted diseases within the laboratory centre for disease control. I think there is a continuing need for programming to combat sexually transmitted diseases, especially in adolescents and young adults, the groups with the highest rates of reported disease. The division of sexually transmitted disease control is working closely with provincial and territorial governments to improve surveillance activities, especially in the area of chlamydia infection. Chlamydia is the most commonly reported sexually transmitted disease in young women and is important because of its potential long-term consequences, such as pelvic inflammatory disease, ectopic pregnancy and infertility.
In 1986 the laboratory centre for disease control established an interdisciplinary advisory committee on sexually transmitted diseases in children and youth in particular. It has recently completed its mandate which included examining issues of sexually transmitted diseases and sexual abuse among children and youths, conducting comprehensive research at a national level, advising on sexually transmitted, disease education and treatment, and making recommendations with respect to the development of public education and health promotion programs, one of the major undertakings included the establishment of Canadian guidelines for the diagnosis and management of sexually transmitted diseases in children, adolescents and adults. These guidelines were published in 1989, were widely distributed and have been extremely well received and implemented in the health field.

Private Members' Business
The Bureau of Communicable Disease Control has dedicated $450,000 for five years to fund research in the area of sexually transmitted diseases. Recently two professional schools were funded for research that will study sexually transmitted disease education currently being provided within universities.
The outcome of this research will be published in academic journals and will be another step in the fight against sexually transmitted diseases. The Canada youth and AIDS study has implications for all areas of sexual health.
A secondary analysis of the Canada youth and AIDS study of college and university students was funded and the findings published in June 1990. Analysis of the data revealed that many students are engaging in high risk sexual behaviour, despite being quite knowledgeable about safe sexual practices. Of particular concern was the finding that among college women, as the numbers of partners increase, there is a parallel increase in the use of oral contraceptives, but condom use declines.
Another secondary analysis in process will compare street youth, school dropouts, and grade 11 students. All of these studies that the government has supported have direct application to the primary prevention of sexually transmitted diseases.
An expert working group sponsored by health and welfare is currently developing national guidelines for sexual health education. The impetus for this project arose from a recommendation of the expert interdisciplinary advisory committee on sexually transmitted diseases in children and youth and will fulfil one of the recommendations made by the federal, provincial and terrHBitorial working group on adolescent reproductive health. These guidelines will be addressed to multi-sectoral groups implementing sexual and reproductive health programs. The guidelines will enhance the knowledge base of community workers and will assist with the development of sexual health educational programs in schools, in the work place, and in communities. These guidelines will also promote the comprehensive approach to sexual health as an important principle.
The recently published "Sexually transmitted diseases" pamphlet is an educational tool available for teenagers, parents and service providers. This pamphlet was a collaborative effort within National Health and Welfare and with the sexually transmitted disease directors from the provinces and territories. It describes the types of sexually transmitted diseases, as well as ways to prevent and treat them. The pamphlet will be distributed across Canada to school boards, public health agencies and organizations involved in sexual health education.
In another area the royal commission on new reproductive technologies is examining not only reproductive technologies but is placing a strong emphasis on the prevention of reproductive health problems, including sexually transmitted diseases. The final report is due in October 1992. The recommendations will have important Implications for sexual health education.
Research in the area of sexual and reproductive health is an essential component of program planning and of implementation for governments, voluntary agencies and community groups. In turn, improved services and better information will help to reduce the incidence of teenage pregnancies, unintended pregnancies, sexually transmitted diseases, and can lead to healthy sexual development.


Mr. Phillip Edmonston (Chambly):: Mr. Speaker, I rise today to speak to Motion No. 44 put forward by my hon. colleague. To put the debate in perspective, I would like to read the content of this motion, and I quote:
That, in the opinion of this House, the government should consider the advisability of taking action to reduce the numbers of unwanted pregnancies in our society by reinstating a Family Planning Division at Health and Welfare Canada; reinstating funding to the Planned Parenthood Federation of Canada at its previously adequate levels; establishing new programs to combat sexually transmitted diseases and unwanted pregancies; establishing a national clearing-house on family planning; and increasing funding for research on safe and effective methods of birth control.
The motion tabled by my colleague from British Columbia is extremely important considering the present situation in our society. Let me give a few examples of problems of sex and sexuality among young people today.
First of all, at least one out of five 14-year-olds and 50 per cent of young Canadians 16 years old and over are sexually active. This means it just is not true to say that young people are not interested in sex or sexuality. They
December 5, 1991

