1991-10-11

Mr. Dennis Mills (Broadview-Greenwood) moved:: That, in the opinion of this House, the innovations and jobs created by Canadian entrepreneurs constitute the best hope for the Canadian economy and society and that, therefore, the government must take immediate steps to reduce interest rates, to lower the level of the Canadian dollar, to reduce the paper burden on small businesses, and make available more funding and loan guarantees for early-stage companies.
He said: Madam Speaker, I am honoured to have the opportunity to begin today on behalf of the Liberal Party of Canada, Her Majesty's Official Opposition. I think that too often in this House over the last few months we have forgotten about the Canadian entrepreneur that exists in this country.
When I first came to this city 12 years ago as a young entrepreneur I never dreamt at that time that I would ever have the opportunity to stand on the floor of this House and debate on behalf of the 900,000 entrepreneurs that create almost 90 per cent of the jobs in this country.
Most of the entrepreneurs of this country today are in deep pain. The loss of confidence in our community, the low morale, have produced a chain reaction. It has produced a chain reaction which is causing fear, tension and a lack of confidence. Most entrepreneurs feel today that their government, their leaders, are in fact not listening to them. We know that the government, day after day, especially in the last couple of months when we tried to put forward questions regarding high interest rates, the high dollar, and we talk about the problems and plight of small and medium-sized businesses in this
country, the government always comes back with numbers and statistics.
It is a reality that interest rates have come down by almost 6 per cent in the last year. It is a reality that inflation is reduced. In fact if you would take away the government inflation in this country right now inflation is practically zero. Those are realities.
Where I would like to challenge the government today is not with a debate about statistics. I would like to challenge the government today on the way that it has handled the national will of this country. I believe that the problem we have in this country today is the fact that there has been a fracturing of the national will, the national spirit and nowhere is this fractured national will more evident than with the 900,000 entrepreneurs in this country.
Entrepreneurship is a state of mind. It is an attitude. It is an attitude where if you are feeling confident in the environment then you take risk and that risk when properly managed is probably the greatest wealth creator this country has ever had. It seems to me that this government has not focused on that asset of 900,000 entrepreneurs. That has led to this fracturing of national will.
In 1961, John E Kennedy said: "We are going to put a man on the moon". With that single sentence, he began the process of galvanizing the will of Americans from school children, grade schools, high schools, universities, small business, big business. A whole new spirit invaded the American system. In 1969, when Neil Armstrong landed on the moon, the American will was at its most galvanized point in many, many years. That is what is missing in this country.
That will, which has been fractured in this country, needs immediate attention. The force of the 900,000 entrepreneurs is the force that I believe members of the House should be paying attention to.
Can you imagine, Madam Speaker, 900,000 enterprises in this country? Can you imagine if in the next 24 hours each one of those enterprises hired just one more person? That would reduce our unemployment rate by

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almost 6.5 per cent, and it would be a savings on the treasury of almost $8 billion to $10 billion.
Can you imagine if over 60 days they hired a second person? That would put the economy of this country back on track. In order to get the entrepreneurs of this country thinking in that direction, we have to provide the proper environment.
What this government has failed to do is read what motivates the entrepreneurial spirit of this country. When the Minister of Finance came to power, Mr. Wilson, in 1984, he made a commitment to the people of Canada that he was going to address the complicated tax system of this country, a tax system that I was a part of for many years.
He made the commitment that we would redesign the tax system of this country. The government failed in comprehensive tax reform. It went ahead, and instead of honouring the commitment that many members on that side made during their leadership campaign of saying we must put comprehensive tax reform into this city, task forces when they were in opposition, they somehow just ignored the words and the radical tax reform which they promised was never implemented.
In fact, the opposite happened. We ended up having a further complication of the system and a further 32 tax increases. That is precisely the thing that is a disincentive to the entrepreneurial spirit of this country.
For the next seven years, this government has built a litany of disincentives for the 900,000 entrepreneurs in this country. It is not all related to the tax system.
The free trade agreement. I did not totally agree with my previous leader, Mr. Tbrner, when he stood up in this House and said, "If I was running this country, I would rip up the free trade agreement."
I thought when I was campaigning during the last election that those words were a little too aggressive. Upon reflection and upon examination, I think Mr. Tbrner was right. I cannot see any benefit to this current free trade agreement.
I think this free trade agreement has been one of the biggest hoaxes perpetrated on the people of Canada, and ultimately, the entrepreneurs of Canada. When I say "entrepreneurs", many of them on blind faith bought in.
I can remember when I was campaigning in Broadview-Greenwood in the last election and after the debate, people were saying: "Mr. Ibmer convinced me. This is not a good deal for Canada." Then, almost magically, full page ads appeared in newspapers in my city such as The Sun, The Star, The Globe saying: "No, do not listen to Mr. Tbrner. This free trade agreement is a good deal." The entrepreneurship of the country bought into this government's free trade agreement. With entrepreneurship in this country, if it were asked today, would they still buy those full-page ads and tell their staff, their employees, them customers, that it is a good thing? I believe they would think twice. In fact, I would venture to say that probably all of them would decline on buying those full-page ads.
The litany of disincentives to the entrepreneurial spirit in this country goes on and on and on. One cannot galvanize the will of a nation when one is constantly putting out these disincentives to productivity.
Let us just deal with the issue, for example, of productivity. This government constantly talks about productivity; we must be more productive, we must be more innovative. I worked for one of the greatest entrepreneurs in this country for two years. The man's name was Frank Stronach and he is the chairman of an organization called Magna International. Magna International makes auto parts. It is probably one of the most competitive industries in the world, making auto parts, because one is naturally competing in a very tough market. Frank Stronach had a very simple answer when people would ask him: "What is the secret of your success?" He would say: "Well, I make a better product at a better price". Then people would say: "But Frank, how do you motivate people to make that better product at a better price?" Again he would simply answer: "You must treat your people fairly."
That is what we in this House forget.
October 11, 1991

Dofasco Steel in Hamilton says it clearly. They say: "Our product is steel but our strength is our people". This is where we miss in this House. The strength of this nation is our people.
We have to ask ourselves, all sides of this House: "Are we treating our people fairly?" I bet there is not a member in this House who would not acknowledge the fact that the tax designs of this country, this government, are the most complex-they are definitely unfair-and the most inefficient and, I bet you, they rank with being the worst in the world.
It seems to me that rather than having ad hoc decisions to help the 900,000 entrepreneurs in this country, it is time that we, in this House, put forward a comprehensive approach. Let us begin with the one instrument that the Government of Canada controls that affects every person in our nation and that is our tax system.
I believe that if we had a comprehensive approach to tax reform, that is the secret to motivating the will of this people to becoming one of the most productive nations on earth.
But the converse of that is also true. If we continue to be captives of officials in this city who tend to work as word smiths, tend to forget about what drives people, tend to forget about what drives entrepreneurs, we are not going to advance.
We are going to have a long day today to debate the difficulties of business in this country. We are not just talking small business, we are talking the medium size and the large corporations of this country. They are all crying out for help. They all ask themselves these days: "Does anybody up there in Ottawa listen? Does anybody up there understand the kind of pain we are in? Does anybody up there have any ideas?" Quite frankly, it is all well and good for those of us on this side of the House to get up and challenge the government for its lack of political will or its lack of action.
It is also incumbent upon us on this side of the House to throw some challenges in a very specific way at the Government of Canada and say: "Why are you not experimenting? Why are you not trying to put into place some of the ideas that we are hearing from the people we are talking to when we walk the streets of our ridings or visit other parts of the country?"
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I have one very specific recommendation for the Government of Canada. I personally believe, and I know there are a few other members in this House who believe, and I am not speaking on behalf of the Liberal Party of Canada right now, but I am speaking on behalf of thousands of people in this country, that it is time for a comprehensive approach to tax reform.
I personally believe in the single tax system. I believe a single tax of 20 per cent, corporate and personal, would probably send a signal to the people of this country that we are serious about radical tax reform. I know John Bulloch at the Canadian Federation of Independent Business thinks I should be banned to Siberia because my tax system is asking smaller business to go from 10 per cent to 20.
I say to Mr. Bulloch, and I say to the entrepreneurs: "Would you not rather have a 20 per cent rate and throw away the thousands and thousands and thousands of pages of tax law, rules and regulations? You could cut down on your paper burden. You could cut out the red tape. You would save on administration and overhead".
Just imagine a small company that might have a net profit of $100,000 a year. Under the current tax system it would pay $10,000. Under the single tax it would pay $20,000. But it would save in the paper burden, and in the cutbacks in accountants' fees and lawyers' fees. More important, it would have a motivated labour force, because it would not spend its time on negative energy trying to figure out all the rules and regulations and exceptions to exceptions, all the disincentives to the creative process, the things that suck the entrepreneurial juice out of a person when they are trying to imagine and create ideas that expand a business and expand wealth. It would be adding jobs to the labour force rather than cutting back and diminishing. I believe that a single tax system would go a long way in advancing the strength of entrepreneurship in this country.
The second thing I would like to challenge the Government of Canada on is its communications practices. I noticed last week that the government sent out a message on the Constitution to every household in Canada. An Invitation to Help Build a new Canada.
I am not disinterested in the Constitution. But I can tell you that most of the people that I talk to suggest that yes, the Constitution is important, but it seems like the

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only thing we talk about in this country right now is the Constitution.
It seems that this government is going to extraordinary pains to communicate the message of its proposal to the Canadian people. I really do not have a problem with that. What I do have a problem with is the fact that there are fabulous programs and services that exist within the Government of Canada. There are fabulous programs within the Federal Business Development Bank, match making exercises where investors can be matched with small businesses that are short of capital.
There are fabulous programs in many other departments of government which, I would say, 99 per cent of the businesses in this country do not even know exist. My experience is that it is only those corporations which can afford to have government relations people working in Ottawa, or lobbyists working in Ottawa, that know these truly good programs exist within the Government of Canada, within the bureaucracy of Canada.
I must confess at the same time that I feel there is a fine line here because we know that this Prime Minister has an extraordinary sort of communications skills. His tactical skills sometimes makes me nervous. However, I still believe that the Government of Canada should be communicating to the 900,000 entrepreneurs the fact that there are programs and services available to them which can help relieve some of the pain that they are going through. This is my second recommendation. The first is comprehensive tax reform. The second is a very specific, small business-directed campaign on programs and services available.
The third point that I want to make is on tourism. I think tourism is a gem we have in this country that has been neglected. It seems that very few officials understand the power of tourism in this country. If I were to make a third recommendation to the government in terms of helping the tourism sector of this economy which is, by sector, the largest job creator we have, I would quadruple the tourism budget in this country. Not only does it create jobs, but it also works at galvanizing the will of this country, and making us feel good, and making us feel proud about this country again which is something that we are all in desperate need of.


Mr. Paul Martin (LaSalle-Emard):: Madam Speaker, first of all, I would like to congratulate the hon. member for Broadview-Greenwood on his speech. He has always had an abiding interest in the concerns of small businesses, and today's speech is eloquent testimony to his interest and dedication.

The member for Broadview-Greenwood, who has taken a major lead on the issue of tax reform in this country, has spoken today again about his concern, and the important implications for small and medium-sized businesses and, indeed, large businesses. He asks how one can reduce the tremendous paper load and simplify the system so that Canadians can function in the global economy.
There is another area as well on which our speaker has been very eloquent in the past and that is the whole issue of environmental technology. This is something that he shares with many of us in our party as, indeed, the issue of tax reform. Environmental technology is one of the great growth areas for this country. It is, unfortunately, one that the current government is completely neglecting. As I understand it, it may well be that it is because it does not understand that Canadians can compete with anybody in the world.
I believe, and I know that the previous speaker believes, that there is a tremendous role for small business in the development of environmental technology. I think that it would be very helpful to this House, and to Canadians across the land, if the speaker was allowed perhaps some time to give us his views on the relationship between small and medium-sized businesses and that which we in the Liberal Party feel is very important, the opportunity for Canadians to take the lead in this very important area of the economy.


Dennis Joseph Mills: Madam Speaker, I thank my colleague for LaSalle-Emard for his question.
I believe that the support for environmental technology in this country is something that can create a new thrust for jobs which we are in desperate need of in this country. With almost two million people unemployed, and a planet that is deteriorating at the rate that ours is, I
October 11, 1991

think it is absolutely ludicrous for us not to blend the two; the unemployed factor and also the environmental technology that we have in this country that is not given proper exercise or proper support.
I attended the Water Pollution Control Federation Convention last Monday in Toronto. There were 12,000 delegates from all over the world and close to 500,000 square feet of exhibits of environmental technology from all over the world. We did not even come close to having substantial representation, and it was in Toronto, Canada.
I totally support my colleague's view that we must, for the sake of the planet, factor in the fact that we have human capital available and willing to work on environmental technology. I think it is incumbent on this government to get on with it right away.


Mr. Eugene Bellemare (Carleton-Gloucester):: Madam Speaker, I want to congratulate the hon. member for Broadview-Greenwood on his excellent presentation and his initiative in moving the motion before the House. Like the hon. member, I am familiar with the advantages of small business. We are lucky to have 900,000 entrepreneurs who are the real key to economic development and job creation across this country. It is always risky to put all your eggs in the same basket and to consider only big business. The hon. member is absolutely right.
I would like to start off by saying that I agree the economic environment is extremely important and that our banking system, which influences the economy, is faced with two problems-in fact, I and all average Canadians are very much aware that interest rates and the value of the Canadian dollar can make or break small business.
Madam Speaker, I would appreciate the hon. member's comments.


Dennis Joseph Mills: Madam Speaker, I thank my colleague for the question. The problem we have with small business vis-a-vis the interest rates and the dollar is that at the same time that interest rates go up in this country the banking institutions begin their process of restricting credit. One of the scariest things for small and medium
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sized entrepreneurs is when that bank manager calls them in and says: "Listen, even though I am making a little bit more, I have to tell you that I am curtailing your line of credit or even reducing it because I am a little bit nervous about your cash flow and your ability to handle it".
The other thing happening right now is that the government talks about the fact that interest rates have come down 5.5 or 6 points in the last year. There is a sense of: "Wow, isn't that great". Do you know what is happening, Madam Speaker? None of the banks are lending any money. There are big posters in bank windows saying: "Mortgage rates 9.5 per cent", but go and try to get it. If you are a small or medium size business go and see if they will. Interest rates are down now, and that is usually a signal that the economy is getting better. Well, it does not seem to be getting any better for the banks.
That crushes the entrepreneurial spirit of this country. When that is multiplied by 900,000 entrepreneurs, that creates a national malaise.
As my colleague from Willowdale said yesterday, for every penny the dollar goes up we lose $1.3 billion worth of exports. In the last six weeks the dollar has gone up by almost 3 cents. That is almost $4 billion worth of sales. Translate that into jobs, mostly in the manufacturing sector.
The interest rate problem and the high dollar are causing deep pain for the 900,000 entrepreneurs of this country. When the government says that the interest rates are going down and the dollar is holding, and we hear these statistics every day, it is missing the point.
We must go beyond those statistics and see the spirit, the will, and the heart of the entrepreneurs. Those statistics, at this point in time, do not mean a dam thing.


Hon. Tom Hockin (Minister of State (Small Businesses and Tourism)):: In 1980, 1981, and 1982 interest rates were at 22 per cent and inflation at 13 per cent and the dollar was where it was. Look what happened to the economy then.
Is he suggesting that with a lower dollar and higher interest rates we would have a better economy, as we did in 1980, 1981 and 1982?

October 11, 1991
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Dennis Joseph Mills: Madam Speaker, I am so pleased that the minister responsible for entrepreneurship for the Government of Canada has entered into the debate. He refers to that world-wide recession of 1981 and 1982. I was here in this town at that time working for Mr. Trudeau, the then Prime Minister. I want him to know that we did something different then.


Mrs. Bourgault:: What did you do?


Dennis Joseph Mills: We did let the deficit rise, but we put people back to work. We had a special recovery program which put people back to work. It was a cushion for the pain that was going on in this country.
We also did another thing. We were also very sensitive to the fact that if we were going to get out of this high inflation-and it was high-we were going to have to do it with the will of the people. That is when we came out with the six and five program. The six and five program was an effort to recognize that the only way we could pull out of that mess was by galvanizing the will of the people and getting them all involved in the anti-inflation fight.
When we left office in 1984, we left the Conservatives with one of the hottest, most productive economies in the world. Yes, we left with a deficit of $180 billion, but over the next seven years the Conservatives blew it. They blew it. They doubled the debt because they forgot one fundamental thing. They want to chop this country up into blocks but it does not work that way. It is necessary to galvanize the national will, but their programs are not designed in the national sense. They tend to be in blocks and in regions, and that will not work.


Mr. Steven W. Langdon (Essex-Windsor):: Madam Speaker, I don't know where to begin, having just heard that the six and five program galvanized people across this country. It certainly galvanized people across my constituency. It galvanized them into throwing the Liberals into third place in Essex-Windsor for the first time in recorded history. It galvanized people in other parts of this country to ensure that the Liberal Party came back to this House with 40 seats, the lowest level of support it had ever received in any national election since 1867.
It certainly galvanized people. I have to say it galvanized the labour movement too. It galvanized the labour movement almost as much as the PSAC strike has galvanized labour, as the PSAC efforts to win justice for clerks, for the low-paid people in the Public Service,
while those at the top will get their bonuses. They were sent back to work by this government.
That has galvanized the labour movement too. It galvanized the labour movement in such a way that it will mobilize across this country as I gather it mobilized last night in my constituency of Essex-Windsor to welcome one of the figures who represents this government's economic policies, the Minister for International Trade. He was met with anything but pleasure in the city of Windsor when he visited it yesterday.
Yes, there are events which can galvanize people but there are also policies which can galvanize an economy. This Conservative government has been in power since 1984 but sometimes you would not realize it the way it tries to blame the Liberals for its mistakes. Unfortunately this government has not been able to find policies to give this economy the drive and dynamism to give us growth and economic fairness, or to give us the kind of employment people need throughout this country.
Let me deal with each of these points. We talk first about employment because the latest unemployment figures came out today. I have already said they are good news for the country because they show a decrease in the unemployment rate from 10.6 per cent to 10.2 per cent. The fascinating thing about these statistics is that in the province of Ontario the decrease was from 9.9 per cent to 9.2 per cent. That was by far the biggest decrease and the most important part of the over-all decrease within the country evident any place in Canada.
Why has that taken place? It has taken place because the government in the province of Ontario has taken the problem of getting people back to work seriously. It has taken the concerns of Canadians, the concerns of small business and the concerns of farmers, it has taken all these concerns seriously. The results are starting to show up in the national statistics that came out today. There are 40,000 fewer people unemployed in the province of Ontario as of this past month of September.
The budget of the province of Ontario which this government on the other side so strongly criticized and condemned is in fact showing itself to be getting people back to work while national policies continue to leave the country in stagnation, while national policies continue to leave us with unemployment rate changes in provinces such as that in Quebec for instance.
October 11, 1991



If we consider the Province of Quebec which applied this government's economic policies, decided to cut spending and opted for the politics of austerity, what are the results? The result for the month of September was an increase in unemployment.
In Alberta, another Conservative province which has followed the national government in trying to squeeze things in the face of a recession, again the unemployment rate has gone up.


Mrs. Vezina:: But speaking about Ontario and Manitoba-


Steven W. Langdon: I talked about Ontario already. The unemployment rate there decreased by .7 per cent, from 9.9 per cent to 9.2 per cent. Compare that 9.2 per cent figure to the Quebec figure of 12.1 per cent.
The politics of austerity in Quebec-

The politics of austerity have created an unemployment rate of 12.1 per cent in Quebec. In Ontario, where the government is applying an expansionist policy, the unemployment rate is down to 9.2 per cent.
Madam Speaker, I think this is a clear indication that the economic policy they have in Ontario was the better choice.

If we move to the question of growth, I think that this government has also demonstrated its inability to generate the kind of broad-based fair growth across this country which would give us a recovery from this recession to the benefit of all Canadians. Instead, what we have seen is a continuation of regional differences which show up again in the unemployment rates that came out today.
In Newfoundland 17.8 per cent of the population is out of work, in Nova Scotia 12.6 per cent is out of work, in New Brunswick 12.8 per cent, and in Quebec 12.1 per cent. It is only in provinces like Ontario that have chosen policies aimed to help people that the unemployment rate is down to 9.2 per cent.
If we take the policies of this government, and we could take a great many of them but let us just take one,
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let us take its tax policies. We were at the very height of a recession, the very worst period of economic development for our country in 10 years. What does this government decide to do? It decides to put into effect a massive new goods and services tax, a 7 per cent hammering of consumers across this country. I believe that 7 per cent hammering had the effect of prolonging the recession, of making recovery from the recession significantly more difficult for our economy. It was a move in taxation terms which has also been especially painful for small businesses.
I talked to small business people in my constituency and in other constituencies throughout this country. For instance, the foundry manufacturers, the mould makers in Windsor, had to come to me as a New Democrat finance critic to get action from this government on a piece of absolute nonsense which had been put into place because of the GST.
Mould makers, as anyone who knows the industry will know, move their goods back and forth across the border, especially in areas like Windsor, for different processes which are undertaken with respect to those moulds. Those moulds, for instance, have to be etched. Often these are sent to the United States to be etched. The Government of Canada had decided that every time these moulds were moved back and forth across the border they had to pay the GST again, regardless of whether the GST had already been paid on a previous movement across the border.
It took us three months to persuade the Department of Finance to finally eliminate that provision which was so seriously damaging hundreds of mould-making firms in the city of Windsor and in many other communities in southern Ontario.
We were pleased that the Department of Finance finally moved. However, it put a tax like that into effect, not realizing how detrimental the effects of that tax would be when we live right beside the United States, a country which does not have a tax of this sort anywhere in its economy.
We see massive increases in cross-border shopping spending. We have seen massive increases in the number of Canadians going to the United States on tourist trips this year. We have seen an increase of 10 per cent this year alone in the number of tourists choosing the United States instead of Canada. At the same time we have seen

a decrease of 2 per cent in the number of American tourists coming to this country.
This shows us what the GST is doing to economic development in this country. It is seriously damaging the prospects for the future of our land.
I mentioned not just growth, not just the question of employment, but the question of fairness, because that, too, is important. What we have seen from this government from 1984 is a series of tax changes which have benefited those at the top and hurt those at the bottom. We have seen, for instance, $100,000 in exemptions provided for capital gains tax benefits. This is of benefit to that small percentage of people at the top of our economy who earn a great deal of money from capital gains.
We have seen the top rate of income tax, which the Liberals first decreased down to 34 per cent, brought down even further by this government to 29 per cent. The decrease has been combined with a shift of taxation to the ordinary people of this country, a shift to the GST which falls on middle and lower middle class Canadians, working class Canadians, a shift to the manufacturers' sales tax before that, which was increased year after year after year by this government. So the ordinary people in this country pay much more tax than they did in 1984, while those at the top pay less tax. We have seen unfairness. We have seen lack of action with respect to unemployment. We have seen lack of action with respect to growth. Instead we have seen things that have hurt growth in this economy.
We have to take a new course. I think the course which the Liberals have suggested is in a sense some of the same old stuff which they have tried to pursue in the past and which has not built a solid basis for our economic development in the future.
For us as a party, we certainly would hope that the next election will bring changes that make it possible for us to start to get some of those benefits which Ontario is enjoying of dynamic expansion and of reduced unemployment which we see in the unemployment figures today.


Madam Deputy Speaker:: I will interrupt the hon. member. There will be two minutes after our daily
routine business for him to conclude and after which we will proceed to questions or comments.
It being eleven o'clock a.m., pursuant to Standing Order 30(5), the House will now proceed to Statements by Members.


STATEMENTS PURSUANT TO S. O. 31
Mr. Doug Fee (Red Deer):: Madam Speaker, this weekend is Thanksgiving when Canadians offer thanks for the many blessings that we enjoy in this great land. As we offer thanks and pray for the future of our nation, it is appropriate to reflect on the contributions that families make to the Canadian way of life. It is also appropriate that Family Service Canada sponsors National Family Week just before Thanksgiving.
I thought much of my family this last week and how important they are to me. My wife and youngest son celebrated their birthdays at home while I was here. I had to console myself with the fact that what we do here will help all Canadian families.
Programs like the recently announced $136 million commitment by the federal government to help eliminate violence against women, children and elders are unfortunately necessaiy. Other federal government programs, like the family allowance, child tax credits and supplemental tax credits for children under six are all important to families.
The government is committed to families and I encourage that commitment.


QUEEN'S UNIVERSITY
Mr. Peter Milliken (Kingston and the Islands):: Madam Speaker, 150 years ago Queen's University was established by royal charter. The document was granted by Queen Victoria on October 16, 1841, after years of effort by the Presbyterians of Upper Canada. Classes began on March 7, 1842, when Queen's College at Kingston opened a small wood frame house on the edge of the city with two professors and 13 students.

Known as Queen's University since its separation from the Presbyterian Church in 1912, it is one of the oldest and most distinguished universities in Canada with a long established tradition of service to Ontario and the nation. Today there are more than 70,000 Queen's alumni living and working throughout Canada and in more than 100 countries around the world, including nine hon. members of this House.
This year, Queen's invites Canadians everywhere to help the university celebrate 150 years of achievement. Oil thigh na banrighinn a'banrighinn gu brath, chagheill.


NATIONAL AIDS AWARENESS WEEK
Mr. Ricardo Lopez (Chateauguay):: Madam Speaker, the World Health Organization predicts that by the year 2000, 40 million people, including 10 million children, will be suffering from AIDS. In the United States,
100,000	people have already died of AIDS. According to recent Canadian figures, more than 5,000 Canadians have AIDS and their numbers are increasing.
Madam Speaker, this is National AIDS Awareness Week, an important event indeed. Front line workers already working in this area across the country will try to make Canadians more aware of the existence of AIDS, and its disastrous effects, and how it can be prevented.


Madam Deputy Speaker:: I am sorry but I must interrupt the hon. member. The hon. member for Scarborough-Rouge River.


VINAY DOPHE
Mr. Derek Lee (Scarborough-Rouge River):: Madam Speaker, in what are most definitely compassionate circumstances, the Canadian government has again refused a request for a visitor visa.
Almost four years ago, 11 year old Vinay Dophe was the innocent victim of an acid attack which left him sightless. Thirteen operations later, the metro Toronto
Herbie Fund helped bring young Vinay to Toronto sick kids hospital for further treatment.
As Vinay prepares for yet another operation in which he will receive a cornea transplant, he would like his mother by his side. The Government of Canada has refused on two occasions to give her a visitor visa.
A former federal Ontario Human Rights Commissioner has already written to the Prime Minister on behalf of Vinay and his mother. I too would like to lend my voice to his appeal and call upon the minister or the government to reconsider the visa, or grant a permit to Mrs. Dophe so that she may be by the side of her very brave son for his upcoming and delicate surgery.


THE UNEMPLOYED
Mr. Cid Samson (Timmins -Chapleau):: Madam Speaker, I want to appeal to the Prime Minister and his minister of Finance to avoid making political capital at the expense of formerly unemployed Canadians who are now on welfare.
In fact, instead of rejoicing in the latest statistics on unemployment, we should deplore these figures which obscure part of the facts, unemployed workers who have exhausted their unemployment insurance benefits.
Madam Speaker, we cannot afford to sweep under the rug the fate of thousands of Canadians who during the past months have been looking for jobs that do not exist.


NATIONAL UNITY
Mr. J. W. Bud Bird (Fredericton-York-Sunbury):: Madam Speaker, the next few months present Canadians with a unique opportunity to contribute their opinions to the constitutional design for Canada's future.
This is a special opportunity for members of Parliament as well to stimulate such dialogue in their constituencies and to encourage all citizens from all walks of life to express their views about our country.

