1991-03-22

Mr. Rod Murphy (Churchill):: Mr. Speaker, I rise on a question of privilege. I would like to begin by giving a brief explanation before I get into the real matter of privilege.
Last night in the House at about 5.58 p.m., the Minister of State and deputy leader of the government in the House of Commons moved:
That the amendments made by the Senate to Bill C-79, an act to
amend the Parliament of Canada Act, be read the second time and
concurred in.
The minister did not make a speech. A Liberal member, the member for Kingston and the Islands, immediately got up, agreed with the minister and spoke for less than 15 or 20 seconds. Then the chief government Whip got up and moved that the previous question be put.
We were fortunate that the member for Saskatoon- Clark's Crossing, our deputy House leader, was in the House. He spoke until six o'clock, at which time again the chief government Whip rose and tried to have the House speak after six o'clock to end the discussion on this matter.
That is all within the rules of the House. I do not question that, but the result of what they did affects the privileges of each and every member of the House.
As a result of the Senate amendments, which the House has not had a chance to review or debate, we are opening a credibility gap which members of the House and the public will never be able to bridge.
As a result of the Senate amendments, whether they were intended or not-


Mr. Speaker:: The hon. parliamentary secretary.


Mr. Cooper:: Mr. Speaker, I have been listening to the hon. member and this sounds a great deal like debate, and not a point of privilege. I would just ask the Chair to take a close look at the words of the hon. member. We are here to debate an opposition day, not an issue that was before the House last night.


Mr. Speaker:: I appreciate the remarks of the hon. parliamentary secretary. I was listening extremely carefully. I want the hon. member for Churchill to know that also. At the moment the hon. member for Churchill has set out certain facts that seem to have happened. He has agreed that whatever happened was within the rules of this place. I think when the hon. parliamentary secretary sought the floor, the hon. member for Churchill was just starting to say how this could possibly be a question of privilege.
I probably have to hear a little bit more to see whether there is any basis for privilege in the hon. member's presentation.
I think it is appropriate that the hon. member stay on the procedural point. It is going to be difficult enough for a Speaker to find a prima facie privilege when what seems to have happened was within the rules.
The result may not be what somebody wants, but that may not be anything resembling a question of privilege.
I am sure the hon. member for Churchill will hone in very carefully on exactly what the question of privilege is and assist the Chair accordingly.


Rodney Edward Murphy: Mr. Speaker, I appreciate your intervention.
Had the parliamentary secretary to the government House leader been listening, he would have heard me say that I would just give a very short precis of what happened last night. That is what I did.

March 22, 1991
Point of Order
The Speaker is correct in inferring that I had said I was getting on to the meat of the matter of privilege that affects all of us.
As a result of what happened last night, I and other members of Parliament cannot amend the motion. The chief government Whip got up and moved that the previous question be put.
The privilege is this. As a result of what happened, members in this House are not going to be guaranteed fair and equitable treatment and process by the legislation as it now stands. The Board of Internal Economy in the House and the committee that has the equivalent responsibility in the Senate, with its majority formed by the government, will decide when they will issue their opinions to police officers and when they will not.


Mr. Speaker:: The difficulty I am in is this: The hon. parliamentary secretary has just said "debate" and it most certainly is debate.
What we have here is something which even the hon. member for Churchill agrees was done within the rules. The consequence may be that certain things somebody in the House might have wanted to do cannot take place at this time. That may have certain results.
It may be that a piece of legislation has moved farther than members in the House would want. The substance of that legislation is hardly something about which when the rules are followed, I can enter into a debate. What I am being asked to do by the hon. member for Churchill, it seems to me, is to say that the legislation is offensive, at least in the minds of some members, and that as a consequence of what was done, certain things will inevitably take place under the legislation if, in fact, the legislation is ever passed by the House. That is so clearly a question of debate that it puts the Speaker in very great difficulty trying to infer even a prima facie case of privilege under the circumstances.
I understand that there may be strong feelings about this bill. There are strong feelings about bills all the time in this Chamber, but we have rules. If the rules are followed, the fact that somebody does not like the consequence of the bill is not a question of privilege.
Of course, I will ask the hon. member for Churchill if he has anything further to add to what he has already said that would change my view. I must say in fairness to
all hon. members that the fact that hon. members may not like the consequences of a bill is not something that can be debated in the "guise"-I do not mean that in any sinister sense-of a question of privilege.


Mr. Churchill:: Mr. Speaker, unfortunately because of what happened within the rules last night, we have a situation now where there will be two classes of MPs.
We will have a government majority on the Board of Internal Economy which will decide when unfavourable opinions will not be given to police officers.



SPEAKER'S RULING

['I am sure the hon. member would want to assist the Chair in maintaining the decorum that is necessary here. There are, no doubt, other ways to express the very strong feelings that are here, but not in a question of privilege. I am sure hon. members wish to co-operate.']
Mr. Speaker:: I understand the feelings with respect to the substance of the bill, if of course the bill ever becomes law. The government has moved that the question be now put, and there may well be further discussion with respect to the bill.
I understand the substance of this bill well. Hon. members will remember that I accepted their invitation to appear in front of the committee that was studying it. Whether I assisted or not I do not know, but I assure the hon. member for Churchill that if there is anybody in this Chamber who is aware of what the bill is about it is certainly your Chairman.
The hon. member has made his point, but it is not privilege and I cannot proceed with it.
The hon. member for Churchill is seeking the floor.



Rodney Edward Murphy: Mr. Speaker, since you will not accept that I have a privilege when I believe I have a very basic privilege to the rights of members in this House, I will rise on a point of order.
Under the rules of this House and the way it has been conducted by this government, with the collusion of the Liberals, members will not have a fair hearing. There is no Board of Internal Economy hearing that we can trust in this issue. The board is not an ethics committee.


Mr. Speaker:: It is probably best that we proceed to another matter.


Some hon. members:: Oh, oh.
March 22, 1991


Mr. Speaker:: We do have a rule here that it is not appropriate to impute the motives of hon. members, despite the fact that in the course of vigorous debate it sometimes happens.
There is no particular need to rise on that point, and I think we should move to Orders of the Day.


Some hon. members:: Oh, oh.


Mr. Speaker:: I am sure the hon. member would want to assist the Chair in maintaining the decorum that is necessary here. There are, no doubt, other ways to express the very strong feelings that are here, but not in a question of privilege. I am sure hon. members wish to co-operate.



GOVERNMENT ORDERS

[Stage Direction]
[English\

Mr. Bill Blaikie (Winnipeg Transcona) moved:: That this House condemn the government for implementing a debt reduction program which accepts the savings of children but fails to ensure that large, profitable Canadian corporations and wealthy individuals pay their fair share.
He said: Madam Speaker, this motion, which I will read again-that this House condemn the government for implementing a debt reduction program which accepts the savings of children but fails to ensure that large, profitable Canadian corporations and wealthy individuals pay their fair share-has its origins in the disgust that many of us in this caucus, and I am sure many other Canadians, felt when we saw the other day the Minister of Finance accepting a cheque from a young child who was making his contribution to the debt reduction fund.
We feel that the Minister of Finance has really gone overboard in this case and that the entire government has gone overboard in its exploitation of children in order to help reduce the deficit.
Perhaps they could keep it down to a dull roar at the other end. We feel that the Minister of Finance, not only through his willingness to accept cheques from children in order to help bring down the deficit, but through other
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policies which the government has implemented, had an over-all policy which is harmful to children and which neglects one of the ways in which we could bring down the deficit, and that is to have a fairer taxation system. That is what I want to concentrate on today.


Mr. McDermid:: Madam Speaker, the member is trying to deliver a speech and there are conversations being carried on, on all sides of the House. I think it very unfair to him. I would ask that there be some semblance of order so we can hear his speech.


William Alexander (Bill) Blaikie: Madam Speaker, normally I do not start raising my voice until I am about five minutes into a speech. I am trying to keep my blood pressure down, at least at the beginning.
To pick up where I left off, as I said, this motion has its origins in the disgust that we all felt watching the Minister of Finance on TV the other day accepting this cheque from children to help bring down the deficit.
I was at Wayoata Elementary School in my riding not so long ago to receive from a couple of students, Tanya Kessling and Dana de Boer, a copy of a song they had written about the environment. I think this is the kind of thing we should be seeking from children: their insights about the environment and the prospects for preserving Planet Earth, rather than their money to help bring down the deficit.
The money to bring down the deficit is out there. It is out there in the form of tax expenditures in the billions of dollars that this government maintains by virtue of its policies and its refusal to close the various tax breaks that exist for the big business sector.
If we pay attention to who was present at this debt reduction charade we had the other day in which these little kids were being asked by the Minister of Finance to break their piggy banks so that the minister would not have to tax the corporations, it was attended by the Business Council on National Issues, represented by Mr. D'Aquino. Mr. D'Aquino and his ilk represent a lot of people who either individually or as part of the corporations they either work for or own, pay absolutely no tax whatsoever.


Mr. Blenkarn:: They appoint them. What is wrong with that?


William Alexander (Bill) Blaikie: I hear the member for Mississauga South going on and on in the far comer there. I hope that when I am done, perhaps he will get up and have something to

March 22, 1991
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say on the record rather than making life difficult for me when I am trying to speak on the record.
The Business Council on National Issues contains a number of companies, and I will just go over their record in the years 1988 and 1989, that made a profit and paid absolutely no tax at all or a very limited amount of taxes.
For instance, BCE Incorporated, Northwest Tel Incorporated, in 1989 had a pre-tax profit of $15.1 million and paid only $0.14 million in taxes. BP Canada in 1989 had a pre-tax profit of $6.2 million and had a credit of $1.4 million. Brascan in 1989 had a pre-tax profit of $442 million and paid only $0.3 million in taxes and in 1988 had a pre-tax profit of $262.8 million and paid no tax at all.
The list goes on. I will not bore the House with all the details of these various companies that make millions and millions of dollars. In the column which reads "taxes or credit", we find zero after zero after zero.
We find, not only with respect to these companies as companies, that individuals in Canada have been benefiting from the tax reforms brought in by the Tory government, to the extent that the number of people who made over $250,000 and paid absolutely no tax at all increased as a result of the Tory tax reform. The number of people who made over $50,000 and paid absolutely no tax at all increased as a result of the Tory tax reform. These are in the years 1988 and 1989.
I mention that in particular because the Minister of Finance is fond of accusing the NDP of using 1987 statistics which applied before the Tory tax reform, but I am using figures now which are after the Tory tax reform.
What we are referring to here is what we think is the moral flaw in the government's approach to reducing the deficit. If the Minister of Finance was serious about reducing the deficit and about distributing the burden of reducing that deficit, then we feel that some significant sacrifices should be asked of the corporate sector. This is what did not happen in the budget.
In that respect we released after the budget a list of what we called the five top loopholes we felt the Canadian government could deal with. We referred, for instance, to the interest deductibility rule, the business and entertainment tax deduction, the manufacturers and processing tax credit, the dividend tax credit, and the
capital gains exemption. All these five top loopholes, in our judgment, added up to some $6.7 billion.
There may be elements of these loopholes or tax breaks which one may want to maintain, but it is clear that there is a lot of money here which could accrue to the public Treasury if there were the willingness on the part of the government to make the same demands of the rich and the powerful in Canada as it makes upon children.
The government is fond of saying that it does not want to send the bill for the deficit to our children, and it is referring to the children of the future. It is willing, however, to send the bill for the deficit to the children of the present, but not all children; only the children of the poor.
What the government really means when it says it is not willing to send the bill for the deficit to children is that it is not willing to send it to the children of the rich and the powerful. They will continue to receive the tax breaks.
Indeed, the government only recently indicated that it is bringing in a reform in order to preserve, in its tax free status, the money put in trust, back in 1972, by a great many wealthy Canadians, presumably for their children. This was done as a result of reforms which took place at that time when money was put in certain trusts, would be there for 21 years, and then become taxable at the end of that 21-year period.
That 21-year period is coming up in 1993, and what did the Minister of Finance do just before he produced the budget in which he called for everyone to make a sacrifice? He indicated that he is going to change the rules with respect to trusts so that that tax break can continue in a way that it would not have continued if he were to leave the legislation as it is, and the people who have that money in trust could pay the tax which they have had 21 years' notice of having to pay. It is not as if this is some sort of surprise attack by the Treasury on people who have this money in trust.
If the Minister of Finance is serious about reducing the deficit, if he wants credibility when he says to Public Service workers that they have to accept the 3 per cent cap on their wages or that sort of thing, he must not continue to allow the corporate sector and wealthy Canadians to benefit from the reforms he has made in the tax system. These reforms have made the income tax
March 22, 1991

system less progressive. The reforms he is unwilling to make would collect some of that money from the corporations. If he is not willing to do that, then he should not really have the nerve to go to the Public Service sector or any other Canadian, for that matter, and say: "We want you to make a sacrifice".
It is the same hypocrisy which attended the government's attempt just before the budget to up the salaries of heads of Crown corporations by 4.2 per cent, at the same time, within days, it asked the Public Service to accept a 3 per cent ceiling. Actually 4.2 per cent does not look like that much when we consider some of the increases which have happened lately at the Bank of Canada. We have the head of the Bank of Canada, the architect of the government's fiscal and monetary policy, seeing his salaiy rise inappropriately at the same time as he is the great lecturer, telling Canadians about how they have to accept restraint.
All these things undermine the government's credibility when it comes to the question of deficit reduction.
I would be concerned about that for two reasons. First, if I thought the government were really concerned about the deficit, I would ask: "Why don't you do these things in order to beef up your credibility and therefore be able to fight the deficit better?"
What it points to is that the government is not really that concerned about the deficit. What the government is doing is using the deficit as a cover for what is really an ideological and philosophical agenda with respect to Canada's social programs and Canada's social spending.
It is using the deficit as an excuse to attack these programs because the Conservatives do not have the courage to do this in an open way. They know if they revealed what they were really up to, the Canadian people would say "no". They play upon the appropriate fear that all Canadians have of debt and they say they have to do these sorts of things. Therefore Canadians are more inclined to say: "Well, maybe that is what we have to do".
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A study being done at Statistics Canada-we cannot get our hands on it yet-which shows that 44 per cent of the accumulated deficit owes its origins to tax expenditures, to the tax breaks which have been given to wealthy individuals and corporations going back to 1975 when the Liberals first started to turn the tax system into something which the corporate sector could use to make money instead of actually doing productive things. That is apparently what this study shows. The other 50 per cent is attributable to paying the interest on the debt which was created by that 44 per cent. Only 6 per cent is attributable to social spending.
Study after study has shown that social spending is not the cause of the deficit. It is other policies of the government that are the cause of the deficit. Yet it is the unwillingness of governments to admit that this is the problem.
Why are government members unwilling to admit that? It is because they would have to challenge their friends. Instead of taking decisions about funding that affect people and kids on the streets of Vancouver, the inner city of Winnipeg or Toronto or wherever, people they will never have to see, people who they do not run into in their ridings, in their lives and their social networks-they do not meet them at cocktail parties at the Canadian Club or the Carleton Club or any place like that-they prefer long-distance decisions which they never have to come to terms with the reality of.
If the Conservatives did the right thing, they would have to explain to their friends, the people who finance the Liberal and Conservative parties through donations and the people who are part of the social and economic elite of this country, why they are finally being asked to kick in and do their part. If they did have that kind of courage, if they were willing to say to those people "look, do we have a country or don't we have a country", it would not be unrelated to the question of national unity and the sense of whether or not we have a country.
It is hard to work up a sense of patriotism when we know there are people with money in this country who are unwilling to contribute their fair share to getting the country out of the so-called debt crisis we are in.

March 22, 1991
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All we ask is that they contribute their fair share through the tax system. We are not advocating that instead of having kids lined up with their piggy banks we have individual businessmen and corporations lined up with cheques to give to deficit reduction programs. That is not how you fight the deficit.
You fight the deficit by having a fair tax system. We do not want to be part of this charade in which people line up to give money to the debt reduction fund. For that matter, most of the businesses, if they were to give, would find a way to make it tax deductible anyway. I believe there is such a provision. Let us not have this charade.
Let us have a fair tax system in which both the corporate sector and the rich and powerful in this country are finally asked to pay their fair share. They have not been paying their share for some time due to the growing imbalance in the tax system whereby the share paid by corporate taxation has gone way down and the share paid through income taxes has gone way up. Even that share, at the same time as it has been going up, has been becoming less progressive. It is more and more the middle class that is paying a larger share of the over-all pie that exists between the income tax and the corporate tax.
The other way of taxing is through consumption taxes, and that has also been going up. That also hit the middle class even harder than anyone else. The icing on the cake as far as consumption taxes was concerned was the goods and services tax.
Over all we have a tax system which is more and more asking ordinary Canadians to pay the bill for this country, while some people get away with the taxation equivalent of murder. Some of these large Canadian families, like the Bronfmans and others, own all kinds of companies and pay absolutely no tax at all. These people have made millions and millions through playing the tax system, through literally taking money out of the pockets of ordinary Canadian taxpayers and becoming millionaires at their expense.
When the day comes that this government and other governments are willing to ask them to prove they truly care about the Canadian community and that Canada is not just a place to make a buck, then we will know that
indeed we have the kind of community that will be able to withstand the pressures that are now on it.
One of the reasons we have the crisis that we have in this country is that we have fostered particularly over the last seven years, the attitude that a country is simply a place to make a dollar, that there is really no difference between one country or another, that the only way to measure these things is by how easy it is to make money in that particular country.
The majority of people, almost everybody that I know, do not have the mobility of capital. They cannot move their money down to the Caribbean or to the U.S. or to Europe or anywhere else. They are stuck here in Canada and they are glad they are stuck here in Canada, because they consider themselves to be Canadians. They do not consider themselves to be a bunch of parasites who are always judging one country over another to see whether that is the best place to put their money or is the best place to invest. They have a sense of community and belongingness and rootedness in their country, instead of having the kind of attitude which has been fostered over the years and which has been accelerated in the last seven years, whereby everything is to be judged on how much it helps one to make money or not make money.
Money is the root of all evil, and it is worshipped on the other side of the House. That is the root of Canada's problems.


John Horton McDermid: Madam Speaker, I am going to participate in this debate, but I want to ask the hon. member to apologize for one thing he said today, because it is totally inaccurate. It has never been said by the Minister of Finance, nor has it been indicated by the Minister of Finance. The member erred, and I believe I am quoting him accurately when he said that the Minister of Finance has asked kids to break their piggy banks to help with the deficit.
The Minister of Finance never said that. The Minister of Finance has never indicated that. The Minister of Finance has never hinted at that. It is a very unfair statement that the hon. member made.
I sat very patiently listening to the hon. member's speech. He made some very good points. In my speech I hope I will be able to counter some of the things he said.
March 22, 1991

But that was a very unfair statement to make. I know what he is referring to. I will refer to that in my remarks as well. The Minister of Finance has never done that.
The Minister of Finance is trying to make sure that the kids today will not have to pay our bills down the road so that their kids have piggy banks. That is what this is all about. For the hon. member to make that statement, that accusation is totally unfair. I wish he would retract it.


William Alexander (Bill) Blaikie: Madam Speaker, I have no intention of retracting the statement. If the Minister of Finance is willing to appear on TV accepting a cheque from a young child for the purposes of reducing the deficit, then he has effectively given the message to a lot of kids that maybe this is something that they should do.
If they do not have their money in a piggy bank, well then I guess they cannot go and break it. To the extent that not all kids keep their money in piggy banks, I take it back. But to the extent that some kids do keep their money in piggy banks, that message implicitly calls upon them to do the same.
It is the Minister of Finance who should be ashamed of himself, not me, for allowing himself to be portrayed in that way and for allowing himself to appear in a context which gives that message.
While we are on this question, why do we want to ask future generations to pay for the deficit? I am asking the question: Why do we want to ask certain sectors of the current generation to pay for the deficit and not other sectors of this generation to pay for the deficit? That is the point. No one wants to leave any kind of inter-generational debt to anybody.
If we are leaving any debt to future generations, it is a debt which we are not willing to pay now on the environment, so that they have air to breath, soil to grow their food in, and water to drink. That is the shortsightedness in terms of the environmental deficit.
We are leaving them a deficit they might never ever be able to repay because we are so concerned about our fiscal deficit at this point that we are willing to cut back on the green plan and other things that we should be doing at this point. We will be leaving them a deficit in terms of social and economic malaise.
They will be paying for more police from now until doomsday if we do not start to do what needs to be done
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in order to solve the problems in our inner cities. It is a question not of spending; it is a question of investment, where we are willing to spend the kind of money that needs to be spent now in order to avoid problems for future generations.
Where do we get that money? We get that money by creating the national sense of community and the national sense of will to go to these people and say: "Look, maybe in the best of all possible worlds you'd be able to keep your 80 per cent lunches through the business entertainment tax deduction and we could still fund medicare". But it is not the best of all possible worlds. It is a world in which we have to make choices between the $1.1 billion that goes to the business entertainment tax deduction or the $1.1 billion that the Minister of Finance took out of Established Programs Financing for medicare.
If I have to choose between having more nurses on the wards or more free lunches for the business community, I will choose the nurses every time.