are already sexually active. One out of five 14-year-olds and half of our young people 16 years of age and over are sexually active.
Among teenage girls, one out of five will become pregnant before the age of 20. Imagine, Mr. Speaker, before these girls are 20, one out of five will be pregnant. This is incredible. We always think this is something that happens to other people, to those who did not get a good education, to people who are stupid and do not understand. Not at all. It can happen to anyone. One out of five of these young girls will become pregnant before they are 20 years old.
We could also talk about sexually transmitted diseases. Here again, people tend to think it only happens to people who are stupid or sexually promiscuous. We always think it will not happen to us. But do you know how many people are affected by STD today? One out of 100? No. One out of 50? No. One out of 25? No. When I saw the statistics on people affected by what used to be called venereal diseases but are now referred to as sexually transmitted diseases, I was astonished.
In Canada, one person out of eight is affected by STD. One out of eight is a lot. It is not just people who are stupid or ignorant. It is not just the poor. Just talk to our hockey players today. They are pretty worried. This is something they cannot-


Dawn Black: Talk to Magic Johnson.


Philip Edmonston: That is something they cannot skate around, because there are no two ways about a sexually transmitted disease: either you have it or you do not. Talk to Magic Johnson. Talk to the athletes, the guys who look big and brawny, and I am sure that with all the money Magic Johnson made and all the girls he met, today he is sorry. He is sorry now. He happens to have a sexually transmitted disease called HIV positive, which most people call the first stage of AIDS. [DOT]
Mr. Johnson is not poor, and he is not stupid. Today maybe he thinks it was stupid to forget to wear a condom. Sure. This was one of our most respected and nicest athletes, someone we could call a role model. Some role model. This is exactly why we desperately need to educate people.
Adjournment Debate
Instead of doing what the Liberal Party did and gradually cut grants to family planning organizations, we should increase those grants. It is not a matter of educating people about a subject they can choose to ignore. It is a matter of life and death. It is a matter of being sick or not. In the case of girls who become pregnant, it is a problem that concerns future generations. Do we want to people the earth with unwanted children? Come on. Do we want to people the earth with children who will be abused because they were never wanted by their mothers? I do not think we do. To some extent I respect people who say: "I am against abortion. Abortion is terrible, and I cannot condone it". I respect those people because we must respect the opinions of others.
A mature society should give information on family planning to people who want that information, and that is what we are trying to do with this motion.


Madam Deputy Speaker:: I am sorry but I must interrupt the hon. member.
The time set aside for Private Members' Business has now expired.



PROCEEDINGS ON ADJOURNMENT MOTION

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

Coline M. Campbell: Madam Speaker, on October 1, 1991 I asked the Minister of Finance if he was going to abandon the high Canadian dollar policy that is hurting so many of our primary industries. I asked this because I had just learned that the Rio Algom tin mine, the only tin mine in North America, would have to close.
I had just received a letter from the president of Rio Algom who blamed the decision to close the mine on "the ongoing problems of the international tin market and the strong Canadian dollar".