The 28 proposals for political and constitutional change which are now before us represent a critical and constructive stage in Canada's long journey toward national unity. They demand and deserve our most dedicated deliberations.
In my riding of Fredericton-York-Sunbury in any possible way, through citizens' committees, at public meetings and in every other such forum, our common theme will continue to be: "Please come. Let's talk about Canada."


FOOD BANKS
Mr. Jean-Robert Gauthier (Ottawa-Vanier):: Madam Speaker, the Thanksgiving weekend is coming up, and at this time of the year, many Canadians give thanks for the abundance they enjoy.
However, there are also many Canadians who have not been as lucky and do not enjoy that abundance.

Within the shadow of the Peace Tower, Madam Speaker, the Ottawa Food Bank operates year round supplying emergency hamper programs, shelter and soup kitchens.
This weekend, the Ottawa Food Bank is asking area residents to please think of those who are needy, and give generously. Food can be dropped off at any of the 37 major grocery stores tonight and tomorrow.
There has been an increase in demand for food of 20 per cent over last year. This is not good news. This should not be happening in a society where apples in this area rot in the fields because producers are overstocked.
Food banks all across this country need donations. Please give so that many others can give gracious and thanks to the Lord for this great country.


ENTREPRENEURSHIP
Mr. Marcel R. Tremblay (Quebec-Est):: Madam Speaker, this year, the first day of October was a special day for a businessman in my riding.
In fact, Nicola Cortina, a jovial gentlemen, officially inaugurated his pasta plant, Cortina Inc., the only plant in Quebec that produces fresh pasta and sauce.
This ultra-modem plant, Italian in inspiration, which will enable him to compete with the Americans, was built thanks to a partnership of federal, provincial and municipal levels of government, and to financial assistance from the private sector.
Mr. Cortina, a real fighter, known as a persevering and sometimes even obstinate man, has taken advantage of all resources at his disposal to carve out an enviable niche on the market, both in Canada and throughout the North American continent. This is someone who isn't afraid to build! Good luck, Nicola!


THE ECONOMY
Mr. David Dingwall (Cape Breton-East Richmond):: Madam Speaker, I wish to rise today to underline the seriousness of the economic situation within my constituency, and indeed, on the island of Cape Breton.
Today it was announced that the unemployment rate in my constituency is in excess of 17.5 per cent, which is twice the national average.
We have steel workers without jobs or bridge benefits. We have miners without jobs or hope of jobs. We have construction workers who are unemployed and have been denied the privileges and the benefits of an older workers' adjustment program. We have fishermen without fish to catch or benefits in order to feed their families. Our youth have no hope of economic opportunities in Cape Breton.
I would urge the Minister of Employment and Immigration to work in concert with Enterprise Cape Breton and the various municipalities in industrial Cape Breton to put together a measure of job programs in order to sustain those individuals over the winter months.
I see that the minister responsible for the Cape Breton Development Corporation is in the House. I would hope that he would use his good offices to assist in a very, very difficult situation.
October 11, 1991


COMMENTS IN CHAMBER
Ms. Dawn Black (New Westminster-Burnaby):: Madam Speaker, Canadians are very disturbed at the justification offered for racist and sexist remarks made in the House yesterday. We are all subject to heckling here. Sexist and racist remarks are not simply personal insults, they are insults to a significant portion of the population.
How do those members think racial and ethnic minority people feel when a member of Parliament refers to a committed, active and respected member of Parliament by a slave name? How do those members think women feel when women members must deal not only with all of the regular put-downs of this place, but insults that are directly related to their gender? It not only shows a lack of respect for the individual, but for women in general.
There is never a justification for racism and sexism. It is not simply a matter of decorum. Racism and sexism do not belong in the House of Commons nor anywhere else in Canada.


SUDDEN INFANT DEATH SYNDROME AWARENESS MONTH
Hon. Alan Redway (Don Valley East):: Madam Speaker, this is SIDS, or Sudden Infant Death Syndrome Awareness, Month. This term refers to the sudden and unexpected death of an apparently healthy baby. Such a death is a tragedy that strikes not only the mother and father of the child, but also other children in the family, their grandparents, playmates, teachers and everyone in the community.
Few are aware that SIDS is now the leading cause of infant death under one year of age after the newborn period. The number of infant deaths from other causes has decreased while death from SIDS have not.
From November 1 to 3, Prince Edward Island will be hosting the annual Baby's Breath Conference sponsored by the Canadian Foundation for the Study of Infant Deaths.
I would urge everyone to participate in the activities aimed at increasing the awareness of SIDS during the month of October. Families affected by this syndrome need our compassion. Only through the concerted efforts will we make progress in understanding and some day eliminating this phenomenon.


IMMIGRATION
Mr. Jim Karygiannis (Scarborough-Agincourt):: Madam Speaker, on September 27, immigration adjudicator Susan Lavendar ruled to grant refugee status to a Trinidadian couple who had been waiting 23 months for action on their case. Her decision, based on the Charter of Rights and Freedoms, indicated that the long wait to which the couple was subjected was an unreasonable delay, causing them mental and physical suffering.
Unfortunately, this type of delay is not the exception, but the norm. People all across Canada, particularly in the metropolitan Toronto area and in my riding of Scarborough-Agincourt, are experiencing exactly the same mental and physical hardship.
What about the thousands of cases still sitting in the backlog? Where is the justice for them? Even the immigration adjudicators, appointed by this government, recognize the injustice of the situation.
I call upon the government to alleviate this suffering and set up a review process which will find a reasonable and constitutional solution to the immigration backlog.


THE CONSTITUTION
Mr. Peter L. McCreath (Parliamentary Secretary to Minister of State (Finance and Privatization)):: Madam Speaker, once again Canadians and their leaders are engaged in a round of constitutional discussions.
Our government has come forth with a comprehensive set of proposals which seek to respond to all the various deficiencies that have been identified by one group of Canadians or another.
In particular, the proposals attempt to respond to alienation from western Canada to the unacceptability of the status quo to the indigenous peoples of Canada and to the sense of betrayal that is so widespread in Quebec resulting from what, to many Quebecers, was the great betrayal of 1982 and the rejection of the Meech Lake Accord.

Oral Questions
Most Nova Scotians do not take great issue with the constitutional status quo. Not surprisingly, many say they are bored or even disgusted that their elected leaders and much of the energy of government will once again be distracted from what they see as far more pressing economic problems.
To these people I say we must be prepared to listen to the frustration and imperatives of our fellow Canadians if we wish them to be sensitive to our needs and concerns.
Without a united Canada there cannot be an economically strong Canada. This time it is the Canada round. I urge all Canadians to get onside and participate.


CFB CORNWALLIS
Mrs. Coline Campbell (South West Nova):: Madam Speaker, I rise to bring to the attention of the House an endeavour put forth by the Committee for Base Cornwallis in the Annapolis-Digby area concerning a United Nations peacekeeping training centre. This would be a centre in which armed forces from other countries could be trained in Canada.
Canada is well known for its efforts on peacekeeping. This would extend our role as international peacekeepers if we could train for the United Nations' future peacekeepers.
About a month ago, Premier Cameron presented this proposal to the Prime Minister. This week, the Minister of National Defence told the committee nothing would be done.
I call upon the government to start negotiating with the United Nations to see if there are countries which would like to have their troops trained in Canada in peacekeeping. We have the facilities at CFB Cornwallis. We would welcome these foreign troops. Will the government at least pursue this matter with the United Nations.


AGRICULTURE
Mr. Len Taylor (The Battlefords-Meadow Lake):: Madam Speaker, I would like to ask today rhetorically where has the Minister of Agriculture been for the last
seven months. The population of the farm community in Canada has been calling for farm payments for many months. Since spring, the New Democrats, the Saskatchewan New Democrats, the wheat pools, the National Farmers' Union have called for payments for farmers.
It just so happens that over the course of this period of time, the Minister of Agriculture, who is supposed to defend the interests of agriculture producers., has been saying that there is no money for farmers in western Canada. In Rosetown, his own constituency, he stood up and said there was no money for farmers. Yesterday, magically, there was $800 million announced. That was very appropriately timed, Madam Speaker.
Where was the minister when the people were calling for an agriculture payment? He was not there.



ORAL QUESTION PERIOD

[Stage Direction]
[English\

Mr. Maurice Foster (Algoma):: Madam Speaker, I want to put my question to the Minister of Agriculture.
Last year the government cut farm support programs by 40 per cent. This year the government has been stonewalling farmers' demands for emergency cash assistance. Now we learn that the government's announcement yesterday for farmers may not actually be paid for the next six months.
Why is the government refusing to make the payments to farmers now? These are farmers who are facing the loss of their farms, their homes and their livelihood this fall. Why is the government stonewalling?


Hon. Bill McKnight (Minister of Agriculture):: Madam Speaker, the hon. member must realize that we are not stonewalling. We have been working with the farm industry over the last number of months. Our intent is to support agriculture, and we will be doing that.
Of the $1.5 billion that will flow between now and Christmas and of the $1.1 billion originally designed to flow from January to June, adding to it the announcement yesterday of an additional $800 million, will amount to on a seeded acreage basis, if you want to use that as a calculation, of $40 an acre assistance in the
October 11, 1991

programs that have been designed by the farmers, the provincial governments and the Government of Canada.
If the hon. member will reflect back to when he sat on the government benches when interest rates were at 24 per cent, when farm land was being taken over, when inflation was running at 13 per cent, he will recall that there was no-and I repeat, Madam Speaker, no-assistance coming from the government that he was part of.


Maurice Brydon Foster: Madam Speaker, to the minister. The minister knows that we are talking about the emergency assistance-even though it was only 60 per cent of what was needed-that the government announced yesterday.
The minister knows that his senior officials have told farmers that they could make the payments within three to four weeks if they used the NISA program. What I want to ask the minister is this: Why does the government not use this program, stop stalling and get the cash out there now. It is needed now.


William Hunter (Bill) McKnight: Madam Speaker, I am not too sure who the hon. member has been talking to, but I would like him to tell me. All the advice I have received has not only been from senior officials in the Department of Agriculture, but from farm groups. They have worked over the last seven days, at the request of the Prime Minister, along with the Minister of State for Grains and Oilseeds, the Minister of Finance and myself, to come forward with a program within the draft report received from that farm group, that industry group. They suggested that it was inappropriate for them to make a suggestion, a recommendation to the government, as to how the money should flow because they believed there was further work necessary.
I can inform the hon. member that that committee will be meeting on Tuesday of next week, recognizing that Monday is Thanksgiving. They will get together and design how the dollars will flow from this program.
Unlike other governments, we believe it is important to listen to the producers when it comes to giving them assistance.
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Maurice Brydon Foster: Madam Speaker, if he listens to the members of the third line of defence committee, they will tell him that they should make the payments and make them soon, just like his most senior officials have told those members of that committee that the payments could be made in three to four weeks if they used the NISA program.
Farmers have been suffering right across this country during this year because the government has refused to make the payments. I want to ask the minister if he thinks it is fair that this payment should have been held up and farmers should have suffered all year long so that the Prime Minister could make an announcement in the middle of the Saskatchewan election just to help his political buddy, Grant Devine, save his political skin.
Does he think that it is fair to make farmers suffer all year so that this announcement could be made in the middle of the Saskatchewan election, a cynical, political ploy? Do you think it is fair?


William Hunter (Bill) McKnight: Mr. Speaker, if the hon. member had the best interests of the farmers at heart he would say to the government, as farm leaders have said to the government and to the Prime Minister who has given unprecedented support to agriculture in this country in the last seven years, that farmers recognize that we have a deficit in Canada. The Prime Minister recognized we had a deficit in Canada. The Prime Minister said to farm leaders: "I will do everything within his power to find assistance for you in this difficult time". The Prime Minister has done that.
I want to get back and say to the hon. member that I have a few quotes from farm leaders.


Some hon. members:: Order.


William Hunter (Bill) McKnight: NDPers are calling "Order", because they will not like this.
"The Canadian government responded to the plight of thousands of farmers who risk losing their farms because of a continued subsidy between the United States and the European community", said the president of the Canadian Federation of Agriculture.
"That is 60 per cent of what has been identified as needed in the province. It is short but you know I don't

October 11, 1991
Oral Questions
believe very many farmers are going to send cheques back and say it wasn't enough. It is vitally needed"-


Madam Deputy Speaker:: I will interrupt the hon. minister. I think this is getting into a speech.


Mr. Don Boudria (Glengarry-Prescott-Russell):: Madam Speaker, my question is also for the Minister of Agriculture. Yesterday, the minister gave us an announcement, after letting Canadian farmers languish for six months. But the minister has still not answered the question asked earlier. After waiting for six months, why must Canadian farmers now wait another six months for the Conservative government to get organized?


William Hunter (Bill) McKnight: Madam Speaker, no one has said the producers should wait another six months. What we have said and will continue to say is that we will do everything within our power to make that money flow.
We have asked the third line defence committee to give us recommendations as to how it will flow.
But the member says that the government has done nothing over the past number of months. Ele will recall that NISA was announced in April and May of this year. He will recall that producers only have to file, and to fill out a form, and they can receive their NISA benefits. To this point, if we are going to be able to flow $1.5 billion to producers in Canada before December 31, we are going to have to have those forms returned. At this point we have had only 20 per cent of those forms returned to the NISA office.
It is available. It is there. Farmers need it, and I think from the quotes I have here that farmers appreciate it.


Don Boudria: Madam Speaker, with all due respect, the minister has still not answered the question. Farmers are going bankrupt every day, throughout Canada. The government has been asked for help-emergency assistance!-for six months.
Why must Canadian farmers be made to wait another six months before getting organized? Why not offer aid
now, by Christmas? Help in farmers' pockets, before more go under!


William Hunter (Bill) McKnight: Madam Speaker, why does the hon. member and why do the members of the Liberal Party not recognize that there is assistance available to producers in Canada?
That assistance has been available for over eight weeks. There are forms that are available. Producers now are starting to send them in. I say to the hon. member that it is not fair and it is not reasonable to say that there has been nothing done.
The member knows full well the support that has been given to agriculture across Canada by this government. We have available through the-


Maurice Brydon Foster: Oh, oh.


William Hunter (Bill) McKnight: The hon. member had an opportunity to ask his three questions. Now I am trying to reply to his colleague.
The hon. member knows that the NISA forms have been available. Farmers will fill them out. Support is available now. He also knows that cash advances up to $50,000 interest-free are available.
The hon. member is misrepresenting, maybe not deliberately; it may be because of lack of knowledge. We have a third line of defence committee made up of the industry. We are going to listen to it and we are going to do what we believe we can on its recommendation.


EMPLOYMENT
Hon. Audrey McLaughlin (Yukon):: Madam Speaker, my question is for the Acting Prime Minister.
Today the unemployment statistics are down slightly and that is certainly good news. However, there is still across the country a great human tragedy that is occurring, whether it is salaried workers who are unemployed, farmers, or small business.
What it has meant is a great loss of faith in this country and a great sense of despair. Surely a country in despair cannot be a country united. As the Acting Prime Minister will know, in many cities across this country school

October 11, 1991

lunch programs for hungry children are being created at a faster rate than jobs.
I want to ask the Acting Prime Minister: How does his government propose to address this human tragedy now? It is not just a statistic. It is a human tragedy when we have unemployment at double digit rates.


Hon. John McDermid (Minister of State (Finance and Privatization)):: Madam Speaker, indeed we were pleased to see that the statistics on unemployment had dropped somewhat, and that is a good sign. There is lots of good news out there today. I think that we can be negative and bring forward all the bad news, but there is a lot of good news out there and there is a lot of hope for Canadians. I think that is very important.
If we take a look at interest rates, they are dropping at fairly significant rates. I think that is most important for Canadians. It is obviously helping in the housing industry, as it is helping in other industries as well. We are also seeing all the legitimate economic prognosticators coming out with some very encouraging news for Canada, the latest being the International Monetary Fund which is projecting that real growth next year will be in the 3.8 per cent range and that in fact our inflation rate will be down to 2.8 per cent, the second lowest in the industrialized world. That is most encouraging.
The policies of the government are working. We promised that there would be a little growth this year, not spectacular, but a little growth that is starting to happen. We are very encouraged by those signs.


Audrey Marlene McLaughlin: On a supplementary question, Madam Speaker, the fact remains that there are still 1.5 million unemployed in this country.

More than two million people live on welfare. All those who are no longer looking are not part of the statistics. This government does not lack ideas to ensure the prosperity of the rich and powerful. Where are its ideas to ensure the prosperity of those who are desperate? Now!


John Horton McDermid: Madam Speaker, there are programs in place to help these people. Those programs are helping these people at the present time. The important thing is to get the economy back on track to create jobs. That is the best method of solving the poverty problem and
Oral Questions
getting people off unemployment insurance and off welfare.
That is the plan of this government in co-operation, I might say, with most other provinces in the country in trying to get our fiscal house in order so that in fact we can have employment created in this country, get people off welfare, off unemployment insurance, and back on the working rolls where they rightfully belong.


Audrey Marlene McLaughlin: Madam Speaker, clearly it has been the high interest policy, the high dollar policy of this government and the trade deal that have led us to this situation. Canadians are not going to believe that those people who led us into this tragedy are going to lead us out of it.
When the minister says that the statistics are improving, that the recovery is under way, who is it under way for? We saw 7,000 farmers this week demonstrating. We see people going from the unemployed rolls to the welfare rolls.
I want to ask the minister: When is this government going to make full employment in this country a priority so that we do not have to deal with the human tragedy of children going hungry, food banks increasing and the homeless increasing and get Canadians back working?


John Horton McDermid: Madam Speaker, the hon. member mentioned farmers. I think the Minister of Agriculture yesterday made a very profound statement to help farmers out in their difficult times and he should be congratulated for that.
The hon. member mentioned the trade deal. All the manufacturing industry will tell you that the trade deal has helped them through these difficult times, and that in fact if they had not had the trade deal the recession would have been a lot worse.


Some hon. members:: Oh, oh.


John Horton McDermid: That is a fact and that has been stated clearly by industrialists in this country.
I am mystified at the hon. member talking about the high interest rate policy of this government. Interest rates today are lower than they were four years ago. The highest interest rate was over a year ago at around 14 per cent. If you want to talk about high interest rates, talk about 22 per cent interest rates back in 1982 and 1983. That was high interest. Now they are coming down and

Oral Questions
we are going to keep them down because we are getting inflation down. That is going to help the-


Madam Deputy Speaker:: We are getting into a speech again.


FISHERIES
Mr. George S. Baker (Gander-Grand Falls):: Madam Speaker, the government claimed in this House yesterday that it was concerned about our cod fishing resource and conservation of that resource in eastern Canada.
I want to ask the Secretary of State for External Affairs: Why then did Canada sit down recently with nine other nations and decide to reopen a cod fishing zone that is internationally recognized as a cod spawning zone, 290 miles east of St. John's, Newfoundland, against the advice of our own scientists and give to nine foreign nations 13,000 tonnes of cod and to Canada 100 tonnes?


Some hon. members:: Shame, shame.


Hon. Frank Oberle (Minister of Forestry):: Madam Speaker, on behalf of the minister let me respond to this question.
The zone to which the hon. member refers is one of those that straddles the 200-mile zone, not directly associated with the interests of Canadian fisheries. My recollection is that we voted to extend the moratorium for conservation purposes at NAFO and the hon. member's information would therefore be wrong.
Not only that, we do have the support of other nations to keep the Spanish and the Portuguese fleets, the rascals that have been overfishing in that zone, in line.


George Baker: Madam Speaker, the Government of Canada abstained from voting in 1991 at that meeting and went along with it for
1992.	It is agreements like this that will destroy forever and an eternity the very fish in our ocean.
Is there any limit to the efforts of the Department of External Affairs to satisfy every fishing country in this world except Canada? What was the Secretary of State
for External Affairs doing yesterday? She was meeting with representatives of the Government of Denmark and claiming they were talking about fish conservation, when Denmark will receive 29 times the quota of Canada in that zone for 1992. Why, the Danes must be laughing all the way to the fishing bank.


Frank Oberle: Madam Speaker, all I know is that many of the problems that we are facing in the fisheries today, particularly in our relations with the international fishing fleets, are problems that we inherited from our predecessors.
While this member is standing in his place here pontificating about historical problems, the Minister of Fisheries and Oceans is down there in the trenches trying to fix some of the problems that were created by those people over there.


Hon. Lloyd Axworthy (Winnipeg South Centre):: Madam Speaker, perhaps I could say to the hon. minister that it would be much better if the minister of fisheries got out of the trenches and back into the House of Commons so we could deal with the important fisheries problems of this country. That is where we need him.
I have this question. We are seeing the collapse of the resource industries right across Canada. We have seen announcements now dealing with the western farmer and to some extent with eastern fishermen. What we have not had a response to is the plight of the fishermen in the prairie region, the inland freshwater fisheries, who are now also facing collapse because of the cutbacks and pullbacks of support.
I want to ask the government: Why has it refused to deal with that request and come to the aid of the inland freshwater fishing industry of Canada?


Frank Oberle: Madam Speaker, the hon. member knows that there is a marketing system in place, one that is policed and managed by the fishermen themselves. There has been all kinds of programs put in place to save that fishery and to restore it to its health and prosperity. It just does not help to be standing here and pontificating about these problems. Every once and a while you have to get out and deal with
October 11, 1991

them on site and help the fishermen. The hon. member never did that.


Lloyd Axworthy: That is exactly what I did this summer. I met with the fishermen of inland Manitoba, something the minister of fisheries refused to do.
Madam Speaker, I want to point out that the Government of Canada participated along with its provincial counterparts in a report and study that I initiated to deal with the plight of fishermen. Half the fishermen in that province are of native origin. I want to ask the Minister of Indian Affairs and Northern Development: considering that these recommendations have been available since last February, why has this minister and this government refused to take any action for eight months to deal with the plight of fishermen and what will result in the destruction of the lake communities and northern communities of Manitoba unless this minister does something about it? Why are you so late?


Hon. Thomas Siddon (Minister of Indian Affairs and Northern Development):: Madam Speaker, the report that the hon. member speaks of would be much more useful to me if he would send it to me directly and speak to me about it.
Furthermore, I am extremely concerned about the importance of the freshwater fisheries to the native communities of northern Manitoba and the northern prairie provinces. It was the Liberal government, I believe, in the late 1970s that took the authority for the fisheries and the benefit of the fisheries away from the native people of Manitoba and put it into the hands of a Crown corporation they created, which has destroyed the freedom of the fishermen individually to produce and market their product.


CANADIAN SECURITY INTELLIGENCE SERVICE
Mr. Phillip Edmonston (Chambly):: Madam Speaker, in the absence of the Solicitor General, I will direct my question to the Minister of Justice. A former agent of the Canadian Security Intelligence Service, Guy Cham-berland, a constituent of mine, says that he was contaminated by bacteria during a top-secret search of debris
Oral Questions
from the Soviet consulate in Montreal after the fire of January 1987.
My question is: Since this search was part of "Project F" (for fire) and other agents were involved, I ask the Minister of Justice how many other agents were involved. Why does the department refuse to compensate my constituent? And how many other people, organizations or political parties were the targets of these spies, the federal government's amateur garbage cleaners, in direct contravention of the Charter of Rights and Freedoms?


Hon. Kim Campbell (Minister of Justice and Attorney General of Canada):: Madam Speaker, I would respectfully suggest that that is a question more appropriate for the Order Paper. The hon. member will know that it is the policy of the government not to comment on the operational activities of the service.
With respect to his constituent, I understand that legal proceedings are ongoing, and I think it would be inappropriate for me to comment on them at this time in the House.


Madam Deputy Speaker:: Considering the hon. minister's answer, I would advise the hon. member to be very careful in his supplemental.


Philip Edmonston: Madam Speaker, I understand that there are certain things which are sub judice and that we have to be careful in this House.
However, in a general sense, I am asking a question about a practice of this government and the direct violation of the charter of rights and liberties where people are having their garbage looked into and their agents, probably because of budget cuts, are inadequately protected.
I would like for the minister, not for the Order Paper, to confer if possible with the Solicitor General and perhaps we can have this thing at least aired out so that my constituent will be able to get some kind of help from the government.


A. Kim Campbell: Madam Speaker, I would be very happy to bring the hon. member's comments to the attention of my colleague, the Solicitor General.

Oral Questions CN RAIL


Mr. Russell MacLellan (Cape Breton-The Sydneys):: Madam Speaker, my question is for the minister who is answering for the Minister of Transport.
CN's own accounting staff has done an examination which shows that CN has the worst productivity of any railroad in North America and on the average has twice as many administrative workers as any railroad in the United States.
Why is the government standing by and allowing branch lines to be cut by CN, when CN is allowing themselves to have such a generous administration staff? Why is the government paying these fat bonuses to CN executives? Why does the government not order CN to stop its privatization and start serving the Canadian people?


Mr. Lee Richardson (Parliamentary Secretary to Minister of TVansport):: Madam Speaker, I think the hon. member is asking a fallacious question. Obviously CN is acting in the best interests of its shareholders and not as has been suggested by the member.


Russell Gregoire MacLellan: Madam Speaker, it seems that the best interests of CN are for the government to pay fat bonuses so they can cut branch rail lines and run the most inefficient railroad in North America to save their own skins.
Why is the government allowing this to happen? Why is the government allowing the CN to run this kind of railroad? Why does the government not say to CN: "Look at your own offices instead of cutting branch lines in Nova Scotia."


William Hunter (Bill) McKnight: Madam Speaker, the hon. member has just stated the obvious.
Canadian National has recognized its inefficiency. Every time Canadian National, on behalf of the shareholders of Canada, takes steps to become more efficient, the members in the opposition say: "Do not do that. We have to keep operating as we were 50 years ago."
What the Canadian National management has recognized is their own inefficiency. It is taking steps to serve the shareholders in a much better manner.


EXTERNAL AFFAIRS
Mrs. Christine Stewart (Northumberland):: Madam Speaker, I wish to pose questions on foreign policy positions. In the absence of the Prime Minister and the minister, I will pose them to the Acting Prime Minister.
At the Commonwealth Conference to be held in Zimbabwe next week, continuing sanctions against South Africa's apartheid regime will be a major topic of discussion. In view of the fact that Europe and the United States have dropped economic sanctions against South Africa but black South Africa leaders and frontline states are calling for maintaining economic sanctions, what will the position of Canada be at the Commonwealth Conference?


Hon. Michael Wilson (Minister of Industry, Science and Technology and Minister for International TVade):: Madam Speaker, as my hon. friend is well aware, the Secretary of State for External Affairs has been the chair of the group of foreign ministers who have been reviewing these matters.
She will be with the Prime Minister presenting the conclusions of the working group of which she has been the chair and the heads of government will be responding to those recommendations. Out of that will flow a recommendation and a decision.


Christine Susan Stewart: Madam Speaker, the situation in Yugoslavia continues to deteriorate as we see the failure of yet another cease-fire.
Guarantees of safe passage and of humanitarian assistance have been sabotaged. For too long we have had no answer to questions about Canada's efforts at the United Nations to deal with the situation.
I ask again today; what proposals is Canada presenting to press the United Nations' response to this critically violent and internationally peace threatening situation in Yugoslavia?


Michael Holcombe Wilson: Madam Speaker, I think my hon. friend is very much aware of the initiative that was taken by the Prime

Minister in seeking the involvement of the United Nations in this crisis because it ceased to become, in our judgment, simply an internal affair but a matter which had international implications.
We are working with representatives in the United Nations. We are working with the European community in trying to put in an international effort there which will involve peacekeeping, which could involve sanctions and, out of that, hopefully maintenance of the cease-fire and the cessation of the loss of life that has arisen from the violence.
I think the position of Canada has been very straightforward, very open and one of leadership in trying to resolve a very, very difficult situation.