Mr. Tom Wappel (Scarborough West):: Madam Speaker, I listened very carefully to the member and I have read the opposition motion that he put forward. I am very interested in what the NDP has to say.
As the premier of Ontario has learned, it is one thing to be in opposition and criticize and criticize; it is another thing to be in government. The NDP federally has not had the privilege, and probably never will have the privilege of being in government, and deservedly so.
I say this because instead of offering constructive criticism, instead of offering an alternative which the NDP is prepared to put forward, all we hear is criticism and carping.
The member, with respect, spoke of the goods and services tax, and it is a perfect example of the hypocrisy of the NDP. It is my understanding, and the member can correct me if I am wrong, that the goods and services tax is opposed by the federal NDP. But I remind the member-and I know he was there because I saw him on television-of the NDP leadership convention in 1989. Certain resolutions were passed at that convention, and I would like to refer him to one and ask for his comments, particularly in relation to his constant criticism. I quote:
Be it further resolved that it is the position of the NDP that any
reform of federal sales taxes must exempt essential goods and
services from taxation.

March 22, 1991
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I do not know how the hon. member reads that resolution, but it is one thing to say: "we are against the goods and services tax, there should be no goods and services tax", and it is another thing to have a resolution of the NDP saying that: "essential goods and services should not be taxed". That implies two things: that non-essential goods and services should be taxed, according to the NDP and, second, that services, which have never been federally taxed before, should be taxed.
If that is not hypocrisy I do not know what is. I ask the hon. member to comment on that and indicate precisely what the NDP solution is to these problems.


William Alexander (Bill) Blaikie: Madam Speaker, I recall Liberals at one time in Ontario saying that the NDP would never form the government, and displaying exactly the same kind of arrogance that the member just displayed with respect to the prospects of the NDP in Canada. It may well be-and I certainly hope it is-that that kind of arrogance will be rewarded with the same kind of political event it was rewarded with in Ontario.
The hon. member says we do not present any alternatives. We have been presenting alternative after alternative after alternative in this House, before the budget and certainly after the budget, outlining in questions to the Minister of Finance in finance committee, in statements that we have put out, where we think the government could find the money that it alleges it needs to raise through the goods and services tax and through cutbacks to what we regard as essential programs, like health care and post-secondary education.
The alternatives are there. If the member would care to read Hansard, he would find that we have been making the case over and over again, both in the debate on the GST and on the budget. The alternative to the GST is to have a fair taxation system, is to raise the money which is now forfeited through a variety of tax breaks and loopholes that we have outlined very clearly for the member and very clearly for the Minister of Finance. If the member has somehow missed it in all the things that come across his desk, I would be glad to provide him with the information, because it is there.


John Horton McDermid: Madam Speaker, I want to thank the hon. member for Winnipeg Transcona for bringing this motion forward, because it does give the government an
opportunity for the government to put some facts before the House and before the people of Canada.
Many members here will be familiar with the saying: "Those who cannot remember the past are condemned to repeat it". However, today's motion makes it painfully clear to all Canadians that my hon. friends of the opposition have the same problems with history as they do with economics.
If this were 1981 or 1982, aspects of the motion before us would have been timely and true.


William Alexander (Bill) Blaikie: With a Liberal government.


John Horton McDermid: Years of Liberal governments had put in place a tax system that invited abuse and avoidance, a tax system chock-a-block of loopholes, exclusions and exceptions. The result was that many large profitable corporations and wealthy individuals were able to avoid paying their fair share of the national tax burden.
Of course, there was another aspect of that decade-ago government that the opposition would also like Canadians to overlook. I do not think the NDP would, but the Liberals certainly would. That was a government, some of whose members still sit across the floor of the House although I do not see any of them today, which turned surging deficits and soaring debt into the favoured tools of national policy. We are living with the tragic results of that policy today.
The budget our government tabled last month works directly at getting Canada out of the current recession and back to growth ar.d j;b creation. It is also a budget that makes a crucial watershed choice about how this renewed prosperity must be not only achieved, but more importantly, sustained.
Instead of spending our way out of the recession, the budget's plan for economic recovery emphasizes controlling expenditures and reducing inflation. This is the key to the lower interest rates that will boost consumer spending and business investment to fuel growth and new jobs.
This approach, the fact that we are committed to stopping the growth of the national debt, obviously has its critics. We have heard them today. That is absolutely no surprise. After all, for nearly 20 years through the early 1980s Canadians were accustomed to a federal
March 22, 1991

government whose fiscal philosophy could be summed up in two words: charge it.
That is why in 1984, the government was handing out $1.33 in programs and services for every dollar it collected in taxes. That is why in the same year, we had the highest deficit in history: $38.5 billion. That is why our national debt had more than doubled to more than $200 billion in four short years.
The interest payments on that 1984 debt we inherited are a direct reason the federal government is in a deficit position today. It is the reason our national debt is now approaching $400 billion or about $15,000 for every man, woman and child in Canada.
The interest costs alone on the federal debt will eat up over $43 billion next year. That is equal to 36 cents of every tax dollar Canadians pay. It is more than the government spends on old age security, unemployment insurance, veterans' pensions and family allowance combined. That is why the February budget refuses to buy short-term recovery at the cost of a return to surging deficits and a runaway debt.
The lessons in the last 20 years make the point bluntly. This spendthrift approach only creates a vicious circle of higher inflation and interest rates leading us back inevitably to economic decline, lost jobs and lower government revenues.
Instead, we have taken a different path, based on a continuing commitment to deficit and debt control. The February budget severely restrains the cost of government, including wages and salaries for the Prime Minister and cabinet, for MPs and the federal Public Service.
It also extends the two-year expenditure control program that we introduced in 1990, including limits on the growth of transfers to provinces. It now continues through to 1994-95. The savings achieved will total more than $15 billion.
What makes this a watershed budget is that it also takes dramatic measures, including the creation of the Debt Servicing and Reduction Fund to achieve nothing less than a fundamental change in the political culture of government spending.
These interlocking measures will transform good financial management by government from the realm of promise and political will into a matter of law. They will ensure that all revenues from the goods and services tax go solely to servicing the deficit and getting that debt under control.
Government Orders
Perhaps I am being a bit unkind to today's opposition motion, because it can be read to suggest, although grudgingly, that they do recognize that debt reduction is a vital foundation for Canada's long-term prosperity and economic health. If that is so, I applaud sincerely this great transformation of the NDP. I wish the NDP had been more forthright in sharing such an historic transformation with all Canadians.
If this motion does finally recognize that we can no longer borrow our way to real recovery, it still fails to acknowledge the wide-ranging changes in the national tax system that our government has introduced over the last seven years. Last November my colleague, the Minister of National Revenue released his department's 1988 personal income tax statistics. I specifically asked my hon. friend today what year he was quoting from for the 1988 results, because these figures provide the first substantial result of the tax reform initiatives that we announced in 1987.
The two major thrusts of the reform were to lower tax rates and to broaden the tax base. Lower rates provided an incentive to work and invest, thereby raising living standards. Broadening the tax base, by removing special tax preferences, makes the tax system simpler and fairer and reduces the opportunities for tax planning and avoidance that were most often used by high-income Canadians.
As well, another key element of the reform was the conversion of personal exemptions into tax credits, many at enriched values, such as the child tax credit.
Unlike exemptions which provide the greatest benefit to higher income earners, credits are fairer because they provide the same degree of tax relief to all taxpayers. The results released last year showed that, as we promised, the tax system has become more progressive and the burden of taxation was reduced for most Canadians, especially for those with lower to moderate incomes.
For example, the figures released revealed the following facts. The share of total personal income tax burden paid by those earning less than $15,000 a year was reduced by almost two-thirds, from 2.1 per cent of all income tax collected in 1987 to .8 per cent in 1988, a very dramatic drop. The share of total federal income tax revenues paid by Canadians with incomes between $15,000 and $30,000 declined from 26.5 per cent to 23.1 per cent. For those earning between $30,000 and $50,000,

March 22, 1991
the share of total tax revenues dropped from 37.3 per cent in 1987 to 35.7 per cent in 1988.
By contrast, despite a larger proportional reduction in their tax rates, tax revenues from individuals with incomes between $50,000 and $100,000 increased by over 25 per cent, while tax revenues from people with incomes over $100,000 increased by 31 per cent. That is exactly what tax reform was designed to do.
I also want to highlight that the number of seniors paying income tax decreased by almost 300,000 taxpayers between 1987 and 1988. This represented an increase of 43.2 per cent in the number of seniors not paying income tax.
Madam Speaker, shall I call it eleven o'clock and continue the debate after Question Period.


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


STATEMENTS PURSUANT TO S. O. 31
Mr. George S. Rideout (Moncton):: Madam Speaker, higher than reasonable gas prices continue to plague the people of my riding of Moncton. In Ottawa, Consumer and Corporate Affairs has launched an investigation into high gas prices. My colleague from Ottawa Centre got newspapers to threaten to publish the names of those stations which sold gasoline at 60 cents a litre or more. Lo and behold, magically, gas prices fell to 58 cents.
Moncton has a similar problem. I have written Consumer and Corporate Affairs to request that the file be reopened. The price of gasoline in Moncton is consistently out of line with the prices elsewhere in the province. Moncton consumers can pay 6 cents a litre more than in any other part of the province. Gasoline is 2 cents to 3 cents cheaper just 10 kilometres outside the
boundaries of Dieppe, Moncton and Riverview. It is not fair and it is not just, especially in these economic times.
To date, I have received no answer from Consumer and Corporate Affairs. Could this be because the people in Consumer and Corporate Affairs have to buy their gasoline in Ottawa rather than in Moncton?


INDIAN AFFAIRS
Mr. Allan Koury (Hochelaga-Maisonneuve):: Madam Speaker, as vice-chairman of the Aboriginal Committee, I have the great pleasure to offer congratulations to the 20 graduates of the Mohawk Law and Security Enforcement Program on behalf of the Minister and the Minister of State for the Department of Indian Affairs and Northern Development.
These students from Akwesasne Mohawk community were able to participate in this course through the Department of Indian Affairs and Northern Development's Indian Study Support Program which provided $200,000 in funding to cover the course expenses and curriculum development.
Employment and Immigration Canada provided additional funding of $470,000 under the job development program of the Canada Jobs Strategy.
This is an important step in providing Akwesasne residents with an opportunity for long-term employment. This program provides reserve members with skills and enables them to contribute to self-government and the administration of justice on reserves.
The department is fully committed to programs such as this which support and encourage the wishes of native people to gain control of their own affairs.


BALTIC STATES
Mr. Jesse Flis (Parkdale-High Park):: Madam Speaker, my colleagues and I have just returned from the Baltic States where we witnessed the March 17 unity referendum. As you know, Latvia, Lithuania and Estonia refused to participate, though each country overwhelmingly endorsed independence in their own referendums.
March 22, 1991

Their leaders said that the speed with which our Parliament expressed opposition to the Soviet military action in Vilnius on January 13 and in Riga on January 20 was significant in the build up of the international pressure which they are convinced averted a further military crack-down.
Talks between the Soviets and Baltic governments are now deadlocked. I propose that Canada, with our history as a peacekeeping peacemaking country, take the lead by promoting a special international conference on the subject of the Baltics.
The objective would be to bring interested parties together in discussions where objective criteria and the rules of international law would be used to determine the legal status of the annexation of 1940 and to set the semantics and terms of reference for further negotiations which will hopefully result in a resolution to this complex issue.


REFORM PARTY
Mr. Larry Schneider (Regina-Wascana):: Madam Speaker, again I would like to address a concern I have with the Reform Party and its vague agriculture policy.
Mr. Manning admits to his lack of agricultural expertise and acknowledges that his agricultural ideas might not work. Not only is this an insult to farmers across the country, but it is also a knife in the back to the small business sector everywhere.
We all know that the ties between the economies of the agricultural sector and small business are inseparable. For every one dollar a farmer puts into the system, this results in a seven-fold multiplier to the economy of small business.
How can the Reform Party ask anyone to take it seriously when it does not appear to have the desire or ability to formulate an agricultural policy which would in turn mean support for the small business sector?
This concerns me and I think it should concern anyone who thinks the Reform Party has anything to offer this country or its citizens.


THE ENVIRONMENT
Mr. Jim Fulton (Skeena):: Madam Speaker, environmentalists resigned from the new Global Warming Advisory Committee today because the government's position is "gravely inadequate".
While scientists from across the globe have concluded that the greenhouse effect is real and other countries adopt urgent strategies to reduce releases of carbon dioxide, methane, halocarbons and nitrous oxide, Canada waits at the sidelines with no specific targets or timetables for reduction. Even the Canadian promise of last November in Geneva to freeze greenhouse gas emissions by the year 2000 has proven to be false.
The Minister of the Environment recognizes that projects, such as the Point Aconi thermal plant, should be subjected to a full EARP because of its massive carbon dioxide releases, yet he does nothing.
The Standing Committee on Environment on Monday will release a unanimous report on global warming called "Out of Balance-The Risk of Irreversible Climate Change" where once again we call for a 20 per cent reduction of carbon dioxide releases, a call for action now not next year.
Delay is a crime no future generation will forgive.


TORONTO HUMANE SOCIETY
Mr. John A. MacDougall (Timiskaming):: Madam Speaker, the Toronto Humane Society yesterday decided to blacklist certain Canadians from their membership. In making the announcement of their exclusions, Secretary Treasurer Bob Hambley stated: "There's the morality of it. If you want to be involved in the humane movement, you have to take a stand".
Well, let me tell Mr. Hambley, the greatest environmentalists are those who live off the riches of the land. They are the trappers, the bushmen, the miners, the farmers. They have the greatest understanding of nature. They have a profound respect for the wild animals, the forests and the soil.
I say to those members of the Toronto Humane Society, those city dwellers who walk on cement, breathe the auto exhaust and keep their pet dogs and cats on

March 22, 1991
leashes and wander through a square block park, your righteous words sicken those who know better.
Care and respect for animals and the land begins with a profound understanding of environmental issues, not hollow and ignorant morality statements.


SENIOR CITIZENS
Mr. Lawrence MacAulay (Cardigan):: Madam Speaker, in Tuesday's throne speech in Prince Edward Island, the provincial government announced the creation of a Ministry for the Elderly. For far too long the concerns of Canadian senior citizens have been ignored.
The federal government has a Minister of State for Seniors, but this government will not allow her to do her job. If this government had the needs of seniors in mind, it would not be cutting funding for basic medical research and it would do something about the poverty in which so many of our seniors are forced to live.
I congratulate the government of Premier Joe Ghiz. By appointing a Minister for the Elderly, the government of Prince Edward Island recognizes the contributions that seniors have made to Canada. These are the people who have made this great country what it is today. Every effort should be made to ensure that our seniors live with as much dignity and independence as possible.
He *	*


SENATORS' ALLOWANCES
Mr. Jacques Vien (Laurentides):: Madam Speaker, I want to congratulate the hon. member for Ontario on his efforts to defeat an attempt by the senators to vote themselves a non-taxable per diem allowance of $153, simply for reporting to work. The Senate voted in favour of this controversial bonus last June. Imagine, in addition to their salaries and non-taxable allowances, the senators would have received a non-taxable per diem allowance of $153, simply for reporting to work.
All the efforts of the hon. member for Ontario were directed towards having this unnecessary allowance cancelled, and I am sure, Madam Speaker, that this would be greatly appreciated by many, many Canadians.


INDIAN AFFAIRS
Rodney Edward Murphy: Madam Speaker, I have a copy of a recent letter from the Minister of Indian and Northern Affairs to Manitoba's Minister of Family Services. This letter shows how trivial this government regards its constitutional responsibility to native people. In it, the federal minister states that federal funding for all social services to natives living off-reserve will be cut off after March 31, 1991, in nine days.
The federal government has a responsibility to all native people in Canada. It is shameful that the federal government is going to dump its responsibility for off-reserve natives on to the provinces. This is both unfair to the native people and to the provinces that will be forced to pick up the bill. It is even more shameful that the federal government would take this action with only three weeks notice and without any consultation with the provinces or native people.
It also poisons the constitutional debate in this country with regard to aboriginal people and federal-provincial relations.
It seems clear that this government is not interested in developing good relations with the provinces or with native people alike.


CROSS-BORDER SHOPPING
Mr. Jerry Pickard (Essex-Kent):: Madam Speaker, Canadians crossing into Detroit at Windsor presently spend $1 million to $1.5 million weekly in the U.S. This border shopping is causing hardship for Canadian retailers.
The brain dead policy of the Minister of Revenue to fast track border crossings will sound the death knell for retailers in border areas.
This government's policy on trade and the goods and services tax have already made it easier and cheaper for Canadians to shop in the U.S. Instead of taking measures to reverse this trend, it is introducing initiatives that will
March 22, 1991

encourage more cross-border shopping. Ask the merchants, the unemployed, the seniors in Windsor and Essex-Kent what they think of the minister's PACE project.
In my riding PACE stands for lost revenue, forced closures, unemployment and unfair competition. It is breaking the backs of-


Madam Deputy Speaker:: The time has expired.

[Translation\


TRIBUTE TO HAROLD HARVEY AND RICHARD BEAMISH
Mr. Guy Saint-Julien (Abitibi):: Madam Speaker, I would like to pay tribute to Messrs. Harold Harvey and Richard Beamish, who discovered the disastrous effects of acid rain.
The two men made this discovery entirely by accident during the summer of 1964, when they were on Lumsden Lake in Ontario's Killarney Provincial Park, 50 kilometres south of Sudbuiy.
Working from canoes and backpacking hundreds of kilograms of nets and equipment on numerous expeditions, Harvey and Beamish investigated the disappearance of fish from vast expanses of Ontario's territory.
I also want to thank the Speaker of the House of Commons, the hon. John Fraser, for what he did as Minister of Fisheries in 1979. He took these findings seriously and asked the government to take action.
The people of Canada are indeed indebted to Harvey and Beamish!


CROSS-BORDER SHOPPING
Mr. Bob Kilger (Stormont-Dundas):: Madam Speaker, cross-border shopping has caused serious economic problems for Canadian border communities. The decision by the government to consider using express lanes at Canada-U.S. border crossings and the recent Ontario Supreme Court ruling against Sunday shopping will add to the steadily increasing numbers of Canadians shopping in the U.S.
Total border crossings are up 15 per cent over last year. Crossings have almost doubled at the Comwall-Massena border, up from 43,000 in February 1990 to 77,000 for the same month this year. The loss in business revenues and jobs outline the negative economic impact cross-border shopping is having on our border communities.
I call upon the government to immediately implement initiatives to help these communities deal with this threat to their economic survival.


NATIONAL UNITY
Hon. Alan Redway (Don Valley East):: Madam Speaker, most Canadians with whom I talk want to see some fundamental changes made in Canada, but they do not want those changes to be made by 11 middle-aged white men in blue suits meeting behind closed doors. They want an open and fair process, a process that involves everyone.
I personally believe that the best way to do this is by establishing, through a direct election, a national constituent assembly. That is not a revolutionary idea. It has been done in other countries. But we need a constituent assembly in which men and women, native Canadians, Canadians bom here and Canadians born elsewhere, are all represented in the same proportion as they appear in Canadian society itself, one which meets and discusses the issues in public.
That is the only way that all Canadians will be able to feel that they have personally participated in the process.


SUPREME COURT OF CANADA RULING
Ms. Dawn Black (New Westminster-Burnaby):: Madam Speaker, the women of Canada have something to celebrate today. Yesterday's Supreme Court ruling that a foetus is not a person until it has completely left a woman's body simply reaffirms that life does begin at birth.
But this decision does more than reaffirm what equality-seeking women already knew. The decision serves as yet another reminder to this government that there is no need for an abortion bill, except one which promotes equal access to midwifery and other reproductive health services.

March 22, 1991
Oral Questions
That is why the New Democratic Party calls on the federal government to work with the provinces in getting midwives out of legal limbo. Regulations, mandatory formal training, and the right to decent wages are initiatives that Canada must take to be the last industrialized member of the World Health Organization to legally recognize midwifery.


WORLD BALLOONING CHAMPIONSHIP
Mr. Clement Couture (Saint-Jean):: Madam Speaker, today I would like to pay tribute to the town of Saint-Jean-sur-Richelieu, which will host the World Ballooning Championship from August 10 to August 18 this year. This world championship is a first for Canada, and will be attended by more than 400 participants from 35 different countries.
This unprecedented event will be one of the highlights of the tourist season in Canada. The Canadian government is proud of Saint-Jean-sur-Richelieu and all the organizers of this tenth world championship, and it hopes the event will be a resounding success.
I also want to take this opportunity to urge all Canadians to come and take part in the championship events at Saint-Jean-sur-Richelieu. You won't be disappointed!