December 5, 1991
Adjournment Debate
This was just one more company in Canada that was closing because of a strong Canadian dollar compared to the American dollar. It is simple economics that every cent our dollar goes up in relation to the U.S. dollar makes it more difficult for our exporters to obtain a return for their product in the U.S. or international market.
In November 1985 our dollar stood at 72.7 cents U.S. This was at the height of an economic boom, the likes of which this country had not seen for a long time. Today, thanks to this government's policy, it is at 88 cents U.S.
Average Canadians know what this government's policy of a high Canadian dollar means. Just ask the 220 tin mine workers who will be out of work in January. Just ask 330 Dominion Textile workers in Yarmouth who lost their jobs last June. Just ask fishermen and processors in southwestern Nova Scotia who have to cope with decreased quotas, dockside monitoring and a high Canadian dollar to try to sell their product.
Look at lobster fishing where costs have gone up over the last year. The dollar has gone up over last year and the price has gone down over the last year. How can we expect our primary industry to compete in the American or international markets as our dollar goes up? Just ask anyone who works in the primary industries what a high dollar has meant. Ask the local businesses which are going out of business what it has meant.
The minister will answer tonight as he answered my question that day. He will talk about having lowered the interest rates. At this point lowering interest rates does very little to stimulate the economy through increased investments.
As reflected in the narrow spread between the bank rate and the prime rate, there is very little demand for new loans for two reasons. Businesses are not making any profits and individuals are too concerned about keeping their jobs even to think about making investments.
However, a fall in interest rates accompanied by a devaluation of the dollar will do a great deal to boost export performance. This is what the government should be looking at and trying to accomplish.
More people are unemployed today than a month ago. A substantial percentage of the unemployed have been without work for over a year. This is something that
Canada and Canadians should not accept. This is not what Canadians expect from a government. It is certainly not what Canadians should have to put up with.
This is just one more lesson for the government on how its suicidal high dollar policy in the wake of the free trade agreement has decimated our Canadian industrial base.
We cannot have a high Canadian dollar and expect to compete with the U.S. but the minister goes on saying the high dollar is not a deliberate policy and he will not give Canadians a strategy to lower the Canadian dollar to help our exports, to help our primary products and to help our industries.


Mr. Ken James (Parliamentary Secretary to Minister of Labour):: Madam Speaker, I would like to advise the member for South West Nova that the government does not have a high interest rate policy. It is quite the opposite. The policy is geared to achieving durable lower interest rates through reducing inflation, as she probably knows.
Our policy we believe is working. As inflation pressures have eased in recent months, interest rates have declined in step. Short-term interest rates are more than 625 basis points lower than at their peak last May. Interest rate declines will continue and they will be sustainable.
Let me turn now to the exchange rate which she speaks of. There is no target or target range for the dollar. The exchange rate is determined by market forces. I think the member knows that but is just causing a bit of mischief.
The relative value of our dollar is affected by many factors, not just interest rates, such as inflation performance and prospects, investor confidence in the economy, international and political and economic uncertainty and the borrowing practices of Canadian businesses and governments. These can all affect the dollar.
It is clear that the Canadian interest rates are no reason for the increase in the exchange rate over the last year or so. Provincial government borrowings and international uncertainty are contributing to the dollar. They played key roles in the value of the dollar. Provincial governments placed $10.9 billion in new debt issues in the foreign financial markets in the first half of this year. This is double the amount that was placed in all of 1990.

Political uncertainty also affects the dollar. The problems in the Soviet Union, the Middle East and elsewhere have meant increased demand for safe haven currencies. This has produced a shift by the European and Asian investors into the North American market.
While the exchange rate does affect our competitiveness, the root cause of the deterioration in our competitiveness, is the more rapid increase in wage costs and the slower increase in productivity in Canada than in our major trading partners.


Coline M. Campbell: A zero per cent increase.


Kenneth Albert James: Lasting improvements in our competitiveness can only come through improving productivity and controlling domestic costs. Attempting to improve our competitiveness by lowering the dollar through inflationary monetary policy would provide at best temporary gains and would be ultimately self-defeating.


MEME BREAST IMPLANTS
Joy Langan: Madam Speaker, on September 261 rose in the House and asked the Minister of National Health and Welfare if he would require manufacturers of breast implants to provide information to breast implant patients just as the American food and drug administration was doing in the United States.
The other thing I raised was that the deputy minister had stated publicly it was not necessary. The minister in responding said he was informed the day before by the deputy minister about the U.S. directive to the implant makers and he said he would ask the same thing of makers of implants sold in Canada.
In a supplementary question I asked the minister if he would also do something about the booklet that had been produced and which the minister referred to in his first answer about breast implants by the breast implant industry, the Canadian Quebec Association of Plastic Surgeons, the Canadian Society for Aesthetic Plastic Surgery and the government. It stressed two things.
Adjournment Debate
First, the booklet was not totally clear. It was a whitewash of the whole question of implants. Second, in our view it was inappropriate that the industry should be involved in the production of this booklet.
The minister responded by saying that he looked forward to me agreeing with him that the information should be provided. I had already agreed with him on this. He went on to say that he felt it was important that information be provided to women regarding breast implants.
It is now December. I have had a letter from the minister saying that he intends to revise the booklet. I have asked that the booklet be revised in plain, understandable language for women who are considering breast implants, whether for cosmetic reasons or for post-mastectomy reasons.
It is very important to point out that the booklet the minister is planning on revising does not tell women about the life expectancy of implants. It does not tell women about the pain associated with the surgery for breast implants. Women are not advised of known side effects for implants. They are definitely not told in that booklet that there is a growing body of evidence that links silicone implants with possible auto-immune disease. There is definitely no information outlining to those women who have had cosmetic implants that discusses any of the concerns they might have regarding childbearing and nursing after the child is bom.
The ministry has not written that booklet. I am urging that when the ministry does write a booklet it include these very important points. It must be written independent of the plastic surgery industry.