METRO TORONTO
Alan Redway: Madam Speaker, my question is for the minister of industry.
In spite of the deficit and our growing national debt, the government has, quite rightly, found money for our hard pressed fanners.
I would like to ask the minister, however, what the government intends to do for metropolitan Toronto, where the unemployment rate has been in excess of the national average, where recently McDonnell Douglas has announced layoffs of an additional 1,000 employees, de Havilland 1,300 more, Philips another 300, where there are already 127,000 on the unemployment insurance rolls and an additional 65,000 on welfare because their unemployment insurance benefits have run out and there are no jobs available?
The Diefenbaker government provided a program of winter works. What does the-


Madam Deputy Speaker:: Will the hon. member put his question, please.


Michael Holcombe Wilson: I am not sure that I heard the question, Madam Speaker, but I think I can-


Madam Deputy Speaker:: If I may help the hon. minister. I did interrupt the member asking would he please put his question. The preamble was very, very long and I would like him to put a very specific question.
Oral Questions


Alan Redway: Madam Speaker, I think I did put a very specific question quite early. I asked what the government was going to do for metropolitan Toronto in light of all those very difficult economic situations.


Michael Holcombe Wilson: Madam Speaker, I think the best thing we can possibly do for the city of metropolitan Toronto, as is the case with economies right across the country, is continue to get interest rates down.
We are starting to see the impact of those lower interest rates in housing starts. For the last five months, housing starts have been over 150,000. They are up substantially from the early months of this year.
We have seen an improvement in automobile sales. That helps the golden horseshoe market with the involvements of General Motors and Ford.
My hon. friend referred to the very difficult situation in de Havilland. We are working very closely with the province of Ontario, with the Boeing Aircraft Company and with others which are interested in the resolution of the ownership situation with de Havilland. It is the uncertainty of that ownership which is troublesome. We are hopeful that with the active involvement of all parties we will be able to resolve that shortly.


SHIPBUILDING
Mr. Iain Angus (Thunder Bay-Atikokan):: Madam Speaker, last Friday I put a question to the minister responsible for shipbuilding policy. Quite appropriately, the minister of state for small business answered, because that is what it has become in Ontario and on the Pacific coast.
He has had a week to think about my question. I want to ask the minister what specific assistance will be given to those shipyards in Ontario and in British Columbia who find themselves without either repair work or construction work on a long-term basis?


Hon. Paul Dick (Minister of Supply and Services):: Madam Speaker, if the shipyard owners are restructuring they can make an application for restructuring. There has been a restructuring fund in place for about five of six years and all workers are being treated equally.

October 11, 1991
Oral Questions
At the present time, there are discussions on restructuring of the shipping industry on the west coast. There has been no decision made of any changes in the shipbuilding industry on the Great Lakes at this time, although there may well be an application forwarded to the government.


Iain Francis Angus: Madam Speaker, the minister should realize that Ontario already has restructured by closing Collingwood, leaving only two yards, one in Thunder Bay, one in St. Catharines. There is not enough repair work on the lakes to sustain two yards. Even the contract that is going to Port Weller will not start for at least one year. They are in difficulty from now until then.
I do not think Canadians want further restructuring, meaning the further closure of yards. They need work. The federal government has the responsibility to ensure that they have access to work. What is this government going to do?


Paul Wyatt Dick: The
hon. member's question begs the answer because he says there is not enough work, there is not enough repair work going on in shipping. If there is not enough repair work and enough overhaul work because not enough ships want to go into the shipyards to have this done, we just cannot artificially have the people sitting there waiting and collecting fees. We have got to have the work done.
There is very little shipbuilding going on in this country. The only people who build ships in this country today happen to be the Government of Canada and the provincial governments and ferry boats.


EDUCATION
Mr. Ronald J. Duhamel (St. Boniface):: Madam Speaker, the Commission of Inquiry on Canadian University Education has reported that there is a need to place greater importance on distance education, on continuing education and on the internationalization of education. It pointed out that there is a need to attract more students from aboriginal backgrounds, students from less affluent families, as well as handicapped Canadians and
women. It has also pointed out that there is a need to produce funding to match that provided to U.S. state universities.
My question for the Secretary of State is this. How and when will this government act so that we can regain Canada's competitiveness?


Hon. Robert de Cotret (Secretary of State of Canada):: Madam Speaker, I was quite happy to receive the report of Dr. Stuart Smith earlier this week. As my hon. colleague well knows, my department was very pleased to provide support for the work of the commission.
We are looking at the recommendations very closely. We find that many of those recommendations present an interesting possibility for the government to act. I will be reporting back to the House as soon as that review is completed and that should be very shortly.


Ron J. Duhamel: Madam Speaker, why hasn't the minister used his Student Loans Program to help these people, and I am referring to students on low incomes, women, the disabled and aboriginal people? Why hasn't he done something? When is he going to do something? Could he be more specific?


Robert René de Cotret: Madam Speaker, I have already answered the hon. member's question more than once. I have told him on many occasions that the Student Loans Program is already 27 years old, has never been changed and needs a thorough going over.
The hon. member must know that this program is administered jointly with the provinces. Preparations for a thorough revision of this program are well advanced. After discussions with the provinces, in a few months we will be in a position to announce a program that meets the demands of the nineties and the twenty-first century, instead of the sixties.


Mr. Mac Harb (Ottawa Centre):: Madam Speaker, I have a question for the same minister. The European Community spends in excess of 30 per cent of the gross domestic product on social programs and education. Here in Canada we only spend 24 per cent of our gross domestic product on education.
October 11, 1991

My question for the minister is this. When is this government going to start catching up to the rest of the world and when is it going to close the gap?


Robert René de Cotret: Madam Speaker, I do not want to get into a debating match as to how much we spend compared to other countries. On a per capita basis we spend as much or more than any other-


Mr. Andre:: As a percentage of GDP, second only to Sweden.


Robert René de Cotret: Absolutely.
Madam Speaker, that is the very purpose of the announcement in the Speech from the Throne, that this government wants to have a new training policy in this country because we are not happy with the results we are getting for the huge amounts of money this country spends on education. That initiative is going along very well.


Mac Harb: Madam Speaker, we have yet to see that paper. It is somewhere in the bureaucracy, or in the political arena.
I want to indicate to the minister that in the last five years the government has cut $3.2 billion from transfer payments for education and now the government funds will not keep up with inflation.
Why is this government cutting and freezing funding for post-secondary education when 40 per cent of all jobs in the country will require at least 16 years of training by the year 2000? When is this government going to wake up and smell the coffee?


Robert René de Cotret: Madam Speaker, certainly sooner than the hon. member opposite will wake up and read the statistics. We have been increasing payments to education every year and that is the fact, so I wish he would look at the statistics more closely.


CANADIAN ARMED FORCES
Mr. Pat Nowlan (Annapolis Valley-Hants):: Madam Speaker, I am glad I got recognized because my question fits into the reform of Parliament where members will be taking next week off and going back to their ridings. It will be very interesting to get the playback from the people in the grassroots as to this question which arises
Oral Questions
from sort of the Keystone Cops, Gilbert and Sullivan situation we had here for the last two days on the official policy of gays in the military service.
I would like to know from whoever is answering for the government, perhaps the Acting Prime Minister, if we could find out today what the situation is in terms of government policy and the strange situation that there is a press release from the Pentagon quoting the Chief of Staff on this policy. Are the gays officially in or are they out?


Harvie Andre: Madam Speaker, as you know there is an interim policy in place and no announcement has been made concerning any changes in the policy of employment of homosexuals in the Canadian forces. Any changes in the current policy will be announced by the Chief of Defence Staff in due course.


John Patrick (Pat) Nowlan: Madam Speaker, I appreciate the answer. My supplementary has to do with another rumour affecting the military that I am sure the government House leader is aware of, and if not we will certainly find out so that the people in the grassroots can again respond on things that people in the grassroots understand.
They do not have to have economic dogma on this thing because there is a very current rumour that the Victoria Cross which at the moment is the highest decoration for gallantry against an enemy-it is not a peacetime thing as we all know-will be eliminated through processes within the chancellery as the highest decoration for gallantry in the military force. Could the government House leader give me a statement on that?
In 1988 all peacekeeping forces of other nations got the Nobel peace prize, and since 19881 understand that our military forces and those involved in peacekeeping are still waiting for a UN peace decoration or medal. Could you give me the answer on that so again grassroots people in the hinterland could give some pressure-


Harvie Andre: Madam Speaker, on the question about the Victoria Cross or what is to be and what will be the highest medal for gallantry while serving in the Armed Forces, I cannot give the hon. member that answer. I will have to get back to him. I know that there is a lot of work going on in terms of ensuring that our service personnel, as they serve frequently under great personal risk in these

Oral Questions
peacekeeping situations around the world, will have that service adequately recognized by medals.
There have been a number of things done in the recent past, but I cannot on the spur of the moment give the hon. member an up-to-date comment, but I will have the department of defence get in touch with him to inform him.


IMMIGRATION
Dawn Black: Madam Speaker, my question is for the Acting Prime Minister.
Today The Toronto Star reported that a refugee board had refused a refugee claim made by an Iranian woman. The woman had been viciously whipped with a wire cable because she was not wearing a veil. The woman later lost her job.
The refugee board's decision makes it clear that they do not consider this a violation of her fundamental human rights.
Instead, they merely called it a crime that the religious laws of that country were being followed. Will the Acting Prime Minister act immediately to ensure that this woman is not deported, and that the refugee panels are immediately instructed to treat human rights violations based on gender seriously?


Monique Vézina: Madam Speaker, I can take the hon. member's recommendation as notice, but I would nevertheless like to make it clear that as a government we have a reputation for respecting the rights and freedoms of the individual.
I am sure that when processing this case, we will do everything we can, through our Immigration programs and policies, to ensure that the rights and freedoms of this woman are respected.


Madam Deputy Speaker:: The hon. member for New Westminster-Burnaby will allow me to give another question to somebody else, as this question has been taken on notice.


EMPLOYMENT
Ms. Sheila Copps (Hamilton East):: Madam Speaker, Canadians were certainly pleased to see the job figures today.
However, we have a real concern. Many economists are saying that the numbers of people looking for jobs are going down because so many people are hopeless. They have simply given up hope.
There are 844 people in my riding who received notices this week that they will be laid off permanently, forever, from the Steel Company of Canada.
Given the lay-offs pending at Stelco and the lay-offs announced last week at Consumers' Glass and the potential for a further 900 lay-offs at that company, when will the government bring in a sane dollar policy to allow Canadian companies to start exporting successfully to save Canadian jobs? We are begging the government to bring in a sane monetary policy.


Michael Holcombe Wilson: Madam Speaker, I should say to the hon. member that the other side of the Stelco announcement she refers to is a reduction from approximately 1,800 people being laid off to only 800.
That demonstrates that there are new orders coming into Stelco which have allowed them to reduce that lay-off. Hopefully in a short period of time there will be a further reduction in the number of people laid off.
My hon. friend raises the question of the Canadian dollar. As has been the case in the past, the federal government does not control the level of the Canadian dollar. It does not control it now any more than it controlled it when her seatmate was the Minister of Finance some 10 or 12 years ago.


Mr. Chretien:: It went down.


Michael Holcombe Wilson: The hon. member is proud of the fact that the Canadian dollar went down during the time he was in office. It went down when he was in office because the people in the international markets had no confidence whatsoever in the policies being followed by the government he was a part of at that time.

; **r:


Sheila Maureen Copps: Madam Speaker, the government does control trade policy.
Right now this government is barrelling full steam ahead with the Canada-U.S.-Mexico deal at a time when Consumer's Glass, in my riding, risks the loss of 900 jobs because it is losing orders to Mexico.
When is this minister's government going to introduce some policies to help save the industrial heartland of this country that is bleeding, and bleeding badly?


Michael Holcombe Wilson: Madam Speaker, I think it is very clear that what the government has been doing is bringing down interest rates.
It is helping by bringing about the recovery that is under way right now. My hon. friend talks about some job loss. She is ignoring the fact that in Brantford Intercity 300 more jobs were announced by Freightliner.
I was in Windsor yesterday. A number of announcements have been made in recent months by Chrysler, Ford and Southam Press, which has announced a $40,000 expansion in Windsor.
I think the hon. member is doing exactly the disservice to the country of which she is accusing the government. When she only talks doom and gloom, she contributes to the lack of confidence she is concerned about.
If she would have a more balanced approach and talk about the positives as well as the negatives, possibly she would address the problem she is so concerned about.



ROUTINE PROCEEDINGS


Harvie Andre: Madam Speaker, I am pleased to table, in both official languages, a number of Order in Council appointments.
Pursuant to the provisions of Standing Order 110(1), these Orders in Council stand referred to the appropriate standing committees, a list of which is attached.
Routine Proceedings


POINTS OF ORDER
Frank Oberle: Madam Speaker, in the course of the Oral Question Period which we just completed, my very good and hon. friend from Gander-Grand Falls, obviously swimming in the current of his own enthusiasm, made a statement that is at variance with the facts.
Canada did vote for the extension of the moratorium of the fish catches at the 3N zone and against the establishment of quotas. I wish the record to show that.



ORAL QUESTION PERIOD

['Agreed.']
Mr. Rod Murphy (Churchill):: Madam Speaker, during Oral Question Period when the member for New Westminster-Burnaby asked a question, the minister said she would take it under advisement.
Unfortunately, because you decided that was a reason for her not being allowed a supplementary, there was more information that the member did not have a chance to indicate.
For example, the woman is going to be deported this coming Wednesday and it requires urgent action. Had she been allowed to ask that second question, the minister would be in a better position to act.


Madam Deputy Speaker:: I do take the representation from the hon. member very seriously. I can assure him it was not a question of not wanting the hon. member to add to the information. I am sure the minister is still around and she will be able to do it.
I was trying to allow as many people as possible to ask questions. I am actually quite proud that we did have 30 questions today during our 45 minutes of oral questions. So I think it is an improvement on many days.
I do apologize to the hon. member and I am sure that someone on my right will make sure that further information that should and could be helpful will reach the minister as soon as possible. I do apologize. It was not a question of cutting the hon. member off in any way.



Mr. Blaine A. Thacker (Lethbridge):: Madam Speaker, I have the honour to present, in both official languages, the report of Legislative Committee H on Bill C-17, an act to amend the Criminal Code and the Customs Thriff in consequence thereof, with amendments.
Madam Speaker, as you well know, this bill once again opened up for debate by our fellow Canadians the

Routine Proceedings
balance between our right to own and use firearms and our right to security. I want to assure you, Madam Speaker, that the members of Parliament serving on this committee from the three parties and one independent, worked long and hard on this bill and that the amendments truly reflect the evidence which we heard.
[Editor's Note: See today's Votes and Proceedings.]


ATOMIC ENERGY CONTROL ACT
Mr. John Harvard (Winnipeg St. James) moved: for leave to introduce Bill C-313, an act to amend the Atomic Energy Control Act (engine development and exportation of atomic energy materials and equipment).


Madam Deputy Speaker:: Pursuant to Standing Order 68(2), the motion is deemed adopted.


John Harvard: Madam Speaker, there are many concerns about the use of nuclear energy in this country as there are in other countries as well. There are also concerns about the sale of nuclear materials and equipment to foreign countries.
The purpose of this bill is to generate debate on the issue and to have an investigation by this House of our nuclear industry.


Madam Deputy Speaker:: Mr. Harvard moves that the bill be now read the first time and printed.
Pursuant to Standing Order 69(1), the motion is deemed adopted.
Bill read the first time and printed.


INCOME TAX ACT
John Harvard: for leave to introduce Bill C-314, an act to amend the Income Tkx Act (disability pension).


Madam Deputy Speaker:: Pursuant to Standing Order 68(2), the motion is deemed adopted.


John Harvard: Madam Speaker, the purpose of this particular bill is to bring more fairness to our income tax system. Under our current law, workers' compensation benefits are exempt from income tax while pension benefits are taxable. This bill addresses this inequity.


Madam Deputy Speaker:: Mr. Harvard moves that the bill be now read the first time and printed.
Pursuant to Standing Order 69(1), the motion is deemed adopted.
Bill read the first time and printed.


PETITIONS
Mac Harb: Madam Speaker, it gives me great pleasure to introduce a petition signed by Canadians from all across the land who are calling on the government to set up, or to establish, national education standards in consultation with national institutions, the provincial governments, educational professionals, industry and labour, parents, youths, volunteer organizations and individual Canadians.


Ms. Beth Phinney (Hamilton Mountain):: Madam Speaker, it is my privilege to present a petition signed by residents of my riding of Hamilton Mountain and from various parts of Ontario: Pickering, Toronto, Kitchener and Oakville.
These petitioners are supporting the parents of Nina De Villiers in their request that Parliament recognize that crimes of violence against a person are serious and abhorrent to society. They ask the government to amend the Criminal Code of Canada, the Bail Reform Act of 1992 and the Parole Act accordingly.


Ron J. Duhamel: Madam Speaker, I have a petition from a number of Canadians, in conformity with the rules and regulations of the House of Commons. It is being presented as a protest against the government's policies on education.
These individuals point out that the government talks about globalization, competitiveness and productivity. Yet, at the same time, it cut the transfers to the provinces for education this year by almost $500 million and imposed taxes such as the goods and services tax on student services. These petitioners are very angry at the 3 per cent administrative tax on student loans, the one where one has to pay cash before getting the loan.


QUESTIONS ON THE ORDER PAPER
Mr. Albert Cooper (Parliamentary Secretary to Minister of State and Leader of the Government in the House of Commons):: Madam Speaker, I ask that all questions be allowed to stand.
October 11, 1991


Madam Deputy Speaker:: Shall all questions stand?


Some hon. members:: Agreed.



GOVERNMENT ORDERS


[Stage Direction]
The House resumed consideration of the motion of Mr. Mills (p. 3627).
Madam Deputy Speaker:: At eleven o'clock there were two minutes left for the hon. member for Essex-Windsor. After this we will go to the period of questions or comments.


Steven W. Langdon: Madam Speaker, in a quick two minutes, let me say in summary that this government has failed the country because it has not dealt successfully with the human tragedy of unemployment. It has not created the kind of fairness in our tax system which should characterize this country and it has not given us the balanced and fair growth across Canada which would be the basis on which we could build a unified country.
It has also been an irresponsible government in the extreme so far as its financial affairs are concerned. In a period of seven years this government has more than doubled the national debt of this country. It has done so through tax giveaways to large corporations, and to rich and powerful individuals. It has not done so in a way that has helped the country. It has instead acted out its irresponsibility in such a way that our hands have been tied so far as responding to the seriousness of the recession which we have been experiencing as a country.
In short, Madam Speaker, I think this government deserves nothing but shame as it stands before the House of Commons to try to defend its policies.


Thomas Hockin: Madam Speaker, I want to ask the hon. member a question. He is speaking on a motion that has to do with small business and I heard almost nothing
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about small business in his whole presentation, except when he made reference to the GST. Over the whole length of last year, when the GST was before the House, he quoted continually John Bulloch of the Canadian Federation of Independent Business. John Bulloch just a few weeks ago had something to say about the member's party in office in Queen's Park, and I would like to have his response to this.
John Bulloch said about the NDP government in Ontario: "They are very ideological, naive, and quite incompetent". He said: "Out of a survey that was taken, 36 per cent of respondents are considering moving some or all of their operations out of the province". The problem, said Bulloch, was taxes, the recent Ontario budget, the provincial government's apparent bias against business and proposals to change provincial labour laws that would make it easier for the union to organize.
"Consulting this government", said Mr. Bulloch, "is like consulting a tree; I don't even think they understand what you are saying. There isn't anybody here who has even run a lemonade stand".
I would like to ask the hon. member: Is there anyone on his side who has run a lemonade stand?


Steven W. Langdon: I am not certain, Madam Speaker, if any person on this side, or on that side for that matter, has worked their way through university by running a lemonade stand. But it would seem to me that the issue might have more to do with running important institutions and balancing budgets, which many of us on this side of the House have done.
I did want to say something about the study that the minister referred to because we had some very interesting conversation about this in the finance committee just yesterday, or possibly the day before. It turns out that the interesting statistic is that the CFIB distributed over
40,000	copies of its survey. Over 30,000 businesses in Ontario, small businesses that are part of CFIB, felt that this was so irrelevant that they did not even bother answering it. So, the 36 per cent that the minister quotes is 36 per cent of the very small number of companies that felt strongly enough about the issue to send the report back. This was not a sample survey or anything scientific. In fact, it would seem to me that if three-quarters of the small businesses in Ontario do not feel the need to send back something critical of the budget, that is actually a reasonably good record for the province of Ontario.

Supply


Thomas Hockin: You quote them on the GST. Continue serving on the GST.


Steven W. Langdon: The minister suggests I quote them on the GST. On the GST they are talking about the impact of the GST with respect to small business. They know a great deal about that.
It seems to me that the minister should have spent a great deal more time listening to the CFIB and to other small business groups across the country. The GST would not have had the negative impact it had on the tourist sector, which he was forced to admit this morning during his news conference.
He has mentioned that there are proposals for improvements in labour laws in the province of Ontario. I am very proud of those proposals for changing labour laws. I think that labour peace can be achieved, as it has been achieved in the province in Quebec, much better by saying when there is a strike that takes place, strikebreaking should not occur.
I would be interested if the minister is going to stand up and speak in favour of strike-breaking. I would hope not.


Dennis Joseph Mills: Madam Speaker, I have listened to the NDP in this House almost constantly. They stand up and they criticize and they criticize. They are great knockers. They are "anti" just about everything. They are members of the coalition of "antis". But I have never heard one idea, one suggestion, one recommendation from the hon. member as to what we in this House could do to try and improve the spirit, the morale and the confidence that does not exist within the 900,000 entrepreneurs of this country.
I get a little nervous when I do not hear any ideas from the NDP. I was just reading a report card here. It is called The Interim Report Card on the Policies of the Government of Ontario in the First Eight Months. It has been put out by a rather right-wing organization, I must confess, the Fraser Institute-


An hon. member:: I thought they were left.


Thomas Hockin: Objective.


An hon. member:: Did you say Tory?


Dennis Joseph Mills: Parts of it are objective. But the point is that the NDP always talk a good game. Here is an instance where they got into power in the province of Ontario,
and they are causing such fear and such a loss of confidence that this is exacerbating the lack of confidence problem that exists in this country.
My question is quite specific to the hon. member. What would he do, what specifics would he put forward to the government, if he had the challenge of operating this government?


Steven W. Langdon: Madam Speaker, in commenting on the opposition day motion which the Liberal member has put forward, it did not seem to me to be my role to attempt to steal his thunder in putting his suggestions forward, but instead to make an evaluation of the government.
I certainly will send to the member for Broadview- Greenwood the 22-page document on economic recovery in this economy which our caucus issued this summer. It is full of detailed suggestions, and quite a few new ideas which he may even find useful to incorporate in a future motion.
With respect to the Fraser Institute study, I think that as the ammunition is shot from both sides of the ideological debate, as we get the CFIB or the Fraser Institute taking pot-shots, as we get parts of the labour movement taking pot-shots from the other side, it is important to look at the objective evidence. The objective evidence before us today shows quite dramatically that the rest of the country has remained about stagnant in terms of reducing unemployment, while in the province of Ontario there was the greatest decrease of unemployment in any region of this country, from 9.9 to 9.2 per cent. That means 40,000 fewer people are unemployed.
Again, there is a mistake in the member's suggestion that those on welfare are not counted. This is a sample survey. It includes people who are on welfare. It includes people who are on UI. It includes people who are on neither. It is a full sample so it gives us a clear picture of what has happened to unemployment. That clear picture shows that in one province, which is headed by the single New Democrat government in this country, there is marked progress in reducing unemployment.


Thomas Hockin: Madam Speaker, first of all I want to congratulate the opposition for bringing forth a motion that at least parenthetically deals with small business. This House has not had much of an opportunity under the aegis of opposition days to debate small business and recognize the importance that entrepreneurs play in the life of our country and the creation of jobs in Canada.

Eighty-three per cent of all jobs created in Canada since 1984 have been created by small business.
I guess the opposition does not use its days for this because the NDP and the Liberals are generally not too interested in the private sector. They are more interested in the public sector.


Some hon. members:: Oh, oh.


Thomas Hockin: So I do commend my hon. friend on the Liberal side for bringing forward this motion. It dwells primarily on macro-economic matters, on the high dollar and on interest rates. I would like to say a word about that before giving a more systematic recital of what has been happening in terms of government leadership for small business in Canada.
There is an alternative to what we are doing as a government. The clearest alternative is to do what this motion suggests. This motion suggests that we devalue the dollar to, let's say, 81 cents and let interest rates rise. That is the alternative.
There was a real-world alternative when that happened. That was in 1981. The dollar was worth 81 cents. The hon. member does not like me reminding the House of this, but this is reality. This actually happened. I had mortgages on my homes. Everyone in this House probably had debts they had to pay.
In 1981 exactly what this motion asks happened, interest rates were allowed to go up. Ten years ago today interest rates were 20 per cent. They also want the dollar to go down to 81 cents. That also existed 10 years ago.
What happened 10 years ago? Over 360,000 manufacturing jobs were lost during the period from 1981 to 1982, over twice as many as we have suffered in this recent recession. Second, there was a haemorrhage of spending which has saddled us with a debt which will take us decades to eliminate.
That is the alternative and that is what this motion is asking us to return to. I do not think that any Canadians sitting here in the gallery or watching this debate want to return to 1981-82. The motion invites us to do that.
Let me go from there and start talking about small business more specifically. Let me begin with a little story. I was invited to speak to the 500 fastest growing companies in the United States. Before I spoke there was a breakfast speaker. He was an evangelical speaker
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who was talking about the loneliness of being an entrepreneur in the United States.
In his speech he developed the theme of how lonely it is to be an entrepreneur, and indeed it is in all countries. In the American context it seemed especially true. He said: "You know, when business is bad, when competition is getting better, you are finding that you can't survive as well from week to week. It looks like you are not bringing so much home to your family as you would like each week. When you tell your spouse that things are going from bad to worse, that you have moved from the fast lane to the oncoming lane", as he called it. He went on to develop this theme of loneliness for the entrepreneur. He said: "We entrepreneurs sleep like babies. We wake up every three hours and cry". He developed this theme of loneliness.
I sat there as a Canadian minister. I thought that maybe in the United States entrepreneurs are completely lonely. In any country those who invest their resources and take risks ultimately are responsible. However we in Canada have done a number of things to help the entrepreneur and make him or her less lonely, especially in the regions of this country. The hon. member for Essex-Windsor mentioned the regional imbalances in Canada. We have put in place a number of programs to make entrepreneurs, especially in disadvantaged regions, less lonely and to help them.
We have done it with a different philosophy than that which preceded us. What preceded us was an indiscriminate throwing of money at everything, from painting churches to building lemonade stands to Lord knows what. The Trudeau government, through a bunch of programs-PIP, ZIP and DIP and all these different programs-indiscriminately threw money at businesses whether they needed it or not.
We have tried to bring a Conservative philosophy to the promotion of small business. We have said that we will continue with our programs through the regional agencies to help agencies help entrepreneurs. We will continue with our very powerfully effective program for natives. Over 1,000 small businesses have been created on and off reserves through our programs. However we will do it differently than the Liberals did it, and

October 11, 1991
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certainly the NDP has done it when it has been able to govern a province.
The different way is this. We will give loans but we will not give outright grants. At $100,000 or below we still have some outright grants. Above that figure, we help businesses through loans. We also suggest when making loans that there be substantial equity participation by the owners. As a result, we have a series of programs with a Conservative philosophy which have helped bring dynamism to the regions of this country which have not experienced it before.

Madam Speaker, Canadian small businesses do not want any hand-holding, not by the federal government or any other level of government. That is why the business community has said quite clearly: Stop intervening on the market and stop giving subsidies or grants to business. That is exactly what we have done, Madam Speaker.
At the behest of the Leader of the Government in the House, and ever since the Finance Minister's Budget was brought down, we have practically eliminated subsidies and grants, introducing repayable loans instead.That is what we have done. We now have programs that provide an incentive for entrepreneurs to modernize and start new companies, but we also ask entrepreneurs to invest. That is our philosophy.