WOODBRIDGE HOUSING PROJECT
Mr. Maurizio Bevilacqua (York North):: Mr. Speaker, Canadians want their government to listen to their concerns. They want to be consulted on national as well as local issues that affect them and their communities.
In my riding of York North, in the city of Vaughan there is a growing concern among residents that their views are being ignored in relation to the development of 106 acres of land for a housing project in the Woodbridge area.
I firmly believe that the minister of housing has a responsibility to listen to the concerns expressed by the residents, the ratepayers associations, and the elected officials of the area.
The residents know what is best for their community. Their concerns must be addressed and taken into account before construction begins. Madam Speaker, I urge the government to listen to Canadians and act accordingly.



ORAL QUESTION PERIOD


Ms. Sheila Copps (Hamilton East):: Madam Speaker, my question is for the Deputy Prime Minister. Patrick Watson, chairman-designate of the CBC, has accused the Prime Minister, and I quote, "of playing games", "a cheap trick", and "indifference" in dealing with the CBC cuts.
Mr. Watson said in defending the savage cuts the Prime Minister expressed "a lofty kind of contempt for all those people who've lost jobs and all those communities that had service taken away from them".
How does the Prime Minister justify his own outrageous distortion of the facts surrounding the CBC cuts?


Hon. Don Mazankowski (Deputy Prime Minister, President of the Privy Council and Minister of Agriculture):: Madam Speaker, in response to the acting leader, I must say that it is rather unfortunate that Mr. Watson placed such a distorted interpretation on the comments of the Prime Minister because the Prime Minister's comments were taken specifically from a quote from Mr. Watson which appeared in The Globe and Mail on February 27, 1991, in an article entitled "It's Time to Clean House if the CBC is to Survive".
The article goes on to say that despite the recent budget cuts, the corporation still has a handsome annual income and "I am frankly embarrassed we can't manage on $1.4 billion a year. That's a lot of money," chairman-designate Patrick Watson told The Globe and Mail reporter.
I think it is pretty clear in the quote, and I trust that it is accurate, that that is precisely what Mr. Watson said and that is precisely the context in which the Prime Minister referred to Mr. Watson's remarks.
March 22, 1991

I could go on and quote further from the article, but unfortunately there is some unparliamentary language in it, so I would not be allowed to do so.


Sheila Maureen Copps: Madam Speaker, I would like to quote further from Mr. Watson who, I remind the Deputy Prime Minister, is the Prime Minister's appointee. I quote: "I think it's pretty sad that the Prime Minister should resort to a cheap trick-in order to protect his government, when he knows perfectly well the precarious situation the CBC is in".
Why has the Prime Minister distorted the comments of Mr. Watson when he knows that Goose Bay, Comer Brook, Sydney, Rimouski, Sept-Iles, Matane, Toronto, Windsor, Saskatoon, and Calgary have lost their local stations and local programming has been eliminated across the country at a time when the Prime Minister claims he is fighting to keep this country together?


Donald Frank Mazankowski: Madam Speaker, perhaps the hon. Acting Leader of the Liberal Party may want to ask Mr. Watson whether in fact he was quoted accurately or inaccurately. It is pretty clear that he stated, and I quote: "I am frankly embarrassed if we can't manage on $1.4 billion a year. That's a lot of money," said Patrick Watson.


Sheila Maureen Copps: Madam Speaker, what is so unfortunate about the CBC cutbacks is that today, the Prime Minister claims to champion the cause of Canadian unity. Real unity is impossible unless our two language groups in Canada are able to communicate. Why is the Prime Minister again trying to weaken the unity of this country? Could the Prime Minister or the Acting Prime Minister tell us how closing down CBLFT, for instance, the only French station in Toronto, will help anglophone and francophone groups across this country communicate? How will closing down this station help Canada's unity?


Hon. Gerry Weiner (Secretary of State of Canada and Minister of State (Multiculturalism and Citizenship)):: Madam Speaker, the CBC's total revenues have increased yearly since 1985. What the Acting Prime Minister said this morning is quite clear. Mr. Watson said in
Oral Questions
February that $1.4 billion was enough. It is up to the CBC to manage its finances and that is what it is doing. Did Mr. Watson change his mind about what he thought two months ago? Does he now think he is a politician? Is that it? What does he mean? In February, he said clearly: I have enough money. That is what he said about the $1.4 billion. Let the CBC look after its finances. It is a good service appreciated by all Canadians, and we want it to stay that way, but run by CBC.


Mr. David Kilgour (Edmonton Southeast):: Madam Speaker, my question is for the Deputy Prime Minister.
Mayor A1 Duerr of Calgary told the CRTC this week that Calgarians' "money is important to the CBC but our news and views are not".
Will the Deputy Prime Minister tell the House if any of his Calgary MPs stood up against the cutbacks affecting their city?


Some hon. members:: Order, order.


David Kilgour: Does he really think-


Madam Deputy Speaker:: The hon. member has been in this House for quite awhile, and I do not think this is a question being asked of the government. The hon. member will put his question.


David Kilgour: Will the Deputy Prime Minister tell the House whether he thinks that one local news show from Edmonton is sufficient for 2.3 million Albertans from High Level to Milk River.


Gérard (Gerry) Weiner: Madam Speaker, what is important to note here is that the global receipts of the CBC have been increasing constantly each year since 1985.
In the month of February, which is not that long ago, Mr. Watson seemed pleased and said that $1.4 billion was enough money. It is not for me to decide that.
These are the people who are running the CBC. Let them administer the work of the CBC. I appreciate how effective a force it has been in providing service to some Canadians. Obviously there are other means that are

March 22, 1991
Oral Questions
being provided across the country. We do not support them all.
Let me just repeat what is written in The Globe and Mail. Mr. Watson said again: "I am frankly embarrassed if we cannot manage on $1.4 billion a year. It is a lot of money". That is what I want us to reflect on.


David Kilgour: Madam Speaker, I have considerable respect for the minister.
He knows and I know that the CBC is part of the glue holding this great, single country together. He knows the 11 stations that were cut have weakened the bonds that keep Canadians together: his province and my province and all the other 11 stations affected.
He also knows that the president of the CBC told the CRTC that the highest levels of governments, or some such words, were consulted about these cutbacks. Will he tell us whether he as a member from Quebec was part of the decision to cut back the CBC?


Gérard (Gerry) Weiner: Madam Speaker, when you have more money, not less money, it means you are able to administer better, not worse.
There were decisions that were taken by the board of the CBC-this is totally appropriate-on how a corporation should be administered. We on our own behalf have seen to it that the CBC has received significant support in each of the years we have been in office, and that continues unabated.


THE ECONOMY
Hon. Audrey McLaughlin (Yukon):: Madam Speaker, my question is for the Deputy Prime Minister.
A few weeks ago in this House the Minister of Finance put forth a budget destined to fight a recession on the backs of the poor, the unemployed and the sick. Today Statistics Canada announces that inflation is 6.2 per cent higher than it was last year at this time.
In the same budget the finance minister announced that the government would be limiting the salaries of federal employees so that a secretary is expected to cope
with this increased cost of living at a much reduced salary.
Will the throne speech, which the government has announced it will be making later in the spring, reverse this government's current policies that hurt low income and poor Canadians and introduce some economic policies that will help working Canadians?


Hon. Gilles Loiselle (President of the Treasury Board and Minister of State (Finance)):: Madam Speaker, if the hon. leader of the NDP were to read the budget carefully, she would understand that all the measures we have taken are aimed precisely at helping working Canadians and at getting Canada back to work.
We are very proud on this side of the House that over a number of years we have created 1.5 million jobs. After seven years of record growth, the economy was overheating and we have had to take some measures to reduce it. It is sad to see many Canadians thrown out of jobs. We understand that.
That is why we must take measures to ensure that interest rates go down. They have been going down. Over the last three months they have gone down by 200 basis points. The inflation rate from early January went down six-tenths of a point.
We are heading in the right direction. We are confident that come this summer the recession will end and we will all be in a better position.


Audrey Marlene McLaughlin: Madam Speaker, I have a supplementary question.
The people who are unemployed, the 1.5 million Canadians who do not have jobs, the increasing number of children who are lining up at food banks and those families who cannot afford to put food on the table, cannot afford to wait either.
While this government is fighting a recession in which it says that everyone should share the burden, and seeing clearly that it is the unemployed who are paying the price, I point out to the government certain sectors of this country like the mining sector, which made 164 per cent higher profits this year and the petroleum industry, which made 149 per cent higher profits this year.
I ask the minister: Why not bring in a fair tax system which will ensure that everyone truly pays his or her share of the cost?
March 22, 1991


Gilles Loiselle: Madam Speaker, in listening to the hon. member I would think that she believes in the policy that was used of government creating jobs. This was followed in eastern Europe. It does not work.
It is through private enterprise that we create jobs. By helping Canadians to create jobs artificially, competing with companies that already have difficulty maintaining employment, causing more people to be thrown out of jobs and less income to help social programs is not the way.
The only good way is to help the economy and to create an environment for Canadians to be able to get on with the job. This is what we are doing.
We have increased our contribution this year for the unemployed. We have provided the money to help them surmount this difficult period. We all agree it is a difficult period, but we must use the right methods to extricate ourselves from it.


Audrey Marlene McLaughlin: Madam Speaker, I am sure Canadians are hoping the "right methods" that this government has used-the failed economic policies of the goods and services tax, the trade deal and the high interest rates which have destroyed this country's economy-will not be the methods that this minister is talking about using.
[Translation)
Madam Speaker, day in day out, this government tells this House that national unity is an absolute priority. But it will take more than constitutional amendments brought in one after another to safeguard national unity. This government must build a country where it is pleasant to live, in the West as well as in the Maritimes and in Quebec. What kind of country does this government have in mind for the thousands of young people who are unemployed in Quebec and elsewhere in the country?


Gilles Loiselle: I wonder, Madam Speaker, if the hon. leader of the New Democratic Party imagines that by borrowing abroad and thus increasing the Canadian debt we would be preparing a better future for our young people. What these young people are looking for, Madam Speaker, are ways of building a life
Oral Questions
for themselves, of earning a living and of competing. Canada is a huge but sparsely populated country with no national market. It has to be competitive. It is our responsibility, as national government, to manage that environment. We brought about, in just a few years, the greatest era of prosperity this country has ever known and we are preparing yet another one.


BANKRUPTCIES
Mr. Mark Assad (Gatineau-La Lievre):: Madam Speaker, my question is directed to the Minister of Consumer and Corporate Affairs. The rising number of bankruptcies in Quebec is proof positive that the recession is getting worse. According to the figures, there were 2,000 bankruptcies last month, which is 40 per cent more than in February 1990. For almost a year, the business community has been saying that high interest rates would provoke a recession. And now we have one! What does the minister intend to do to provide some relief, especially for owners of small businesses who have always created most of the jobs in this country?


Gilles Loiselle: Madam Speaker, I am surprised at these comments coming from the other side. Perhaps I may point out that we had the beginning of a recession a few months ago. There was a major inflationary crisis. However, we have taken a number of measures and interest rates are now going down.
If we look at what happened under the Liberals in a similar situation for instance, a Canadian with a $50,000 mortgage had to pay $910 per month, while today, he would pay $411 per month, which is $4,900 less per year. Now that is the kind of policy that actively improves the economic situation in this country. Interest rates are going down, and that will give businesses a chance to recover.


Mark Joseph Assad: Madam Speaker, the minister quoted figures from 1982, when this side of the House was in power. However, we were later judged by Canadians and Quebecers. We paid for it! And 9 years later, now that the responsibility is yours, I want to ask the minister this: Don't you think you will be judged as harshly by the people of Canada as we were at the time?

March 22, 1991
Oral Questions


Gilles Loiselle: Madam Speaker, if he applies the same criteria that were used at the time, I don't think so. Certainly not. In fact, according to Statistics Canada, inflation is down by 6/10 of a point. That's not bad in such a short time.
There is another point I would like to make. You mentioned the GST. Initially, because of the Liberal filibuster in the Senate, many small businesses thought the GST would not be enforced, so they did not bother to claim their inventory rebate. We had reserved a considerable amount for this purpose, over $1 billion. They started claiming this rebate around the end of January, however, so the savings will start being passed on to Canadians, and that is how this tax will help our businesses compete with the United States.


Mr. Ron MacDonald (Dartmouth):: Madam Speaker, my question is for the Deputy Prime Minister.
In the last 24 hours alone, another 160 companies and individuals have been driven into bankruptcy. In the month of February alone, in the province of Saskatchewan bankruptcies are up a stunning 60 per cent. In B.C. since the beginning of 1991, over 1,000 companies have bitten the dust.
Does the Deputy Prime Minister take responsibility on behalf of his government for this economic tragedy, or will he reject his government's insane fiscal policies which have caused this national tragedy?


Gilles Loiselle: Madam Speaker, it is certainly not with any great deal of pleasure, far from it, that we see the difficulties that many of our companies and many Canadians are facing these days because of the recession.
The hon. member can repeat that every day. He can look at what is happening in the United States, and the same thing is happening in Europe. However, what is happening in Canada that is not happening elsewhere is that our interest rates and our inflation rate are going down. This will create the condition for a renewal of our economic progress.


Ronald MacDonald: Madam Speaker, my supplementary question is for the Deputy Prime Minister.
In the coming months in the province of Saskatchewan alone, over another 30 farms will have to declare bankruptcy, losing not just their land but also then-dreams, their pride, and a way of life.
Will we have to wait until the entire agricultural sector in western Canada is driven into bankruptcy before the Deputy Prime Minister and the Saskatchewan MPs understand the depth of destruction of their own economic policies?


Donald Frank Mazankowski: Madam Speaker, I appreciate the hon. member's concern about the situation in Saskatchewan. As I am sure he is aware, the agricultural economy is largely a grains and oilseeds based economy and one that has been affected very seriously by the trade war that has been going on, the result of which has driven prices down to depression levels.
He knows that currently before the House there is a very broad and comprehensive agricultural measure, the Farm Income Protection Act, which speaks to the very point that the hon. member raises.
I appreciate the genuine support that members on our side of the House, and particularly the Liberals, have given toward moving this legislation along. If we can only get some support from the NDP to move it along quickly, we will be able to have it in place for April 1, so that farmers will be able to have the kind of protection which will provide stability and confidence for the future.


THE ENVIRONMENT
James Ross Fulton: Madam Speaker, my question is for the right hon. Secretary of State for External Affairs.
Yesterday in Washington Canada's ambassador, Mr. Burney, said that his government would not let the environment get in the way of progress.
By progress, he was referring to the free trade deal which would encourage polluting companies to avoid environmental regulations by moving to Mexico, a country with such lax environmental standards that a 90-second breath of fresh air now costs $2 in the capital city of Mexico City.
March 22, 1991

Would the right hon. minister clarify whether his government shares the view that environmental standards and regulation are an obstacle to progress?


Right Hon. Joe Clark (Secretary of State for External Affairs):: Madam Speaker, neither I share that view nor does the Ambassador of Canada to the United States. New Democratic Party members would serve the interests of truth and of their own responsibility if, instead of misquoting Canadians when they declare themselves on important issues, they would quote them correctly.
If you have an issue to join, state the issue honestly. Do not introduce dishonesties into this House of Commons to try to improve your own partisan position.


James Ross Fulton: Madam Speaker, there is one thing you can always be sure of in this Chamber, and that is when you hit a nerve right on with the right hon. minister of external affairs, it is because of accuracy and not because of the dishonesty that he is always trying to flick over at the opposition.
I will quote from the transcript, and this is exactly what Mr. Burney had to say: "What should not happen, in my view, is that environmental concerns should not become the obstacle to progress toward a trade agreement". That is exactly what he said.
Is that the view that Canada is taking into these negotiations, that environment can play second fiddle, that all the polluting industries from Canada can simply move on down to Mexico?
I would like to hear some truth from the minister of external affairs.


Charles Joseph Clark: Why doesn't the hon. member sit down and listen to some truth? He knows very well that what was said by the Ambassador of Canada to the United States was that these two issues have to be pursued with equal speed but on separate tracks. One is not an obstacle to the other.
If the hon. member would adhere to his own earnest demands for the truth, he would tell the truth in this House of Commons and not abuse his place as a member of Parliament by trying to spread falsities across the country.
Oral Questions JAMES BAY AGREEMENT


Ms. Ethel Blondin (Western Arctic):: Madam Speaker, my question is for the Acting Prime Minister.
Yesterday, Mr. Diom Sagamish, Vice-Chief of the Grand Council of the Cree, said:
If we are provoked-and James Bay II is massive provocationthen I will not predict how Cree anger and frustration will manifest
itself. Law and order is not always justice.
Will James Bay be the next Oka? Respect Cree rights and your own
constitution. That is the real answer.
I ask the Deputy Prime Minister, is the government really prepared to listen? Is it listening and is it prepared to take appropriate action to ensure that fundamental change is undertaken and that the government will deal directly with the native leaders on how the James Bay project is handled and their constitutional agenda?


Mrs. Dorothy Dobbie (Parliamentary Secretary to Minister of Indian Affairs and Northern Development):: Madam Speaker, I should say that the hon. member raises an issue of great concern to all of us. But she should know, and I am sure she does know, that there are leaders of the Cree involved in the discussions about James Bay. Everybody is concerned that there be no further incidents up there.
If the hon. member is as sincere as she always presents herself to be in this House-and as I have said before, I am sure she is-she will work with us to ensure that the concerns of the Cree are addressed in the most appropriate manner and that we work towards a conclusion that will be suitable for everybody.


Ethel Dorothy Blondin-Andrew: Madam Speaker, I am really offended and disappointed. I got an invitation from the Deputy Prime Minister to address questions to him on aboriginal issues and he does not answer today. That is appalling.


Mr. Andre:: You want appalling, look in a mirror.


Ethel Dorothy Blondin-Andrew: If you want appalling, looking at yourself Harvie Andre.


Some hon. members:: Bravo.

March 22, 1991
Oral Questions


Ethel Dorothy Blondin-Andrew: Madam Speaker, the Cree of James Bay feel they have been abandoned by the federal government in their attempts to have federal laws and international conventions on the environment upheld.
Clearly, this government is unwilling to live up to its own laws and constitutional responsibilities. Therefore, will the Deputy Prime Minister accept the offer of Noel Brown, the deputy director of the United Nations-


Some hon. members:: Oh, oh.


Madam Deputy Speaker:: Order. I do not know if anyone on the right-hand side of the House has heard the question. I know that because of all the noise, I did not. The hon. member may want to put her question very succinctly, very briefly, please.


Ethel Dorothy Blondin-Andrew: Madam Speaker, I appreciate that. I want to ask whether the Deputy Prime Minister or the government is unwilling to meet its obligations and live up to its own laws and constitutional responsibilities. Will it accept the offer of the deputy director of the United Nations Environmental Program to intervene on behalf of the Crees to help resolve this issue?


Hon. Pierre H. Cadieux (Solicitor General of Canada):: Madam Speaker, I think the hon. member has raised a very important point. It is a question of respecting the laws of Canada.
The governments in this country do respect the laws and if everybody did, it would probably resolve the problems.
As I said in committee yesterday, the solution is at the negotiating table and the Government of Canada is always there.


JUSTICE
Mr. Russell MacLellan (Cape Breton-The Sydneys):: Madam Speaker, my question is for the Deputy Prime Minister.
The case of Linda MacDonald is a blight on the Canadian justice system. She was an unwilling victim of brainwashing, funded by the Canadian government in 1963. As a result, she lost her memory. She could not recognize her own children. She had to learn to walk all over again and she even had to be toilet trained.
The Minister of Justice has refused compensation to this person. Will the government reconsider this unfortunate and misguided decision and compensate Mrs. MacDonald?


Pierre H. Cadieux: Madam Speaker, I am informed that my colleague the Minister of Justice, as indicated by my colleague here, has looked into this matter. I understand the matter is still before the courts and it would be inappropriate for me to comment any further at this point.


Russell Gregoire MacLellan: Madam Speaker, the Solicitor General is not correct in that. This matter was co-funded with the CIA. In 1962 the CIA withdrew funding and Mrs. MacDonald underwent these experiments in 1963.
In her reply to Mrs. MacDonald, the Minister of Justice said that the allegations of impropriety against the Canadian government were ill-founded. It is not an issue of propriety; it is an issue of negligence. The government was negligent.
In the sense of common decency, will government please admit its negligence and compensate Mrs. MacDonald?


Pierre H. Cadieux: Madam Speaker, I am not sure exactly to what my colleague is referring when he says I am not exact. The case is still before the courts. The Minister of Justice has looked into it. There have been meetings with the attorneys representing the plaintiffs in this case and the case will go on.
It would be inappropriate for me to comment any further at this point.