Michel Champagne: Madam Speaker, the Department of National Health and Welfare has been in the forefront of providing patient information concerning breast implants for more than three years now. The department, in co-operation with plastic surgeons' associations, published a booklet on breast augmentation. This booklet is widely used by plastic surgeons and serves, in addition to the information provided verbally, to give

December 5,1991	i
Adjournment Debate
women contemplating breast augmentation precise information on its risks and benefits.
Health and Welfare Canada also provides this booklet in response to requests for information about breast implants.
To complement the booklet, the health protection branch will require that manufacturers of breast implants sold in Canada provide information for patients. Canadian and American women will receive similar information. Manufacturers have been advised of this labelling requirement through an information letter. These information sheets will have to be available 60 days from the date of the information letter announcing this change.
The information to be contained in these information sheets is very similar to that contained in the Canadian breast augmentation booklet.
In addition, working with the plastic surgeons' associations, the department will revise the present booklet to ensure that the information which it contains is current.
The breast augmentation booklet refers to a high level of patient satisfaction. In May of this year, the vast majority of callers to Health and Welfare's information line on breast implants said that they were satisfied with the results of their surgery.
Breast augmentation has been chosen by thousands of women in Canada. As with any surgical procedure, some patients can be expected to have post-operative problems. Risks exist, as in any human activity. The Department of National Health and Welfare wants to ensure that these risks are well understood by women contemplating breast augmentation. The final decision always rests with women in consultation with their doctors.
The department will continue to provide women with all available information and to ensure that the breast implants on the market meet current standards for safety and effectiveness.


Joy Langan: Madam Speaker, under Standing Order 44, if I feel, and I do feel, that the parliamentary secretary has misunderstood my words I can rise on a point of order.
It would be most helpful if in future the parliamentary secretary were to listen to what the person speaking said and then responded to that and not something that is totally-


Madam Deputy Speaker:: I have a difficulty right now because our rules say that I should not have accepted a point of order in the midst of the adjournment motion. This is the adjournment motion, which is what the late show is called. I should not accept points of order during this part of our debate.
I am sure the hon. member and the parliamentary secretary who replaced the Parliamentary Secretary to the Minister of National Health and Welfare could get together and ensure that the hon. member gets a satisfactory answer to her question.


IMPORTED CARPETING
Mr. Jean-Guy Guilbault (Drummond):: Madam Speaker, I am pleased to rise this evening to pursue the question I asked in this House on October 4 regarding the launching of an anti-dumping investigation on carpeting produced by tufting machines made in or exported from the United States of America.
Following representations made by Mr. Yvon Hebert, president of Tapis Venture Limitee of Drummondville in my riding, I was pleased to guide Mr. Hebert and his business partners, Barry Husk and Bertrand Desautels, in their efforts to launch that investigation.
The complaint lodged by the Canadian Carpet Institute, whose executive director is Mr. Michael Kronick, contends that in 1990 the total production in Canada for that kind of carpeting was almost 54 million square metres, which translates into sales of $506 million on the domestic market and $37 million on the export market.
The Canadian market for the years 1988-89-90 clearly demonstrates that the absolute size of the market and the relative share of Canadian producers have narrowed tremendously during that period. The ten carpeting producers concerned in Canada, of which six are members of the Canadian Carpet Institute, support that complaint. Since 1988 the volume and value of imports
s
II!