Let me just go through some of the programs we are now putting into the marketplace to help the entrepreneur in this uniquely Conservative way. I just came back from northern Ontario, where I was for the last two days. We have a program in northern Ontario called FED-NOR. It was initiated in 1987. Over 436 small businesses have been helped right across northern Ontario. This program is sprinkled right from one end of northern Ontario to the other, from Kenora all the way over to Kirkland Lake.
These projects that we have approved have been veiy successful. We have had almost no failures, even in the past year when the economy has turned down. The dollars spent through FEDNOR are $36 million, but it has levered two or three times more money than that from the private sector and as of yesterday we announced that 3,002 jobs have been created or maintained
as a result of FEDNOR in northern Ontario. I am very proud of that program.
We do not hear enough about northern Ontario here in this House, but northern Ontario is unique in Canada in the sense that it has a tremendous tradition of hard working people, people who quite frankly moonlight, who often have one or two or three jobs and work hard. It is a region of Canada where three cultures get along very well: the French speaking culture, the English speaking culture and the native culture. It has an ethic of working hard. This program helps to continue that.
Yesterday, at the Northern Ontario Business Awards meeting, I was struck by the fact that the award winners were all high-tech companies, high-tech operations moving into northern Ontario.
I was in Scarborough two weeks ago and some company presidents were saying that they were getting letters from American governors asking them to take a look at Tennessee or take a look at Nebraska and saying: "Come on down here because real estate is so much cheaper". Let me tell the House that real estate is not only cheaper in northern Ontario than it is in Nebraska or Tennessee, but we have a hard working work force, we have a tremendous educational system supporting it, and one of the best transportation systems in the world.
Northern Ontario has seen a remarkable turnaround. It is a checkerboard. There are black patches of real problems in northern Ontario, but there are some wonderful success stories too and FEDNOR is helping with that.
Another federal program, of course, is the Small Business Loans Act. It started in 1961 under the Diefen-baker government, which is typical of a Conservative government. What we want to do is put in place a kind of small business assistance scheme that does not give money away, but simply helps guarantee loans. It has provided almost $8 billion in assistance.
If you started in Toronto, for example, right at the lake and looked at small businesses right along Yonge Street, you would probably go all the way to Richmond Hill with $8 billion worth of businesses. That is what this program has done and its term loan assistance up to $100,000. Most of the loans go into construction, communications, retail, manufacturing, wholesale and so on.
I have to say that as minister of small businesses I have been unhappy with the performance of this act though in the past year. The banks are not telling people about it,
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the banks are not using it, and it has to be changed and approved. It has had a tremendous history for 30 years, but it is now at the stage where the banks are not using it.
I am not only meeting with them, but with the new financial institutions reform I had the responsibility to help put together we are going to be having unlimited commercial lending by trust companies, by insurance companies and by credit unions. They will be in play now and we have go to put an SBLA together that encourages them to use it.
Something that banks do not like, which I would like to ask the House for advice on, is software; the banks will give you a loan if you have assets, bricks and mortar backing it up; but if you ask for a loan for software so that you can improve your handling of accounts payable or anything like that, the banks are often very wary of doing that. Perhaps the SBLA could move into that field and help there. We are looking at that.
Another federal government program, one which I am particularly proud of and it gets almost no attention here, is the Canadian Aboriginal Economic Development Program. Actually all members of the House have been quite co-operative on this because they want to see this succeed. We have had over 1,000 native businesses started or maintained as a result of this program. We have had over 4,000 jobs created or maintained through this program.
One of the best kept secrets in Canada is that the native population in Canada-I am talking Inuit, Metis, status and non-status-is becoming more entrepreneurial. They want to be wealth producing. This program, to which I made some important changes two years ago, allows some joint ventures with non-natives. It also allows consulting help so that they can pull together good business plans. I am very proud of this program. It has done very well.
Something that this program has created as well is something called aboriginal capital corporations. We would fund a native group in the amount of $5 million and would say: "You put this in the bank and it earns interest. You lend it out. You have your own board of directors. You get paid back, and just keep recycling the money year after year after year". We have 31 aboriginal capital corporations that are working very well. The last time I looked their failure rate, their arrears rate, is no
higher than the Royal Bank's. It is a very good success story.
The third program I did want to mention to which the federal government is very dedicated is this whole series of services through the Federal Business Development Bank. The Federal Business Development Bank is not exactly a bank of last resort, but it is there when you go to your banker and the banker says "no, I don't think I can deal with it; I want you to go to the Federal Business Development Bank".
I think we have 77 branches of this bank now across Canada, specializing in the smaller towns and in the outlying areas. That is really where its focus is because often the big banks do not deal with that area very well. It has done well. It has also moved into consulting in a major way; the whole CASE program, giving small business seminars, giving advice on how to start and maintain a business. But more important it is moving into something called venture capital.
I think we all know that most small businesses today do not need any more debt on their balance sheets; what they need is some subordinated data and some equity, and the vencap program is an attempt to see if we can get some mezzanine financing, some subordinated debt to help the various businesses. That program is new and I look forward to discussing it with members in committee. But it is something that I kind of like to publicize because not enough people know about it.
Then of course we have the programs through our regional development agencies, the Western Diversification and Atlantic Canada. All of these programs are out there where we are helping small business.
In addition to that, since I have been minister, I do want to remind the House of a number of things that we have done. We have established a National Entrepreneurship Development Institute. This is an important institute, to pull together people who care about entrepreneurship in this country. They are people who often do not talk to each other. They are university professors, they are public servants who work in provincial governments, and also for municipal governments, they are teachers, people who teach entrepreneurship in high schools. We pull them together, hold important conferences, material is developed, and we now have a program developed for teaching entrepreneurship in high schools.

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So that in grade 10 or grade 11 there is now a module being put together complete with videos where young people can think, "what would it be like to become a chairman Mills and own my own business? What would it be like? How would I go about doing it?" This entrepreneurship program is spreading right across the country.
Do you know what I find, Madam Speaker? This program, through some other programs where we have assisted young people, has moved so-called government towns-and I think of Regina, I think of Charlottetown which I always thought of as primarily government towns and Ottawa, primarily a government town-into a veiy thriving entrepreneurial culture. The biggest junior achievement in Canada, I think, is in Regina, of all places. Charlottetown has the second biggest. Twenty years ago 50 per cent of Ottawa was the Government of Canada and today only 27 per cent of the economy of Ottawa is the Government of Canada. The rest is private enterprise and other things.
So we are getting a much more entrepreneurial Canada. We are trying to help that through NEDI, also through the business opportunities system which is something that I cannot explain in the House right now but it is something that we pay for as a government. We encourage small businesses to come in; we will tell them where their markets are; we will tell them where customers are, not only in Canada but around the world. And then again, we are trying very hard to get the small business community in Canada to think of exporting.
I do not think we are as great an exporting country as we should be. I know we are the fifth biggest exporter, or whatever we are, but usually that is big stuff like wheat and automobiles. Our small businesses are not very export oriented. We are trying to change that. The NEDS program have had over 150 missions already to the United States and will literally take you by the hand. Let us say you are a small textile manufacturer, or let's say you are a small machine shop and you want to expand. We will introduce you to 13 customers in Toledo, Ohio if that is where you want to find them, and we will show you how to do customs and bring you home. This program, has worked very well. Also NEXUS, which is oriented for southern United States does the same; and then Going Global, which is broader, takes us into Europe and the Pacific Rim.
We have student business counselling as well. We have the CASE counselling and we have the Canadian Jobs Strategy, and so on and so on.
But over all, Madam Speaker, no political party has the total answer for helping small business.
What every political party owes the people of Canada is a recognition that this is where the jobs are being created. I spoke to the Empire Club three weeks ago and I said the following with the Premier of Ontario in mind.
I said: "Premier Rae, I read a statement from you the other day where you said that those who care passionately about social justice and those who care about the creation of wealth are both important. You cannot have the one without the other." Those are good words. "However, a thriving small business community is essential if we are ever going to pay for all the social programs. I invite the NDP in Ontario to start to address itself to the creation of entrepreneurs because that is where the jobs have been created, that is where the jobs will be created and we, as a federal government, stand to help not only in Ontario but right across the country".


Coline M. Campbell: Madam Speaker, I cannot help but raise a couple of issues that the minister mentioned.
Before saying that, I want to congratulate my colleague from Broadview-Greenwood. The motion is timely in view of Small Business Week that we will be concentrating on. I think there is a difference of opinion whether it will be next week or the week after, considering some of the notices that I have had. However, I do think it is timely that we debate it, because small businesses in Canada are definitely suffering and are definitely losing each day to the perils of the conditions that exist today.
The minister in his speech referred back to 1982.1 just happen to have the submission of the Canadian Federation of Independent Business to the committee studying bankruptcy dated September 11, 1991.
I want to read into the record what they thought when they were giving a submission in the context of this debate. I read: "The 1980s provided a roller coaster of economic conditions for business in Canada. The country
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experienced a recession in 1982, the likes of which had I ask the minister how he could put blame anywhere not been seen for many years."	else but on his own government policies which I have just
enumerated.
I add on that note, a recession that was international. Continuing on that: "Recovery from that recession was uneven with some regions of the country taking years to climb out of the abyss. More recently, the current recession has been even more severe and recovery experts agree will be much slower and more painful than in 1982. Businesses are reeling from a myriad of pressures, high interest rates, high inflation, structural adjustment, tax increases, the GST, the recession, constitutional uncertainty and most recently Public Service labour disputes. The latest survey of small business expectations shows that small business views the worst of the recession is over but is extremely cautious regarding future investment in employment."
Those are conditions that exist today because of this government. They went on to say: "Beyond the dramatic effects of the economy, independent business is telling us and the minister"-I hope he is listening-"that they are taxed to death. Thx reform has amounted to a cruel hoax for small business who have witnessed the total tax take and compliance costs imposed by governments at all levels continue to escalate."
They went on to say: "In a poll of CFIB members taken between January and July of 1991, 73 per cent indicated that the total tax burden,"-I heard it all summer-"is a significant problem for their business. Seventy per cent point to government regulation and paper burden as significant."
I ask the minister: How do you get off criticizing others 10 years ago when people are saying it is now that there are high taxes, high interest rates, high Canadian dollars and we are not able to produce and export our products? I had a company the other day, the Tin Mine in Yarmouth contact me. The president wrote to me and said it was not the workers. They were doing a good job so do not tell me they had lost their competitiveness in the labour force. It was because of the tin market, the price in the world tin market, and that is dealt by a world council, and "the high Canadian dollar" that they had to close.


Thomas Hockin: Madam Speaker, I appreciate the intervention and the questions and I am very happy to answer them.
First of all I have to remind the hon. member that in 1987 the federal government brought in corporate tax reform. One of the reasons we brought it in as a lead-up to the free trade agreement with the United States was that we wanted to make sure that our corporate tax structure was not too much out of line with our neighbours. So we reduced corporate taxes. This was for big corporations-fought, by the way, by the NDP and the Liberals-but we reduced corporate taxes.
In the province of Ontario, six months later, the Peterson Liberal government filled up the tax room that we had cut.
Yes, it was a cruel hoax, Madam Speaker, it was a cruel hoax because we cut the taxes and the provincial Liberals filled up the room left with more taxes.
Second, the individual corporate tax rate for small businesses in Canada at the corporate level is the lowest in the industrialized world. It is 12.8 per cent. That is the effective tax rate when you have a profit of $200,000 or less in Canada. You are in the best federal tax position of any country in the world. We have maintained that and we continue to do that.
Third, when you take a look at the over-all tax burden of business, and I agree with the hon. member that small business has had it up to here with taxes. They have had enough of taxes. But look where the taxes come from.
If you would see the survey on our border communities, most retailers find that 52 per cent of their tax burden is municipal. It is municipal taxes. When you have American governors write you a letter and invite you to establish your plant in their state, they are usually talking about some municipal tax break.
Municipal taxes are a major part of this. Provincial taxes as I have just explained-and by the way it was amazing when the provincial governments of Liberal stripe moved in and increased corporate taxes nobody

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over there complained. Now they stand up and complain about taxes.
Then there is the GST. The GST is a very interesting tax because it replaces the manufacturing sales tax. The manufactured-


Some hon. members:: Oh, oh.


Thomas Hockin: -see, they are going to shout so I cannot complete this answer.
The manufacturing sales tax was 13 per cent. We removed that and brought in the GST at 7 per cent which, in effect, is zero per cent on businesses because when you pay the GST as a business you get it all back at the end of the month. Therefore the effective rate is zero. So we removed a 13 per cent manufacturing sales tax and put in its place not a 7 per cent tax, but a zero per cent tax after the input tax credit. That is what we have done to decrease the burden on small business.
I agree with Mr. Bulloch that the burden of tax on small business is heavy but the federal government has been decreasing it, not increasing it. It is the other levels of government that have to answer to him.


Steven W. Langdon: Madam Speaker, I would first like to say to the minister that I think that is one of the most constructive speeches that I have heard a minister make in response to an opposition motion and I for one want to congratulate him on it.
I also think that some of the programs that he listed are important innovative programs which his government has put in place.
I want to make a brief comment with respect to his final parting shot about the Ontario New Democratic Party because I think we would both agree that the government of Ontario has taken important steps in the last two or three months to really reach out to the business community, to establish dialogue with the them and to try to move back from actions which were seen as provocations, including the move to establish publicly-owned auto insurance.
However I want to ask a question if I could as well as make these laudatory comments which I am sure will leave the minister in shock. Is the minister and his government prepared to do what has been so important to the small business community in the United States and establish a regime of small business set asides with respect to government purchases?
As the minister knows, these set asides are exempt even under the free trade deal on the United States side. Surely we should establish similar set asides for our small business community so that they do not operate at a disadvantage with the U.S. small businesses on their side of the border.


Madam Deputy Speaker:: There is one minute left for the hon. minister.


Thomas Hockin: I am sorry about that, Madam Speaker, because I would like to respond at some length.
It is an interesting proposal. It is true that you get a better shot at government contracts in the United States if you are a small business or if you are a minority. They have minority set asides also.
I am wondering whether we, in Canada, should not do the same. The only problem is we want to be competitive. If we burden government with more expensive goods and services because we are not taking the lowest bidder, then we are less competitive and taxes go up.
We are going to look at that. There is something in what the hon. member says. I know regional agencies have tried to make sure that we get small businesses reflected in government contracts. We have tried it through the defence department as well. We will look at it, but there is this other side, which is if you burden the federal government's full purchasing mechanism with the inefficient bidder rather than the lowest bidder, it could be that taxes will probably have to go up to pay for it. I do not know whether we want to do that.


Don Boudria: Madam Speaker, on a point of order, I merely want to indicate that my colleagues would like to avail themselves of the opportunity to share the 20-minute time slots for the rest of the day into two equal 10-minute slots so that more members can be accommodated on this important topic.


Ron J. Duhamel: Madam Speaker, I would first want to commend the minister for speaking on this motion and on a number of points that he has made.
I was disappointed however that he should in fact resort to some pettiness when he suggested that the Liberals were not interested in the private sector. That kind of commentary is not at all necessary. Look at the Liberal governments in Newfoundland, New Brunswick


HnHH!

and Quebec and at previous Liberal governments. There was a significant interest.
His reference as well to the setting up of lemonade stands in order to create employment really does not become a minister of the Crown. His comment too about throwing away money is somewhat verging on the irresponsible.
I would like to mention as well that my colleague from the NDP was rather cute about some of his comments when he referred to the Liberals' old policies not producing results. There is nothing "old" about our policies. In fact, I would be quite prepared to compare our Liberal policies in Ontario with the current social democrats' policies today to see who would win greater favour with the business sector. I find that unbecoming, and I think that is one of the reasons why we have difficulties in this particular House.
Would the member care to repeat his comment so that I could respond to it, or is he going to stoop to the kind of pettiness that we have just heard too?


Mr. Dorin:: I'm waiting my turn.


Ron J. Duhamel: Good, good.


Madam Deputy Speaker:: Order, please. This is Friday afternoon. We have an important debate. It does not have to get acrimonious. I will recognize members one after the other. If heckling starts, it sometimes goes further than all of us had expected it to go and nothing good is done for the people of Canada. I would really appreciate it if we could spend this afternoon in a fruitful, friendly manner.


Ron J. Duhamel: Thank you, Madam Speaker.
We recognize that about 80 per cent of the jobs created between 1978 and 1987 were created by small and medium-sized business. We find that it is a very dynamic sector for the country and creates jobs for Canadians. We also recognize that small and mediumsized businesses contribute to the quality of life in Canada, and I think that is often forgotten. Unfortunately, there is sometimes this negative attitude, this idea that business is insensitive to people, to the environment, etc.Of course, some businesses are not as sensitive as they should be, but in general, there are still people,
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men and women, who make an extremely important contribution to our quality of life in Canada.
I would also mention that I recently conducted a survey of small and medium-sized businesses in my riding.
I wanted to know from my own constituents, those men and women who run small and medium sized businesses, what they felt were government policies which were of assistance to them and which they felt were not terribly useful or in fact created certain barriers. I want to quote from that summary.
With respect to government as an aid to business, 6 per cent indicated that the export and trade shows were useful, that the local enterprise group was also of benefit to them, and that government grants-6 per cent again-could be particularly helpful depending upon how they were administered.
With regard to the government as a detriment to business, this is what was reported. The goods and services tax was felt by 54 per cent of the people to be a real impediment to their growth, to their vitality. They felt that the property and business taxes were not at all useful, that they were in fact detrimental in a significant kind of way. Many referred to the Canada-U.S. Free Trade Agreement, 18 per cent, and there was a reference by 12 per cent of the respondents to the government requiring paperwork, a reference to interest rates, to unnecessary government regulations and to government competing with business. Some 9 per cent of the people felt that those got in the way of building the kind of climate, the kind of atmosphere, that could contribute to growth in their sector.
I want to bring to the attention of this House the following points. In a number of recent surveys here are some of the problems that have been identified by people in those sectors, in addition to the ones to which I referred, as to what lies in the way of future growth.
Small business confidence is low in this country at the present time. In 1991 it was pointed out that 78 per cent would probably see their businesses weakened as a result of what is happening; that many of those businesses, the large majority, were bracing for a deterioration of the business climate; that 55 per cent of the businesses

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would be spending less; that there would be cutbacks; and that those cutbacks would exceed new hirings.
There was an economic outlook survey undertaken showing that small and medium sized businesses have slid in terms of confidence since 1985. It is not the Liberal Party or the NDP Government of the Province of Ontario that says this. It is, I hope, an objective survey which suggests that all these results called into question the appropriateness of government policies. They refer of course to the high interest and high dollar policies of this government, including the many taxation increases, well over 30 since they have come into power, and to the goods and services tax.
Many people who own small businesses in my constituency have called me and talked to me, come to visit me and talked about cross-border shopping, how detrimental it is to their businesses. They referred to the high dollar and high interest policies. They know a great deal about them and how detrimental and how heartbreaking they can be.
Of course I have mentioned the goods and services tax. It is not only the notion of the tax. It is the paperwork. It is the additional infrastructure that they require in order to make it work.
I have not yet had a chance to talk about the bankruptcies that are on the increase. I would like to refer to a recent survey in Ontario where there were over 3,500 respondents. I think it points out to a number of real concerns that we should have as members, that over one-third of those people who responded are thinking of moving out of Ontario, either their whole operation or part of it.
That put into risk roughly 500,000 jobs. Some 63 per cent of those who responded in this particular survey indicated that they were going to decrease their hiring; 57 per cent had cut or intended to cut capital investments; and most of those who responded were thinking of going to the U.S. as an alternative. I find those trends, as well as the trends in terms of lack of confidence, lack of hope, rather disturbing.
What can be done? I think the motion points out that there is a need for more capital for certain businesses,
particularly those which are getting started; that there is a need for less red tape; that we really have to be particularly sensitive to the increases in taxation because these men and women are directly affected by it; that there is a need for less paperwork; that we must remove unnecessary government regulations; and that the government must not be competing with the private sector when the private sector can develop that service at a reasonable cost to Canadians.
Those are things that can in fact be done. Some of those have been attempted by the government. In fact there have been successes in certain areas, but I would argue that much more needs to be done, particularly with respect to the cutting of the red tape, the paperwork and making more capital available.
I just want to point out, as I near the end of my address, that we as parliamentarians have a golden opportunity with Small Business Week coming up. We could point out that the small business sector is potentially a high growth area; that the small business sector is creating a number of interesting, challenging jobs for Canadians and if properly supported could do a lot more; that small business is indeed extremely rewarding because it brings a personal sense of satisfaction; and that small business contributes to innovations in our society and that is extremely important. We should also be pointing out that small business is really rather resilient when there are economic downturns.
I am particularly pleased to know that there is increased participation by women in small business; that technological change has accelerated and being integrated; and that there is a recognition that skilled people are an extremely precious commodity.
I have one final point. Small business is becoming increasingly integrated into the global economy. I see that as very positive.

I conclude, Mr. Speaker, by saying that we will soon have a wonderful opportunity to celebrate small and medium-sized business, during the week of the 20th to 26th.
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Entrepreneurship really is a very precious resource, a renewable resource, and we should celebrate that.


Dennis Joseph Mills: Mr. Speaker, I would like to thank my colleague for participating in this debate today. I would like to get his opinion on something quite specific.
The minister responsible for entrepreneurship and tourism in this country spoke earlier. I too want to commend him for what I felt was a solid address on the state of affairs of entrepreneurship in this country.
One of the things that he did mention in his speech was the programs and services available to small business to help entrepreneurs. For example, he mentioned the Small Businesses Loans Act which is an insurance policy for bankers who give loans up to $100,000 for small business.
My experience with the bank managers I have talked to is that nine out of ten do not even know that that policy exists. My own brother is a bank manager with the Royal Bank. I asked him about it and he did not know anything about it. In fact his supervisor did not know about it. This was about a year ago. I was quite amazed.
The second thing is that the Federal Business Development Bank has a training program or assistance program, a small enterprise program where it takes semi-retired or retired executives to help small business work out business plans, et cetera. It has a match making exercise where it matches the investor with the entrepreneur who is looking for help.
My question to my colleague is: Does he not think that the communications support from the minister's department probably needs added strength so that rather than hiding these services under a bushel basket and only making them available to larger corporations that can afford government relations people and lobbyists the Government of Canada should communicate these policies, especially since our entrepreneurs, the 900,000 of them, are in such desperate need in the country today?


Ron J. Duhamel: Mr. Speaker, I want to thank my colleague from Broadview-Greenwood for his question. Yes, he raises an extremely important point. As I indicated, and as he and other members have as well, there are some laudable programs out there, but one of the unfortunate realities is that those programs are not reaching many of those 900,000 entrepreneurs to whom
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he has referred. That is unfortunate because there have been literally millions of dollars spent to promote those, yet probably the majority of people do not know anything about them.
When I met with the business people to whom I referred previously, business people from my constituency, they indicated that it was extremely difficult to get information from government. They felt that there were a lot of programs out there that could in fact have assisted them, but it was virtually impossible to get that information.


Jim Karygiannis: It is
very important to note, Mr. Speaker, that in the House today we are discussing something which is very important, the backbone of Canada, the backbone of the Canadian economy. When we look at both sides of the House we see that the Liberals on this side are very interested. When we look at the other side we can only count a handful of members, maybe two or three at the most.
It is very important that we realize that our country's economy depends on the small business.
I had the opportunity to visit my colleague's great city and great province out west. I saw there that entrepreneurship, the little engine that we call small businesses is, working. My question to my colleague is: In his province has the GST and that way that this government has brought it about hurt? Yes or no.


Ron J. Duhamel: Mr. Speaker, I thank my colleague for his question. Yes, it has.
I have received calls. I have received visits. I even circulated a survey. I note my colleague has just joined us. I want to make sure that he understands this. I circulated a survey to the business people in my constituency asking them which programs were a help to them; which programs from government, I wanted to be fair; and which programs were not of assistance. The one that received the largest negative response was in fact the goods and services tax. Not only were they annoyed at the tax but really the implementation of it, the red tape, the government bureaucracy, the inconsistencies, the contradictions. They felt it was a massive negative blow they had to accept which did not help them at all. In fact it pushed them back.


Mr. Gilbert Parent (Welland-St. Catharines-Tho-rold):: Mr. Speaker, I compliment my colleague, the member for Broadview-Greenwood, for bringing forth this motion today.

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It goes without saying that the small business person in Canada has since the inception of our country provided the great bulk of jobs for our Canadian citizens.
Today in this debate, if I may, I want to deal with three aspects of the problems which this government has created by its monetary and fiscal policies. I want to deal with a topic that another colleague raised just before, the effect of the GST on small businesses and on consumers.
Second, I would like to address the debacle of bankruptcies to small businesses in this country.
Third, because I am the critic for youth in the shadow cabinet of the Liberal Party I want to discuss the effect of the clawback clause on child benefits as it comes under the scope of the buying power of the people of Canada.
First, the goods and services tax. We ask ourselves, why was sales tax reform necessary? For many years, corporations have been asking the government to reduce their taxes. So this Conservative government, with a 7 per cent GST, will remove about $4.6 billion in sales taxes from corporations and transfer those taxes directly to average Canadians. Under the GST, virtually all Canadians will pay more taxes and corporations will pay less. That is a given; that is a fact.
For people here in this Flouse and in the gallery today and those watching us on television, I am sure all of us are aware that you and I and all of us pay federal sales taxes today. Starting in January 1991, you paid a lot more federal sales tax with the GST. Canadians pay about $700 a year in federal taxes today. With the GST, Canadian families on average will be paying $400 a year more under the GST than they had been paying before.
Most purchases of goods and services will be taxed by the new GST from here on in and consumers will have to pay federal sales taxes on purchases of many items for which they have not directly paid federal sales tax before.
The question was asked before, does the GST hurt people in Winnipeg? The answer was very forthcoming. Yes, it will affect people all over Canada and it will hurt Canadians. Many economists predict that the GST will push Canada into a further economic recession instead of having us fight our way out. Canadians face higher prices, higher inflation and higher interest rates in this year with the introduction of the GST.
It also means, Mr. Speaker, lost jobs. The Liberal Party had a task force on the effect of the GST on the economy and it went right across Canada getting facts and figures. We have concluded that the GST will mean more jobs-for bureaucrats. It will not mean more jobs for Canadians. The member for Willowdale-


An hon. member:: Tax policing.