BILL C-79
Rodney Edward Murphy: Madam Speaker, before I ask my question, I would like to apologize to the House for some of the language I used earlier this morning.
My question is for the minister responsible for the C-79 legislation which was before the House for two minutes last night. In a meeting that occurred in my office on Monday of this week with a representative of his office and the Privy Council Office, I was told that as the legislation was amended by the Senate, it takes away any obligation by the board to give any opinion that it has made with regard to the proper use or improper use of
March 22, 1991

the goods and services of the House of Commons to a police officer.
Will the minister tell the House what he thinks the public perception would be if the board refuses to give an opinion to a police officer, an opinion that that board has already made. What would the public perception be?


Hon. Marcel Danis (Minister of State (Youth) and Minister of State (Fitness and Amateur Sport) and Deputy Leader of the Government in the House of Commons):: Madam Speaker, I think my hon. friend, who is a member of the committee which studied this legislation for over one year, has a very wrong impression of our Board of Internal Economy.
I heard his comments this morning. He appeared to say that this new board, reformed by this government in 1985, which all members of all political parties sit on-I sat on it for a number of years-is partisan. I can assure my hon. friend that it is a totally non-partisan board. His House leader sits on the board.
I can say very honestly that I have never seen one decision made by that board on a partisan basis. I really do not know what he is afraid of.


Rodney Edward Murphy: Madam Speaker, a supplementary question to the minister. The problem is that the board under this legislation has been given new powers and new obligations. Again, the problem is public perception. There will be a Conservative majority on the board. What is going to be the public perception when the board refuses to give that information to a police officer after that police officer has asked for that information?


Madam Deputy Speaker:: The minister may want to answer the question, but this is a highly hypothetical question. If the hon. minister wants to answer, of course I will recognize him. If not, we will go on.


Marcel Danis: The hon. member must know who sits on this board. The Speaker sits on the board; the Deputy Speaker sits on the board; the House leaders of the three political parties; the Whips; one member appointed by the Leader of the Official Opposition and two members appointed by the Leader of the Government.
Oral Questions
Does the hon. member really think that his own House leader would engage in some type of conspiracy on something? I do not think so.


GOODS AND SERVICES TAX
Hon. Herb Gray (Windsor West):: Madam Speaker, my question is for the Deputy Prime Minister. Today Statistics Canada reported that for the second month in a row prices in Canada were higher by over 6 per cent from last year. Statistics Canada said:
This rate of increase remained well above the 4.8 per cent annual
average experienced in 1990 as price levels continued to reflect the
introduction of the goods and services tax in January 1991.
I ask the Deputy Prime Minister, why does this government insist on pursuing policies which are so harmful to the Canadian economy and its workers and consumers. Why won't it make some changes to help them right now?


Gilles Loiselle: Madam Speaker, I have a feeling that this question has been asked and has been answered before.
I will repeat again that Statistics Canada has indicated that inflation rates, the CPI, is coming down. It has come down from early January to now by six-tenths of a point. Interest rates also are coming down and this, I believe, is the result of the only valid policy that can be followed by a government. The former Liberal government did not follow it and Canadians have been paying the price.


Herbert Eser (Herb) Gray: Madam Speaker, I would suggest the minister read the Statistics Canada statement which says in part that "the impact of the January 1991 introduction of the goods and services tax can still be felt in prices". Look at the price of clothing-up 9.9 per cent since last February. I ask the minister how such results can possibly help workers and the Canadian economy. Again to the minister; Why is the government so intent on implementing policies such as the GST which have such a devastating impact on our economy?

March 22, 1991
Oral Questions


Gilles Loiselle: Madam Speaker, the government itself had warned that there would be a one-time increase in the Consumer Price Index, so there is nothing unexpected there. But the government indicated as well that the introduction of the GST would rid Canadian manufacturers and companies of an extremely harmful federal tax and pump $9 billion into the economy, something which would be bound to have a very positive impact.
For their part, Bank of Canada officials also predicted that this temporary adjustment would not have any effect on interest rates and might easily be absorbed by the economy, if you will. That is what is happening now There was a sudden rise at the beginning because the billions of dollars the government had set aside to refund the old tax were not claimed by companies, convinced as they were that the Liberal senators would be successful in their attempt to prevent the adoption of the GST legislation. Such was not the case and, over the past few weeks, we have seen the six tenths of a point decline.


EXTERNAL AFFAIRS
Hon. Lloyd Axworthy (Winnipeg South Centre):: Madam Speaker, I have a question for the Secretary of State for External Affairs. We have learned that as a consequence of the budget recently brought down by the government that the Department of External Affairs is considering cancelling the very important consular facility in Kiev in the Soviet Union, as promised by the Prime Minister during his trip to that country last year.
I would like to ask the minister if he will give us assurances in this House that this very important consular facility, long sought by Canadians of Ukrainian descent and very crucial during these very turbulent times in the Soviet Union will not be a casualty of the government's budget but in fact the plans will go ahead.


Charles Joseph Clark: Madam Speaker, if there are casualties, they will not be of the budget but of the long period of excessive spending by Liberal governments that put this country into a situation where it is simply not possible for
us any longer to continue to follow all of the policies we would wish to follow.
A series of budgets have been brought down, which have begun to reverse a trend set in place by Liberal governments, a trend which was deadly to the future of this country. The most recent budget was part of that process. It will impact on all departments. The Department of External Affairs is considering the impact that particular budget will have on some of our activities but no final decision has been taken.


Lloyd Axworthy: Madam Speaker, as the Secretary of State for External Affairs well knows, the recent Statistics Canada study shows that it is not a problem of spending, it is a problem of monetary policy and that this government has driven up the deficit.
I would ask him again, because we did not get the assurance. He knows that a commitment has been made by the Prime Minister. He knows that this is an extremely important facility at this time in the Soviet Union. In terms of the entire department can we at least ask this specific question? Can the minister assure us that the consular office in Kiev will not be a casualty of the cutbacks now being contemplated in the Department of External Affairs? Can we get that assurance today?


Charles Joseph Clark: Canadians are paying a very high and continuing price for the extravagance of Liberal governments who sat in office as though there would never come a time when we would have to deal with the realities of fiscal responsibility in this country.
This government has recognized, with the broad support of the Canadian public, that those days cannot continue forever. That will have implications for this department as it does for other departments. We are considering the exact nature of those implications. No decisions have been taken on where exactly those limitations may apply.


Mr. Chris Axworthy (Saskatoon -Clark's Crossing):: Madam Speaker, my question is for the Minister of National Health and Welfare.
As the minister knows, Saskatchewan has been in serious breach of its Canada Assistance Plan agreement with the Government of Canada. The province has denied social assistance, as the minister knows, to
March 22, 1991

entitled people who refuse to participate in work for welfare programs, clearly a violation of CAP. Also, as across the country, welfare rates in Saskatchewan are well below what are needed in order to meet the basic needs of Canadians, another violation of CAP.
After months of promises to look into the evidence in Saskatchewan, will the minister act now to stop Saskatchewan from breaking the law? Why will he not enforce the Canada Assistance Plan agreement?


Hon. Perrin Beatty (Minister of National Health and Welfare):: Mr. Speaker, I want to refer the House, first of all, to the statements that were made in the hon. member's question. He says I know that Saskatchewan was breaking the law in instituting a work for welfare program.
What I know is that allegations have been made by the hon. member to that effect. What I know is that I undertook to look into the matter, to have it fully investigated. What I know is that the results of that investigation showed that no work for welfare program existed; indeed, we have it in writing from the government of Saskatchewan that they do not have such a policy.


Chris Axworthy: Madam Speaker, over a year ago, social action groups in Saskatchewan informed the minister, giving him names of people who had been denied social assistance because they had refused to work on the make work programs that the government had provided. He has had information, he has had names, and he has refused to act.
We know the minister does not have a heart, Madam Speaker, but now we know he has no guts. He will not enforce the Canada Assistance Plan.
Why will he not stand up for his responsibilities to poor Canadians? Why does he not take them seriously? Why does he not enforce the Canada Assistance Plan?


Henry Perrin Beatty: I do not know whether the hon. member lacks heart or guts, but he apparently lacks the ability to understand that this government must act on the basis of facts. If the hon. member has facts, none to date which he has tendered, let him bring them forward.
Oral Questions
Madam Speaker, what we have done is investigate every allegation that has been made. We have found no evidence which would justify the claims made by the hon. member.
If we are talking about what is lacking, what is lacking most of all here is any substantiation of the claims of the hon. member.


CHILDREN'S BUREAU
Mr. Rey Pagtakhan (Winnipeg North):: Madam Speaker, my question is for the Minister of National Health and Welfare.
The children's bureau was officially opened this week, six months after its mandate was first announced by the Prime Minister. During those six months, over one million children passed through the lines of food banks. That is more than 3,500 hungry children for each constituency.
How many thousands more will we have to line up before the children's bureau and the Ministry of Health implement the anti-poverty plan of action signed by the Prime Minister at the World Summit for Children?


Henry Perrin Beatty: Madam Speaker, along with children's advocates across the country, I welcome the creation of the children's bureau. I was delighted this week to be able to preside over its official opening, although it has been in place for some time.
When the hon. member talks about children's poverty, he should be aware of the fact that since 1984 some 300,000 children in Canada have been able to escape poverty and low income circumstances as a result of the government's policies.
The greatest threat to the future of our children is if we allow our economy to get out of shape and if we allow that massive national debt, that amounts to some $15,000 for every man, woman and child in Canada, to grow.
It is no surprise, Madam Speaker, when every child being born in Canada inherits a $15,000 debt, that the first thing they do is cry.


Rey D. Pagtakhan: Madam Speaker, my supplementary question is for the same minister.

March 22, 1991
Point of Order
Canada lacks a nation-wide policy on child health. The implications of this for poor children are staggering. They are much more susceptible to injury and death.
Will the minister make it a top priority of the Children's Bureau to develop a comprehensive policy on child health for Canada? Please give a straight answer.


Henry Perrin Beatty: A straight answer, Mr. Speaker, that is we are going to do everything we can to improve child health in Canada. We have already taken a number of important steps, including the creation of the Children's Hospital Injury Reporting Program, which is, for the first time, giving us a data base in Canada on children's injuries which will allow us to act in a very proactive way to reduce the deaths and injuries among children. Accidents are the major cause of deaths among children between the ages of 5 and 14 in Canada.


Madam Deputy Speaker:: I have received notice of a question of privilege.


PRIVILEGE
James Ross Fulton: Madam Speaker, my question of privilege arises from the remarks made by the right hon. Secretary of State for External Affairs during Question Period. It would not be the first time this week that the minister's words during Question Period have been challenged.
The Minister used the words "false" and "dishonest" regarding a question that I put in the House. I want to seek a response from the the right hon. minister because the quotation I used is a verbatim transcript that I obtained from the main Library of Parliament from Media Tapes and Transcripts Limited, dated March 22, 1991, eight o'clock. I obtained it at 9.14 a.m. It is a verbatim transcript from World Report on CBC. The quotation that I used came directly from the verbatim transcript.
If the right hon. minister would like to clarify his remarks, I certainly hope that he would because I know he knows the rules of this place. When a member quotes from a document that is obtained from a public broadcast
and is from the Library, it is not up to the minister to suggest that it is false or dishonest to use it.


Charles Joseph Clark: Madam Speaker, of course I was not suggesting that the transcript was false or dishonest. My comments related to the characterization of that transcript by the hon. member. It is a practice I wish he would stop and that members of his party would stop.


James Ross Fulton: Madam Speaker, I would ask that you review the "blues" of what was said during Question Period. I am prepared to move the necessary motion to have this matter referred to the Standing Committee on Privileges and Elections because I think that kind of nonsense from the former Prime Minister is an abuse of the privileges of not only myself as a member but all members of this House.


Madam Deputy Speaker:: This, to my understanding, is a dispute as to facts and I do not think there is a case of privilege in that. Nevertheless, the "blues" will be checked and should there be, the hon. member will be advised. To my understanding, this is more a dispute as to facts than it is of breach of privilege.


POINT OF ORDER
Mr. David Dingwall (Cape Breton-East Richmond):: Veiy briefly, Madam Speaker. While my colleague from Western Arctic was posing a question, a number of comments from across the way were stated. Some of these comments were quite sexist and quite unparliamentary. I was wondering whether we could reserve the right to raise a point of privilege after we have had an opportunity to review the "blues" and to examine exactly what has been said by ministers of the Crown with regard to comments directed at my colleague from Western Arctic.


Madam Deputy Speaker:: The hon. member may remember that at one point I did have to rise and ask the House to be a little more quiet so that we could hear whatever was said around the House. I am sure that should anyone have said things that I did not hear, it would then be deemed necessary for that person to apologize and the person would do so, but the right is reserved.
March 22, 1991



ROUTINE PROCEEDINGS

[Stage Direction]
[ Translation ]

Albert Glen Cooper: Madam Speaker, pursuant to Standing Order 36(8), I have the honour to table, in both official languages, the government's response to ten petitions.
[Editor's Note: See today's Votes and Proceedings.] [English]


Mrs. Beryl Gaffney (Nepean):: Madam Speaker, I have signatures from approximately 50 people who are concerned about the elimination of the cultural enrichment program of the Ministry of State for Multiculturalism and Citizenship.
The petitioners feel it will have a disastrous effect on the quality of instruction in heritage language schools. They would like the continuation of the preservation and enhancement of heritage languages as an integral part of multicultural policy.
These undersigned petitioners call upon Parliament to ensure that the quality of heritage language instruction in Canada is consistent with the preservation and promotion of our multicultural heritage.


Mr. Rene Soetens (Ontario):: Madam Speaker, pursuant to Standing Order 36, it is my privilege to present a petition today.
There are many constituents in Canada and in this case, many constituents from Scarborough and from my riding of Ontario, who are concerned about people who suffer allergies relating to the contents of food.
Through this petition, the petitioners request that the Parliament of Canada enact legislation amending the food and drug regulations in order to require manufacturers to list specific food ingredients and additives used in prepackaged foods in place of the general classifications now permitted. Further, the legislation should require restaurants and foodretailers to provide, on
Routine Proceedings
demand, to customers a list of all the food ingredients in their prepared foods.


Mr. Dan Heap (THnity-Spadina):: Madam Speaker, I have another petition from about 300 Canadians, mostly in the Toronto area, which calls upon Parliament to withdraw Canadian Forces from the gulf region so we can be assured that they are not deployed in an offensive capacity.
The petitioners call upon Parliament to use our tax dollars for useful social programs such as child care, pensions, health care and education, and not for military adventures in the Middle East.
I have a petition from 100 or more people from the Toronto area.
The petitioners urge the government to commit our country to take all possible measures at the United Nations and elsewhere to bring an end to war, and to restore peace to the region of the gulf through an international peace conference on the Middle East.


Daniel James Macdonnell Heap: Madam Speaker, I have a petition, found in order by the Clerk, under Standing Order 36 from a number of people in the Toronto area who are concerned about the low-level flight training that continues in Labrador and parts of Quebec.
The petitioners ask that Parliament call upon the Canadian government to end all NATO-NORAD low-level flight training in Canada and to redirect Canada's NATO-NORAD funding toward enabling Canada's original people to gain control of their lands and their livelihood, and toward sustainable development for all Canadians.


Mr. David D. Stupich (Nanaimo-Cowichan):: Madam Speaker, I have a number of petitions signed in communities from one end of my riding to the other stating that especially at a time of serious instability in the international oil markets, Canadians need Petro-Canada to act as a watch-dog on the mostly foreign-owned and controlled oil industry.
Canadians need Petro-Canada to take the lead as a green energy company helping them to make environmentally responsible energy choices and we need Petro-Canada to remain 100 per cent Canadian.

March 22, 1991
Supply
The petitioners humbly pray and call upon Parliament to repeal Bill C-84, an act respecting the privatization of the national petroleum company of Canada and keep Petro-Canada as a Crown corporation acting in the best interests of all Canadians.


Jesse Philip Flis: Madam Speaker, these are petitions signed by Canadians from St. Catharines, Guelph and metropolitan Toronto again requesting that Canada Post issue a commemorative stamp in honour of Madam Sklodowska Curie who discovered radium and who helped heal many people around the world, including Canadians. It would be only fitting that Canada issue a stamp in her memory on the 125th anniversary of her birth.


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


Madam Deputy Speaker:: Shall all questions stand?


Some hon. members:: Agreed.



GOVERNMENT ORDERS


[Stage Direction]
The House resumed consideration of the motion of Mr. Blaikie (p. 18859).
Madam Deputy Speaker:: When the House began Statements by Members and Question Period, the hon. Minister of State for Finance and Privatization had the floor. He had 10 minutes remaining for his speech.


John Horton McDermid: Madam Speaker, I appreciate that. When we interrupted for Statements by Members and Question Period, I was just reviewing the changes in the tax system and the results of tax reform which are very
positive and have provided concrete evidence of the mistaken assumptions and unwarranted condemnation from the New Democratic Party at the heart of today's motion.
They highlight how the fundamental structural changes we have taken deliver tangible benefits, benefits I might say, assisting Canadians today at a time of economic weakness and hardship, when in fact they are most necessary.
Under our government, Canada's personal income tax system has indeed become more progressive and fair, reducing the burden of taxation on those most in need. The reforms have ensured that those Canadians who enjoy above average incomes are paying the increased share of the national tax burden, which their affluence makes reasonable.
What about corporations? We heard about those this morning. Here again, the opposition's motion is about as outdated as its economics. When we first took office in 1984 we recognized that there were problems with the tax system we inherited when it came to business paying it's share of the national tax burden. That is why in 1987 we introduced measures to eliminate loopholes that had allowed too many businesses to avoid paying any corporate income tax, even when they were fully profitable. That is not all we did.
This motion seems to forget that in order to help in the battle against the large corporations tax, in order to help against the national deficit, the 1989 budget included the large corporations tax. This measure, one of those that opposition members in the Senate, I might say, refused to pass for over a year, ensures that all large corporations will pay tax.
The bottom line impact of these measures is emerging. Government revenue figures for 1989-90 show that at a time of declining corporate profitability, total corporate tax receipts actually increased some 11 per cent. In the banking sector alone, which paid very low levels of tax in the early 1980s, federal corporate income taxes in 1989 amounted to $1 billion, so changes have been made.
In fact, leaving aside the impact of the recession, the over-all impact of tax reform and the large corporations tax has increased the government's revenue from corporate income tax by $2 billion annually compared to what it would be under the previous system. Yes, there are
March 22, 1991

still companies which rate as profitable, but which do not pay corporate income tax, as my friend from Winnipeg Transcona pointed out this morning. However, there is no favouritism involved, no conspiracy against the hardworking taxpayer, no exemption from the struggle to control the deficit.
One of the things he forgets to conveniently mention when he talks about corporations that do not pay taxes in a given year is that he does not go back to see if they had losses in the year before, which of course they can write off. If the profits do not cover those losses, then it is still not a profitable company, although it shows that it made a profit in any given year.
The figures the New Democratic Party stands up in the House day after day and lays on us are somewhat misleading, making it sound like these corporations are cheating the tax system when, in fact, they are not. The combination of tax reform and the large corporation tax should cut in half the number of profitable corporations which do not pay tax. All large corporations will pay tax due to the large corporations tax.
Among the small and medium-sized profitable firms which are not taxed, the majority of these will not pay tax, as I mentioned, because of losses in previous years.
The blunt truth is that this government has taken concrete and historic action to reform the tax system we inherited. By perpetuating the myth of the corporate welfare bum, this motion sadly demonstrates the lack of substance and the absence, I might say, of meaningful alternatives which the combined opposition brings to bear on today's dilemmas. It is political grandstanding at its most cynical best.
There is a related issue I want to address head on which was brought up today by the hon. member. This is the argument that the 80 per cent tax write-off which business can claim on business related meals and entertainment expenses is a tax boondoggle and should be abolished.
This is a claim that blindly ignores the competitive reality confronting Canadian businesses. The ability to deduct these costs as legitimate business expenses is a fact of life in the United States as much as it is in Canada. Both systems recognize that meal meetings and
Supply
business entertaining are legitimate parts of the business process, helping to generate sales, profits and jobs.
My colleague from Pickering has made it very, very clear how, when he was in the business world, a couple of meals ended up helping Canada to the tune of some $60 million in sales.
It is part of the legitimacy of doing business in this country. If Canadian firms were to lose this measure, we would be placing them at a direct disadvantage by increasing the comparative burden of taxation compared to their American companies, i.e., their competitors. It is not a formula for effective debt reduction. Instead, it is a prescription that would ultimately lead to lost sales, lost jobs and finally, lower government revenues. Then we would hear the NDP, up on its feet here in the House, complaining about lost jobs and so on and so forth.
Is this what the opposition wants? I do not think so. Not when it sits down and takes a very close look at this. For the government's part, the fair and proper answer, of course, is no. Absolutely not.
Two days ago at the Debt Freedom Conference, chaired by one of my hon. colleagues, a young Canadian handed the Minister of Finance a cheque for $168. The hon. member for Winnipeg-Transcona made a big deal out of that this morning. This was money which 12 year old Corey Snow had raised through a garage sale and was his contribution directly for the purpose of helping our national debt. At the same conference, other individuals and groups also demonstrated the recognition that the public debt is a national problem which demands a national solution. We are all in it together.
The 1991 budget in its plan for economic recovery is making that solution real and certain. It takes the tough, decisive actions on spending restraint to bring down inflation and to bring down interest rates, so that the deficits for 1990-91 and 1991-92 will be $30.5 billion, despite the difficulties caused by the recession. For 1992-93, the deficit will fall below $25 billion for the first time in a decade; for 1995-96, it will be down to just $6.5 billion.
I want to emphasize, as the Minister of Finance has done with audiences across Canada; there is no misplaced optimism or mathematical mumbo-jumbo at work when we say the deficit will come down to $24 billion by 1992-93.