from the United States have increased, whereas the market share of imports from other countries such as Belgium, Mexico and West Germany has fluctuated around 1 per cent in terms of volume and value. Since 1988 the imports from the United States have increased by 12 million square metres, or $98 million. This is a 215 per cent increase over three years. In terms of value, the United States share has increased 190 per cent.
Following the complaint made last June 21, the study undertaken by the department has revealed margins of dumping from zero to 91 per cent. The goods imported into Canada at alleged dumping prices have had a direct impact on the sales and production of carpeting in Canada. Undervalued imports caused domestic sales to drop by 5 million square meters in 1989 and 10 million square meters in 1990. The Canadian market share of U.S. imports grew from 8 per cent to 28 per cent in 1990.
The strong price competition from carpets produced in the United States undermined the prices of Canadian carpets. In fact, the number of jobs in this manufacturing industry fell from 1952 to 985 between 1989 and 1990. We should certainly speed up the valuation process on this issue, in order to determine formally if there is dumping.
In order to prevent more job losses or plant closures, could the minister assure us that this inquiry will be done rapidly and that its results will be known shortly? As there is dumping and as sales, markets, production, prices, profits are dropping and jobs are lost, there are also plant closures. It is easy to blame the free trade agreement for all that, but commercial piracy will always exist. I believe that if the department really has the will, it can get more employees and work harder to complete this inquiry.


Michel Champagne: Madam Speaker, I welcome the opportunity to provide the hon. member for Drummond with further details in response to his question in the House on October 4, 1991.
As the hon. member pointed out, on August 6, 1991 the deputy minister of National Revenue, Customs and Excise, ordered an investigation under the Special Import Measures Act of carpeting from the United States produced on tufting machines. The investigation fol-
Adjoumment Debate
lowed a complaint filed by the Canadian Carpet Institute on behalf of Canadian carpet producers.
I can inform the hon. member that departmental officials are analysing information obtained from exporters and importers. This is a tremendous task, which includes calculating margins of dumping for thousands of types of carpeting exported to Canada by the various exporters.
The hon. member may be interested to hear that because of the large number of importers and exporters concerned by the investigation and the many different types of carpets for which the margin of dumping, if any, must be calculated, the duration of the investigation of the dumping of certain carpets producted by tufting machines has been extended from 90 days to 135 days, as provided by the legislation. The preliminary stage of the investigation may result in a preliminary determination of dumping or in termination of the investigation, if no evidence of dumping is found.
If the deputy minister makes a preliminary determination of dumping, departmental officials will start collecting preliminary anti-dumping duties on the imported goods and will refer the question of whether dumping causes material injury to Canadian carpet producers to the Canadian International Trade Tribunal. Departmental officials will pursue their investigaton for another 90 days and will them make a final determination. The CITT has 30 days more to reach its conclusions as to the material injury that might be caused Canadian producers by the undervalued goods. If the CITT concludes there is material injury, the preliminary duties in effect at the time of the preliminary determination of dumping will continue to apply as anti-dumping duties to all subsequent carpet shipments imported into Canada.
Finally, to ensure that the government does not take any inappropriate or arbitrary measures, the hon. member for Drummond may rest assured that the investigation will be completed as soon as possible and that the findings will be released at that time.


Madam Deputy Speaker:: The Chair is very well aware of the importance of questions raised by hon. members and that parliamentary secretaries are trying to give answers as complete as possible.

Adjournment Debate
I must remind members on both sides that the new rules call for four minutes, and two minutes and not seven and three. We will be going past the time. I will let people go four and two. Please help whoever is in the chair during the adjournment motion.