Gilbert Parent: Yes, we have those, these tax police; 3,500 new people will be getting jobs to police the rest of Canadians who have been paying their taxes all along.
I was referring to the study brought out by the hon. member for Willowdale. He said that in excess of 225,000 jobs were lost in our country directly because of the GST. We were told at one point that if there were any surplus moneys collected through the GST, these moneys would be used to attack the deficit.
How will the GST affect the deficit? First Mr. Wilson, who was then the Minister of Finance, told us that the GST would be revenue neutral, meaning that it would have no impact on the deficit one way or the other.
Next he told us that the GST was an integral part of the Conservative's deficit reduction plan. Well you cannot have it both ways. Then Mr. Wilson's budget showed that the GST and its rebates to corporations in 1991 would increase the deficit for the first two years. How will the GST affect the deficit then? It depends which Michael Wilson story you choose to believe.
I choose to believe the story that says that the corporations will be benefiting a great deal more than the average Canadians. The small businesses of our country are the ones that are going to be paying the real tab.
The tax is charged on a multitude of goods and services, but here are just a few, Mr. Speaker, which are now taxed but that were not taxed before. These are such things as hair cuts, funeral services-now we are even going after dead people-taxi rides-how difficult it is to add that 7 per cent unless it is worked right into the price-lottery tickets-which for some people are so entertaining in an otherwise dismal week-and stamps to mail our letters as we speak to each other as Canadians.
October 11, 1991

They are even taxing books, which students must have if they are going to learn. So we have a tax on education. We are taking money out of the pockets of students who have to work all summer just to get enough money to return to school in September. Then it is not enough because they have to get loans, they have to borrow money. That makes it ever so much more difficult.
As the hon. member before me has said, we pay a lot of lip service to the fact that the youth of our country are our most valued possessions and are where we should be investing our money, to help them along. How do you say that in one breath and in the next breath tax the very tools that students need to develop their thinking powers. This is a great mistake. It sends out the signal that this government has other priorities than the youth of the nation.
Finally there was one letter I received some time ago. It was written, actually printed, in very poor English. It was from an eight-year old in my riding who asked if even cookies would be taxed with the GST. I had to tell that student, that young child, that yes, even cookies were going to be taxed.
The GST will hurt modest income families. A recent study by economic analysts at Global Economics Ltd. revealed that even after families received the refundable GST credit more than half of all families with incomes less than $30,000 will be worse off or no better off under the GST than they were before. Fully 46 per cent of all families earning less than $30,000 will be worse off than they were before.
An average income Canadian family with children will pay $684 more in tax every year because of the GST. Is this fair? Is the kind of Canada we want to have one where the people who can afford it least are the ones who are taxed the most?
On top of this unfairness the government has not fully indexed the refundable GST credits which are available to modest income families nor the income threshold at which families can qualify for the credits.
I submit that over time inflation will erode the value of the credits and each year fewer and fewer low income families will qualify to receive the benefits.
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I point out that half of all seniors will pay more tax under the GST. Global Economics Ltd. estimates that half of all seniors will pay more tax as a result of the GST even after receiving their refundable GST credits.
In this House I and many of my colleagues have presented petitions to this government asking it to rescind the GST or at least to change those portions of the GST which would affect those people least able to pay. We submitted over 600,000 signatures to this House to no avail.
The GST means higher prices. The government admits that the GST will raise prices and increase inflation. The government itself predicts that prices will increase by 1.25 per cent on average and other economists predict that prices will rise by much more than that.
Sadly no one believes, or very few people believe, the government's claim that prices of goods will decrease with the introduction of the GST. I challenge anyone in this House, or anyone listening to my words today, to give me any proof that prices have decreased anywhere in Canada on any items. Send it to me. If there are decreases I for one am not aware of them.
It has been said that some prices will go up a little and some prices will go up a lot. How will you know if you are being treated fairly?
I had so much more to say. In one inquiry I received from Mr. John Pastirik he asked how we were going to police this, how we were going to keep these prices down. My colleague points out that we have 3,500 police. They have not been very effective.


Madam Deputy Speaker:: I would ask for the co-operation of members of the House. When members are splitting the time, it somehow always seems that the period of 20 and 10 is much longer than it should be. This is why I had to interrupt the hon. member.


Lise Bourgault: Madam Speaker, I heard the member for Broadview-Greenwood, from the Liberal Party, say that his brother, who is a bank manager, does not know that the Government of Canada has a special program for small entrepreneurs. Maybe the member for Broadview-Greenwood is a better member of Parliament than his brother is a bank manager. It seems to me that it is almost impossible for somebody

October 11, 1991
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who has that kind of job to not know that this program exists.
I want to ask the member if he recalls-he was not here as I recall in 1987, he was newly elected in the 1988 election-that when the committee of the House of Commons discussed the free trade agreement and the GST, specifically the GST, the majority of those who appeared said that they were against the manufacturers' sales tax. They said: "Please take off that tax. It is not good for us. It does not help". But they said at the same time: "Please exempt me, tax somebody else". Ninety-nine per cent said no and 99 per cent asked to be exempt.
I am wondering how the member would have responded to that kind of behaviour if he had been in the place of the government at that time.


Gilbert Parent: Madam Speaker, I would make a couple of observations. First, I thank her for saying that I am a new member of the House. In fact I am of the class of 1974 and we have been around quite some time.


Lise Bourgault: There is nothing wrong with that class.


Gilbert Parent: The second thing she brought up was the free trade deal. The record will show that I spoke very forcefully against the free trade deal. I was opposed to it all the way, as were my colleagues on this side of the House.
When you make the statement that eveiyone who appeared before your committee for the implementation of the GST was in favour of the GST and then everyone wanted to be-


Lise Bourgault: I did not say that.


Gilbert Parent: The hon. member said that 99 per cent of the people thought that the GST would be a good idea and by the same token 99 per cent wanted to be exempt. I believe that is the gist of what the hon. member was saying.
It would seem to me that if 99 per cent of Canadians want to be exempt from the tax that means that only 1 per cent wanted to be covered by the tax. I do not know how this government came to the conclusion that this was a good thing for Canadians when most if not all of us were opposed to it.
The people most in favour of this were the big business people who have been well taken care of by this government, but the average Canadian has been forgotten.


Mr. Sergio Marchi (York West):: Madam Speaker, I would like to start by commending my colleague from Welland-St. Catharines-Thorold for a very passionate speech focusing on the GST and how the government's taxation policy has undermined the small business sector across the country.
I would like to ask the member, since he comes from a part of Ontario seriously affected by the cross-border shopping phenomenon, how the taxation policy, namely the GST, has contributed to the fact that we have so many consumers thinking of the bottom line, legitimately so, on the mass exodus that is the phenomenon of cross-border shopping?


Gilbert Parent: Madam Speaker, the hon. member, my colleague and chairman of our caucus, hit the nail right on the head.
The GST has driven people in my riding across the border. Perhaps this government is correct. As I have pointed out, the GST is creating a great many more jobs for the bureaucrats and now the Americans in Buffalo.
The people who are losing the jobs are Canadians. Our small business people are going out of business because they cannot compete with the burden of these taxes which have been put on their shoulders. We are not only losing our consumers but we are losing the businesses and jobs. That is a direct result of the GST being imposed.
Cross-border shopping is just another phenomenon. I believe it is because the consumers of Canada are rebelling against these taxes imposed by this government because they are unfair and fall on those people who can least afford it.
Like the hon. member, I can well understand that Canadians in my area, as well as in other areas close to the border, are trying to stretch their dollar as far as they can to take care of their families who have been put into
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jeopardy by the monetary and fiscal policies of this government.


Murray Dorin: Madam Speaker, I welcome this opportunity to join in this debate. I hope I can add something to it here today.
I would like to try to directly address the question involved in this motion.


Madam Deputy Speaker:: I apologize. The hon. member will be recognized as soon as this business has been looked after.


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 C-37, an act to provide for the resumption and continuance of grain handling operations at Thunder Bay, Ontario, without amendment.



THE ROYAL ASSENT

Madam Deputy Speaker:: I have the honour to inform the House that a communication has been received as follows:
Rideau Hall Ottawa
October 11, 1991


Mr. Speaker:: I have the honour to inform you that the Honourable 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 11th day of October, 1991, at 1.30 p.m., for the purpose of giving Royal Assent to a Bill.
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 his 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 Deputy Governor General was pleased to give, in Her Majesty's name, the Royal Assent to the following bill:
Bill C-37, an Act to provide for the resumption and continuance of grain handling operations at Thunder Bay, Ontario -Chapter 31.



GOVERNMENT ORDERS


[Stage Direction]
The House resumed consideration of the motion of Mr. Mills (p. 3627).
Murray Dorin: Madam Speaker, now that we have that important piece of business out of the way, I will try to continue.
What I want to try to address today is this question of the value of the Canadian dollar. We are hearing from a variety of people out there almost like a kind of tribal chant with drums beating about high dollar, high dollar, high dollar. They are talking about a dollar that in terms of the United States dollar is about 88 cents compared to the U.S. at the moment. In fact what we should be seeking instead of an 88-cent dollar is a 90-cent dollar, a 95-cent dollar, a $l-dollar, a $1.50-dollar or a $2-dollar. That is the direction we should be trying to go; not the other way, which some members and some people are suggesting.
If it were true that an 80-cent dollar would be better than 88 cents, why not a 70-cent dollar or a 50-cent dollar or a 25-cent dollar, or how about a 1-cent dollar? Would that not be wonderful, a 1-cent dollar? It would mean that everybody would have lots of them, but the problem would be that you could not buy anything.
I just returned awhile ago from the Soviet Union. When I walked around there were a few things that people have to sell but not many. There are very few, but for those few things that they have available to sell and if they sense you are a foreigner, they ask you for hard

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currency. That is the word they use, hard currency; not rubles but hard currency because they do not want rubles.
Why do they not want rubles? The average wage in the Soviet Union for a government workers is about 350 to 400 rubles per month. The current exchange rate that you can convert them for is about 35 rubles to the dollar. This means in real terms that they are getting about $10 U.S.-Canadian per month wages, and they are only getting 35 to 1 because that is artificially being set even now by the Soviet government. The real rate, some suggest, would be closer to 60 to 1 so they would be earning about $5 Canadian per month.
Why do they not want rubles? The reason they do not want them is because there are lots of them. The government over there has printed them over time and they have become worthless.
Is the answer to economic problems driving your dollar down by printing money? After all is said and done, that is what we are talking about here. It is done in a slightly different way these days by the Bank of Canada, how it operates and how it actually puts money into the system. If people are not aware of that, I would suggest members may want to go over to the Bank of Canada, as I did awhile back, and take them through it, or I would even by glad to sit down with them and tell them about it.
In any event, at the end of the day what we are talking about here is printing more money or not printing more money, plain and simple. That is it: to print or not to print. When we say that we should put the dollar lower, drive the dollar down, the way you do that is you print more money so that there are more dollars. That is what drives the dollar down, but the more you drive it down, the less value it has when you go to buy something.
If we think historically about the countries that have done well in the post-war period economically, most of us would probably think of countries like Japan and Germany. If we think about the value of their currencies, what comes to mind? Low value currencies, worthless money? No. High value currencies, hard currencies, strong yen, strong Deutschmarks. Why is it that the Japanese have all the money to invest? Why is it that the Japanese can come over here and they can buy with their yen, convert into Canadian dollars and make all this investment? It is because they have value. They have created value relative to the Canadian economy and relative to the Canadian dollar.
What happens when that investment flows into Canada, whether it is in the form of debt or whether it is in the form of equity investment? Naturally it has the effect of raising the value of the Canadian dollar because it is being traded at that time. All of that investment, that job creating investment, is raising the value of the Canadian dollar.
Why is it coming in? It is because by and large around the world Canada is being seen as a place to invest. When your dollar is going down and people are taking money out, there is a lack of confidence. A high dollar is a sign of confidence.
A few years back, if we can remember, previous ministers of finance including our own at one point were running around the world seeking emergency lines of credit to try and prop up the Canadian dollar. Why? It was because there was a lack of confidence at the time, for whatever reason.
That is not happening right now. What is happening is not only have we not been borrowing any, at least at the federal level, we have been paying them off. We have been buying up foreign currency which in fact helps keep the dollar down. Our foreign reserves, in the neighbourhood of $20 billion or so, I believe are probably at historic levels. We have probably never had such high foreign currency reserves. Why the Bank of Canada on behalf of the Government of Canada has been buying it is to try and actually hold the dollar down.
All the evidence does not support the facts, the rhetoric that is going on. What it does support is that there is an element of confidence.
I would predict-and I cannot guarantee this, of course-that if we were able to reduce the uncertainty, the one major uncertainty in this country right now which is the constitutional question, if we were able to resolve that satisfactorily, I would suggest to you that would increase the confidence in this country to an even higher degree, to the point that we would probably reach par or even better with the American dollar. People would say: "There is a stable country. There is a good place to invest. That is where we will put our money". Those are investments, those are jobs.
That is the way you get jobs, not by printing more money. Printing money is for losers. The question is: Why do we want to join Argentina, the Soviet Union and countries like that in terms of economics? What we want to do is join the winners' circle: Japan and Germany.
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That is the group we want to be with. Not the losers, the winners. They want to be with the losers. This tribal chanting: print more money, print more money, print more money, because at the end of the day that is what it says. No matter what kind of code you use and how you disguise it, that is what it is. Print more money is not an answer. It has been tried before by many governments, many times, and it is being tried today by many governments all over the world. Not to my knowledge at any point was it ever successful.
That is why in Germany, after they learned their lesson in the thirties because everyone had wheelbarrows full of money but could not buy anything, they put in their constitution the requirement or the goal of the bank, the Deutsch Bank in Germany, for zero inflation. They say currency stability or whatever words they use that would translate.
Hard currency has been behind the success stories of the economic power houses today. That is the club and the circle we are trying to join, not the losers' club.
The question is then: Why do we have this difficulty right now, vis-a-vis the United States? I think someone can answer it better than I can. I would like to quote from testimony before the finance committee earlier this week. The gentleman was Mr. Lloyd Atkinson, chief economist of the Bank of Montreal, who said: "Second, there is no question that bringing down the value of the Canadian dollar from its current level of 88 to 80 would have a beneficial impact initially and it may even have a somewhat permanent impact on our exporters, but it would not fundamentally solve what I consider to be the bigger problem".
Let us look at the past five years. This is the key, just looking at five years alone. These are numbers reported in Canada. They have also been reported by the Bureau of Labour Statistics in the U.S. so it takes account of the appreciation of the Canadian dollar. We have seen unit labour costs in Canada's manufacturing up almost 48 per cent and unit labour costs in U.S. manufacturing down three-tenths. In just five years we have lost in comparison with the United States in terms of unit labour costs 48 per cent. That is our problem, not the dollar. The dollar can go up and down, but by and large at the end of
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the day what you want are dollars that will buy you something in the rest of the world or that you can invest in the rest of the world; that will purchase you something, not a bunch of worthless paper which some would seek now to suggest is the answer to our problems.
The question then becomes for us: What would properly be the result if we were somehow to suggest that this high dollar could be changed or how it would have an impact on interest rates? I will try to make that connection. I am not quite sure how much time I have left or whether I will be able to make it.
The more and better currency stability that we have, the greater confidence there is in the Canadian dollar and the less people will be willing to take or expect for it or demand for it in terms of lending you money. The reason for that is there will be confidence that they are going to get real money back. They are not going to see their money lost through inflation or money that has just been printed. They want to get real money back.
That is what brings interest rates down. That is why they have come down about 500 basis points, about 5 points over the past year. It has been money flowing into Canada that does push the dollar up. As I have explained, that is not necessarily a bad thing. That is an impact.


Dennis Joseph Mills: What about our exports?


Murray Dorin: That does push the dollar up. It is not necessarily a bad thing. There will be a question period. I will be glad to answer the question.
What it does is it brings interest rates down. If that money were not flowing in, interest rates would be even higher than they are. You cannot have one without the other. You cannot suck and blow at the same time. You cannot bring interest rates down unless you are prepared and want to see an increase in value or at least a stable value of the dollar.
The suggestion that somehow we should just print a more money, that that will take the dollar down, yes, it will. Will it take interest rates now? No, it will not.


Thomas Hockin: Madam Speaker, I would like to ask my colleague a question. I want to congratulate him.

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Some hon. members:: Oh, oh.


Thomas Hockin: I notice that opposition members stand up and ask other opposition members questions. It is nice for me on a Friday afternoon to have this opportunity myself. I am just going to take advantage of it.
What the hon. member is trying to do is something that is very difficult, which is to explain monetary policy.
President Kennedy once said he never knew the difference between monetary and fiscal policy. Often I feel that the people across the aisle do not know the difference either.
In his explanation he made a very important point. Let me just ask him, if we unilaterally lowered the dollar from 88 cents to 80 cents tomorrow and held to it for a whole year, would that mean that we would have to adjust our interest rates to pay for this diminished dollar that the person who borrowed our money would get back at the end of the year?


Murray Dorin: It would mean a number of things. It would mean that people who had borrowed in foreign currency, such as Ontario Hydro for example, would have to pay many more dollars to enable them to repay the interest and the principal on their loan. Ontario Hydro would have to pay many more Canadian dollars and somehow raise it by raising prices for hydro in Ontario in order to make those payments.
That would be one of the impacts.
This debate originated earlier this week from some statements made by Mr. Tom Courchesne, a noted economist. Mr. Courchesne is not entirely wrong on this question. He suggested pegging our dollar to the United States at 80 per cent. Mr. Atkinson explained this quite well, maybe better than I, and maybe I should quote from him. This is the gentleman I quoted from earlier.
Let us put it in the context of what Tom Courchesne was talking about. He was talking more or less about the irrevocable fixing of the Canadian dollar to the U.S. dollar at approximately 80 cents. First and foremost if we do that then we are essentially relegating the Bank of Canada to a role as the 13th federal reserve district, led by Mr. Allan Greenspan. We will not make our decisions
in Canada. We will accept whatever Mr. Greenspan and the federal reserve do.
So we become a 13th part of the United States, a 13th federal reservist. That is what Mr. Courchesne is essentially suggesting, for those who wish to read about it.
He goes on to say that because it would have one role and one role only, namely to fix the exchange rate and whatever rates of inflation or interest rates came along with it, we would have our currency tied to the U.S. and would get whatever inflation or interest rates that brought us.
The question is do we want to run our own show here in Canada? Or do we want to accept Mr. Courchesne's suggestion that we relegate our responsibility in terms of monetary policy to the federal reserve in the United States?


Mr. Jerry Pickard (Essex-Kent):: Madam Speaker, it is a privilege to ask the member who just spoke a question. However, I would first like to clear up one of the myths that seem to exist. Liberals have not advocated printing money. Liberals have suggested that the difference in interest rates between the U.S. and Canada has been as high as 6 per cent and that is not producing better business circumstances here when there is such a large gap between them. That gap should be reduced, which would drop our dollar which is over inflated because of the interest rate policy that is being carried out.
I have a document here printed in The Toronto Star yesterday in which the member for Halton-Peel, a past minister from the Toronto area, and the member for Mississauga South, clearly say that this government's high dollar policy is an extreme problem and that there is a tremendous internal battle in the Tory caucus.
Could you justify what you just said and leave out half your Tory members such as the one for Mississauga South, who led the finance committee across this country, and other members who have been grossly outspoken about finances in this country and are now saying that your policy is wrong?


Murray Dorin: Madam Speaker, what it means is that I am going to have to take those members and sit down with
October 11, 1991

them and tell them just what I told the rest of the House here today.


Maurice Brydon Foster: Madam Speaker, I was pleased to hear the hon. member for Edmonton Northwest explaining the joys and values of the high dollar because clearly the agricultural community in this country has suffered tremendously over the past several years.
It is estimated that the high dollar cost Canadian farmers something like $426 million a year in the value of their crops, which are mostly exported and sold in international markets in American dollars.
The great concern this year is the $2 wheat and the fact that the government cut government support programs last year by 40 per cent, $1.3 billion. That is carried right over. That shortfall last year was carried over into this year.
Yesterday the government came through with some support. We do not know exactly when it will be paid. Perhaps next March or April. We have seen the response, especially in southern Alberta where we saw 40 kilometres of tractors, combines and trucks on the highway just a few days ago.
That same farm protest group from Wardner in southern Alberta, the hon. member's own province, has issued a press release today taking the government to task not only for cutting their support programs last year by some $1.3 billion and stonewalling this year on emergency assistance. It also called into question the very figures the Minister of Agriculture used yesterday in his press conference.
It pointed out that payments made in April, six months from now, will not help those producers. Many of them will be irreparably destroyed. They will lose their property and so on. The group is so frustrated that it is calling on farmers to withhold their grain deliveries.
One of the organizers, Bob Grbavac, said to me today: "If the Prime Minister wants to give away wheat to Russia, he is going to have to crawl over their bodies". They are frustrated and disgusted with the way the government has handled their support programs at a time when world prices have dropped to the lowest level since the 1930s.
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Murray Dorin: Madam Speaker, I could perhaps explain this question in the way it was explained by a farmer from western Canada earlier this week on television.
He said that about 20 years ago his phone bill was $4 a month and it took one or two bushels of wheat to pay for it. These days his phone bill is about $99 a month and it takes 25 or however many bushels of wheat to pay for it.
Rather than two bushels a wheat to pay his phone bill it now takes 25 bushels of wheat. We have a situation where there is a lot of wheat around that for various reasons people know well, which I will not bother to explain, nobody is prepared to pay much for.
That means that while he has wheat, maybe as much or more than he had before, he cannot buy anything with it, if he wants to buy other things or real goods.
If we want to draw an analogy, it means that if we print a lot more money when we go to buy oranges or anything we might want to buy from the rest of the world we will not be able to get as much for those same dollars.
We can sell all the wheat we want if we are prepared to take rubles for it because there are lots of them in the Soviet Union. It showed us the way.


Sergio Marchi: Madam Speaker, I would like to pick up and perhaps get the debate back on track after a professorial speech urging a $2-dollar.
I think the motion put forth by the Liberal Party, namely the critic for entrepreneurship, the member for Broadview-Greenwood, is a very important one. It is also a very timely one as this country goes through its difficulties.
In terms of the motion there are four aspects to the undermining of the small business network across this country. They are the question of the interest rates, the level of the Canadian dollar, the reduction of the paper burden, and the fact that there is very little financial or other assistance available for the small business sector.
It is timely because while this government purports to be a friend to business, the real situation is that if it is a friend to business it is clearly only to big business.
I would like to draw this debate a little closer to home, to metropolitan Toronto. Indeed, we all talk about it. It is true that the small business sector is the engine of economic wealth, prosperity and jobs.
In the metropolitan Toronto area there was a survey done by the Toronto Board of Trade. It looked at all the

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various employers. It concluded that the 500 largest employers, plus all three levels of government, plus all levels of our social service agencies, account for 40 per cent of all the jobs created in metropolitan Toronto. I am sure that within that component, we have a good slice of what we can consider small business.
To take these figures at their worth it means that in metropolitan Toronto, close to 60 per cent, if not more, of the jobs created and being created, are done by small business people. But the picture of metropolitan Toronto in that small business sector, despite the speeches before us by the other side, is a grim one indeed. It is not that we like to preach and pass on bad news, but we are of the mind that unless we recognize the failures in the system, unless we recognize the problems, and unless we recognize the hurt and frustration felt in metropolitan Toronto and across the country, we will not be able to get the policy, the program, or the solution that will stop the bleeding as it has been for the last little while.
The government this morning stood up and cheered the unemployment levels, but metropolitan Toronto is still in double digit unemployment. Over 200,000 are searching for work, and as of this morning, there were
6.000	fewer people in the labour force. That meant that either 6,000 people left metropolitan Toronto or that
6.000	people have given up looking for employment.
Since 1989, over 75,000 jobs have left the city of metropolitan Toronto; over half, 47,000 to be specific, in the small business manufacturing sector. Unemployment in the building trades is over 60 per cent. I talked to a construction contractor yesterday from my riding who had 300 employees last year. That has been reduced to a payroll of 50 individuals. He has building contracts in of all places, Ottawa, because of a shortage and the lack of activity in metropolitan Toronto.
The movement out of metropolitan Toronto, either to other parts of the country or particularly south of the border, is rampant. The Federation of Independent Business commissioned a study of their own membership and found that 36 per cent of small businesses would be seriously looking at moving out of Toronto, with most of them looking to the United States.
Bankruptcies are another way of measuring the pulse of small business. In the month of August there were 100 additional businesses, small businesses in Toronto that went belly up, bringing to a total over the last year of 900 further bankrupt businesses, enterprises, call them what you will, employers in metropolitan Toronto. And to make matters worse, we also have a provincial New Democratic government that is poisoning that atmosphere further, and aggravating the situation and escalating the number of people and companies that are moving out of metropolitan Toronto.
When I said that this government purports to be a friend of business, it is not a friend of small businesses or of medium-sized firms. If you look at each of the Conservative's financial blueprints in their budgets, they talk in great rhetoric about the small business sector, the small business family-created company. Yet, if you flip through any one of the pages in the federal budget, there is nothing there to encourage the type of activity that my hon. friend from Broadview-Greenwood spelled out in his motion today. There is nothing to spur on the ideas from going from an idea in someone's mind to creating economic wealth on the streets of Toronto, no financial assistance.
We read about the large multinational corporations getting financial assistance from this government, companies that have received hundreds of millions of dollars in taxpayers' moneys and then all of a sudden decide one day that they are going to move the shop south of the border. Yet small businesses that are looking to buy new machinery and are looking for approval cannot get the time of day from this government. That is the frustration that this motion speaks to.
The government then talks to us about foreign investment, but there too we have to dissect what foreign investment means under a Conservative regime. For me foreign investment equals foreign takeovers. Of all the foreign investment, 100 per cent that has been approved, the bulk is in the form of foreign takeovers. I do not think over the long run that that is going to help the economy. Why? Because the decisions will be taken south of the border and Canada will gradually lose the
October 11, 1991

ability of making its own decisions for its own reasons, for its own people and for its own advantages.
The de Havilland company is a perfect example now that de Havilland is in foreign hands. Not only because there are some 4,300 jobs at stake at de Havilland, but economists estimate that for every job at de Havilland there are four other jobs in the province of Ontario and across the country. How many small business entrepreneurs are feeding de Havilland? How many suppliers rely on de Havilland? Yet, if the decision on the future of de Havilland is taken by Boeing, an American conglomerate, then that is not only going to affect the livelihood of de Havilland but it is going to have a multiplier effect on the lives, futures and careers of other individuals and other enterprises in the province.
The other factor, when I speak to small business individuals in my riding, is that they get very little help when they are competing for international contracts. They run into West German and Japanese companies that have the backing of their respective governments. Our small businesses do not.
What about research and development? When we talk about the creation of the new ideas, doing business differently and being on the leading edge of today's technology, why are we not spending the R and D money that our competitors in the global village are spending?
We had the member for Welland-St. Catharines- Thorold talk about GST and taxation. Small businesses are feeling over-regulated and overtaxed. The bottom line is driving them south of the border. There are more businesses that are wondering why they are in business, because at the end of the month they do not have too much to show for it.
I see, Mr. Speaker, that you are signalling that my time is up. It is my hope that this government listens to the motion that we are presenting today. It is not a motion crafted to try to take up the time of the day until four o'clock but to speak of the real need to take care of the big business friends in this country and to get behind the small business network. That is the foundation and the pillar of job creation in this country, a pillar that unfortunately is coming apart at the seams.


Mr. Jim Jordan (Leeds -Grenville):: Mr. Speaker, I would like to congratulate my colleague from York West for portraying so vividly and in such a short span of time
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the importance of small business to this country and the dilemma in which small business now finds itself.
I just wondered if he was familiar with a recent report that was issued yesterday from the Canadian Federation of Independent Business in which it portrayed the sagging interest in a free trade deal. Back in 1987 there was some support from small business for going into a Canada-U.S. trade deal. There is a much reduced interest by Canadian small business people in going into a trilateral deal with the Canada, U.S. and Mexico bloc. The emphasis was placed, particularly in the article that I read, on anything that had to do with agriculture in this country, whether it be at the manufacturing level, the processing level or the distribution level. There was very limited support for the free trade bloc of Canada, U.S. and Mexico.
I wonder if my hon. friend from York West would like to comment on that scenario: limited interest back in 1987 but even less interest in that now. What experiences does he think they have had that would lessen this interest in the free trade deal being broadened any broader than it is right now?


Sergio Marchi: I would like to thank my friend from Leeds-Grenville who I think raises a very interesting concern.
He started off the argument by saying that during the free trade debate of the last election there was limited enthusiasm from the small business sector. He is quite correct on that because most of the cheerleaders, as we recall, were the big business corporations, the multinational corporations, the corporations that funded the free trade campaign as third party advertisers, and I hope the Lortie commission comes to grips with.
I think there is no doubt that not only the small business sector but Canadians in general, unfortunately, after free trade had been approved are certainly sceptical about the results of the free trade discussions and about amplifying it and going into it in a North American context. In the last election we split the anti-free trade vote, I suppose, with our friends of the New Democratic Party. But in every poll since the election the number of people who think that the free trade pact was a good one has been reduced. There is a very good reason for that. It is not built by political speeches or by rhetoric. It is formulated based on the experiences that Canadians are

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losing more as opposed to winning more from this free trade pact.
Consider a small business person from Toronto who is forced to go to Buffalo because they do not have the taxes that are imposed in Canada, the rents in Buffalo are cheaper than they are in the city of Toronto, the wages are lower in the States than they are in the city of Toronto, they get a three-year tax holiday from the city and the regional government in the United States. Compare that to here.
When they begin to see that as a reality they begin to compare the experience of how it would be to locate in Mexico where products will be built and then shipped back into this country. Given the labour laws and the labour wages, it obviously puts the fear of God into the small business person in this country. Not only is the situation bad today, but he or she sees the potential for it being aggravated.
The small business network is not of the mind to expand the free trade agreement but rather to revisit the existing agreement between the Americans and Canadians and say: "Look, let us clean up those areas where clearly the Americans are winning and the Canadians are losing".