March 22, 1991
Supply
The fact is that we will no longer be faced with the transitional costs of the GST That represents a $2 billion saving. The gulf war spending will be behind us. The expenditure control plan will deliver incremental savings. Lower interest rates will ease the burden on servicing the debt, and economic recovery will reduce unemployment insurance costs and strengthen government revenues.
In turn, this sharp drop in the deficit combined with national recovery will see the debt begin to shrink as a portion of our economy. This threshold step will mean that government revenues, combined with the continuing benefits of lower interest rates and government spending caps, will be sufficient to eliminate the need for new financial borrowing by the government in 1994-95, a very worth-while goal. That is the target we set out two years ago, in 1989.
In conclusion, in the words of the Minister of Finance delivered to the Debt Freedom Conference here in Ottawa on Wednesday, I am convinced that economic recovery is within our sights. Interest rates have fallen more than four percentage points from the peak last May. Indications are that housing sales are picking up. In fact, The Toronto Star reported earlier this week that the sale of new homes in that city last month was at its highest level in two years.
Following the conclusion of the gulf war, oil prices have returned to near their pre-crisis levels and United States consumer confidence appears to have jumped sharply. Given such stimulus, there is every reason to expect growth to resume by mid-year and to expand by 3.5 per cent in 1992. Just as important, the plan for economic recovery sets us on a path where that growth can be sustained, and confidence and investment flourish in the years to come.
Contributing to that recovery and growth will be the national tax system that we have reformed, based on a concrete and proven commitment to fairness and progressiveness. The facts are evident. It is this motion that fails to meet the test of truth and fairness.


Mr. Nelson A. Riis (Kamloops):: Madam Speaker, as usual, I listened to my hon. friend with interest. While I find I do not agree with very much that he says, I do not say he is being misleading. I think we just see the world quite differently and I think that is fair.
My questions are twofold. First, at the Debt Freedom Conference when the children gave the Minister of Finance money presumably to apply toward the debt, does he know whether the Minister of Finance accepted it? How does that actually work, when a person comes forward with a pile of money and hands it to the Minister of Finance? I ask that just out of curiosity.
Second, being from Toronto, he will know that in the Skydome, because of the Income Tax Act, corporate executives and all sorts of other people who tend to come from higher income families or are members of high income families entertain their friends and guests in boxes. A lot of the costs of their tickets and the entertainment is written off as a business expense. Consequently, it is a tax break to allow certain people to entertain their friends and watch the games and other events from privileged boxes, as opposed to the normal citizen in Toronto who attends the games or whatever and has to pay the full price of the ticket and cannot write it off on his or her income tax.
What I am trying to bring to the minister's attention is whether he personally has difficulty with that part of the tax system that continues to allow a very small spectrum of our society to wine and dine friends at the taxpayers' expense, enabling them not to pay, in my judgment, what would be their fair share toward the debt in this case, being the issue of conversation.
Could he explain where the money that the children presented goes? Does he actually believe that this tax system that allows this to occur is really the right way to proceed during these tough economic times?


John Horton McDermid: Madam Speaker, to answer the first question, up until this budget any moneys that came in from people-and believe it or not people in the United States left money to the government and people did donate money to the government during the year- went into the Consolidated Revenue Fund. They were given a tax receipt for that and so on.
Under the budget which the Minister of Finance introduced in February, he set up a deficit and debt reduction fund. This fund will be audited by the Auditor General and will receive the moneys from the goods and services tax, the net proceeds from privatization, and any moneys that are given to the government for deficit reduction.
March 22, 1991

Believe it or not, since the budget the Minister of Finance has received some cheques from individuals to go into this fund, such as the cheque that was given by this 12-year old Canadian, Corey Snow, who had a garage sale and donated the proceeds to the deficit reduction fund. I give him full marks for that. He felt that was part of being Canadian. He wanted to make that contribution. Nobody coerced him into doing it; he did it on his own. I applaud that kind of initiative.
As a matter of fact, there was another group of kids that had a lemonade stand. I think they raised $5.58, something like that, a very small amount, and they donated that to the fund as well. I congratulate them for that.
However, the government has the responsibility of getting the deficit down to a position where it no longer has to go to the public for borrowing and it can start paying back some of the bonds and treasury bills that this government has, which by the middle of this year will total some $400 billion.
The next question the hon. member asked was about legitimate business entertainment expenses in the Sky-dome, in which the provincial Government of Ontario has the majority ownership and in which his friends the premier of the province of Ontario, the vice-president of the Canadian Labour Congress and president of Canadian Auto Workers have their own box where they can go and watch every event that goes on. They get into everything, not just the baseball games but the rock concerts, the tractor pulls, and all the other events that go on. What is really interesting, though, is that the NDP government in Ontario wants to privatize the Skydome. The NDP government in Ontario is going to privatize the Skydome. Isn't that interesting?
The hon. member knows full well that they are legitimate business expenses. They are in other countries. If he wants some very good evidence on how it works, just ask my friend from the riding of Ontario which takes in Pickering. I was there the other day. He can give concrete examples from when he was in the business world working for Lasco Steel of how a legitimate business expense, which it was, paid dividends for Canada in export sales to the United States.
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I can tell him that it is a legitimate expense.
I have another short point. The New Democratic Party purports to support small business and tourism. The small business companies throughout Canada and the tourism industry, which the hon. member purports to support, support this particular business expenditure. As a matter of fact, they were very upset at the government when the government reduced it from an 100 per cent write-off to an 80 per cent write-off. The hon. member had better be careful because he is speaking with forked tongue in the House.


René John Soetens: Madam Speaker, I would like to ask the hon. minister for a response to the question he has just alluded to and also the question raised by the hon. member in the NDP.
They were discussing the business lunch expense and the Skydome. happens that I have some particular experience in this matter. For $200, while I was working in the private sector, I bought lunch for a group of people. That lunch culminated in the successful conclusion of a contract for the company by which I was employed of some $5 million. It created an awful lot of employment in my riding. It kept a contract in Canada that may have gone to some other country.
Having spent $200 on lunch which was only 80 per cent deductible, I guess it cost the company in a sense $160 which it could deduct from its expenses. Was that $160 tax deduction a wise investment so that this Canadian company could keep $5 million worth of orders in Canada? It did make about 10 per cent profit on that order. Was it better for the company and Canada to be able to deduct $160 or to get a share of the half million dollars in profit through the form of income tax? The corporation paid 43 per cent income tax that year.
Is it better to get a share of $160 through a tax deduction, or is it better to get a share of half a million dollars in profit through income tax?


John Horton McDermid: Madam Speaker, that question obviously answers itself.
The hon. member is correct. It is a legitimate business expense. It is one which serves a very useful purpose within our business of creating economic activity within

March 22, 1991
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this country, and the New Democratic Party knows that. It keeps bringing these things forward.
For example, it is suggesting we wipe out capital gains tax. Yet the capital gains tax gives a half-


An hon. member:: Like the Americans have done.


John Horton McDermid: Now my hon. friend over here is saying: "Like the Americans have done".


Madam Deputy Speaker:: The hon. member for Kamloops is rising on a point of order.


Nelson Andrew Riis: Madam Speaker, I am not sure it is a point of order, but I simply want to say that the United States does not have a deduction for capital gains and I do not think-


Madam Deputy Speaker:: I think we are getting into a question of dispute as to facts and it is a question of debate. There is one minute left for the hon. minister.


John Horton McDermid: The Americans have a much lower corporate tax rate. The hon. member is saying that we do not tax them enough, but the point I am trying to make is that we have a $500,000 capital gains tax exemption for three groups. First is farmers because their farm is really their nest-egg, their pension. We give them a capital gains exemption once in a lifetime of $500,000. Second is small business. The third area that gets a one-time capital gains exemption of $100,000 is the investor. That is nothing to the big guys, the big shots, but to the little investor, to the small person who has a few dollars to invest and makes a bit of a capital gain on it, it means a tremendous amount. Their investment in the economy is extremely important. The big shots do not need this. They do not need this at all. It is the little investor who has faith in this country, who invests in the country, who we are helping with this, and it is good for the economy of Canada.


Mr. Alfonso Gagliano (Saint-Leonard):: Madam Speaker, I am pleased to speak to the motion introduced by the hon. member for Winnipeg Transcona.
The motion now before the House takes the government to task for implementing a debt reduction program which accepts the savings of children but not those of large, profitable corporations. In other words the responsibility for reducing Canada's debt does not rest equitably on ordinary taxpayers and major corporations. On the strength of the Conservative government's performance since 1984,1 will find it very difficult to believe that debt servicing charges will be shared equitably if ever this debt reduction program becomes reality.
Their reasoning is more for the wealthy and less for the others, more for large corporations and less for small businesses. Such is the doctrine of the Conservatives. No wonder hardship is on the increase in Canada, they create it.
The Tory government has abandoned the traditional role of the government in Canada, which is to redistribute wealth equitably and provide a social security system for the neediest in our society. Since they came to power in 1984, the Tories have been out to destroy all the institutions that provided a safety net for Canadians. They made cuts in the Canada Assistance Plan, they reduced pensions, and now they are going to start on medicare. That is the Tory philosophy: Give to the rich and soak the poor and the average Canadian.
Madam Speaker, I realize we must reduce the debt. However, I don't think the Tory way of doing it is the right way. We should reduce the debt by making everyone pay a fair share. Look at the GST, a consumer tax system implemented by the Tories. Since the GST was introduced and corporate expenses have now become business expenses, corporations can deduct those expenses and claim a credit on the GST paid. For instance, Madam Speaker, the president of a large corporation who goes to a restaurant can claim a credit on the GST paid because he can put the bill on his expense account. This way, a company that claims the GST credit doesn't pay GST. However, a construction worker who buys a sandwich at the mobile cantine pays GST and he doesn't get a credit. That's Tory tax justice!
Let's take a look at what the government proposes. On February 26, in his Budget speech, the Minister of Finance said that any excess funds collected through the GST would go directly towards reducing the debt, after having promised many times that the goods and services tax would be revenue neutral. It was supposed to be a replacement tax to collect money that was formerly collected through the federal sales tax, and it was introduced to replace a system that had become obsolete and was no longer equitable.
March 22, 1991

According to the Budget things have changed, but Canadians have realized for some time that this regressive tax would not be revenue neutral.
Finally, the Minister of Finance realized that the GST would produce a lot of revenue for his government. In his last Budget, he proposed that GST revenues would go directly towards paying off the debt. Clearly, the GST has been selected as the front line weapon to attack our debt. However, the debt we are talking about today doubled in only six years, thanks to the Conservative government. It is a fact that the debt accumulated during the past six years under the Tories equals the amount accumulated between 1867 and 1984, in 117 years. They doubled it in six years. In other words, in six years, the Tory government managed to accumulate the same debt amount that all other governments of this country had accumulated in 117 years!
If it were not for the sinister policies of this government, including high interest rates, the GST would be unnecessary.

Canadians realize that the government's inept economic policies such as the high interest rate policy unnecessarily added to the debt. Canadians are now being asked to pay for the government's mismanagement of the economy with the goods and services tax. Liberals have said all along that this was the largest tax grab in history. But the government said it would be revenue neutral. We were right.
The Liberals said all along that the GST would be inflationary, and again we were right.
We just have to look at the statistics released today. In the month of January we had an increase in the cost of living of more than 2 per cent. The Minister of Finance, when asked, said; this is just temporary, next month it will go away. Well, we had the statistics for February today, and we still have over 6 per cent inflation in Canada. So what happened? What happened there?
Now the government has decided to use the revenue collected from the GST to finance the debt. We must now look at who is paying the GST. I should add, Madam
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Speaker, that this additional revenue amounts to a $8 billion. But don't take my word for it, ask the Minister of National Revenue. He announced it publicly.
If the GST is financing the debt, who is financing the revenue collected from this tax? The answer is obvious, and is the essence of the motion in front of us today.
For the record, Madam Speaker, I will tell you who is asked to pay the GST and finance the reduction of the national debt. Students are paying the GST, senior citizens are paying the GST, unemployed Canadians are paying the GST, Canadians on welfare are now paying the GST.

As I just pointed out, students, senior citizens, the unemployed and the neediest in our society are paying the GST that will be used to reduce the national debt. These people have one thing in common: they are responsible for financing the debt reduction fund. However, they are hardly in a position to do so. The Tories apparently think this debt should be paid by people who hardly have enough money anyway. Why does the government want to punish low-income Canadians for the impact of its disastrous economic policies? This government has decided to punish Canadians who are least well off for the present state of the economy in this country. Canadians are not responsible for today's recession. The Tory government is. This government is going to pay a very high price in the next election.
The Liberal Party of Canada agrees with the tenor of the motion before the House today. We believe that responsibility for the debt should be shared equally. This responsibility should never be placed on the shoulders of students, the sick and the unemployed. We believe this policy is deplorable and most unfair.

There is one ray of hope. There is light at the end of the tunnel. The ray of hope is that the next federal election is fast approaching, and Canadians will finally and decisively rid this country of this Toiy government. They will, with no doubt, rid this country of the unjust and inept policies in which they have been inundated over the past seven years.

March 22, 1991
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Madam Speaker, not six months ago but just a few weeks ago, the headlines told us how disastrous the economic situation is in this country. A few days ago, a foreman and a vice-president were attacked by an employee who had just been told he was fired. There we have the human tragedy brought about by these policies. More than $200 million was invested in General Motors because we wanted to protect jobs in Quebec and Canada. Now GM has annonced it is going to close its plant for a year and 1,800 employees will no longer have jobs. So much for this Tory government's economic policies!

The Globe and Mail, March 21, 1991, yesterday, stated "Bankruptcies Soar to Records", "Bankruptcies up 68 per cent". That is the economic policy of this Tory government.

Last week, on March 14, Le Devoir reported:
Canada is losing the free trade battle.
Who said that? Andre Bedard, president of the National Bank of Canada. He said that he had campaigned with the Tories to get them elected because he thought free trade was a good idea. And now he says that Canada is losing the free trade battle. Again, so much for Tory economic policies!

The minister mentioned earlier how construction was going up. The Ottawa Citizen, March 12, not long ago: "New home starts hit six year low, Canada Mortgage and Housing Corporation says". The opposition is not saying that. It is the Canada Mortgage and Housing Corporation which is a Crown corporation.

188,000 jobless in Montreal
That was in La Presse on March 13, Madam Speaker. [English]
"Department stores take a hammering"; states The Globe and Mail on March 14. Montreal, besides being the capital of the unemployed, now is the capital of the economic slump. Again, Montreal in January lost more
than 20 per cent. It is the highest city that lost the most retail sales in Canada.

On March 14, La Presse reported:
Retail sales: January a disaster.
As I said before, Montreal lost 20 per cent, followed by Quebec City with 18 per cent, in just one month.

The Toronto Star on March 14 stated: "Few believe Tories can end recession". That is the reality. This government is, on economic policy, as a matter of fact on all policy, totally bankrupt and it should go to the people so the people can elect a new government. Then this country can prosper and get back into business.


Gilles Loiselle: Madam Speaker, I listened closely to the hon. member. He seems to be forgetting that, in the days when the Liberals were in power-he was there then-for every dollar the government of Canada received, this very generous government spent $1.33, which put us in this horrible situation we are now trying to get out of.
The hon. member talked about the GST. He failed to mention that value added tax systems are in place in 48 countries, including the most dynamic countries in the world, and that Canada has the most generous system of all and that shows the most consideration for the lower income earners.
He also failed to mention, as the knowledgeable man he is on the business world, how beneficial this tax reform will be for our imports and how much it will improve our competitiveness on the global market. I would like to know if the hon. member recognizes the fact that the old federal sales tax was a disaster, as determined by five successive commissions. I would also like to know if he will admit that the previous Liberal government had said that it had to be replaced by a value added tax but that no one had the courage to do it because such a reform is very unpopular.
I would like the hon. member to tell me what he thinks of this reform. Is it necessary or not?
March 22, 1991


Alfonso Gagliano: Madam Speaker, I thank the President of the Treasury Board for his question and I will attempt to address each and every point he has made.
First of all, the government keeps harping about the so-called free spending policy of its predecessor. But the President of the Treasury Board must certainly have the relevant figures within his reach. If he would only look at our last financial statements, that for March 31,1984, he would realize that before his Party came to power, we had a deficit of about $32 billion. After six or seven years of economic growth and in spite of the many tax increases, the deficit this year is about the same. After all that time, the government should therefore stop blaming its predecessor, and begin to assume its own responsibilities.
I should like to deal now with the GST and the 40 countries of the world with a similar scheme. But once and for all, let us be realistic and call a spade a spade. It is a fact that nearly 40 countries have a GST of sort, but how many have two retail sales tax system? Name one. In most of these 40 countries, there is no sales tax at all. They have what is called a value added tax scheme, a business tax or a goods and services tax, but only Canada has one.
Now, according to the statistics released this morning, we can see that clothing is the cost of living component which increased the most over the past two months. Why? Since you hail from Quebec, Madam Speaker, you are familiar with the situation there. Before January 1, there were no goods and services tax, no federal sales tax and no provincial sales tax. Now there are two! Overnight, there was an increase of 15.6 per cent, because people have to pay the provincial tax on top of the federal GST. '
We should take this into account when we say that we had no choice and that Canada is now an "in" country because it has joined the other 40 countries with a GST. Nobody ever discussed with the previous federal tax system. I, for one, sat first on the Finance Committee which examined the tentative draft, and later on on the Finance Committee which studied the whole issue of the GST during this Parliament and the previous one. We all agreed on the need to reform the tax system. I remember quite well that, when the Finance Committee held
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hearings in Vancouver, the mayor of that city suggested then that it might be advisable for the three levels of government to stop picking each others pockets and get together instead on a true reform which would settle this matter once and for all.
The fact is that, in the end, whether it is called the federal GST or the Quebec TVQ, it is always the same Quebec taxpayer who foots the bill. The time has come to overhaul the tax system in order to pay the national debt, the deficit, and to become more competitives in this era of globalization. But no! I ask the President of the Treasury Board to read again the famous speech made by the Minister of Finance in which he insisted on the need to carry out a major reform. For political reasons, this reform was done in two stages: The first one, because he wanted to offer pre-election goodies to the people. After having placed over a million Canadians on the tax roll, he came back and said: Fet us take 800,000 off. Some 200,000 remained, just the same. But there was an election. He just could not introduce his GST, because I am sure that if he had fought the 1988 election campaign on the GST instead of the free trade, there would be no Tory government today.
[English\


Chris Axworthy: Madam Speaker, first let me say how pleased I am to rise to discuss this issue today and to say that I, in fact, commend those young children who are concerned about the financial state of the country, are concerned about the deficit and who have been moved to make their savings available to the government. There is no questioning their motives. There is no questioning why they did it. They did it for what they felt to be good reasons.
Why are we in this situation in the first place? Why has it come to children having to use their savings to cover the deficit of the Government of Canada?
We need to remove some myths about the way the deficit arose. If we do not, we will see this government continuing to put forward its argument, obviously with some success, that its social programs and government expenditures are out of control and must be brought back into line. In other words, those less well-off Canadians, the sick, students, and the young have to pay for the past mistakes of both this government and previous Fiberal governments.