EMPLOYMENT
Mr. Maurizio Bevilacqua (York North):: Madam Speaker, on October 101 rose in this House to ask the Minister of Employment and Immigration a very important question regarding the 1.5 million Canadians who are unemployed.
I asked the minister when the government would face reality and take all necessary steps to halt the deindustrialization of this nation and put Canadians back to work.
The reality I was speaking about was the reality of the unemployed in the current recession. Unlike past recessions, jobs that are being lost will never reappear. Factories whose doors have been shut will never reopen.
Unless this government fulfils its responsibilities, Canadians will be stuck with a decimated economy and economic structure. Another side of the sad reality is a youth unemployment rate of 16 per cent. That is 400,000 young people out of work.
This is the generation that, after all, expects to pay for its standard of living in the future. I wonder how it will do it while it stands in the unemployment lines of this nation today.
These realities seem to matter little to the minister. When he answered my question, he made a number of statements which I believe deserve to be closely analysed.
First, the minister said: "I do not know why he and his party and its cohorts in the other place fought Bill C-21 for so long". We fought Bill C-21 for two very good reasons.
As Liberals, we believe that the government has a role to play in helping the unemployed. Bill C-21 took the government out of the UI fund, leaving the entire burden to employers and employees.
Bill C-21 also made it more difficult for unemployed Canadians to qualify for unemployment insurance.
Again, in these difficult times, Liberals believe in helping Canadians and not in abandoning them.
The minister also said, referring to the unemployed: "This year these people will get $1.8 billion more in training". That is incorrect. Last year the training budget was $1.4 billion and this year it is $1.8 billion.
From that it seems like the unemployed will get an additional $400 million instead of $1.8 billion. Even more, the modest figure of $400 million is questionable.
As the Canadian Labour Force Development Board pointed out, half of that sum will go to making up the $200 million that was cut out of the budget of the Canadian Jobs Strategy over the last two years.
Finally, even a $200 million increase is an illusion. The money that will be spent on training programs comes from the extra moneys that the government squeezed out of Canadians by increasing UI premiums and by tightening eligibility requirements.
In the end, we see the minister's statement of $1.8 billion more in training is not at all as impressive as it sounded. This case is a good example of this government's indifference toward training.
Between 1987 and 1990 federal expenditures on training as a percentage of the GDP fell from .19 per cent to .17 per cent. In 1988 the average Japanese worker received 200 hours of training. In Sweden it was 170 hours and in Canada it was less than seven hours.
If Canada wants to compete globally, we have to start moving in the opposite direction. The German electronics giant Siemens Electric has said that it would like to create 9,000 high-tech jobs in Canada but worries that this country will not be able to supply a skilled work force.
We will need those high-tech jobs to maintain the social programs and standard of living we have all grown accustomed to. To compete globally we must help unemployed Canadians and young Canadians get ready for the 21st century with a modem day, up-to-date training system.
The government fails to see that. Between 1985 and 1990, it cut the SEED program in half taking nearly
40,000	jobs away from young Canadians. The govern-
December 5, 1991

ment must draft a comprehensive training plan for Canada.
In conclusion, until it accepts that the future belongs to the country with the best trained and the most highly skilled work force and does something about that, Canada's future will be in peril.
I call on the government to do its job and provide us with a training master plan so that unemployed Canadians, young and old, can meet the challenges of tomorrow while addressing the reality of today.


Mr. Bill Kempling (Parliamentary Secretary to President of the Treasury Board and Minister of State (Finance)):: Madam Speaker, on behalf of the Minister of Employment and Immigration I welcome the opportunity to provide additional information relating to the question raised by the member for York North on October 10 on the government's labour policies.
In 1989 the government introduced the Labour Force Development Strategy. Under that strategy the government has allocated $3.1 billion this year and $3.4 billion again in 1992 on training and adjustment programs for Canadian workers. That is more than $6 billion in the first two years.
These funds have helped workers and their employers improve skills and maintain and create stable and long employment rather than make-work projects.
In his recent report on Canada Professor Michael Porter, an authority on competitiveness, noted that the recent federal government initiatives to devote more resources to training the unemployed are moving in the right direction. Furthermore, the creation of the Canadian Labour Force Development Board earlier this year is a model of the partnership that needs to be developed in Canada if Canada wishes to remain prosperous in an increasingly competitive world.
As part of the government's prosperity initiative, on October 29, 1991 the minister of science and technology and the Minister of Employment and Immigration released two discussion papers, one on competitiveness and the other on learning, which are intended to stimulate a national discussion on the factors which affect our current and future prosperity.
This national discussion will be co-ordinated by a private sector steering group on prosperity and will involve all interested Canadians.
Adjournment Debate
On the learning issues, the consultation will help identify gaps that may still exist in the area of human resource development and ways for all Canadians to address them co-operatively.
Past and current initiatives of this government demonstrate clearly the importance the government places on labour market policies to facilitate the adjustment process for Canadians and ensure a stronger and more competitive Canadian economy.