Lise Bourgault: Mr. Speaker, I have been in the House since 10.15 this morning, listening to Liberal members congratulating each other and airing their views on the economy. That is all very well, but they do not have the government's responsibility to make decisions and run the country in very difficult times.
As I listen, I can imagine Canadian voters sitting in front of their television screens, eagerly following the debate this afternoon, and the people in the gallery who have a keen interest in these proceedings as well, and I imagine they are reacting the same way I am and saying to themselves: Fine, the Liberals are against the Goods and Services Tax, against free trade with the United States, against the government's Budget, and in fact against everything this government has done. On the other hand, they are asking the government for more money for farmers, for the refugees who are a specialty of the Immigration critic-I have often heard him talk about the refugee situation, immigration, and so forthmore assistance for fishermen and increased assistance for families.
They want us to ensure there won't be any taxes for truckers, because they have problems, and that I agree, with the Americans. They are indignant about crossborder shopping. I think we should start a campaign to enhance Canadian nationalism and ask Canadians to buy Canadian, because we have the social services Americans do not have. Of course the system costs more. Mr. Speaker, I really wonder what would happen if the government were not committed to reducing the deficit and thus enhancing Canada's position internationally. I wonder what the Liberals would do. I don't know whether the hon. member would care to respond. This is probably more a comment than a question.


Sergio Marchi: Mr. Speaker, our party is not alone in its fight against free trade and the GST. The Canadian people are against this government's programs. It is no accident that the government is down to 15 per cent in the polls, in this country. This is not something that was dreamt up by the Liberals, it's reality, the opinion of people who don't like this government's policies any more than they like its programs. We are working for Canadians, and they want an alternative. Well, we are ready for an election. We have programs. We have alternatives to offer. When my hon. friend moves to the other side of the House, she will get plenty of answers to her questions.


Jerry Pickard: Mr. Speaker, one only has to walk down the streets in small communities in this country to see the devastation of small business. I see store closings, I see empty stores, I hear of people being laid off. In my riding yesterday, I heard that one of the major farm equipment dealers was putting his entire staff on shared work programs. I have a major tire dealer who has written and told me that a staff of 16 is now down to 3. I am seeing this type of thing, either tremendous reduction in the labour force or closures of businesses or empty stores. That tells us the plight of small business.
We do not have to go beyond that to know small businesses' problems. I think that the debate this afternoon is to zero in on what are the causes and then what are the remedies. It is very important, if we are to examine the problem from causes to solutions, to really
October 11, 1991

look at what small business is telling us. If we were to look at the positions they put forward, we would quickly understand some of the difficulty they experience every day.
First of all, let me point out that small business is the basis of business in this country, the generator of jobs. Three out of four new jobs which have been created in the past 10 years in Canada have been created within small business. We know that the way small business goes in Ontario or British Columbia or in the maritimes is the way the country goes. Small business is attempting to tell us where some of the myths about how much money is being made by those who own small businesses, and that really is a myth. I am not really sure that everyone realizes that 61 per cent of the seif-employed small business entrepreneurs in this country earn less than $27,000 a year. In the general population, it is 54 per cent. Small business owners, entrepreneurs in the iow categories earn less money than the general population.
In the $27,000 to $40,000 income bracket, while 22 per cent of our country's population falls in that bracket, those people in small business to fall in that bracket are only 16 per cent. Fewer small business entrepreneurs earn from $27,000 to $40,000 than the average in the country.
When we go to the higher figures, it is again very much against small business. Incomes of owners of small business is much less than the average income in this country yet they generate the majority of jobs in this country.
Why are those incomes less? We have talked about taxes. We have talked about interest rates. We talked about input costs to business. Very clearly it has to be understood that before the GST was put in place, the average Canadian small business was paying in the neighbourhood of 34 per cent taxation, while its counterpart in the U.S.A. is paying in the area of 29.5 per cent.
The GST has pummelled much of that small business just by extra cost. At the same time, the GST has created a perception of over-taxation to everyone who walks into a store.
We take the 8 per cent provincial tax in Ontario, add the GST on top of it and in my riding, people say: "We are driving away business in droves." When you buy a
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product and you go up and pay for it, at the same time, you have to pay 15 per cent more in taxes. American tourists who are very abundant in southwestern Ontario do not come nearly as much. When they see those tax increases, they walk away very rapidly.
That is one of the major problems that small business is facing; the perception that taxes are extremely high and the reality that in fact they are really high.
Second, I think if we look at the phenomenon that has been created in the last five years but certainly far more in the last couple of years since the GST has been introduced, that is cross-border shopping, we certainly realize that in areas where we are near the border, we receive monthly or weekly circulations from communities across the border. They send to each one of the residents in Essex County, Windsor, Chatham, Kent County brochures telling them where you can get deals, what kind of buys you can make. They are really hard hitting sales items that are brought in from the States to our communities.
I do not blame people for going across the border and shopping for those values. I do think that we have to look very carefully at what we as the Canadian government, provincial government as well as business can do to prevent that from continuing.
I know that if we do not take an aggressive position to deal with the cross-border shopping issue rather than look away from it, we are going to be in dire trouble.
I would like to read a quote from the mayor of Windsor, John Millison:
Cross-border shopping is part of a tax revolt across Canada. I
don't think Ottawa understands or realizes it. Ottawa still thinks it's
just a new fringe group here and there.
Cross-border shopping is destroying many, many small retail businesses in our country. It is taking the tax dollar away from our federal, provincial and municipal governments. As a result, I think we have to act very rapidly to alter that.
I do believe we must start looking at taxation, interest rates and perceptions of high taxes. We realize from store closings, we realize the farm community and the automotive industry in my area have lost tremendous jobs, and there are fewer shoppers and a lot less dollars to be spent in small business. They are under a great

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squeeze. Unless we take actions that have been suggested by the Canadian independent businessman's group, unless we take actions as we have heard from businessmen across this country to change perceptions to help small business and to encourage business in this country, we are going to be in dire trouble in the future.
Mr. Speaker, I know you have a great deal of concern about small business and what is happening. I hope I do not hear another member of Parliament saying it is a frivolous debate this afternoon. It certainly is not frivolous. It is a deep concern we all have. It is a concern that this government must address.


Don Boudria: Mr. Speaker, I have listened attentively to the speeches of a number of members today. I was very impressed particularly with the speech of the hon. member for Essex-Kent who has just spoken. He is very knowledgeable. Unfortunately, I guess he is knowledgeable in the area of cross-border shopping. The reason why he is unfortunately so knowledgeable is because like me, his constituency has been a victim of that terrible situation that we have facing us in this country now.
The government across the way likes to pretend that the GST has had no influence on cross-border shopping. I received a letter which I have in front of me, not from a constituent but from a lady who writes from Pierrefonds, Quebec. She states: "After listening to the Minister of Revenue state in the House of Commons that the GST has had no effect on the increase in cross-border shopping, I think you should draw to his attention the statement in the enclosed American newspaper clippings".
The newspaper clippings that this lady has sent me are from Plattsburg, New York, a newspaper called The Press Republican. I have another one here from Lake Placid and another one again from The Press Republic of Plattsburg, New York, from a different day. Here is one that I want to bring to your attention. This article signed by Meg Denison talks of the following. It is entitled "Canadian shoppers flock to New England". Here is what it says in one paragraph: "Higher taxes in Canada also are sending more Canadians over the border to
northern New England. A controversial 7 per cent general services tax was enacted earlier this year, plus Quebec levies a 7 per cent provincial tax on the goods and services". It goes on to describe all those problems with cross-border shopping.
I want to ask my colleague: How is it that his constituents and mine know that the GST is a major cause of cross-border shopping, that American business is taking advantage of it or is aware of it, that American journalists' writings are aware of it, that Canadians generally are aware of this problem, but that the Conservatives across the way have not discovered it yet?


Jerry Pickard: Mr. Speaker, I would like to thank my colleague for a very deep based thoughtful question. This question is one that is being brought about by advertising, by newspaper articles, by all kinds of information coming forward.
I have an article here that was printed in the Detroit Free Press which tells how high the Canadian taxes are in comparison to American taxes, which encourages businesses to go from southwestern Ontario into the United States, which really suggests to American shoppers not to come to southwestern Ontario.
Ernst Young has done a report, a very careful report, about cross-border shopping. In it they suggest there are three levels of declaration of people coming across the border. Level one is the verbal declaration of someone who comes across the border with less than $100 worth of goods. That has increased since 1987 by 285 per cent. They also suggest that written declarations of people returning to Canada with $300 worth of goods have increased 325 per cent. Finally the number of people who fill out forms and pay taxes coming across the border in the last few years has increased 500 per cent. They outline all of the reasons for cross-border shopping and make it very clear that taxation is a primary motivator. As well, gasoline taxation in Canada: people going across the border to fill up their cars. Liquor: people going across the border to buy liquor.
Those taxes are increased by this government every time a budget comes along. We should not deal with just GST. We should look at the gasoline tax, the liquor taxes and all other taxes that have been imposed on Canadians
October 11, 1991

which have driven them out of our border communities into the States.


Thomas Hockin: I would just like to ask my hon. friend about provincial taxes under the Liberal government of Premier David Peterson. He increased 28 different taxes on the business community while he was premier. He brought in a special tire tax. He brought in the special garbage tax. He brought in a special increase in the corporate tax. Now the NDP government there refuses to collect the provincial sales tax on tourists bringing things back into Canada.


An hon. member:: In what riding did David Peterson run?


Thomas Hockin: David Peterson was the provincial member of Parliament from my riding and he lost by a huge margin. I have to tell you that the people of London care about these issues too.
The reason I am mentioning this is that there were many taxes brought in by the provincial Liberal government in the province of Ontario. Is the hon. member suggesting that they should be cut or done away with?


Jerry Pickard: I would like to thank the minister for his question.
The federal Liberal Party is not responsible for provincial government decisions, but I might point out that it is very clear that the Peterson government did increase taxes dramatically and there was strong reaction to that government. We all know that, but I must point out to the minister as well that the Peterson government showed a great deal more wisdom than the Tory government, because it balanced the budget. It did not run an extra $30 billion in debt. Your government not only increased taxes, added the GST, did all the horrendous things we are talking about by doubling taxes virtually over a short period of time, but it also ran a $30 billion debt year by year by year for every year that it has been elected.
You talk about fiscal responsibility. I might point out very clearly in the policies that this government has adopted it came in with a $180 billion debt and it has now brought up to the $400 billion level. When we consider high taxes, certainly that is one problem, but I think not only have you brought about high taxes. You have also
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raised our debt higher and higher and higher so that we are having difficulty functioning in this country. I would say that it is a crime the Tory government has done that.


Mr. John E. Cole (York- Simcoe):: Mr. Speaker, I certainly want to commend the hon. member opposite for raising this particular motion today because I think it gives us the time to talk about the economy, talk about what is going on in this country, and refer to some of the things in the motion. Maybe I will get to that a little later on.
I noticed in listening to him, and I did listen, that he was talking about tax reform and some other things. The Constitution came up in his discussions in the debate. He reflected something that I am hearing in my riding also, that people are kind of sick and tired hearing about the Constitution. There are other things to get on with. We have got this economy to get on with.
I think the economy is a very major part of our constitutional process and the constitutional proposal. I think it is very incumbent upon all of us to include that in our discussions.
If our economy is not good, if our economy is going down, if our barriers to trade and all the things that we talk about are there, it is going to be very difficult to get unanimity, certainly to get consensus, in a country that is feeling the pressure and not having the ability to move on into other directions. I think those other directions are very important.
I want, as does the member, to feel good about this country. I think the people of Canada want to feel good about this country. In order for them to do that, small businesses, large businesses, employers and employees must feel good about what they are doing. They must feel that they are contributing not only to the constitutional process but to the economic development and improvement of this country. I think that is a good start.
Another aspect of the member's motion and what he talked about was his book on a single tax. I have read that book. It took me a long time to get through it, because I put it at the side of my bed and I kept falling asleep every time I read it. I do not think that was because of the content from the hon. member, but maybe it was the fact that we do not get to bed too early around this place

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sometimes. He has some good concepts in there and some concepts worth while pursuing in certain areas. Basically I like the idea of it. I do not mind saying that publicly as I have said to him personally. The concept is good. There are some things about it that caused me some difficulty as I am sure they did him. When we look at it he made changes in it and even refers to that in the book.
I think what the member is saying is that he is trying to be constructive and provide constructive alternatives, and I like that. I think that is very commendable. It is not like the lead speaker from the third party in this place who was talking earlier today and blaming the federal government for unemployment statistics. Where they are bad it is the federal government's fault; where they are good it is the provincial government's bonus. They are doing a great job because they happen to be up in one area. It is the NDP provincial government that gets the credit. I think that kind of debate is not constructive.
One thing the member raised in his speech was increasing the budget for tourism. I can recognize that. Tourism is very important. We have talked about that. It is important to people in my riding of York-Simcoe whom he is aware of. They have got a problem. There is no question. When you quadruple the budget-I think that was the number he used-those tax dollars have to come from somewhere because they are tax dollars from the citizens who live in my riding, as well as the citizens in Broadview-Greenwood.
The member talked about environmental technology, that we have to put a push on there, that governments should be pushing that and getting financially involved in that area. That may be so, but I know a company in my riding called Engine Control Systems that is now worldwide. It has now developed a system of purifying exhaust from buses, that kind of diesel-type production, dropping the levels of pollution that comes out of these vehicles. It is going ahead. It now has an international contract. It is working with the United States, Mexico and a few other countries. I am very proud of that company. In fact it won the achievement award last year. It was the first time ever it was given out in the environmental field by the Government of Canada. I am very proud of the company and I see the work that it is
doing. It did that without government intervention, that word that scares me and I think it scares the member opposite.
Then we talked about the banks. Yes, I think there is concern about the banks not lending money to small business, even though there are programs there that the federal government has endorsed over the years to help. I do not think they are being as co-operative as I would like and certainly as the business people in my community would like. I agree with the member on that.
If I take those three or four things that we have talked about, the part that concerns me is that that means more government intervention. That means more government daily involvement in business. That means more bureaucracy, more tax dollars and, quite frankly, poorer run businesses in my view because I do not know of a situation where I can compare a business that is run by government and one that is run by private enterprise. If I compare those two businesses, I do not know one that I would say is more efficiently run by government regardless of the level of government. I think back to a few years ago when I was a member of municipal council in my home town of Newmarket. We got into this very same debate, not on the scale we are talking about here, but we were talking about concessions in arenas and who should deliver them. The municipality controlled those concessions for a while and it cost us a pile of money at the end of the year. We had bidders in private enterprise saying that they wanted to come in and do that. They were prepared to do that and they did it more efficiently. They made money.
That is what private enterprise is all about. It does not want government involvement. It wants to get government out of it. I think it makes a lot of sense in that way.
One thing I have heard about is what the Government of Canada is doing for small business, the tax situation and tax initiatives, and there have been lots of them. We can talk about the capital gains exemptions introduced for small business and the pension fund initiatives. We can talk about increased RRSP contribution limits. We can talk about the relaxation of ownership limits. All these kinds of things are very important, even the reduction of the federal corporate tax rate.


Lots of things have been put in place with regard to helping small business. I think those things have to be addressed and I think they should be talked of in a positive light because there are opportunities. I think it is a great opportunity for small businesses today and if we can get them thinking that way I think that will help, those 900,000 companies. Maybe we can make it into a million or 1.2 million companies. Let us make them solid. Let us give them the opportunity to be successful.
I am sorry our friends from over there are not here, but I do not consider profit a dirty word. I do not consider it a bad word. It is what makes this country click. It is what makes our economy click. It creates jobs, jobs. They did not feel it was important to talk about the economy of this country and small business, so they did not feel it was important to come today.
One of the points the member mentioned was the paper burden on small business. I do not think too many of us would argue about the amounts of paper, the paper that certainly crosses our desks. I know the amount of paper that crossed our desks when we were in a different life, before we became elected.
You look at it and you ask what the government has done. The government has done a number of things and the list goes on and on. In fact I have a list here of 20,30, or 40 of them, whatever it is. I could not even get through them all. I wanted to bring to the fore a few of them because I think they are important. The government has met with small business people and asked what it could do to make the system smoother, to make it easier, to make it easier for business to show a profit. That is what it is all about.
There were changes that were made to the Patent Act. That was one of the ones that was very important.
Another one which I think is very important and is going to help Canadian business and employees of Canadian business is the reform to the Bankruptcy Act. That is something that has been banged around and bashed around in this place and in many places for years and years. There obviously had to be changes made to that, simplifying the information burden requirements for both debtors and creditors. That makes a lot of sense to business people. They can understand that.
There have been all kinds of other things. One of the most interesting ones that I came across was something
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that I did not know about and I am sure members opposite did not know about it: the forms review within Canada Employment and Immigration. It was undertaken for the development, printing and use of all new and revised forms in employment and immigration.
There were 10,500,000 forms declared redundant and were rejected, 10,500,000 forms floating around this country affecting small business through employment and immigration. There was selective elimination and standardization, and now there are 3,000 official forms. There were 10,000 eliminated and we are now using
3,000	forms, which sounds like an awful lot to me but is one heck of a lot less than what has been out there and what we have been used to. I think that is a major step in the right direction.
Timing to statistic gathering, I know Statistics Canada has an important role to play in this country.
We look at the information quite often and in fact it is quoted in this place quite often. There have been a number of steps taken to assist small business, such as lengthy questionnaires being replaced by short forms. Most of the retailers, I think the figure is 85 per cent of the small retailers, no longer have to fill in annual questionnaires. Their results are taken from the tax records. The information is already in the system. It is just a case of getting it from somewhere else.
That seems to make more sense. The list goes on, but I do not want to bore you with all the details. However, it would be worth while for those people interested in this particular topic to talk to the ministers of finance, revenue and small business and get a copy of the list of changes in these areas.
The other point that has come up quite often, and I think we are rehashing an old debate but it has been brought up quite regularly, concerns the goods and services tax which replaced the manufacturers' sales tax.
I had, as did everyone else, an awful lot of people say to me that they were against the goods and service tax. I said in a public meeting that I was against the goods and services tax too. I am also against income tax, business tax, property tax, and all the other taxes. However, I happen to like the benefits they provide whether at the local municipal level, the provincial level or the federal level.

October 11, 1991
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Somewhere along the line we have to pay bills. If we want these services we have to pay for them. I think the hon. member in putting this motion was suggesting that we try to have something that was fairer and more equitable, and I agree with that. I think we have to focus in that direction.
Those members talking about the goods and services tax must recognize that it replaced a tax that virtually all sides of this House agreed had to go. The manufacturers' sales tax had to go. It was bad. lalk about loopholes. I think there were something like 22,000 special deals in one act affecting 750,000 people. The numbers were astonishing. That did not make a lot of sense to a lot of people.
The question became what to do about the difference in revenue. If you eliminate the manufacturers' sales tax that is fine. Eliminate the manufacturers' sales tax and where do you get the $15 billion or $18 billion that tax generated on an annual basis? Do you add it to the deficit? I do not think too many people would agree to add it to the deficit. I know that none of the people in my area would agree to add 20 per cent to 25 per cent to their personal income tax. I do not think there would be too many in my area willing to do that.
The question became where to get the revenue from? Because we have to get the revenue I have heard that maybe we could tax the very wealthy in our community, in our society. That is probably fair. I do not argue with that if we can eliminate those loopholes. I think most of the loopholes have been eliminated. Certainly people are telling me that over the last five, six or seven years most of them have been eliminated. It is getting harder for an accountant now to find these loopholes.
Maybe what we are doing is reducing the work force of accountants because they are not finding the loopholes and do not have the ability to buck the system we are trying to make fair.
There was a lot of discussion with small business pertaining to the goods and services tax. When it was first proposed there was no question it was going to be a major burden, financially. It was going to be a major burden of paperwork, reporting and all the other things that go with it. However after discussions with small
business those changes were made. There are still going to be changes made.
Here is a tax that is less than a year old. I expect that fairly soon we will see some other changes pertaining to the goods and services tax to make it more efficient, to make it more equitable, and to make it easier for businesses to comply.
The GST registration form, which I think we all thought would be page after page after page, has been reduced to one page. That seems to make a lot of sense to me. I do not have business people complaining to me now. Sure, they complained the first month or the first three months when we first put it in, but they understand it now. Their system is working.
The filing frequency was changed to make it easier for the smaller businesses so they did not have to file as often. It varied with their system to make it easier for them.
Another question small business raised was: What can we do to make it easier for the very small business, the largest group of our small business community? We brought in a quick method system, which was endorsed by the small business community, has been complied with by the small business community, and seems to be working pretty well. This quick method of filing, a two or three liner, is now done by 600,000 small businesses. They have the information. They know what their gross sales are and they know what their gross expenses are. They just add and subtract and multiply the difference.
I think the Government of Canada has been very responsive. I am not suggesting for a minute that all the answers are there, that it is a simplified tax system, that there are not difficulties for small business. However, I am one of those people who feel good about small business in Canada. I am one of those people who are optimistic for the opportunities that small business has in Canada. If we talk about some of the positive things, some of the things that can happen and the opportunities, I think business in Canada will respond. I think business understands the difficulty the federal government is facing with regard to the Constitution and all the ramifications of that. I know that the people in my community want to be successful; they want to make profits. If they do that, that is good for Canada. That is good for everyone.


Dennis Joseph Mills: Mr. Speaker, I will make a short comment because I know we are trying to put as many people forward today as possible in this very important debate.
First of all, I want to congratulate the member for York-Simcoe who has always taken a very constructive and creative approach on the floor of this House of Commons.
I wanted to clear up two points. First, I was not suggesting when I spoke earlier today that I did not have a concern about the Constitution of this country and the effect that it will have, if properly concluded, on unity and ultimately the economy of this country. The point I was trying to make-and we are partly accomplishing it today-was that there are thousands and thousands of entrepreneurs and people out there who would like to see us spend more time in this House on of the micro-economic problems facing us, some of the specifics. I just wanted to clear up that point.
The one question he did ask in his speech was if we did not have a GST and were to take a more radical approach to comprehensive tax reform, where would we get the revenue that we would no longer have from a phased out manufacturers' sales tax? I would suggest to the hon. member that simplicity and fairness in a tax system will dramatically increase the productivity in this nation.
That productivity will do two things. It will create better products at better prices, which will also attract foreign investment. That will obviously place downward pressure on interest rates. That will mean that our borrowings for the Treasury will be less and that our unemployment insurance draw on the Treasury will be billions of dollars less because we will have dramatically fewer unemployed people.
I do have confidence in entrepreneurship and specifically small business in this country. However, we have to take a leap of faith in the small business communities of this country, especially when there are so many of them. We took a leap of faith with the free trade agreement, and I think that if we took a leap of faith with comprehensive tax reform the increased productivity would show dramatic results.


Thomas Hockin: Mr. Speaker, I have a very quick question. I used to live in the riding of my hon. friend
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from York-Simcoe and I am aware of his success as a small businessperson, so when he speaks on this subject I listen very carefully.
He wanted to spare this House some details on what the government has done to reduce the paper burden.
I do not think he should feel he has to spare us the details on this at all. I would like to hear just a few more examples of what the government has been doing to reduce the paper burden for the small business community in Canada.


John Cole: Mr. Speaker, I thought it was a good question.
I will try to go through some of these as quickly as I can. I want to mention to the member for Broadview- Greenwood that I was not inferring that he was not concerned about the Constitution. If my words came out that way, I apologize. Certainly, that was not the intention.
I agree with him completely on simplicity and fairness. That is what I was referring to in some of the other things that I was talking about.
Some of those special arrangements to make it easier for small business, the Work Place Hazardous Materials Information System, the establishment of uniform national information requirements for product suppliers means that small businesses are not faced with labour requirements that differ between provinces. It is a simple little factor, but it makes it easier.
Records of employment: Steps have been taken to implement a simplified mechanism to reduce the paper burden of employers with regard to the unemployment insurance program. Small business co-ordinators have been set up within the CEC.
With regard to domestic workers which a lot of small business people seem to be involved in when they are bringing foreign live-ins to help them in that area, there has been a streamlined administrative procedure that facilitated the processing of requests from employers concerning domestic worker movement.
That seems to make it a lot easier. There have been a number of things under Industry, Science and Technology to help small business reduce the paperwork. A native entrepreneur program has been done. There has been the development of a four page statement of intent

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form, which is designed to make an initial determination of eligibility for the program.
They no longer have to complete the whole application. They can find out basically by initial letter, saying what their intentions are and how they expect to set the program up. That seems to make a lot of sense to me.
There has been a customs automated data exchange system set up. That is going to help the importers and exporters. That seems to make a lot of sense when you look at it.
The number of types of bonded transactions, there used to be 26 of these. I am not too familiar with that kind of thing, but that brings it down to one.
When you look at the export situation and the statistics that go back and forth between Canada and the United States, the two countries were bringing their own statistics. When one country would do it, the other country would not use theirs.
I think that has eliminated somewhere in the neighbourhood of 200,000 documents every month just by having that type of an agreement with the U.S. There have been a lot of things, whether it be product certification, special import measures, automated customs tariff or simplified income tax guide. These are all the things that have presently been done or are certainly very close to being completed.
I think the federal government has been very supportive. There is probably still lots of room to manoeuvre and lots of steps to take, but we are getting there.


Maurice Brydon Foster: Mr. Speaker, I hoped to have a little longer intervention, but I wanted to at least congratulate the hon. member for Broadview-Greenwood on the motion that he has put before the House today.
In the years that I have been a member of Parliament, I cannot remember the kind of overt concern there is with the economy. I have never seen people less confident in this country that we will survive. It is not just the government's monetary policy, which has been absolutely Draconian for the last three or four years where we have seen the highest interest rate in real terms in history.
Interest rates have gone down since last spring, but clearly the year before and the year before that, we were
looking at 13, 14 and 15 per cent interest rates when the inflation rate was only 3 or 4 per cent, giving a real interest rate of some 8 or 9 per cent. Even when we were at the very high world interest rates in the 1980s, our real interest rates were not any higher than that, and that was an international situation whereas this is brought on by the government.
That combined with a dollar that is over-valued by everybody's estimate has totally jangled the entire business community as to whether it will survive. We see plants closing day after day, moving to the United States. So the member for Broadview-Greenwood must be congratulated for a wonderful motion, a motion which descriptively sets out the concerns that every Canadian has in big business, in small business, right across the land.


John Cole: I do not think there was a question there for me. I think the member was being laudatory and I congratulate him for that.
I do want to comment on one thing. He did not say the same words that are usually used in this House, this made-in-Canada recession, and I find it hard to believe that this made-in-Canada recession affected the United States, affected England, affected Europe, affected all these other countries.
I think it is being a little silly.
We have a world-wide recession and we must accept that fact. Canada is going to come out of it. The Canadian economy is going to boom and small businesses are going to be successful.
Mr. Francis G. LeBlanc (Cape Breton Highlands -
Canso): Mr. Speaker, I cannot rise to the eloquence of my hon. colleague from Algoma in commending the member for Broadview-Greenwood on his motion, but I too would like to say that the hon. member for Broadview-Greenwood has once again with this motion demonstrated the great contribution that he is making to this place with his ideas, his vision, his energy, his enthusiasm and concern for Canadians. Today it is small businessmen.