March 22, 1991
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A recent secret Statistics Canada study shows that fully 44 per cent of Canada's national debt is due to tax breaks to corporations and to the wealthy. Another 50 per cent is caused by the interest payments and their compounding nature as a result of these revenue shortfalls. Fully 94 per cent of the national debt in Canada has nothing to do with government expenditures or social programs. Indeed, only 6 per cent of the national debt can be attributed to that.
Let's ask how this arose because we are faced with choices. Governments have to and do make choices every day. In this context, the government is making choices which benefit the rich, large corporations and hurt children. Then it is receiving from children gifts to help pay for the deficit.
We do not have to go back very long, but if we go back 15 years, we can see that the Liberals lowered the combined federal-provincial marginal tax rate from 56 per cent to 50 per cent so that richer Canadians pay less tax than they did before.
Once the Tories took office, this process speeded up. First, there was the $500,000 lifetime capital gains tax exemption. There was the lifting of about $6 billion in energy taxes from oil companies.
This government frequently says that we have no alternatives to dealing with the deficit. Let me say that we are concerned about the deficit. There is no point in ignoring the fact that the deficit is a serious problem for Canada, and that we do face with some very tough choices. We do need to reduce it.
We should not be reducing the deficit on the backs of the poor, on the backs of children or on the backs of the sick. We should not be cutting off our opportunity to invest in the future.
A senate committee on poverty recently heard that the financial consequences of Canada's disastrous dropout rate from high school is in the order of $33 billion over 20 years. In other words, if we concentrate our efforts on ensuring that children stay in school, that there was a future for them there and afterwards, this country would save $33 billion over 20 years. It would be an investment in the future. Without making that investment, it is hard to see how Canada will have a future.
We still have over 100,000 profitable corporations paying no tax. We still have thousands of wealthy individuals paying no tax. Over the last years, there has been a reduction in the taxes of the wealthy, and the
figures simply do not substantiate the minister's suggestion that our income tax system has become more progressive. It has not become more progressive.
If we ask the lower income Canadians who have seen their taxes increased, they will tell us it is not more progressive and that it is not fair. They will tell us that they do not want to pay more taxes because the system is not fair.
If this set of government priorities and policies was working, we would be able to see it. After all, the proof of the pudding is in the eating, but as a result of these government policies, we have high interest rates, high unemployment rates, record bankruptcies, both corporate and individual.
We have 1.4 million Canadians unemployed and over one million Canadian children living in poverty. Ask them whether this government's policies have worked. They have not worked for those Canadians who are least able to support themselves.
It is time that this government paid attention to those issues. It is not just a question of different political philosophies. It is a question of the future. We cannot continue to ignore the needs of one million children in Canada, fully 20 per cent of our children, and expect Canada to thrive and be competitive in that global economy which is so important to compete in.
The government often says that it has no alternatives. What it really means, of course, is that it has alternatives but it does not like them. We have pointed out those alternatives on many occasions. Basically, one of the alternatives is to pay attention to the tax loopholes that were created by past Liberal and Conservative governments, which gave tax dollars to the wealthy and to corporations, which enabled rich Canadians to become richer, and which enabled business people to entertain their friends for nothing, basically, as a result of the tax system.
Let me just give five suggestions that would save about $5.5 billion. As we have said many times, we could eliminate the $100,000 capital gains exemption. That would save about $1.5 billion. We could eliminate, as has been mentioned, the business and entertainment tax deduction and save another $1 billion. We could eliminate the dividend tax credit and save another $1 billion. This is generally considered to be preventing double taxation of corporate income, but hardly any corporations pay income tax anyway. We could eliminate the
March 22, 1991

manufacturing and processing tax credit, because after all, the manufacturing sales tax is gone. We could remove tax breaks for real estate developers for takeovers and for those multinationals which finance their overseas borrowing at the expense of Canadian taxpayers. Those are just five things the government could do to help reduce the deficit and there is $5 billion right there.
Who would it hurt? It would only hurt the richest of Canadians. This government has chosen not to make the richest Canadians pay their fair share of the burden of dealing with the national debt. It has to be seen as an explicit choice because the evidence is clear. It has chosen to attack the least wealthy, the poorest Canadians.
Over the last few weeks we have seen, as a result of the federal budget, provincial budgets which have severely cut into health care programs, severely cut into the number of hospital beds and the quality of health care available, severely cut into employment in their provinces and severely cut into social assistance programs in those provinces.
The evidence is clear that this government has made a choice and it has made a choice to leave corporations alone and to place the burden unfairly on lower income Canadians.
Coming from the province of Saskatchewan, there is a lesson our governments can give to the federal government. It is not a lesson, of course, that can be provided by the present Progressive Conservative government in Saskatchewan, which started with a balanced budget and now has the highest per capita deficit in the country as a result of its Progressive Conservative ideas.
In 1944 when the first CCF government took power in Canada, Saskatchewan was a bankrupt province and it, I guess, could have decided, had it taken the neo-conservative philosophy of the present Conservative government, to just cut and cut and cut, because after all, it could not afford anything.
In the 20 years that followed, not only did that government move that treasury from one of bankruptcy to one of balanced budgets and surpluses, but it introduced most of the social programs that Canada has come to take for granted. It introduced rural electrification. It
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introduced telephone systems across the province. It introduced medicare, of course.
It is not critical or necessary that a government says: "Because we do not have any money, we cannot invest in the future". In fact, it is absolutely critical that we do invest in the future and that we do not burden the lowest income Canadians, those Canadians who are least capable of fending for themselves.
There is another way. We can cut those tax loopholes to the rich. We can find other sources of revenue. We can stop government waste and we can make sure that we invest in Canadians.
When faced with children coming to the Minister of Finance with their cheques, the minister must have a rather odd view of the world when his economic policies do not work, and when he thinks that taking money from children is an appropriate way to resolve those deficits. Quite clearly this is a manipulation of those children.
Clearly, children will not understand the policies of the government. They are not in a position to judge which politicians are telling the full story. Actually, I am surprised that the minister did not sell these children Conservative Party memberships while he was receiving their cheques. The move to accept the money offered was really I think also a hypocritical one in the sense that the finance minister has been telling Canadians that the deficit cannot be left to our children to pay for, that we cannot leave this burden on our children in the future.
What is he doing now? Instead of leaving for the children in the future, he is taking from the children in the present. What the Minister of Finance should be telling Canadian children is to save their pennies for education and health care because with all of the slashes to social programs, to health care, and to transfer payments to the provinces, those children are going to need that money in the future to buy the services they so critically need.
It is not hard to find other approaches. It is not hard to look across the world and see other economies dealing with these situations in a different way, economies in countries that have governments which put people first as a deliberate political, social and economic choice, and which do not cut social programs and social spending in the hope that some time in the future things will work out.

March 22, 1991
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What does this government tell those 1 million hungry children who go to school and cannot study because they do not have enough to eat? It tells them: "This is necessary because in the future the country will be better off". That is not the way in which any government should be dealing with its most precious resource, our children and our future. What it should be doing, as I indicated, is investing in them.
I think there are two ways of looking at that investment. Clearly we have to deal with the social, physical and psychological pain that cuts in social programs are imposing on Canadians, but this government does not listen to those arguments requiring compassion. We also can put it in the context of economic terms. As I have mentioned, and as many have mentioned, it simply is not sensible economically to cut into those programs which constitute an investment in our future.
We constantly hear the Prime Minister telling us about the need for a world class education system and at the same time cutting funding to that education system. We can see the consequences across the country. In my own city of Saskatoon, the University of Saskatchewan is now thinking of closing colleges and faculties. The dentistry school is one which it is thinking of closing. The agriculture building which has recently been built may not be opened because there is not enough funding.
What we are doing is cutting off our nose to spite our face. We are cutting off our investment in the future.
While I understand the motives of the children who are seeing the need to pay off the deficit, I think the Minister of Finance needs to look in the mirror in the morning, every morning, carefully and ask himself what he is doing to this country.


Thomas (Tom) William Wappel: Mr. Speaker, I listened patiently to the remarks of my friend in connection with this motion. As he and his party know, we in the Liberal Party are sympathetic to the fact that the government is not sympathetic to the people of Canada.
What I am interested in is the alternatives of the NDP. As I said before, it is easy to criticize. It is another thing to come up with alternatives.
The hon. member said that one of the alternatives he would propose would be to scrap the $100,000 capital gains exemption. I would like to explore that for a moment because, to me, that is a startling proposition. I want him to explain it on behalf of his party so that Canadians can know what we are talking about.
Let us look at the ordinary Canadian. Never mind the fat cats, never mind the people who go to $250 lunches, let us talk about ordinary Canadians who struggle to buy a home, perhaps maybe have a cottage if they are lucky, and maybe have a few investments that they try and accumulate in order to be able to have a secure retirement.
As I understand it, the NDP is proposing that there be no capital gains exemption whatsoever. What does that mean? Does that mean that there is going to be no capital gains exemption for a principal residence? Does it mean that when people sell their principal residence in order to retire into a smaller home, they are going to have to pay capital gain on the value of the increase in the property? Is that fair to the ordinary Canadian? Is that what the NDP is going to propose to the people of this country? Is that what it wants Canadians to understand or is it something else?
No, no, no, it is not on the principal residence, but it is on investments in stocks and bonds. The grandmother who has purchased certain blue chip stocks in order to provide for her retirement and has to cash those stocks in order to buy things will have to pay capital gains tax. A meagre $100,000 capital gains exemption, when, for years and years and years, this country had no capital gains tax encouraging the spirit of enterprise and encouraging Canadians to save and provide for their retirement.
What is it exactly that the NDP is proposing? That there be no opportunity whatsoever for people to better themselves in this country? Is it your policy to scrap the $100,000 capital gains tax exemption, have no capital gains tax exemption? Everybody will be paying more taxes then, never mind the rich.
What is the policy?


Chris Axworthy: Mr. Speaker, the member's comments make a pretty stark contrast between those who want to pursue the interest of the privileged and those who do not. The 1.4 million Canadians who are unemployed, the 1 million Canadian
March 22, 1991

children who live in poverty are not really persuaded by arguments which help those who are already wealthy to buy summer cottages. Those 1.4 million unemployed Canadians and those 1 million Canadian children living in poverty are not moved by arguments which put summer cottages ahead of food on the table.
If the member would like to listen for just a moment, he will know, and if he has paid attention in the past he will know, that in getting rid of the capital gains exemption we would provide for two exemptions. We would not apply it to farmers and we would not apply it to small business. So, to some extent, the member's screaming and yelling are addressed in those two exemptions.
We understand that there are difficulties that small businesses and farmers face. It is a question of the government making a choice, of political parties making a choice. I will stand up every day for poor children having more to eat as opposed to people being able to buy summer cottages.


René John Soetens: Mr. Speaker, I would like to ask the hon. member if he could give me a reason why he makes a distinction in his answer. He talked about giving an exemption, in his capital gains formula, to small farmers and small business people and allowing them to have capital gains and, I believe that limit, I do not know if he specified it, could go up to as high as $500,000.
There are many Canadians who do not have that situation of being a small farmer or a small business person. They are people, many of them NDP supporters, who work in companies and earn $30,000, $40,000 or $45,000 a year. They take that money and every year they find they might have $1,000 or $1,500 left over and they want to plan for their retirement.
They buy themselves some stocks in Bell Telephone or some other Canadian company, and as time progresses find that having worked 40 years, having saved a little bit every year, they have managed to accumulate $200,000 or $300,000 they are going to use in their retirement.
If I heard the member correctly, these individuals who have made investments, have made capital gains, are
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going to be expected to pay tax on their capital gain, but he exempts the small business person and the farmer.
Would he mind telling me why he picks on senior citizens who happen not to have been farmers or small business people to pay capital gains in this country?


Mr. Boudria:: That is easy; the NDP are against seniors.


Chris Axworthy: Mr. Speaker, the argument made is that somebody who has $200,000 or $300,000 saved up should not pay taxes on it. That is the point the member is making.


Thomas (Tom) William Wappel: Of course, they should pay taxes.


Chris Axworthy: I would like this member to go to the nearest food bank in his community-after all, there are hundreds of them across this country-and go to the families in that food bank, go to the children and go to the mothers who are trying to put food on the table, and ask this: "Shouldn't we let people with $200,000 or $300,000 get out of paying tax?" Let him see what those people say.
That is not just a small number of people in this country, there are 1.4 million unemployed-I don't know how many who are indirectly affected-and a million poor kids.
The question is one about priorities, and those arguments simply do not wash with those Canadians who are hurting most.


Mr. Pierre H. Vincent (Parliamentary Secretary to Minister of Finance):: If I may, Mr. Speaker, I should like to put the motion on the record before beginning my remarks. I think it is important for the information of hon. members.
That this House condemn the government for implementing a
debt reduction program which accepts the savings of children but
fails to ensure that large, profitable Canadian corporations and
wealthy individuals pay their fair share.
Mr. Speaker, I have been here for close to seven years now, but this has to be the first time I see such a mixture of cabbage and oranges in a motion!


Don Boudria: A socialist salad!

March 22, 1991
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Pierre H. Vincent: Enlightening remarks on the part of my colleague from Glengarry-Prescott-Russell, Mr. Speaker, something new for which I commend him.
I think it is important to go over the events since 1984 to respond to the arguments made by my colleague from Saint-Leonard and the NDP members.
The basic principle in this country is that Canadians do not like paying taxes. I know you do not, you told me so. Nobody likes that. But at the same time Canadians have shown a preference for various programs and they want a country where citizens are properly treated. From that point on, taxes have to be paid and collected.
Earlier today my colleague from Saint-Leonard said that in 117 years the national debt had not increased more than the one we now have in 1990 and which, according to him, can be traced back to 1984.


Don Boudria: Well put.


Pierre H. Vincent: All I can say to him is that the preceding administrations over the 117 years he referred to did not have the unfortunate experience of inheriting a $200 billion debt when they were elected to office. We did, Mr. Speaker. And we are living with it. Since 1984 we have increased public expenditures by only 3 per cent, while provincial legislatures, municipal councils and private sector companies have boosted theirs a lot more than that. We have managed to keep annual increases to 3 per cent, but we did receive much more than that.
In 1984, the federal government was spending $15 billion more annually, on all kinds of programs, than it was collecting revenue. Not 15 million but 15 billion. After six years the federal government is now spending 10 billion less than it collects in revenue. This means a turnover of $25 billion in six years time. That is good management. People will say we raised taxes. Sure, some taxes were raised, but 70 per cent of this $25 billion comes out of cutbacks in the federal government, and only 30 per cent out of tax increases.
And what about these tax increases? Let me explain. Thanks to tax reform, personal income tax for Canadians has gone down. I remember that when I was a tax consultant in Trois-Rivieres, we had 10 tax rates. Not one, not two, but ten, the highest being 34 per cent. After tax reform, we now have three tax rates: 17, 26 and
29	per cent. Before, we had the advantage, and the hon. member for Saint-Leonard who is an accountant will confirm this-


Alfonso Gagliano: I am listening!


Pierre H. Vincent: Someone with an income of $100,000 a year had a personal exemption of $3,000, and federal and provincial income tax added up to a tax rate of about 50 per cent. The personal exemption meant that someone with an income of $100,000 was able to save $1,500 a year. However, someone with an income of $10,000 who was paying, let's say 20 per cent income tax, so 20 per cent of $3,000 is $600. The individual with an income of $10,000 saved $600 in taxes and the individual with an income of $100,000 was able to save $1,500, on an annual basis. In 1988 we changed all that and we said there would be one tax credit for everybody. Fair and square: everybody gets the same amount. In fact, this was a tax increase because people with an income of $100,000 who were paying $1,500 less in taxes, are now paying only $1,000 less.
Mr. Speaker, before taxes, if we compare 1984 and today, people are better off. The average salary has gone up from $20,000 to $22,000. The after-tax figure has changed from $18,000 to $19,700, an increase of 8.6 per cent. This means that taxes have gone down as a result of tax reform, no doubt about it.


An hon. member:: Tory times!


Pierre H. Vincent: I hope my hon. colleague has nothing against the 1988 tax cut.


Don Boudria: Big deal! After increasing taxes in 1984, 1985, 1986, 1987 and 1988!


Pierre H. Vincent: Mr. Speaker, since 1988, the number of Canadians in the $100,000 plus bracket who pay taxes increased by 37 per cent. So, the wealthy individuals not paying their fair, that my colleagues from the New Democratic Party are referring to in their motion, we got them with the tax reform, particularly with the minimum income tax. But we heard no NDPers talk about the minimum tax which, incidentally, was introduced not in 1988 but in 1986. Neither did we hear about the minimum tax imposed on corporations since 1989, Mr. Speaker, or about the cuts in tax shelters: MURBs, limited partnerships, preferred shares, leasing rules. The
30	per cent tax increase I mentioned come from all these
March 22, 1991

cuts in tax shelters, the restructuring of the tax system to make it fair and some taxes which were increased.
My colleague from Saint-Leonard talked about the GST. He said that low-income earners, the students, the underprivileged and the seniors had to pay the GST. Indeed, Mr. Speaker, they do. However, this government did introduce a tax credit. People were phoning me at my office in Trois-Rivieres in December because they were grateful for having received their tax credit cheque before the tax was implemented. The sales tax credit was invented by this government. It is this government, the Prime Minister of Canada and the Minister of Finance who had this clever idea. So, Mr. Speaker, It is not true that the low-income earners are adversely affected by the GST. They have their tax credit, ahead of time, to be sure. That credit is given to nine millions Canadians who, each year, receive at least one cheque, and the Trois-Rivieres area includes many of them. In fact, that credit is designed to offset the GST, which is a consumption tax, and that mean that if you are rich and you are buying, you pay the tax; if you are not rich and you are not buying, you don't pay the tax. That basic principle was quite relevantly underlined by my colleague, the President of the Treasury Board, and is already applied in more than 48 countries. That's no news. France applies the system. It is more complicated than ours and it works.
The 1982 tax reform has cut taxes $2.5 billions. So, Canadians pay $2.5 billions less in taxes since the 1982 tax reform, and that amount is paid by businesses who, as I just said, must pay their fair share. Mr. Speaker, let me quote some figures that speak for themselves. The fiscal reform has made it possible to distribute the tax burden among low and middle income Canadians. In 1987, despite the fact that taxpayers with less than $15,000 income accounted for 47.8 per cent of all filers and 15.3 per cent of all earnings, their share of tax revenues was only 2.1 p. 100 of the total. Compared to 1988, they represented 45.2 per cent of all filers while their share of the tax decreased by about two thirds. In contrast with 1987, taxpayers with $ 100,000 income, representing less than 1 per cent of taxfilers, earned 7.2 per cent of all income but were carrying only 13.7 per cent of the tax burden. In 1988, those same taxfilers earning more than $100,000 have seen their taxes increase by 16.7 per cent. I do not like to give too many figures but I think those
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ones should be mentioned and put on the record to show that this government is efficient and that we have a fair tax system in this country.
True, paying taxes is no fun, but at least the system will be fair from now on. Now, Canadian women and men who earn an income will pay their fair share. And allow me, to answer my colleague from the NDP who says once again that corporations do not pay taxes. This is not true. In Canada, corporations pay their fair share of taxes. He talked about capital gains and I will not come back to that. I think it has already been shown that that argument about capital gains does not hold. He was also talking about the fact that companies are allowed expenses that individuals are not allowed. It is true, Mr. Speaker. It is true that companies are allowed expenses that individuals, that employees are not allowed. I will tell you, Mr. Speaker, that this is normal. Companies must incur certain expenses in the course of their business. So, they are allowed certain expenses, just like unions are.
Mr. Speaker, it is this government once again that cut back on lunches, on automobile expenses. It is this government that said on the issue of meals: there is a part of the meal paid by the company to its employee or to its president that is considered as a personal expense of that individual. That part is no longer tax deductible, but the other part is, because it is a cost of doing business. The individual who pays for his share of the meal, who works for Kruger for example, does is not entitled to any deduction. The owner of Kruger, when he goes to a restaurant with other business people, must pay his own share, it is not tax deductible. This, Mr. Speaker, is an example of fiscal fairness, and I think it disproves what the hon. member for the NDP was saying, that we had done nothing.
He was also talking about dividends. Mr. Speaker, I had the privilege of working as a tax lawyer for seven or eight years, and I can tell you that the dividend tax credit is not a gift. It is a tax measure which is part of a whole package. There are two ways for a company to borrow money. It can go to the bank and borrow $100,000 at a rate of 10 per cent and pay an interest of $10,000 a year for it, which is deductible as a business expense. The other way is to go public and to tell the shareholders: "You buy shares for $100,000 and you have a return".

March 22, 1991
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What happens then? After the company pays its taxes, it uses what is left to pay a dividend to its shareholders.
So the company pays dividends to its shareholders from its after-tax earnings. The shareholders are in turn automatically taxed according to their tax rate, but allowance is made for the fact that it is an amount net of tax, that the money has already been taxed when in the hands of the company.
So, the NDP say it is a tax shelter, but that is not true. That money is taxed in one of two ways: either the company chooses to borrow it from a bank or it finds some investors willing to take a chance on its operations.
Mr. Speaker, the NDP is once again talking about the deductibility of interest charges. How could a business possibly function if it cannot take out a loan and deduct the expense incurred on that loan, that is the cost of borrowing money, to improve its machinery, to expand its plant or for some other purpose. It would be unthinkable, in a system like ours, to be unable to deduct the interest charges incurred for operational purposes.
In concluding, Mr. Speaker, I hope that this motion will be defeated, as I am sure it will be. I hope that people on the other side, and particularly the NDP, will stop making comparisons between children-who have a better knowledge of what is going on than the NDP and who are prepared to give whatever little money they have to pay the national debt-and companies or individuals who pay taxes. They are only trying to confuse the Canadian population.