POVERTY
Mr. Ronald J. Duhamel (St. Boniface):: Madam Speaker, on November 21 I stood in this House and raised a question with respect to child poverty.
There were two parts to that question. The first one dealt with the social assistance payments that certain families receive. I was particularly concerned about single parents, most of whom are women, and then-children. The second part dealt with child care support payments.
Let us look at the situation. There are roughly five million poor in this country, over one million of whom are children, and that is a rate that has grown over time. This year there will be 1.8 million people fed in food banks in this country and roughly 40 per cent will be children. That is a deplorable statistic.
The National Council on Welfare said in its report, Welfare Incomes, that a Manitoba single parent, most often a mother with one child to raise, is earning 3 per cent less today than that parent was earning five years ago. That same parent with one child to raise is living $9,000 below the poverty line. Can you imagine that? That is almost a salary in itself.
The government will say, and I can see it coming, that it spent more. Of course it spends more. There are more people who are poor. There are more people who are collecting. It will say that it increased certain payments. That does not take into account inflation. What help is that to that mother and those children?
I want to address the question of child support payments because it is one that was not at all responded to in my question. I was terribly disappointed. We know that these payment are inadequate. We know that they are paid late and sometimes not paid at all. We know that there is a default rate between 50 per cent and 85 per cent in this country. Those are people who do not pay or who pay late.

Adjournment Debate
We know that those child care payments do not reflect actual child care costs either. We know that parents who pay out can deduct those payments from their income and those who receive the payment must declare it as income and pay income tax on an already very small payment. If you look at them all, they are in fact very small.
We know that the awards do not reflect actual costs, that they are not indexed to inflation and so the poor get poorer. Those are the poor moms and the poor children.
Studies indicate very clearly that children who are brought up in single parent families have more difficulties. They have more difficulties at school, sometimes in learning and in cases of discipline and more difficulties in getting student loans later on because of the delicate situation in which they find themselves.
Child poverty is most likely in Canada and in eight industrial countries, with the exception of the United States. I have been told that in this country today at this moment and as we speak there may be $1 billion-not $1 million-owed to parents because child care support payments have not been made.

For the love of children and their mothers, let us do something. We must react.

I will terminate with this. For the sake of the children and most often their poor moms, let us do something and let us do something now.


Kenneth Albert James: Madam Speaker, I would like to respond to my colleague from St. Boniface. I know he has a very sincere interest in children and their rightful financial position in our country.
However, I would like to raise a couple of points about the use of the numbers in the report that he refers to which comes from the National Council on Welfare. It compares provincial assistance benefits and I bring this to his attention. First, he knows welfare falls under provincial jurisdiction, not federal, and the federal government therefore does not set the social assistance
benefits. The province does that. The government, as he should know, contributes significantly to the provinces to help them meet these financial obligations.
These figures are pretty substantial. The federal contribution to the provinces in 1991-92 was estimated to be in the area of $6.4 billion. That is a lot of money under the Canada Assistance Plan.
Second, we think it is a bit misleading to compare welfare benefits with the statistics of Canada's low income cutoff points that were used because Statistics Canada itself denies that its low income cutoffs are poverty line. So we must be a little careful with that. These cutoffs are best used for making comparisons across time and across sections of the Canadian population, but not as a measurement of poverty.
Further, since 1984 the federal government has taken on a number of initiatives. The member opposite mentioned that we would talk about that. The maximum child tax credit payable in respect of a child has increased from $367 in 1984 to $585. He talks about inflation, but that is a 16 per cent increase after inflation is taken into account.
Further, a child tax credit supplement of $200 per child under the age of seven was introduced by this government in 1988 and low income families now receive about $1,000 of child benefits for every child.
A number of initiatives, new measures and federal-provincial shared programs have been introduced.
I would like to reiterate that this government has a commitment to children and families with children and that is why the Speech from the Throne announced that the government was reviewing its policies in relation to the family. To that end we will be making some new announcements, in which the hon. member will be interested, in the near future.


Madam Deputy Speaker:: The motion that the House do now adjourn is deemed to be adopted. The House therefore stands adjourned until tomorrow morning at 10 a.m.


[Stage Direction]
The House adjourned at 6.36 p.m.
[Stage Direction]
Friday, December 6,1991