Some hon. members:: Hear, hear.


An hon. member:: Dennis for Prime Minister.


An hon. member:: How's that, Mr. Speaker?
October 11, 1991


Mr. LeBlanc (Cape Breton Highlands -Canso):: We
are on a serious subject, Mr. Speaker, and it is difficult to fully comprehend the damage which this government has inflicted on Canadians. No where is this damage more pronounced than in my native Atlantic Canada. We all know the causes of this common distress, the high dollar, the high interest rates, cross-border shopping, the GST, and the most revealing sign of all, almost a million and a half Canadians currently without jobs.
The common denominator is a government whose policies reflect a profound lack of concern for the plight of ordinary Canadians.
Last spring I had the opportunity to co-ordinate the Atlantic portion of the national Liberal task force on the recession and the Canadian economy. My colleagues and I held a total of seven hearings in all four Atlantic provinces. We heard from nearly 100 witnesses, each with their own story to tell, each different, but each with certain common elements.
In New Brunswick we heard from the Chaleurs Regional Development Commission which struck a very familiar note. It argued that federal monetary policies addressed the upper Canadian economy. The present system impacts negatively on Atlantic Canada and offsets any benefits that may accrue to the region through interest buy-down programs since the programs only cover manufacturing and select service sector companies.
Also the paper burden and minimum standards discourage many from applying.
Current federal assistance programs should consider assisting companies to reduce their interest on their operating loans if Ottawa is to continue with a single monetary policy from sea to sea.
What does this have to do with the motion currently before the House, Mr. Speaker? Everything. The motion presented by the hon. member, my colleague from Broadview-Greenwood, is timely and well considered. It touches on exactly what our task force heard throughout its travels. It runs to the heart of the crisis which currently befalls Canada's small businesses, business owners and workers, high interest rates, the high dollar, the crushing paper burden which suppresses the entrepreneurial spirit so essential to innovation and success in business, and the need for better funding programs
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which serve to encourage, not discourage, local small businesses.
The Chaleurs Regional Development Council's primary responsibility is to help small business get off the ground and succeed. That is why our task force was so interested in listening to their comments. What we heard from the council was merely typical of what Canadians in all parts of Canada know to be true.
It is small business which creates the jobs that employ so many Canadians. It is small business which injects so much money into local economies and drives the economic engines of so many small and medium sized towns throughout Canada. It is small business which is suffering most as a result of this government's fiscal and monetary policies.
The government will as usual claim that it has done everything it can for small business. Let me quote an editorial from the Halifax Chronicle Herald which appeared on June 17 of this year:
A new study by the Atlantic Provinces Chamber of Commerce aims to restore some respect for the region by showing its businesses are getting a bum rap. Some of its findings are compelling. For example, when 1,033 Atlantic businesses were surveyed for the Chamber by Omnifacts Research Limited in March, only a third reported getting financial assistance from government. Only a third of those got help from a federal department or agency. One in nine firms hardly makes Atlantic Canada a hospital ward.
The editorial goes on to say:
A sensible conclusion is that if Ottawa wants to make a difference in the region, it might worry less about the one in nine firms seeking aid and pay more attention to the one in two which believe they have something to sell at a competitive price.
It should be noted, Mr. Speaker, that this editorial appeared under the headline "Getting some respect". That is all small business wants from this government, some respect.
The survey to which this editorial refers was a comprehensive survey performed by Omnifacts Research based in Dartmouth, Nova Scotia. Over 1,000 businesses across the four Atlantic provinces were contacted between March 14 and April 9 of this year. The results were quite astonishing.
In terms of government support for entrepreneurs, more than half of the businesses contacted found the level of support to be inadequate in such crucial areas as providing access to skilled labour, direct financial assis-

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tance; counselling and guidance, access to science and technology; and information on marketing opportunities.
I was particularly struck by the report's conclusion, however. The findings concluded that businesses in Atlantic Canada "are not looking as much for government help in the traditional forms, i.e. grants and local spending, but are seeking assistance and support of becoming more competitive and self-supporting". The report's conclusion goes on to say that the business community in Atlantic Canada "is recognizing the fundamental changes taking place in the economy, and the growing importance that must be placed on such areas as entrepreneurship, training, technological innovation and broader markets".
It is this, that the motion of the hon. member for Broadview-Greenwood addresses so succinctly and effectively today. The motion is a strong reflection of the understanding that he has of what businessmen in his riding are currently facing.
It is in these areas where the government has failed our businessmen and women and our entrepreneurs. Not only has it failed them, this government has succeeded in stacking the odds against them. There is no better example of this than the government's implementation of the goods and services tax.
The GST has created havoc for small businessmen. It is difficult to know where to begin in describing it. Let us first begin with the administrative nightmare caused by the increased paper flow. Let us look at the start-up costs imposed on Canadian taxpayers of some $900 million. Let us look at the inflationary jolt which the GST has prompted.
The effect of the GST has been profound and devastating on Canada's small business people. Nowhere has this impact been more pronounced than in the field of cross-border shopping. Canadians are in the midst of a tax revolt and are flocking across the border to purchase cheaper goods in the United States. Canada's small business people have been severely hurt as a result.
The facts speak for themselves. The incidence of one-day trips to the United States by Canadians has increased from 25.9 million in 1986 to 51.8 million in 1990, double the amount. Cross-border shopping has increased by 100 per cent in the last four years and by 20
per cent in the last year alone. This has meant an estimated loss in retail sales of $2.3 billion annually for the Canadian towns and cities near the U.S. border. How can small business people compete, let alone survive?
You may remember, Mr. Speaker, that this year's major league baseball all-star game was played on July 9 in Toronto at the SkyDome. Many Canadians felt an immense amount of pride that Toronto received such media attention in the United States. Of course there was a down side to all this media exposure. One report appeared on ABC World News Tonight where more Americans get their news than from any other news source. This one report showed some American tourists in a Toronto shop shaking their heads in disbelief at the high prices. They wondered aloud how Canadian consumers could get by. It is a wonder they do get by given what this government has done to the economy.
Canada may only just be emerging from a recession brought on primarily by this government's policies. I say may because this is by no means certain. Traditionally when an economy enters a period of recovery after a recession, the corresponding growth is export led. This is not the case this time. Our trade surplus is woefully inadequate, as low as it has been for many years. Quite frankly, there is one reason for this; the high Canadian dollar which many have suggested is a result of some secret deal between our government and the U.S. administration following the free trade negotiations. That certainly has been an allegation of at least one former minister of this government.
For every cent which the Canadian dollar raises against the American dollar, Canada loses some $1.3 billion in exports. Is it any wonder that our supposed recovery from this recession has not been export led? Is it any wonder that we still have 1.5 million Canadians unemployed? Is it any wonder that our entrepreneurs and our small business people are suffering?
What I admire most about the motion before the House is that it draws attention to the important role which small business plays here in Canada. It acknowledges that "the innovations and jobs created by Canadian entrepreneurs constitute the best hope for the Canadian economy and society". I am sure there is nobody in this House who would disagree with that proposition. Surely the government must agree. Surely

the government recognizes the integral importance of small business to free enterprise in this country.
I would therefore challenge this government to respond to the second portion of this motion which states that the government must take immediate steps to reduce interest rates, lower the level of the Canadian dollar, reduce the paper burden on small business, and make available more funding and loan guarantees for early stage companies.
At the moment the government is doing exactly the opposite. It is crushing out the entrepreneurial spirit. It is forcing small businesses into bankruptcy with its high dollar and high interest rate policies and, with its taxation policies, is driving Canadian consumers to shop across the border.
It is time that the government reversed these policies and started treating small business with a little respect. It should start realizing the importance that entrepreneurs and small businesses have in economic recovery and start supporting those small businesses.


Mr. Mark Assad (Gatineau-La Lievre):: Mr. Speaker, I would like to congratulate the hon. member for Broadview-Greenwood who moved the motion before the House today. The hon. member has a lot of ideas, and this motion gives us a chance to speak directly to the problem facing this country.
For the benefit of those watching us, the motion reads as follows:
That, in the opinion of this House, the innovations and jobs created by Canadian entrepreneurs constitute the best hope for the Canadian economy and society and that, therefore, the government must take immediate steps to reduce interest rates, to lower the level of the Canadian dollar, to reduce the paper burden on small businesses, and make available more funding and loan guarantees for early-stage companies.
Mr. Speaker, the hon. member for Broadview- Greenwood understands the problem perfectly. Not that I had any doubts. However, I don't consider myself an expert, especially since even experts make mistakes. In any case, before discussing economics, I preferred to consult the grass roots, the people who are confronted daily with the problems of small business.
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Mr. Speaker, I discussed this motion with a researcher at the Cornell du patronat du Quebec. As you know, the CPQ is a provincial agency in Quebec that represents small business. It has thousands of members in the small business community. They discuss the issues, they do research and they have any number of meetings with people every month to help them be competitive in the business world. What the researcher at the CPQ told me was more or less what the hon. member says in his motion, namely that small businesses are stuck with an overvalued dollar, that taxes are too high and above all, there is too much paper burden and red tape.
The CPQ explained-and I already knew this through my personal experience in small business-that Canadian banks belong to one of the most stable banking systems in the world. Canadian banks do not go bankrupt the way they do in the United States, where people lost all their savings because their banking system is not as sound as ours. On the other hand, we have to pay for this stability. Unfortunately, Canadian banks are reluctant to take risks. Real entrepreneurs who want to go to the market face banks that require endorsers as soon as the slightest risk is involved. Our listeners in Quebec know how difficult it is to persuade bank and credit union managers to lend risk capital. This is a very important factor.
It is true our Canadian banks are reliable, but they lent money to Third World countries, and most of those loans have been written off. The banks took risks in Third World countries, countries that seemed to be developing, and they lost hundreds of millions of dollars. I would not dream of giving the banks advice, Mr. Speaker, but I think they should realize that the risk concept is a given in a competitive society like ours, especially under a capitalist system. And even if the banks know there will be losses at the end of the year, it would be worthwhile to consider the concept because it would help small business.
Mr. Speaker, small businesses are a very important part of the economy, as the hon. member from Toronto and other members mentioned earlier. Seventy-five per cent of all jobs in the manufacturing sector in this country were created by small business-75 per cent. That gives you some idea of the strength and energy of small business and how important it is for the govern-

October 11, 1991
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ment to give them the help they need, and I will get back to this in a few moments.
Big international corporations, take for instance General Motors, have received grants worth more than $200 million to save 2,000 jobs. There is no doubt that the economic situation has a tremendous impact.
But imagine what hundreds of millions of dollars could do for small business, what it could do for the economy in each region. As you know, small business helps regional development-


An hon. member:: It helps national unity too.


Mark Joseph Assad: Yes, it helps unite the country, as the hon. member said. Mr. Speaker, not only does small business create 75 per cent of the jobs and help regional development, but without it, regional development would be impossible and small municipalities across Canada would have trouble surviving.
This is just one more reason why the government should consider this question and revise all the rules that existed in the past. I heard some ideas put forward in the House by the government, the NDP and by our own party. All these ideas contain some useful elements, but I think we have to take a radical position. We have to say: Listen, we are convinced, and we need only look at the evidence of the past few years, especially the last ten or fifteen, that small business is the most important motor of our economy. Once we have set aside all the rules we had in the past, we can advance with leaps and bounds. We will take radical steps to ensure that small business gets all the help it needs to develop.
Mr. Speaker, there are solutions, and this was in consultation with the CPQ. First, it is necessary to have loans to promote small business. No handouts, no grants. Small business wants the government to make available or guarantee loans so it can get started. This is one of the most important aspects of developing small business, in other words, ensuring funds are available.
Of course, we don't expect the government or the banks to give small business a blank cheque. There is a certain process, as the CPQ explained, and I understand that. Second, know the market, which is only common sense; third, know your product, and then know the best
ways to market it. There are experts in this area so the expertise is there. Of course there is also the question of economic feasibility.
As for the criteria, if small business, if entrepreneurs and beginning entrepreneurs meet these four criteria- and there might be others, of course-but if they can meet these four criteria, they will be prepared to face the competition. They will be productive and competitive. But if they don't get a chance -You cannot make something out of nothing. They need this help. I think that was one of the elements emphasized by the CPQ.
Mr. Speaker, let's not forget training. This is a key element. Without training, you will not get anywhere. There is a debate taking place in France at this very moment, which I am following very closely, and I say this for the benefit of our listeners. The French Minister of Education has realized that training has become extremely important in a highly competitive world where the word productivity is sacred. The French Education Minister said that unfortunately, the French are not like the Germans. As you know, the Germans have a great tradition in their country of apprenticeship schools, technical schools and trade schools. They are the best in this respect.
So the French are starting to realize how important this is and that they also need technical schools and training schools and apprenticeship systems. They have to find industries that are willing to make a major contribution to training. In Germany, industries set the curriculum because they pay for these technical schools, to a considerable extent. Now that is a sensible idea we could use here in Canada. You wouldn't think we had relations with Germany! If the French with their reputation for being inventive and innovative, a reputation they have had for centuries, feel they must look to the German experience which has been extremely positive, we in Canada could also benefit by using this approach to train our labour force.
When we have that kind of training, when governments realize the importance of involving small business, I am sure the banks will sit up and take notice, that risk taking will become a normal thing for entrepreneurs in

the small business community and that job creation will be enhanced for the greater benefit of all Canadians.


Lise Bourgault: Mr. Speaker, I listened with great interest to the speech by the hon. member for Gatineau-La Lievre, since I know him well. He was my provincial counterpart before the most recent federal election. Now that he sits as a federal MP, he is in a position to know that the federal government and the province of Quebec have programs to help small business.
I would like to tell the hon. member about an experience that happened in my riding with the Thun-dercraft firm. This company was a gem. It made pleasure boats and the city of Lachute and surroundings were very proud of it. The federal government gave a grant as well as a loan. The IDC, the Caisses populates savings fund and the bank did also. But there was an internal management problem and you know that when that happens, people and workers say: "You should not subsidize a company that way, because due to mismanagement, it is shutting down and it is our money that you are investing in businesses that are going broke."
I would like the hon. member to tell me what restructuring plan he would like. We should be careful, should we not, because our constituents often tell us-as he should know, we live in the same region-that if this company or business is unable after all to manage on its own-
I am telling him about another school of thought of many people who do not want the government to intervene in small business; they want small businesses to get by on their own, without government involvement. How do you reconcile these two points of view, one that wants intervention and the other that does not?


Mark Joseph Assad: Mr. Speaker, I took careful note of the comments made by the hon. member for Argenteuil- Papineau. I said that small and medium-sized business want less paperwork and administration. That is true as far as it goes, but I see the government as a catalyst in this area. I am not suggesting more paperwork or criteria to meet; I am just suggesting that the government act as a catalyst and invest money. You know that capital is extremely important in developing small and mediumsized businesses; they need funds. They are not asking
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for gifts, just for help such as loan guarantees, for example.

The Acting Speaker (Mr. Richardson) Resuming debate. There are a number of members who wish to get on before the designated hour. It is an important debate so I think we will resume debate with the hon. member for Scarborough-Agincourt.


Jim Karygiannis: Mr. Speaker, I would like to also participate in this very important debate. I congratulate my colleague from Broadview-Greenwood in Toronto, which is also my home town, for giving this House the opportunity to discuss a very important issue, small business.
Why is small business an important issue? It is an issue of survivorship, it is an issue of livelihood. Well over 60 per cent of the Canadian economy is made up of small business. Do you think the government of the day is listening? No, it is not. There are close to a million businesses in Canada. Over 60 per cent of them employ less than six employees. We hear on a daily basis of plant closures. We hear of over 300,000 jobs being lost. How many times do we really hear about the tragedy, the devastation of a small business closing in a small Canadian town? That does not make headlines. That is not discussed in this House. We have our party and the government across the way, and we argue over the figures.
If we were to really discuss the figures, if we were to really look at the plant closures and the travesty that this government has wrought on our Canadian people, that figure can jump through the roof.
The need for discussion on small business in this place is not a luxury but a must. We must discuss and explore ways and means to enhance small business throughout Canada. However, the government of the day, the Tory government, has completely failed small businesses. Small businesses are crying out for support, crying out for leadership. The Tory government, however, slaps them with high interest rates, compounded by a Canadian-made recession, the GST, taxes are just killing them.
The government daily claims that times today are better than in 1981-82. In 1981-82 I, too, was a small businessman and I still have friends who are small businessmen. I can assure you that times today are much

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tougher than in 1981-82. The government daily states that we had more closures in 1981-82. Well, those figures are misleading.
In the first three months of this year, there were 3,540 businesses bankrupt, up 39 per cent from the first three months of 1990. What does this government answer? Is there relief in sight for the small businessman? Is this government going to reach out to the small business community and say: "We are going to work with you hand in hand". No. There is no assistance, there is no leadership for the small businessman.
This government wants to lead us down the garden path. In 1988 this government said: "I have the answer for you; I have got the solution that is going to take Canada into the twenty-first century." And what was that answer? 1-800-M-U-L-R-O-N-E-Y, Canada for Sale.
What does the government of the day want to do today? Ah, hold on. I hear the phone ringing. I hear the phone, through the Prime Minister. "George Bush? Aha, we have got a deal for you. Do we have a deal for you, Canadians." And the deal is free trade with Mexico.
Is the government going to take it to the people of the day? Is the government going to ask the people? Absolutely not. What does it want to do? If it wants to fast-track it. It wants to fast-track it so fast and it wants to put it on the table before the general election.
I ask the government: Why don't you put it to a general election? They know clearly that if they go to the election as far as free trade with Mexico is concerned, they will be turfed out. That is another blow to the Canadian small businessman.
Let us examine for a couple of minutes the free trade with Mexico. Do we need to get into it? Must we get into it? The Prime Minister says: "Look at the European experience. Look what they have done. If we get in here we will have $6 billion or $7 billion more". I can tell the government of the day that the European experience is working. Is free trade with the United States working? Is free trade with Mexico going to work? No. The reason for the failure-and I see members across nodding then-heads in agreement-is that if a country in Europe wants to join the European Common Market it is put on a waiting list, on a trial basis for eight to ten years. It is told: "Bring your economy up to par with the rest of us,
bring your infrastructure up to par with the rest of us, and then we will consider you". When it becomes a full-fledged member its people are not restricted from travelling from country to country to seek work. Are we allowed to travel to the United States to seek work? No, we are not. Can we travel into the United States to participate in major contracts? No, we cannot. Yet that is how it is in the European Common Market.
If we compare apple and oranges, which we are doing, and try to say that this is an apple and this is an orange and they look alike, it will not work because they do not. The European experience has clearly demonstrated that it will work. When in the 1970s and 1980s the Prime Minister of the Liberal government of the day was saying: "let us reach out to the European community and become partners with them, let us reach out and work with them", nobody was listening. The Prime Minister of today has the answer: "Let us go down to the States". It is a sellout.
Wages in Mexico are 85 cents an hour. The people of Mexico have to work 56 to 58 hours per week. Some
400,000	people a year in Mexico join the unemployment roles. The president of Mexico said: "If you do not join with us we are going to release all these people to come up north". Frankly I do not care about his people. I care about my children. I care about the future of Canadian children. Do we need to place our people at the same level as the Mexicans? Do we need to expose our children to the environmental hazards that the children of Mexico are facing?
I want to discuss one particular item. In Mexico there are containers that contain different liquids and fluids. After they are finished with them at the factory, people take them home and use them as basins for drinking water. They can be hazardous yet the children drink from them. Do we need to lower our standard of living to that if we are to assist Mexico? If we are to become participating partners in trade with Mexico, why do we not give Mexico the opportunity to improve its standard of living? When it is at par with us then we join. I do not mind competing and I am sure no Canadian is afraid of hard work and competition. However, I do not like to engage in a competition with both my hands and feet tied behind my back. That is not fair competition.
October 11, 1991

I want to close with two thoughts. First, I want to congratulate my colleague from Broadview-Greenwood for giving us the opportunity to discuss small businesses. Second, I see the minister across and I want to say to him that the engine that drives Canada, that drives the Canadian economy, is something called small business.
I have been a small businessman and I know what it is like when the banker calls you and says: "I am calling in your loan". I know what it is like when you have to pay your taxes at the end of the month. I know what it is like in January and February when your sales drop about 20 per cent compared to the other months, and you cannot make ends meet. If we do not reach out to the small businesses, work with them and support them we will not succeed and our bankruptcy rates will increase.


Maurice Brydon Foster: Mr. Speaker, clearly this debate today is one of the most important because of the importance of the small business sector of our economy in providing jobs. It has emerged as the key employer during the past several years of the recession.
I am pleased that the Minister of State for Small Businesses and Tburism is here in the House today. He has had a special responsibility during the last year and a half in my constituency as the minister designated by the Deputy Prime Minister to assist in the massive transition taking place in the community of Elliot Lake, Ontario.
They are expecting over the next three or four years to lose all the mining jobs, which 18 months ago totalled 4,000. There have been lay-offs involving 2,400. There will be another 1,000 next spring and another 600 in 1996.
The Minister of State for Small Businesses has been extremely helpful and of much assistance in his concern for that community, especially in matters relating to the proposed community college for northern Ontario francophones. He has come on side and has been very supportive of the community. We are very appreciative of that. I believe that the Small Business Incentive Program under FEDNOR has been very beneficial.
I want to mention simply that I think FEDNOR is our major instrument for northern Ontario regional development. I believe that when restructuring that organization next year the minister should be given more powers. He
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should have the powers to move, to restructure our industry.
We have a pulp and paper industry which is in very serious difficulty. Whether it is this minister or the future minister, he really needs to have the department behind him. He has to have the support of the Government of Canada for the restructuring of that industry, just as in 1982 and 1983.
Similarly I believe he needs to have powers with regard to making federal-provincial agreements for tourism and other sectors. I hope as the minister moves to reorganize FEDNOR to meet the challenges of the 1990s he will accept some of the recommendations which have been coming forward from members throughout northern Ontario on both sides of the aisle.


Lise Bourgault: Mr. Speaker, the member has caucus meetings as we do in the Conservative Party. Without telling me any secrets from the deliberations of his caucus, could he tell what would happen if the Liberals were forming the government today? I hope no Liberal government will ever form the government. We know what the Liberal government did when it was in power.
The question I would ask the member is whether he will back any suggestion by his colleagues to tear up the free trade agreement. Yes or no.


Jim Karygiannis: Mr. Speaker, we have caucus meetings and we discuss things. We do not say my way or no way like they do in their caucus meetings. They go there, stand up and salute. In our caucus meetings we discuss and listen to each other.
The question that was put was: Will we look at the free trade agreements? Do we need to participate in free trade with Mexico?
We know very well, first hand, what free trade with the United States did. We know very well, first hand, what free trade with Mexico will do. Do we need to participate? Do we need to look at it? We do not want any part of it. We do not even want to see it.
As far as the existing agreement is concerned, my constituents in Scarborough-Agincourt are telling me: "Tear it up".

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John Harvard: Madam Speaker, I want to thank the Chair for accommodating so many speakers in this very important debate this afternoon.
I also want to offer my congratulations to my colleague from Broadview-Greenwood. His commitment to small business is unrivalled. He has worked tenaciously on this issue and has brought it to the floor today. I congratulate him for that. We are all beneficiaries of his outstanding efforts.
Small business is a mighty force in our economy. It is all around us, it is pervasive and extremely important. We have heard that so many times today. I was thinking that you do not need a lot of data and a lot of statistics to get some sense of the presence of small business. I was thinking of the small businesses just around my riding office on Portage Avenue in Winnipeg. Just in the block where my office is located there is a dry cleaning shop, a funeral home, a couple of restaurants, a grocery store, a printing shop, a dress shop, a travel agency, a florist and a lock service, a company that replaces and repairs locks which you find on your doors. It gives you a sense of how important small business is in our lives. I give my full support to this motion prepared by my colleague from Broadview-Greenwood, a motion which calls on the government to take immediate steps to reduce interest rates, to lower the level of the Canadian dollar, to reduce the paper burden on small businesses and make available more funding and loan guarantees for early stage companies.
I think that is a very appropriate and timely motion.
Madam Speaker, I want to give you some sense, a profile, of small business in my home province of Manitoba. In 1988, the last year for which we have figures, there were 36,171 firms with paid employees in my province. Ninety-two per cent of those firms were small businesses with 50 employees or less. Small firms accounted for one-third of the employees of those
36,000	companies.
Madam Speaker, I want to give you another figure which underlines the importance of small business in this country and especially in my province of Manitoba. In the 10-year period ending 1988, 60,000 new private
sector jobs were created, 84 per cent of which were created by small businesses with 50 employees or less.
Not only that, 57 per cent of those 60,000 new jobs were created by companies with five employees or less. It gives you some idea of how important small business is in my province.
Measure that against the performance of big corporations. Big firms in my province with 500 or more workers actually had a net loss of 400 jobs in that very same period, that 10-year period ending in 1988.
Small business is very important and it will measure up against any business in this country. In fact, I am glad that the minister responsible for small business pointed that out earlier today in his speech.
The reason we are having this debate today is because small business is hurting. It is bleeding and it needs our attention. It especially needs the attention of this government. Small business is battered by high taxes, high interest rates and the high dollar.
Let us take high taxes, for example. The GST has created an additional burden on small business. It came at a terrible time when the economy was in recession and remains in recession. It has created a lot of chaos for small business and it has especially created a lot of paperwork.
Let me talk about paperwork for a moment. I have a figure here which I came across the other day which astounds me. I think this comes from the CFIB, the Canadian Federation of Independent Business. It says that small firms have to spend up to 15 times the effort on government regulations compared to their larger business counterparts. That is a terrible burden to put on small business.
I said earlier that small businesses were being battered by high interest rates. I am disappointed in the government spokesman when it comes to the matter of high interest rates because the government seems to be preoccupied with interest rates that were in place 10 years ago, 11 years ago.
There was a terrible problem with high interest rates 10 years ago. Nobody denies that. The government of today must face its responsibilities which are those high interest rates of the moment, not 10 years ago. I wish it would forget about its preoccupation with high interest
October 11, 1991

rates of 10 years ago. That will not solve today's problems.
The high dollar is worrisome. It is a serious problem because it makes it so much more difficult for our businesses to export, particularly to the United States.
There was an analysis done by the Canadian Federation of Independent Business as it relates to Manitoba. It is an analysis that I want to read into the record. It goes just like this:
Our analysis clearly shows that the tax structure in Manitoba is unfair for small businesses. Although the total tax burden is similar for small and large firms, small firms pay a higher proportion of taxes unrelated to profits-a circumstance that greatly restricts their room to manoeuvre. Tax structures are designed for large firms even though 98 per cent of firms in Canada have less than 50 employees. As a major source of industrial innovation, economic development, and job creation, Manitoba small businesses play a key role in the economy. They account for over three-quarters of the net new jobs created in this province and are the life-blood of many communities.
I wanted to read that analysis into the record because it tells us something about the situation faced by small business in the province of Manitoba.
The other matter I wanted to mention is attributed to a survey done by the Canadian Federation of Independent Business. It was a survey that was done a number of months ago. This is troublesome and worrisome because it indicated that the business community, particularly the small business community, lacked confidence in the future. They are pessimistic. They worry about this government's policies, and they are concerned mainly because of some of the things that I have already mentioned, high interest rates, high dollar, the GST, for example. They are concerned about those matters.
Let me mention one thing about the GST and how perhaps the government can do a better job in how this tax is administered. There is an airline company located in my riding. It had an airplane engine waiting for it at the border just south of Winnipeg. The GST on that airplane engine was $25,000. That is a lot of money to a small business.
At the very time that Revenue Canada, or its excise department, was asking for $25,000 on this airplane engine, this small company located in my riding already had a $60,000 credit on its account with Revenue Canada. So they called Revenue Canada and said: "You want $25,000 on this airplane engine but you already, in
Supply
effect, owe us $60,000. How would you like to just sort of juggle the books or juggle the figures so that we do not have to pay the $25,000. After all, you owe us $60,000". They would not do it. I think that is something Revenue Canada could address because it would make it easier for small business.
Again, I want to congratulate my colleague from Broadview-Greenwood. I think this is a very important motion. It is something all of us should support because business is vital to the economy of Canada.