Mr. Geoff Wilson (Swift Current-Maple Creek-As-siniboia):: Mr. Speaker, I congratulate my colleague from Trois-Rivieres on an excellent contribution to this debate. I would like to make a comment with respect to the motion and to pose a question to him.
This motion was put by the New Democratic Party. It condemns the government for implementing a debt reduction program that fails to ensure that wealthy individuals pay their fair share.
First, it seems to me that it is a little hypocritical of the New Democrats to pose such a motion when the very debt which they speak of is something which they and
their cohorts in the Liberal Party inflicted upon this country during the period 1968 to 1984. Twice they had the opportunity to kill off that unholy coalition. They could have done it in the period 1972 to 1974. They could have done it in 1979, but in each case they crawled back in bed with Pierre Trudeau because he was pushing the same kind of socialist policies that they stand for.
The profligate spending that went on during that time period is what left a legacy of some $206 billion to $207 billion of debt in March 1985, the interest on which, as my hon. colleague pointed out, is something that has severely constrained the ability of the government today to respond to the kind of needs that the country has.
It seems to me that there has been a long list of initiatives taken by this government in terms of getting rid of so-called tax loopholes. The SRTC boondoggle was something that the previous government put forward and cost the Treasury of this country $4 billion or $5 billion dollars. This government curtailed that.
It got rid of the thousand dollar interest exemption, the films, the MURBs, the flow-throughs, and the business investment tax credit. It increased the tax rate on taxable capital gains. As my friend points out, it converted the exemptions to credits. It put on high income surcharges, corporate minimum tax, and so on.
At the same time, every one of these initiatives was opposed by the Official Opposition and by the NDP that posed this motion. At the same every move to refine the tax system and to modernize it was opposed by those opposite.
What I find strangest of all is the inconsistency within the New Democratic Party. This motion calls for the government to tax wealthy individuals, that wealthy individuals should be paying their fair share. A year or two ago, this government put forward measures which would result in the taxing back of the family allowance and the old age pension from high income Canadians.
Guess who opposes that move, Mr. Speaker?


Don Boudria: Who?


Geoff Wilson: New Democrats, the very people who want to tax the wealthy and get the rich, really punish them. They
March 22, 1991

oppose the taxing back of the family allowance and the old age pension from these high income Canadians.
Does my hon. colleague not find that approach on the part of the NDP to be completely hypocritical and completely inconsistent?


Pierre H. Vincent: Mr. Speaker, I appreciate the comments made by my colleague. I worked on the Budget and I must say that when I heard that the seniors earning more than $77,000-excluding Old Age Security pension-should pay back part of that money I thought that the Liberals would like the idea. Those people earn high incomes, Mr. Speaker. In Trois-Rivieres, and I think everywhere else in Canada, $77,000 is a fair amount of money. I thought that the NDP would be kneeling to thank us saying that at last, we were taxing without giving hand-outs to people who don't need it. It is as simple as that: we are not giving money to people who don't need it. That income of $77,000 did not include the old age security pension. Therefore I thought that the NDP would get down on their knees to thank us. My colleague was telling me the same thing: finally, the NDP and I are going to agree on one thing. As usual, for more than six years, and this is what is unfortunate here, there has not been one single policy the government has put foward that the Opposition has not been opposed.


Don Boudria: No, no.


Pierre H. Vincent: I am talking in terms of fiscal policies. The NDP and the Lberals have always been against all of them. It is impossible that they should all be wrong. Nevertheles they are against them. My colleague asked me a question, but there is another one that springs to mind. After looking at the so-called loopholes mentioned by the NDP I explained why they are not loopholes. The next question is that not a day goes by without their asking for more money for this or that. Where do they want us to get the money from? That is the question. The question is, where is the money to come from when day in and day out they keep asking for more programs? Every single day they urge the government to spend even more in all sectors. So where do we get the money?
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It has been six years, Mr. Speaker, but unfortunately neither the NDP nor the Liberals have been able to answer that question. They did not suggest practical, intelligent and workable solutions likely to make Canada progress. The role of opposition members is to make the country progress, as is the role of government, and the country will not progress unless they can make suggestions. The have none. They do not make any. That is where the problem lies.


Ms. Margaret Mitchell (Vancouver East):: Mr. Speaker, I would like to continue on the point that was raised by the previous questioner, that is the question of universality as it applies to family allowances and old age pensions.
Perhaps my hon. friend would agree with me that in effect the policies of the Conservatives have done away with universality as it applies to family allowances and old age pensions. For many years Canadians have been very proud of the net of security that applies to those two programs.
Of course, previously pensions and family allowances did go to families where, regardless of their income, there was in effect a tax back, if we can call it that, as people paid income tax on their total income and these items were included within their total taxable income.
The reason why we have always opposed taxing back the total family allowance is that it denies the principle of caring for the next generation of children. It means that those families who happen to have children are the ones that are penalized.
I do not see why myself and other Canadians who do not happen to have children should not be contributing toward the next generation of children. I am very pleased to do this through the family allowance, which is a universal family allowance, and recognizes the importance of all children. Those who happen to have wealthier parents of course will pay a little bit more on their income tax, but we must really reinstate the whole concept of universality.


Pierre H. Vincent: Mr. Speaker, I do not understand my hon. friend's logic, if there is one. If she feels that all families should get family allowances, I personally feel that only those families who need family allowances

March 22, 1991
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should get them. With all due respect for the Prime Minister, Mr. Speaker, I suggest that the Right Hon. Brian Mulroney could do without family allowances and still raise his children. Former Prime Minister Trudeau could well survive without his Old Age Security pension. That is the point which my hon. friend does not understand. We feel that family allowances and Old Age Security pensions should be paid only to those who need them. That is the whole point and it does not take anything away from its universal character.
For instance, let us take the case of a senior citizen in my riding who this year is getting a $100,000 income; suppose that next year, for whatever reason, he has no income, he would automatically receive every month his Old Age Security Pension cheque. Universality is maintained for the needy and not for the others. I feel it is simple enough. It is not normal for a person earning $300,000 a year to get family allowances, and later an Old Age Security Pension cheque. It's not normal. He does not need the money, while other Canadians really need it. If we really want the needy to continue to receive the money, we have to take it away from those who can do without it.


Don Boudria: Mr. Speaker, I am pleased to have the opportunity this afternoon to speak in this very important debate.
There are a number of items which should be considered in this motion. First of all, the people to our far left are commenting on the fact that the government has stooped to what we did not even think was possible for it, in terms of how low it could go, by publicizing the fact that children are selling their toys to pay down the Minister of Finance's debt.
The second theme involved is, according to the New Democrats, that corporations can do nothing right. Finally, there is the issue of taxation generally.
In my opinion, there is nothing inherently wrong for two or three people in a family to incorporate their family store, hot dog stand, or what have you. One does not have to report that to some great big socialist over there, who rules on the evil of having an incorporated family business.
To that extent, I am going to part company with our friends to the far left. I happen to think that family businesses, small businesses in particular, although incorporated are not necessarily wealthy. The idea that businesses cannot deduct such things as interest on loans in order to buy inventory to sell in their store, according to New Democrat theology, is not something I agree with. I happen to think those kinds of enterprises should be encouraged by all of us in the House of Commons, including those who are socialists.
Let us start with this proposition that we are discussing, namely children.
I understand that the Government House Leader is seeking the floor.


BUSINESS OF THE HOUSE
Harvie Andre: I thank my hon. colleague. I would just like to officially designate Monday as an allotted day.
I appreciate your courtesy.


ALLOTTED DAY, S. O. 81-CORPORATE TAXATION
[Stage Direction]
The House resumed consideration of the motion of Mr. Blaikie (p. 18859).
Don Boudria: Madam Speaker, we will be pleased to speak on supply issues again on Monday. As you know and I think the government has also recognized, there is a lot to talk about in regard to whether or not this Parliament should grant supply to the government. There seems to be that recognition, finally, on the part of the government. We will gladly participate Monday as well as other days, presumably, in order to be able to remind Canadians why this government should be held accountable to an even greater degree than it is right now. We will do our best to do that, until such time as the electors can render the ultimate decision of accountability, which is to turf out the government at the polls the next time.
Let me speak briefly about this issue of fairness in taxation and tax policies generally. First of all, we cannot talk about fairness without talking about the dreaded GST. The dreaded GST is creating tremendous havoc yet. I know the government said it had this science down
March 22, 1991

perfectly and that everything it would do would be correct and good and proper and virtuous. Well, let me read an excerpt from today's Ottawa Citizen which was given to me by my very distinguished and eloquent colleague, the member for Stormont-Dundas.
The member for Stormont-Dundas brought to the attention of the House this morning the issue of crossborder shopping in his area of Cornwall, adjacent to my own constituency of Glengarry-Prescott-Russell. I quote from the article:
In Cornwall alone, the crossings nearly doubled last month to
77,000 from 43,000 in February 1990.
This government has created taxation policies that are such that people are running across the U.S. border to do their shopping. What do those unfair tax policies do to the businesses of Stormont-Dundas, and of Cornwall, which are so well represented by my colleague? What did they do?
What did he do to the good people of Glengarry- Prescott-Russell and other Canadians who own businesses in this country? Now, of course, we have our good old socialist friends governing Ontario. The good old socialists of Ontario, the friends of Peter Kormos, remind me a little bit of a dog that caught the wheel of a car as it was going by. They are asking now: what do we do with it?
The members of the NDP in Ontario protested Sunday shopping. They protested Sunday shopping so loudly and with such virtue and wholesomeness and all that good stuff that the NDP does so well, thinking of course that they would never have to deal with the issue because the courts had decided on it. Lo and behold, a couple of days ago the Supreme Court of Ontario ruled that in fact the government of Ontario-the NDP government now, of course; need we be reminded-had the authority to rule on Sunday shopping.
It was easy to be against Sunday shopping when they knew they would not have to rule on it. But now they are going to have to rule on it and the law that had been disbanded is all of a sudden back in place. At the same time, communities along the Canada-U.S. border on the Canadian side are being affected by this Sunday shopping issue. We are anxiously waiting to see how the friends of
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Peter Kormos handle this particular question. We shall wait anxiously for probably a few more somersaults, handstands and headstands on the part of silk stocking Bob and his good comrades at Queen's Park. We shall wait and see how to deal with that.
Let us come back to the issue of fair taxation, the GST and other matters. We have the whole issue of fair taxation by the government across the way to contend with. That is no small potatoes.
I have a letter from a constituent of the great riding of Glengarry-Prescott-Russell that I am going to read to you. Some of the issues he brings to our attention concern the unfairness of the taxation system of the government across the way.
He says in his letter: "If I am at work or home, and I am unfortunate enough to become involved in an accident or suffer a heart attack or other illness which might result in my death, the proceeds of my life insurance policy are not taxable income." Fair and good and proper, in so far as I am concerned. However, let us continue: "If I am at work and become involved in an accident that leaves me disabled for a period of time, and I receive Worker's Compensation benefits, these are not subject to income tax either." Again, that is reasonable.
However, listen to this: "If I am at work or any other place and I am unfortunate enough to suffer a stroke or a heart attack which leaves me disabled but still alive, and I receive disability insurance, it is considered to be taxable and are subject to income tax."
Anyone who thinks that kind of policy is reasonable and fair, has their head screwed on wrong, in my opinion. I wrote to the Minister of Finance about this issue last September. He has not even responded yet. He has not even responded to this very legitimate grievance on the part of a constituent who is trying to obtain redress. I know: "The answer is in the mail."
I have another constituent who corresponded with me recently about another issue involving unfair taxation. I am glad to see that the President of the Treasury Board is here, because perhaps he can note these questions I am asking. I see he is getting out his notebook, he wants to note this. Perhaps he can take note of this question and forwarded it to his boss, the Minister of Finance.
18900	COMMONS DEBATES	March 22, 1991
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I wrote a letter to the Minister of Finance about an issue that was brought to my attention by another constituent in regard to child custody issues.
As members know, there is such a tax rebate device as the child tax credit. The child tax credit is another very reasonable proposition. It is given pursuant to whichever parent has custody of the child on the last day of the year. I have constituents who are unfortunate enough to have parted company, in other words they are divorced. The child lived with one parent for 11.5 months of the year and then, pursuant to mutual arrangement, moved in with the other parent. Guess which parent gets the child tax credit? The one who kept the child two weeks, not the one who kept the child 11.5 months.
I wrote a letter to the Minister of Finance on this issue. Do you know what his answer was? He said that it would be too complicated to calculate this kind of thing and that is why he does not intend to change it. This is Tory fairness. This is the explanation I get from the Minister of Finance.
I cannot believe that the Minister of Finance, who claims that he can count all the money we need to run the government in Canada, cannot count the child tax credit for my constituent. Perhaps this explains the reason why we are in this much trouble in this country; the Minister of Finance cannot count.
Over the last couple of weeks, I have been receiving phone calls from automobile dealers in Glengarry- Prescott-Russell concerning the GST refund to automobile dealers. Do you know how many automobile dealers have actually received their money back from the GST for inventory? Zero. The government promised us that those funds would be coming back 15 days later.


Geoff Wilson: Twenty-one days.


Don Boudria: Twenty-one days. Well, what is the difference? It has been close to three months and they have not received one cent. I have not yet found one car dealer who has managed to get the money back. This is Tory fairness. I have to admit it, they are making more businesses in the constituency that I represent go bankrupt because they are hanging on to funds that do not belong to the government; those funds belong to my constituents to operate their businesses and to make them survive.

The rate of unemployment in my riding of Glengarry-Prescott-Russell is 16.6 per cent. Why would we want such unfair policies that cause more pain, suffering and hardshihp to the people of Glengarry-Prescott- Russell?
A moment ago, Madam Speaker, I had the opportunity to discuss with my colleague from Newfoundland, the member for the riding of-


Mr. Mifflin:: Bonavista-Trinity-Conception!


Don Boudria: -Bonavista-Trinity-Conception, who was telling me that how unfair the unemployment insurance system is. The people of Bonavista-Trinity-Conception, who are so aptly represented in this House, told their member of Parliament, who always listens to them with great interest of course, how unfair it was that the federal government recently stopped contributing to the unemployment insurance fund. So now there is only the taxpayers and the businesses contributing to the fund. Of course, this government helps himself to that fund every now and then, under the guise of grants, to provide training and so on, but have not put anything in for quite some time now.

The parliamentary secretary said in this House that since 1988, taxes were fairer or something like that. I am paraphrasing here. I know that he will stand in his place immediately and correct me if what I said is not quite accurate. I know the Minister of Finance would stand in his place immediately as well, but I do not think they will. I have good reason to believe they will not.
The Conservative members across the way are talking about this fairness in taxation policy. We are in the middle of a recession, and you do not have to be John Maynard Keynes to understand that the middle of a recession is not the time to take money away from the taxpayers, money which they need to stimulate the economy.
Let me tell you what is happening here. A family of four making between $25,000 and $30,000 a year, hardly a rich family- they would not even be considered rich in Glengarry-Prescott-Russell-


An hon. member:: Your comrades.
March 22, 1991


Don Boudria: Well, maybe the comrades over there think they are rich but I do not. They are going to have to pay another $162, and that is the combination of increases in UI premiums and increases in the taxes otherwise, the combination of which is $162.
A family making $10,000 a year-even my friends to my left would consider it poor-is going to have to pay $55 a year more in taxes. You would think that at least people at the lower income bracket, such as the ones I have just described, would be getting a break from the people across the way. The tax system is far from being fair.
I received a letter from someone in Vancouver, British Columbia. It arrived on my desk this morning just as I was accumulating data to make this discourse to the House this afternoon. I thought this letter was quite apropos. It says:
Dear Mr. Boudria:
This letter is to let you know of the effect that the Goods and
Services Thx is having on our business.
My wife and I have operated our business since 1982. We have a
photography Studio which specializes in Wedding photography.
Each year has without exception been better than the previous
year -
Note that they started in 1982 so they have been in business for a long time.
- both in volume of business and in net profits. This year, with the
G.S.T. in place we have seen a drastic drop in both of these
indicators.
This morning we received new economic indicators, namely the Consumer Price Index increase for the last month and the government across the way will recognize the tremendous effect the goods and services tax has had on inflation.

Thus, Madam Speaker, as you can see, the new taxes announced in the Budget are all the more unfair for ordinary Canadians. As you can see, several tax initiatives of the governement opposite are unfair to people from Glengarry-Prescott-Russell and the rest of Canada.

I want to talk a little bit about the issue of the Minister of Finance standing in front of the television cameras with children who had sold their toys in order to pay part of the deficit. I have not yet seen anyone sell a limousine
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to help pay part off the deficit. Speaking of limousines, I meant the used car lot that is outside the west door of the Parliament Buildings when we leave after a vote at night, namely the ministers' limousines.
Speaking of that, if this government were serious about restraints why are there 40 cabinet ministers to handle the affairs of this nation? In the United States, a country 10 times the size, there are fewer than half the cabinet ministers. With 10 times the population, if they can do the job of running the country with half as many people, and I recognize that Tories are only half as efficient as most of the rest of us, but do you not think they could at least do a little better than they are doing now? Could the government at least show an example? Speaking of selling toys, maybe it could sell some of those big toys, those great big dark-blue toys outside the west door here, chauffeur driven and all.
I say to the government across the way that it needs to preach restraint far better by practising some of it itself. I say to the government that it needs to establish fair taxation policies for families and for everyone else. Numerous letters I have received over the last 12 months are from couples with children who are telling me they are financially disadvantaged because they are married. I have complained many times to the Minister of Finance about that. In regard to taxation there is such a thing as the spousal equivalent exemption, or something like that. What effectively that does is it allows an adult to place a child as a deduction, the same as if it were a spouse, which effectively means that married people cannot do something that two people unmarried and living together can do. In other words, each one of them can claim a different person as being the spousal equivalent.
I do not think there should be policies in this country which discriminate against families. If they are not advantageous to families, well I still do not like it, but at least it is fair game. At the very least, one would think that one should not be worse off for being married in this country and raising a family and so I ask the government for some fairness in that regard.


Jesse Philip Flis: Madam Speaker, I would like to congratulate the hon. member who just spoke on debate. What I like about the hon. member's contribution to this House is that he always has his ear to the grass roots in the riding and across

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Canada. He knows the impact of policies created in this House on the average person out there in our ridings.
He talked about the bankruptcies reported in most newspapers yesterday and in The Financial Post, John Geddes writes under the heading "Bankruptcies continue to soar":
Ontario and Newfoundland were hit hardest in February as the recession drove 6,249 businesses and consumers across Canada into bankruptcy, up 68 per cent from a year earlier.
In Ontario, the number of bankruptcies rose to 2,383, more than double the 1,043 in the same month in 1990, statistics by the federal Consumer & Corporate Affairs Department show.
Newfoundland's total also more than doubled in February to 76 bankruptcies from just 30 a year earlier.
The hon. member talked about the bankruptcies in his riding. I would just like to ask him which businesses, which firms are being hit the hardest and how are these people coping? Are they drawing unemployment insurance, just how are they coping when their company goes bankrupt?


Don Boudria: Madam Speaker, I appreciate the question from my colleague. The bankruptcies have affected the constituency that I represent very severely. It is not just bankruptcies. There are partial and otherwise plant lay-offs as well. For instance, the Ivaco steel mill in L'Orignal, Ontario laid off a number of workers a few weeks ago. Canadian Pacific Forest Product Research Lab in Hawkesbuiy, a lab which had been there for 80-odd years, formerly known as CIP Research, is now shutting its doors; 62 people in very good jobs, a lot of them scientists and so, on all losing their work.
There have been many lay-offs at textile plants in my riding as well. Plants have been shutting down, plants have been in some cases going out of business. In some places there are just partial lay-offs. A year ago we lost one industry in Hawkesbuiy, a garment factory known as Canadelle. It manufactures under licence from a company known as Wonder Bra. Some 100 people lost their jobs, as far as I know, all women.
The announcement was in October 1989. The plant closed February 2, 1990. Officials from the Government of Canada met with the people immediately. The local Canadian Employment Centre was there I think the night that they announced the closure or the day after and I was there with it.
To this day, the Program for Older Workers' Assistance-I think it is abbreviated to POWA-for older workers who are losing their jobs; these women who are, many of them, well into their fifties, as of today, March 22, 1991 still do not have an answer as to whether or not they will qualify for the program for older workers assistance. Some 16 months after it was announced the factory was to shut down, 14 months after it did shut down, and I was told yesterday that it would take at least two more months before they will be told whether or not they will get their money.
There is 16.6 per cent unemployment. Grandmothers are not the first people who are going to be rehired, anyway. When there is 16.6 per cent unemployment it makes it that much worse. And that is why there is a program for older workers assistance, which I believe was initiated by the previous Liberal government.
But it is taking so long, 15 or 16 months, to get then-money, and to make matters even worse-and I think I am really getting to the centre of the issue raised by my colleague-at the same time as they are having to wait for this, their unemployment insurance benefits have been cut back. Previously they could draw unemployment for a year, so if it took a year to qualify for the program for older workers adjustment, they at least had something else in the meantime. But now they have run out of UIC and are presumably on welfare, or whatever, until they qualify for this assistance.
I could not get an answer from the government as to why someone had goofed and allowed all this time to go by and not provide a positive answer for the employees of Canadelle in Hawkesbury.
This morning I wrote a letter to the Minister of Labour asking for his intervention, personally, and of course I will not have an answer for a little while, but I plead with him to assist those women who were working at Canadelle so that they can get some benefits instead of going on welfare.