Mac Harb: Madam Speaker, I would like to start by congratulating the member for Broadview-Greenwood on a job very well done. He certainly had the interest of small business in his mind when he introduced this motion.
There is one segment I would like to bring to the attention of my colleague from Winnipeg. It is the question of outreach, the training and retraining when it comes to small business.
In my riding, for example, many businessmen and women in a large number of small businesses and the service sector, whether they are restaurants or retail industries and so on, would love to get their hands on some sort of a retraining program where they could have access to some training courses or training facilities.
I would like to have my colleague comment on the question of training when it comes to small business. In his view, would this not be a good thing for the government to look at in conjunction with the provincial government, some outreach programs that help small business to get training?


Madam Deputy Speaker:: Thirty seconds for the hon. member for Winnipeg St. James.


John Harvard: Madam Speaker, I will recognize the time limit.
Yes, I think it is a very good idea put forward by my colleague from Ottawa. I have heard that from small business, that it wants help with respect to training its workers, particularly at a time when the federal government is cutting back on job training and many of the school divisions in our province are also cutting back. It is troublesome.

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Private Members' Business
What the government can do in that regard would be very helpful.


Madam Deputy Speaker:: It being four o'clock p.m., it is my duty to inform the House that, pursuant to Standing Order 81(17), proceedings on the motion have expired.

Pursuant to Standing Order 30(7), the House will now consider Private Members' Business in the order listed in today's Order Paper.



PRIVATE MEMBERS' BUSINESS


Ms. Mary Clancy (Halifax) moved:: That, in the opinion of this House, the government should enter into an agreement with the government of Nova Scotia, targeting federal and provincial moneys for the subsidization of CN freight rates in order to allow freight transportation rates in the port of Halifax to compete with those in the port of Montreal and maintain valuable traffic in the port of Halifax.
She said: Madam Speaker, before I begin my statement, I just want to say that, in anticipation, my hon. friend for the riding of Glengarry-Prescott-Russell, who will be the second speaker from my party in this, will be bringing a friendly amendment to delete the words "with those in the port of Montreal". I say this so we will know that from the beginning. It was a misprint.
Mr. Speaker-Oh, Madam Speaker. I apologize. Je
suis desolee.


Madam Deputy Speaker:: I must say to the hon. member that I do not take it as a sexist remark. Ever since the day when the hon. member for Don Valley West, who was then in the chair, was called Madam Speaker, I have not taken offence.
The hon. member for Halifax.


Mary Catherine Clancy: Absolument, Madam Speaker.
In the summer of 1749, Edward Cornwallis led a tiny flotilla of wooden ships into a sheltered bay on the east
coast of North America. Cornwallis and his men were awe struck at the depth and width of the finely sheltered harbour, the thickly wooded shore and an inner basin completely protected from the wild north Atlantic.
It is written that the harbour was so abundant with fish that a bucket could be lowered into the water and returned brimming with cod, mackerel and herring.
Cornwallis wrote in his log that all the officers and men agree that the harbour is the finest they have ever seen.
For the last two centuries, the fortunes of the city that Cornwallis founded, Halifax, have ebbed and flowed with the tides of history. Possessing the finest deep water harbour in North America, Haligonians have been secure in the knowledge that as their port prospered so would they.
After two world wars, and the most devastating manmade explosion before Hiroshima, we have survived. In 1991, however, that heritage is threatened. Our port is ill and it may be terminally ill. It is ill because of the lethargy of this government and the near-sightedness of this government. The harbour is emptying of ships, the piers and jetties are vacant, the cranes lie dormant. Recently the ports two largest customers, Hapag-Lloyd and ACL announced that they would be moving most of their business to a rival port. In economic terms the cost is $20 million. In human terms, 90 stevedores will lose their jobs. Soon Evergreen container lines will leave, along with the ships of the K-Line.
Why? A combination of exorbitant rail rates by the CN monopoly, an oppressive tax structure, an unfair subsidization of rival ports have created an atmosphere hostile to the port of Halifax. One example is CN's refusal to initiate double-stack rail service between Montreal and Halifax as competitors had in other areas until only three weeks ago when CN through the financial contribution of the provincial government of Nova Scotia finally signed a deal. It was the provincial government that made the step, not the federal government.
The port of Halifax currently employs 6,000 people directly or indirectly. That employment is at the centre of the economic community that is Halifax. The city and indeed the entire region revolves around the goods and services that enter or exit through our port and 6,000 direct jobs.
October 11, 1991

Further, the activity that surrounds the port is $315 million in personal income, $356 million in revenues and $87 million in direct taxation to this government. Consequently, by pointedly ignoring the port the government does itself damage.
Last year, 2,084 vessels entered the port, 791 carrying containers. Statistics indicate that Halifax is chief among Canadian ports in moving Canadian containers.
What about the other myriad of cargo bound for international destinations? That cargo is being shipped through ports that are being supported by governments that have their eye on the 21st century and the best example I can offer is the port of New York which receives tremendous support from the federal government of the United States.
Then we have the condition of the railways. Any discussion of the port depends on the condition of the infrastructure surrounding it. The infrastructure in Halifax is crumbling because CN has allowed the transportation world to pass them buy. One industry expert recently stated that the ships were not leaving because of the port itself but because of the railway.
U.S. railways pay 8 cents per litre in fuel taxes. By comparison CN Rail pays 9.1 cents per litre. Why? Because this government refuses to follow the lead of the provincial government in Nova Scotia and give the railway a tax break.
Canadian railways currently pay 11 times the amount of fuel taxes that their U.S. competitors do. Further, Canadian railways carry the burden of sales tax that is 4.8 per cent higher than U.S. railways. On domestic goods the disadvantage is at 11.8 per cent on all movement of goods.
CN Rail is at a further disadvantage in terms of depreciation rates in the U.S. A railway in the United States can write off any rail related asset within seven years. In Canada after seven years a railway such as CN will only be able to write off 38 per cent of a railway car, 49 per cent of a locomotive and 23 per cent of a track investment. Therefore, in the United States a railway such as the Delaware and Hudson-the infamous D&H belonging largely to Canadian Pacific, Canadian Pacific which does get federal government help-rolls 90 per cent of its freight over 50 per cent of its track, while CN rolls 90 per cent of its freight over one-third of its track. The result of this policy is that CN Rail has a lot of
Private Members' Business
unused track lying around which it cannot afford to keep up.
What Halifax really needs is quite simply a well integrated route transportation system. Why then was it left solely to the province of Nova Scotia to institute double-stack rail systems? Why must the premier of Nova Scotia go hat in hand to Evergreen, an Italian container line, to beg them to stay with the port of Halifax?
This government has stacked the deck against us in Nova Scotia, even against a government its own stripe, even against its own colleagues. The tax burden, among other things, must be lifted immediately. For example, total sales tax paid by CN in 1989 was nearly $92 million, $55 million of which was paid federally and would not have been levied in the United States. When we are in competition directly with the port of New York, this means a great deal and the great deal it means is hurtful to the port of Halifax.
A recent report, the Brooks Report by the Centre for International Business Studies at Dalhousie University cited inequalities in industrial support for ports, operating differences and fiscal policies of this government as the root cause of the decline of the port of Halifax, not over-capacity on the north Atlantic as we have heard over and over again ad nauseam.
The report was also unequivocal in its praise of Halifax as a competitor. The port of Halifax boasts the lowest price per TEU slot, TEU being the technical name for a container, the best number of moves per gang hour, second best in the highest number of TEUs moved, and the best pilotage charges.
It is not as though the port was asking the government for an unfair subsidy. Rather we wish to level the field between ourselves and our competitors. I spoke twice before today about our competition with the port of New York. Let me emphasize the kind of subsidy that the port of New York gets. Just in the past two years, the port of New York received $350 million from the government of the United States to upgrade its facilities. At the same time New York harbour, which needs to be dredged, which Halifax harbour does not, receives free dredging on an annual basis from the American corps of engineers. We have not even been able to find out how much money this means in lieu of grant.

October 11, 1991
Private Members' Business
Halifax on the other hand does not get a dime from this government that preaches competitiveness. That is what we want. We want the opportunity to be competitive.
If Halifax could be on an equal footing with New York, we know we could show how our port is superior to that port and how we could move the goods better and faster.
On May 291 rose in this House to ask the government if it would recommit programs to the port and at least to recognize that the situation was critical. At that time the focus of the discussion was this government's termination of the At and East rail subsidy. I asked this government, if every region of Canada is important will the Minister of Transport explain why the government has failed to intervene and failed to undertake the necessary assistance to create a truly level playing field for the port of Halifax.
Again on September 191 rose in the House to ask the government why it would not release a Ports Canada study concerning the competitiveness of the port of Halifax. We wanted to know what the bad news was, and we still do. We still have not been told.
The Prime Minister stood up and told me that he had had meaningful discussions with the premier, but again no details.
On September 25 again a question, and again I was told that I would hear something very soon.
Madam Speaker, very soon has come and gone. The people of Halifax, the people of Nova Scotia, the people of an entire region cannot afford to wait. We need answers. We need programs, and we need them now.
I propose that this government treat the port of Halifax with the same attitude that every other seafaring nation treats its most valuable asset, with understanding and a healthy proactive attitude. Give us a chance to compete. That is all we ask for, that chance.
We believe that we have the best natural harbour in the world-and it is not just that we believe it, it is a fact. Others state it. Internationally it is recognized as the best natural harbour in the world, and we want the government to let us prove it.
The National Transportation Act must be amended to allow CN Rail to depreciate its obsolete equipment. That would be one major step in the right direction.
The federal government should follow the province of Nova Scotia in alleviating the fuel excise tax on transportation of goods from Halifax to Montreal. Canadian railways are taxed, as I said before, at a rate 11 times higher than the American competitors and I add again that the main American rail competitor that hurts Halifax is D&H and it is owned-how many times have I said it, how many times will I say it-by Canadian Pacific which receives a great deal of help from this federal government. If we are going to compete, then this must not be allowed to continue.
Section 157 of the National Transportation Act must be amended to allow the railway to depreciate their equipment within seven years. Statistics show that CN Rail currently moves almost all of its freight over only a small percentage of its track. Such an amendment wrill allow CN Rail to spend more money on the lowering of rail rates and instituting new procedures such as providing intermodal facilities.
The federal government must allow entities such as Ports Canada to become the master of the land they operate. In the United States, an organization such as the Port Authority of New York can charge tolls from the bridges and tunnels that surround it. The money is then poured back into the operation in order to lower costs to customers. Ports in Canada have to be in charge of their own destinies.
There is another cancellation that concerns us and that is the cancellation of the At and East subsidy. I have spoken on that more times than I or I am sure the hon. parliamentary secretary would care to remember. Actually the program was designed to prevent American ports such as New York and Buffalo from walking all over us. It was not just another handout to the Atlantic provinces. The problem is, Madam Speaker, that the American ports are currently walking all over us.
We need the grain that the At and East subsidy brought to Halifax move through our port. The elimination of that section of the Railway Act has already closed the grain elevator at Saint John, it has reduced the grain elevator in Halifax by almost two-thirds of its capacity with a commensurate loss of jobs. How long will the
October 11, 1991

historic grain elevator at the edge of Halifax harbour remain open? We do not know the answer to that question and we are almost afraid to ask.
Tkxes on the operating profits of the railway should be formulated to encourage the upgrading of rolling stock, road beds, terminal facilities and new technology. If the government refuses to put CN on an equal footing with the Americans, then could it not devise some form of tax credit system on the vital export traffic that CN carries? The amount of the credit could be calculated on the percentage of total volume of the import-export traffic.
Madam Speaker, most important is that all the concerned interests-the federal government, the provincial government, the port of Halifax, the city of Halifax, and the various sectors of the business community-must meet together to formulate an immediate plan of action. It has to be done and it has to be done soon. The economy of one of our oldest and most historic cities depends upon it. The spin-off from this port is of vital importance to an entire province and a great deal of the port economy is vital to an entire region.
Madam Speaker, I have spoken and will continue to speak on this issue as long as I have a voice and a place in this House. I therefore ask that this motion be accepted.


Lee Richardson: Madam Speaker, I thank the hon. member for bringing the subject again to the House.
I know that the hon. member has a sincere concern for the port of Halifax. But in the commercial world in which the port of Halifax competes, it is more helpful to convince business to use your services because of your assets than to hold up potential problems at every opportunity. But I am not here to stifle criticism. Every person and every business, every port and, yes, even every government can learn from criticism. They can learn from the voice that presents options, that presents solutions.
Madam Speaker, I want to set before the House today some of the facts about the port of Halifax and about the action taken at all levels to counter some of the threats facing the port today.
After the recession in 1981-82, containerized traffic through Halifax was 183,000, 20-foot equivalent units.
Private Members' Business
Through solid management, marketing efforts and a stable partnership with our railways, the traffic at the port of Halifax grew at a faster rate than the economy. In 1990, traffic reached a level of 447,000, 22-foot equivalent units, or two and a half times the level of 1983.
The fact that the traffic more than doubled in six or seven years is worth mentioning and is to the credit of the port of Halifax and to its workers.
The port of Halifax handles a variety of products.
Container traffic accounted for less than 25 per cent of the port's total tonnage in 1990. Increases in the amounts of roll-on roll-off cargo, miscellaneous general cargo and bulk traffic helped Halifax set record total tonnages for the fifth consecutive year.
The port's cargo handling capabilities continue to be expanded to meet demand, and state of the art container handling equipment has been installed. The port and its terminal operators provide a high level of productivity and fast vessel turnaround times for their customers.
The natural advantages of the port of Halifax, its location, the solid management, the support of railway companies and all the conditions that contributed to the growth of Halifax, continue to exist.
We also have to face the challenges for the future. The world recession has negatively affected many sectors and traffic losses are painful wherever they occur. On the other hand, international trade remains a vital sector for growth of the Canadian economy and traffic on the North Atlantic may soon pick up again.
The development of a strong trading bloc in Europe, and efforts to introduce a greater reliance on market forces in eastern Europe may produce new opportunities for ports such as Halifax. Co-ordination of marketing efforts, maintenance of a partnership with railways and quality of the infrastructure should allow solid performances in the future. Co-operative efforts are particularly important today. Ports do not simply provide the termination of one handling activity and the commencement of another.
Ports today are a key element of an intermodal approach made possible by container technology. Canadian ports face stiff competition from our neighbours to the south.

October 11, 1991
Private Members' Business
It is a reality that many Canadian shippers are using American ports for a variety of reasons. For a trading nation such as Canada, this freedom of commerce has always been beneficial since it allows the use of more flexible alternatives and full benefits of advantages of certain routes. Such routing flexibility sometimes presents problems since competition is more acute. This is the case now.
With the recession and development of American land bridges, eastern American ports are facing more competition from west coast ports and, in turn, are trying to maintain their traffic base through competition with Canadian ports.
In order to compete with the U.S. ports, Canadian ports must offer efficient, effective services, particularly on inland movements. In the container world of the 1990s, this invariably means double stack railway cars.
Last month the port and the province of Nova Scotia announced an agreement with CN which would see provincial funding of up to $11.1 million made available for the lease and purchase of double stack rail cars. The plan eventually calls for the implementation of 80 of the so-called "5-packs" to operate in assigned service between Halifax and central Canada.
The operating savings to be derived from the use of these cars should afford rate reductions on the CN rail movement, addressing in this co-operative and positive manner what I know has been a major concern.
While double stack rail cars are not the sole answer to the port of Halifax's container problems, they do represent an opportunity for one of the major intermodal elements to obtain savings in operating costs.
The recent announcement by the Hon. Donald Cameron, premier of Nova Scotia, regarding direct provincial assistance to the port of Halifax is a particularly welcome manifestation of the collaborative spirit that is needed to help this port in its present difficulties.
In addition to the commitment to fund the double stack rail cars, the province has also announced the setting up of a task force under the Hon. Gerald Regan to inquire into ways to assist the competitiveness of the port of Halifax.
I would also like to point out that the province of Nova Scotia has consistently assisted the movement of rail cargo through the province in that it remains the only province which assesses no excise tax on locomotive fuel, an element that has been consistently identified with contributing to the cost burden of the railways in other provinces.
For its part, the port has made several tariff concessions aimed at improving its attractiveness to foreign ocean lines while at the same time remaining competitive with U.S. east coast ports. Among these, the port has capped its berthage charges and offered a wharfage discount incentive on all traffic originating or destined for the U.S.A., a market in which the port is anxious to expand its market share.
At the same time, the port has instituted a maximum limit to the number of times a liner operation must pay harbour dues, a measure certain to be of interest to those lines which call repetitively at the port. Finally, certain other port tariffs have been frozen for two years.
The city of Halifax too has come to the assistance of the port. This year CERES and HALTERM will each have their taxes trimmed significantly. For three more years they will pay taxes of 1.5 per cent to 3 per cent of revenue, based on the volume of traffic. HALTERM president Brian Doherty is quoted as saying that the tax cut and the deal by Canadian National and the provincial government to introduce double stacking rail service, which is estimated to lower rail costs by 20 per cent, should restore competitiveness with New York and her other competitors.
There remains, however, other tax problems. The Halifax-Dartmouth Port Development Commission identified railway fuel taxes as a major problem. U.S. carriers pay a meagre .3 per cent of revenues in fuel taxes, one-eleventh of the level in Canada. The port is also party to an exciting new initiative employing the latest in modem transportation communications technology: electronic data interchange, otherwise known as EDI.
EDI is a computer-to-computer exchange of business documents resulting in lower costs and improvements in efficiency and service for all participants in the transport chain.
October 11, 1991

EDI Port Atlantic is an organization of port users and service providers committed to the development and promoting of EDI at the port of Halifax. The demonstrated benefits resulting from EDI include: one, the significant reduction of administrative costs by eliminating the need for paper documentation; two, the reduction of errors and duplication of work; three, the provision of more accurate and efficient means to book, track, pay for and clear cargo. EDI also provides for easier instantaneous access to more accurate cargo information, and it reduces delays and speeds up the through movement of cargo.
The port of Halifax EDI project is said to be the most advanced of its kind in Canada and one of the most comprehensive port EDI systems in North America. It is expected to be fully operational by 1992.
What I hope I have made clear here is that it is important that everyone works together in searching for new solutions to our problems. Nobody in Canada is interested in seeing the loss of important jobs, and it is surely possible to work together to develop new approaches that will help find solutions to improved productivity and to remain competitive.
The province and partners such as the Halifax-Dart-mouth Port Development Commission are doing this. In a market system this is how the key decisions are made. The government can be a facilitator, but fundamentally the various partners have to get together and it may be possible to develop new alliances for marketing or for services.
It may be necessary to reinforce our alliance with shipping lines serving the port. The current adjustments, decisions and discussions do not yet include any easy or final answers to the challenges facing the port. But certainly it is not subsidies, artificially low rates or a tax against the key partners that will produce a solution.
There are positive signs of an early return to prosperity and the port of Halifax will remain a vital element in the support of Canadian and North American trade.


Iain Francis Angus: Madam Speaker, I am pleased to rise today in support of the motion in the name of the member for Halifax, just as I was pleased to argue for its inclusion as a votable item before the House management committee when we made the last round of selections.
Private Members' Business
I do so because the member has offered one of the solutions that is necessary to be considered for the survival of not just the port of Halifax, but the port of Vancouver, and in a lot of ways of all of our other ports in this country.
I think we all recognize that there has been a major shift, both bilaterally between Canada and the United States, thanks to deregulation, and internationally because of the growing dominance of the Pacific Rim markets. In fact what has happened is in the United States there is a greater tendency now for the west coast ports to capture much of the traffic and send it to the Pacific Rim, therefore setting up the east coast U.S. ports having to look at Canada as a possible source of new markets. In fact, they have been doing that very effectively with subsidies by states. With the low tax regimes, with the low fuel tax regimes, they are able to out-compete Canadian rail, and therefore Canadian harbours.
One specific example: It costs in terms of fuel taxes alone both federal and provincial $10,000 for a train to go from Toronto to Vancouver. The equivalent distance in the United States is $1,000.1 think we have to recognize that situation, just as we have to recognize the depreciation amounts in terms of the capital, as well as other costs are different between Canada and the United States. While we always want to say we have to set our own scenario here in Canada, we have to recognize that a port in Halifax that is competing with a port in New York, whether it is New York City or New York state, has to compete against that port.
They, as a company-if you like to call the port a company-can only do so much to reduce their costs whether it is through efficiencies, volume, changes in labour relations or any of the other variables that are available to them until it is necessary for the governments involved provincially and federally to assist them.
The members opposite would like to refer to any kind of public assistance as a subsidy. I like to think of it as an investment.
If we look at the investment provided to Atlantic Canada by the At and East rates up until the time this government eliminated them, we would see that the treasury of Canada and the treasury of Nova Scotia got much more money back because of the literally thou-

October 11, 1991
Private Members' Business
sands of people who had employment because of that investment.
As the member for Halifax just described it, one elevator has been closed completely. Another one is downscaled considerably, throwing many, many people directly and indirectly out of work.
If I look at the motion before us calling for a federal-provincial program to subsidize the CN freight rates, I see that as an investment in stability. I see it as an investment in the long-term future of the port of Halifax and also in the long-term future of CN Rail between Montreal and the port of Halifax.
Madam Speaker, I do not think I need to remind you and I certainly do not need to remind those people who have knowledge about transportation that there is a real danger. If we do not find a solution, whether it is this one or others, we may not have rail transportation, freight transportation between Montreal and the port of Halifax.
We are already seeing the line up to Cape Breton being sold or at least a desire to be sold. That was something that I predicted when the Conservative government decided to eliminate passenger services from that line. We said that the next thing will be the elimination of the tracks, and the government through CN is now taking that first step.
That has had an impact on the port of Halifax, on the community of Halifax, the passenger rail reduction because people are no longer going there to do then-business, to do their medical. They are staying home.
We have to recognize there is competition, but we have to recognize that we have the ability to provide some solutions. Ensuring low freight rates on the CN line will ensure that the container traffic which right now is railed from Montreal to Halifax will continue, that it will not be diverted either by an American-owned railroad or-dare I say it-by a Canadian-owned railroad from Montreal to somewhere in New York state.
If that does happen, that will also put in jeopardy the domestic container trade that is centred in the Halifax service area within Atlantic Canada. If the major container ships are no longer calling at Halifax or if they are only calling to do a bit of a top-up, they are probably not going to call that often.
This means that the domestic industry, the little bit that exists in Atlantic Canada, will also be in jeopardy. What does it mean for the Canadian economy if we allow this diversion to occur? It affects our balance of payments, it affects taxation and it affects employment because all those benefits are found south of the border.
It also affects our ability to have a secure source of supply from east to west where we have control as opposed to having to rely on the whims of either the United States government or the port in the United States or the railroad in the United States. What happens if that container ship is first filled up with American cargo and there are American preference laws that we have to deal with? That means our containers of Canadian products will be left sitting on the docks in New York waiting for another ship. We lose our ability to market effectively because we cannot guarantee when those products will reach their destination.
I would urge the House to support this motion, the concept of which is to find a solution to a very real crisis. It is not a new crisis because in June 1990 the Standing Committee on Transport heard from the Halifax-Dart-mouth Port Development Commission about the danger. Then, in December 1990, that same commission submitted a brief to the Minister of Finance, I assume as part of the pre-budget work, stating its case in a very effective and detailed manner. But there has been no action.
The provincial assistance does not include federal money. There has been no assistance to do the double stacking. There has been no indication that the government is looking at the federal fuel tax rates, no indication that it is trying to encourage other provinces to reduce fuel taxes on rail.
This government has failed, even though publicly and privately the people of Halifax have made their case through the development commission. It is time this Houses seizes this issue and accepts the motion of the member for Halifax to send a signal to the government that it is time for action to ensure the long-term survival of the port of Halifax.


Don Boudria: Madam Speaker, I am pleased to take part in this debate this afternoon. You no doubt know that my colleague, the hon. member for Halifax, has been working for a

long time to improve the lot of her constituents who work in the Port of Halifax. And of course, my colleague from Dartmouth has also raised this issue in the House many times.
Voters in both these ridings and in many other regions are concerned about the future of this port.

It is not only in Halifax where people are worried about conditions. It is indeed the same, although perhaps not as severe, for other ports as well.
I do not want to take up much of the time of the House this afternoon. I however want to make a minor amendment, I will call it a friendly amendment, to the bill. Its purpose is to remove some of the words from the bill.
My colleague from Halifax initially raised this in her remarks earlier today. The amendment, which I will propose in a few minutes, will essentially remove the reference to the port of Montreal from the bill. Obviously the greatest threat at the present time for the port of Halifax is the port of New York and other ports along the Atlantic seaboard. More and more it is becoming obvious that the threat to that port is on the American side. That same threat is going to threaten other ports unless we are vigilant in our efforts to save the port of Halifax. It will eventually threaten other ports. Indeed the port of Montreal is not immune to competition from those ports south of the border. I know that some of our colleagues across the way like to talk a lot about competition. I see my good friend from Duvemay and he is a big fan of competition. I know because we sometimes tease each other about such issues.


Mr. Della  Noce@: I prefer competition not coalition.


Don Boudria: Competition not coalition he says. A good expression indeed. But the competition in transport and transport infrastructure is a rather difficult expression in any case, because the terms are used in various ways depending on who is speaking them. Of course when one talks about transportation and artificial rates of anything, I always return to the Canadian Western
Private Members' Business
Grain Transportation Act and how it is an alleged subsidy to transport grain, or at least the Americans say it is. When we tell them: "Well don't you dredge the Mississippi River to carry goods down that river," they say: "Oh no, that is not the same, that is for national defence."
I cannot help but grin every time I hear them say that because, of course, it is used for transportation of commercial goods just as our rail lines are used for transportation of commercial goods. Indeed, south of the border, the massive construction some years ago of the interstate transportation system for motor vehicles was totally subsidized. Roads are government owned as they should be.
Nevertheless all subsidies in the area of transportation are a controversial subject and one which is difficult to evaluate at any time. The fact remains that jurisdictions on both sides of the border must maintain their transportation infrastructure in order to ensure the security of their respective nations and in order to be able to transport, quickly and efficiently, goods to markets and to protect the jobs of their citizens.
Madam Speaker, I move:
That the motion be amended by deleting the following words: -with those in the port of Montreal -


Madam Deputy Speaker:: I will, for the moment, take the amendment under advisement and we will resume debate.


Mr. Della  Noce@: Madam Speaker, I think everything has been said. If everyone agrees, I am prepared to skip my turn.


Madam Deputy Speaker:: I will ask the House to give me a few moments to consider this amendment.
The amendment moved by the hon. member seems in good order. Since no other members are rising in debate, I will first put the question on the amendment. Is it the pleasure of the House to adopt this amendment?


Some hon. members:: Agreed.


[Stage Direction]
Amendment agreed to.
[Stage Direction]
October 11, 1991
Private Members' Business
Madam Deputy Speaker:: The question is now on the main motion, as amended.
Is it the pleasure of the House to adopt the motion?


Some hon. members:: Agreed.


Some hon. members:: No.


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


Some hon. members:: Yea.


Madam Deputy Speaker:: All those opposed will please say nay.


Some hon. members:: Nay.


Madam Deputy Speaker:: In my opinion the nays have it. I declare the motion lost, on division.
Motion negatived.


Madam Deputy Speaker:: There will be no objection to my calling it five o'clock.
It being 5 p.m, pursuant to Standing Order 29(2), this House stands adjourned until Monday, October 21,1991, at 11 a.m, pursuant to Standing Order 24(1).


[Stage Direction]
The House adjourned at 4.43 p.m.
[Stage Direction]
Monday, October 21,1991