Geoff Wilson: I would like to make a comment and put a question to my hon. colleague from Glengarry-Prescott-Russell.
I think it is a bit ironic that we on this side have to listen to lectures from the Liberal Party on how to manage the economy and how to reduce debt, given that
March 22, 1991

it is the party which, between 1968 and 1984, over-spent. It has no regard whatever for spending limits. This government in its recent budget has proposed to legislate, for the first time in history, spending limits.
The only regret I have is that it was not done a long time ago. Indeed, had those spending limits been in place back in the late sixties, we would not have the problem and we would not have the need for the motion today.
It was easy back there during the seventies. It was the credit card operation-the Liberals didn't have the guts to face people with the cost of the programs. It was just a matter of shovelling out the vote-getting programs and not worrying about it, we will let the next generation pick up the bills.
Unfortunately, it has come back now, and you can tell that they can't stand to hear it because they know very well that it is the truth.
Take sales tax reform, for example. As far back as 1940 a royal commission suggested that there be sales tax reform. Commissions after that made numerous suggestions, but never, never in all the years that the Liberal Party was in power did it have the backbone to take that initiative.
For example, they oppose in this House any and all measures to reduce expenditures, to curtail programs that are not necessary, oppose every effort to increase revenues.


Don Boudria: Let the limousines go.


Geoff Wilson: That is a clever suggestion. As a matter of fact, I will give the hon. member from Glengarry-Prescott- Russell credit, he has made one good suggestion, he suggests that the limousines go, and indeed that the size of the cabinet be reduced. I heard that, and indeed it is an interesting suggestion.
I would like to give him a chance to redeem himself at this point. He was not here prior to 1984, so of course it is unfair to hold him responsible for the sins of those in his party there before him. The hon. member for Ottawa Vanier was here so he is certainly not without sin.
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I want to ask the hon. member for Glengarry-Prescott-Russell a question. At this point there is still time for him to redeem himself.
Could he at this point put forward one constructive suggestion that we could use to do something about reducing the level of the deficit and curtailing the national debt which his party left to us? At $207 billion in March 1985, the compound interest on that has increased the debt somewhat drastically.
In the last three years of its administration, it overspent in the everyday programs of government by $16 billion in 1984-85, $14 billion in 1983-84 and $11 billion in 1982-83.
I ask the hon. member to redeem himself. Rather than giving forth an endless litany of complaints about what he perceives is wrong, does he have something constructive to put forward in terms of how to deal with this problem?


Madam Deputy Speaker:: The hon. member may want to leave his colleague some time to do it.


Don Boudria: Madam Speaker, I appreciate the fact that the member has given me an opportunity to redeem myself, and I say this to the great redeemer across the way: he said that his government is in favour of tax reform. That is a bit like being in favour of virtue. Everyone is in favour of virtue. I am just not in favour of driving the people in my riding out of business. That is the problem I have with what this government has done.
The great redeemer across the way has asked me to provide a constructive idea of how to cut expenditures. Well, I am glad he asked. I was a little curious, so I put in an access to information request to see how much bottled mountain stream water was being purchased for the office of the Minister of Consumer and Corporate Affairs. In 1989-90, it was $15,047 worth; in 1990-91, it was $17,759.
I'll drink to that.


René John Soetens: Madam Speaker, it is a pleasure to participate in this debate today.
It used to be a common joke that would be told at neighbourhood gatherings when the parents would get together after the kids had gone to bed and share with each other some of the disconcerting things that their children had done to them that day, memorable events such as using a vacuum cleaner to extract a toothbrush

March 22, 1991
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from the toilet or exhibiting artistic talent with magic markers all over the wall. Some parents would comment: "The best revenge is to live long enough to be a problem to our children".
That is no joke today. We even see bumper stickers with such sayings as: "I'm out spending my kids' inheritance" or "I'm going to live long enough to be a problem to my kids".
That is really a problem for our children, and the revenge we are placing on them is far from sweet. It is very sad and it is very sobering. Our revenge is the national debt, a debt that if we leave unaddressed will be a painful inheritance forced on our children and their children and their children.
Many of us were children in the 20 to 25 years from 1950 to 1973. Madam Speaker, I know that would include you; it certainly includes everybody on this side of the House. We grew up during a period of record economic growth and personal prosperity, and we saw a standard of living virtually double in a single generation in that period of time when we were children. Inflation was less than 3 per cent, interest rates were low, and the federal deficits were small or non-existent. We ran a plus or minus on an annual basis, and the economy was functioning well.
As a result, we grew up with confidence that prosperity and economic growth were normal things. It was almost inevitable that we would have prosperity. Our ability to meet and solve the problems and challenges of these years was only constrained by our creativity to define the solutions and a determination to see them through to their conclusion.
But then from 1974 through to 1984, and I might add even a few years subsequent to that, the way was lost. In these 10 years or so inflation soared. We tried to buy our way out of each and every new problem.
The result was very predictable. The federal deficit jumped at one point to $38 billion and the national debt grew from some $27 billion in 1974 to over $200 billion in 1984 and now to almost $380 billion.
Here we are thinking about the closing years of our careers and watching with concern, even trepidation, as our children are just beginning to assume their roles as adults in the society we are destined to leave them.
It is not simply the size of the debt that ought to concern us. It is the very tiny margin of financial flexibility that we are in fact leaving to our children. They like every generation will have their own challenges to meet, some of them about which we do not even know today as to what possible challenges they might have. At the very least we owe our children the opportunity to invest in the benefits of the prosperity they create and the solutions they apply to the challenges of their time.
Instead, we are on the verge of constraining their creativity and their capacity to meet the future by forcing them to pay for the past. This is not the future this government, this party or I would intend to leave to my children and the children of Canada.
Since the first budget and the first thrown speech back in 1984, our government has been committed to two important principles. The first is to maintain a level of social programs that enables all Canadians, young and old, to participate fully in Canadian society. In some areas of high priority, the government does not hesitate to expand its commitment.
The second is to plan year by year the control of our deficit so that our children's future options will be available to them and will not be curtailed by the need to clear away a legacy of financial irresponsibility.
The Canada Assistance Plan, which has certainly received an awful lot of attention in the last few weeks in the press, in spite of misleading assertions to the contrary remains a major component of Canada's safety net. Over $5.2 billion will have been transferred to the provinces in matching money this year to help finance social assistance payments to individuals in need and social programs of support. This will increase by some 7.3 per cent to over $5.6 billion in this coming year.
True, increases to the three wealthiest provinces, the province of which I am a resident and in which my constituency is located, are capped at 5 per cent; but the open-ended arrangement for the other provinces certainly remains intact.
In excess of $550 million of the CAP expenditures are in fact applied to child welfare services for an estimated 50,000 children in care and another 250,000 served annually through various child welfare protection services provided in their own home or in the community surrounding. These services include information and
March 22, 1991

referral services, clinical counselling and also homemaker services.
The Family Allowance Program provides a taxable benefit to over 6.6 million children in 3.7 million families. This fiscal year over $2.6 billion will pass through this program to families with children.
The child tax credit, a more targeted benefit program for low and middle income families, represents another $2.2 billion of income supplementation in next year's budget.
I remind hon. members that the government has doubled the maximum value of this program since 1984, in recognition of the importance it plays to low income families with children. A special supplement for low income families with young children under the age of seven has been added to the benefit package.
Despite the deficit, however, the government's commitment to maintaining a sound safety net remains and, in areas of particular priority, it has been enhanced.
There are other important initiatives that represent the government's determination to confront new problems as they come up. In a direct response to the landmark research report on sexual abuse of children by Dr. Badgley and his committee, sponsored by the federal government, a major initiative was begun in 1986. Sexual abuse of children is a horrifying reality of life for some children for many years. I am sure every member in this House would agree that is a terrible situation. It was scarcely mentioned prior to the late 1970s. That is no one's fault; it was just not mentioned. The problem has always existed, as Dr. Badgley's report proved beyond any doubt, but it was simply hidden away beneath fear, disbelief and denial.
Between 1986 and 1990, the federal government committed $25 million to begin addressing this hidden horror. In 1988 the government introduced an additional $40 million over four years to extend the reach to address violence in the family.
The success of these initiatives and the exceptional efforts of provinces, professionals, individuals, including children and adults who came forward to deal openly with their pain, has not been easy for Canadian society to absorb.
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The federal government brought forward major improvements in the Criminal Code and Canada Evidence Act to better protect children and ensure that they might be heard in the courts of our land.
Important advances in treatment and prevention were supported through this initiative. A special adviser to the Minister of National Health and Welfare was appointed with a mandate to recommend the next phase of federal action.
Last month, in response to Mr. Rogers' report, the Minister of National Health and Welfare introduced a much enhanced $136 million four-year program to continue the effort of reducing the levels of family violence in Canada.
Over 90 per cent of the special adviser's recommendations in areas of federal jurisdiction will be acted upon in whole or in part over the next four years.
The new family violence initiative will assist with training of judges, physicians, nurses and social workers, whose knowledge and experience are critical in dealing effectively with both victims and offenders.
Treatment to offenders will be provided in all 60 federal correctional institutions.
In consultation with aboriginal communities, 2,000 health care and social workers serving Indian reserves and Inuit communities will be trained, and prevention programs for over 500 communities will be developed with the assistance of aboriginal leaders.
Productive partnership will be forged with community organizations, service groups, unions and business.
This program is more than twice the size of the government's previous effort and stands as confirmation that the federal government has not lost its will to confront and address major social issues of our time.
But let us be clear about the nature and the scope of the issue that lies before us. In the report's opening remarks, Mr. Rogers, the special adviser writes:
My life has been deeply marked by my experiences of the last two years as Special Adviser to the Minister of National Health and Welfare on the issue of sexual abuse. I have been shocked by the anguish and pain of so many victims and adult survivors. I have also come to understand that this problem is so pervasive that any child could be a victim of sexual abuse, including my own children and grandchildren.

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He says in his concluding remarks:
The changes we need to make in Canada, both at a prevention and
public education level, as well in co-ordinated services to those in
need, require the concerted and inclusive support of all.
Because the needs of Canadian families are changing, especially due to the increased number of women entering the work force, the government has made important changes in parental benefits. Fifteen weeks of maternity benefits are now available during the period surrounding the birth of a child. Ten additional weeks of parental benefits are now available to natural or adoptive parents. Fathers or mothers can take these benefits or share them between themselves.
Of considerable importance to many working parents is the provision of child care services. Canadians have expressed their wishes to have considerable choice in the child care that they seek for their children.
Through the Canada Assistance Plan, for example, the government is providing a quarter of a billion dollars in support for child care for low income Canadian parents and a further $600 million plus through tax provisions, the child care initiative fund and dependent care allowances for persons on training courses.
We are increasingly aware that marriage breakdown is often the cause of a slide into economic difficulty, even poverty for the spouse that maintains the responsibility for looking after the children. Departing spouses, unfortunately most often fathers, too readily forgo their ongoing financial support of their children. To respond, the government through its Family Orders and Agreements Enforcement Assistance Act is providing for the release of information which can assist in locating those defaulting spouses and the garnishment of pensions, income tax refunds or other federal payments.
There are many specific programs for children and families that are developed by the federal government, usually in consultation or partnership with many fine national or community based voluntary organizations with well-known expertise in issues and services affecting children.
Specifically I would like to reference three that have been successful. These programs were created to provide
practical information and guidance to parents about their child's development and their own changing responsibilities to the children. The Post-Partum Parent Support Program is a resource for new mothers. Nobody is Perfect is a program that emphasizes the parenting skills for parents of children up to five years, and Ready or Not is a resource for parents of children eight to twelve years old.
One final recent initiative by the government is also worthy of mention. It is called CHIRPP, which stands for the Children's Hospital Research Injury and Prevention Program. Its creation was the result of two very basic facts. First, injury is the number one killer of Canadian children, accounting for approximately half of the 5,500 childhood deaths to children under the age of 19. Second, while we knew the number of injuries and the type of injuries, we do not know much about the specific causes of these injuries. CHIRPP is helping to study the causes by monitoring each childhood injury upon entry into a number of selected hospitals.
Detailed interviews are taken from adults and children if possible at the reception desk which seek to determine just how that particular injury occurred, the circumstances and the environment which caused it. The results are computerized within the Department of Health and Welfare. In the near future we hope to have a full analysis and an understanding of the causes as they are indicated.
Perhaps one of the most significant recent events that has occurred with great long-term potential for children in Canada and throughout the word was the September 1990 world summit for children held in New York. Leaders of 70 nations gathered to discuss and adopt a declaration on the survival, protection and development of children.
Canada was one of the six countries that initiated the summit and our Prime Minister was asked by his colleagues to co-chair its proceedings. It was a unique event and certainly a very significant success. The summit was not meant to be the end of interest in children but the catalyst that demonstrates the potential good that can come from attention focused on children.
March 22, 1991

The potential is real enough. The declaration goes on. It contains a 10-point program which all nations are urged to work toward implementing over the coming decade.
Canada was a major participant in the development of the convention through a federal, provincial and territorial working group. Through the continued effort to complete the required legislative review by the federal, provincial and territorial governments, it is anticipated that Canada will ratify the convention in 1991.
I began by talking about the crushing financial burden we could leave to our children if we do not address the implications of a growing deficit and debt. I am reminded that last year the money Canadians spent on the interest payments to service our national debt exceeded the expenditures on all programs administered by the Department of National Health and Welfare. This includes the national health care programs, the welfare programs, the Old Age Security and family allowance support programs.
Imagine the potential of this amount of money in implementing the 10-point program of the summit's declaration not only here in Canada but for children throughout the world. UNICEF projects that $20 billion of new money per year is needed to achieve the minimum conditions for children in developing countries outlined in that 10-point program. Of that, $7 billion will be needed in the form of international aid from donor countries.
It is a considerable sum, but not as great as our annual deficit. We must seize the problem of our deficit. We must maintain our levels of social investment. It is not easy, and the answers are not simple. But we have begun on the difficult path to improve our legacy to our children. May they at least credit us, finally, with having recognized the problem and carefully planned our way toward its resolution.


Jesse Philip Flis: Madam Speaker, in his opening remarks the hon. member paid compliments to his party. He said that it had two main goals. One was in its social policy, to maintain a certain level of social programs. The second was in its economic policy, to plan year by year to control our deficit. Again
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we hear this crying the blues, blaming the Liberals for piling up the public debt.
When the member's party came into office the public debt was $177 billion and now it is running up to $400 billion. I was here from 1979 to 1984. He can blame the Liberals for increasing the public debt up to $177 billion at a time when we were going through world recessions, not Canada-made recessions.
What did his government do with all the money that it collected for selling off Crown corporations? Why didn't that go to reducing the annual deficit further and reducing the public debt? What did his government do with the 33 tax increases that it brought in, in the seven years it has been in power? Could he explain to me today's article in the Toronto Star under the heading "Campaign launched to defeat Tories":
Canadians fed up with Prime Minister Brian Mulroney's "corporate agenda" are launching a grassroots campaign to defeat the government.
"We're no longer zeroing in on one issue like free trade-our goal is to defeat the Tories in the next election before the country is so broken up that we can't shape our own future," Tony Clarke, chairman of the Pro-Canada Network said yesterday.
To that end, the coalition will soon launch a "mass action" campaign -including petitions, advertising and demonstrations -to protest what it says are the de-Canadianizing policies of the government.
Mr. Clarke goes on to say:
"We believe we have to move quickly or the country will be so changed by the"-


Madam Deputy Speaker:: Order. The hon. member has been in this House quite some time. I must say I have a tough time seeing the relevance of this newspaper article to the motion before the House.
The hon. member may want to put a question to the hon. member for Ontario who has completed his speech, but I really cannot agree with these types of comments.


Jesse Philip Flis: On a point of order, Madam Speaker, I did begin by pointing out the social and economic policies the member mentioned in his speech. My closing comment is quoting Mr. Clarke where he says:
"We believe we have to move quickly or the country will be so changed by the government's economic and social policies that we won't be able to save it,"

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I would like to hear from the member that if he was out to save the economic and social policies of this country, why this massive campaign to defeat his government?


René John Soetens: Madam Speaker, I certainly would like to respond to that. The hon. member started off on a comment that I laid the blame on the 10 years from 1974 to 1984. I also believe that in my comment I said that it carried on through 1989 and 1990 when the debt in fact went up to some $380 billion.
I do not absolve the federal government of the last five years of the financial problem that this country has. I would point out that between 1974 and 1984 the debt of this country increased some eightfold. It only doubled in the time we were here. In either case it is a terrible number, but the fact of the matter is that we are trying to address it.
Further, I would like to respond to the hon. member's comment about all these tax changes. I note that in the election campaigns and in many other opportunities which the Liberals take advantage of they complain about the 33 tax changes and how terrible they are. Of course what we were addressing were loopholes that they had put in place. They consider it terrible that we issued a measure to prevent a variety of schemes of transfer tax losses from non-profitable corporations to profitable ones.
The Liberal Party disagrees with the reduction of a variety of special purpose investment tax credits. It disagrees with an increase in the rate of taxation on capital gains. It disagrees with the introduction of a corporate surtax. It disagrees with the introduction of put-in-use rules to limit the use of deductions where taxable income is not forthcoming. It disagrees with the removal of the inventory allowance. It disagrees with the curtailment of the use of leasing to transfer benefits for accelerated capital consumption allowances, and disagrees with a credible tax on large deposit-taking institutions, most recently the large corporation tax which has been adopted to ensure that all large companies contribute to deficit reduction. The Liberals disagree with literally all of these good steps and then complain about the fact that the government is not spending enough money.
The whole issue of the debate today and the budget we brought down is deficit and debt. We are not about to ignore these problems in our role as government.


Thomas (Tom) William Wappel: Madam Speaker, the previous speaker began his remarks by talking about the parties that parents attended without their children to talk about the cute familial antics of their children during the day or during the week. That may very well be.
Obviously the member has not been to one of these parties lately because I have news for him. When the parents get together today without their children to talk about things, what they are doing is asking themselves how in heaven's name they can rid themselves of a government that they thought was going to do something for them when it came to power in 1984 in a landslide election victory.
They talk about the fact that when they take little Billy, or little Susan, to have his or her hair cut they now have to pay tax on that hair cut. When they want to go to a children's store to buy a children's book they have to pay tax. When they want to take that child to one of the few movies that a parent can take a child to today, without worrying about obscene language or anything else, they have to pay tax on that. That does not affect the rich. That affects the poor. That affects the lower income Canadian. That is what those people are talking about today.
The member went on to talk about the terrible deficit, and indeed it is terrible, and to his credit he admitted, and I believe his words were that it went on some years beyond 1984, as indeed it has. He suggested that his government is attempting to deal with it.
What Canadians are asking at these little parties he referred to is how the government is attempting to deal with it. We have had his finance minister for seven years and one economic statement make predictions that time and time again have been completely wrong. Throughout this time they are not tax changes but tax increases that we are talking about.
Lower income Canadians are paying more tax today than they did in 1984 and higher income Canadians are paying less tax than they did in 1984. Those are the facts. What is this government doing to tiy and help those people with children who are struggling in today's society, trying to reduce a deficit that is $30 billion after six years of alleged tough times under the Tories when we have had a strong economy? What in heaven's name,
March 22, 1991

they ask at these parties the member referred to, is going on and how can we get rid of this government?
I ask the member how much tax is too much tax? How many times are you going to tax the Canadian people in an attempt to pay down the deficit when after six and a half years all you have done is double it?


René John Soetens: Madam Speaker, I appreciate the member's question. His riding is very close to mine and I presume economically we confront very similar bases and issues.
I can tell you what happens in my riding at those parties I attend which are obviously different than the parties he attends in his riding. In my riding they do talk about the fact that they have to pay tax on books that they never had to pay before. They have to pay sales tax on the magazines. They have to pay sales tax on the clothing, and they have to pay sales tax on some things, hair cuts, that they never had to before.
They talk about that in my riding, and I am sure they talk about it in his riding, however, in my riding what they also say is: "You know, this is a fair tax, because everybody pays." We in our riding, much like his riding where there are many high income Canadians, also say: "Thank goodness that the government saw the light to put in place a sales tax credit for those low income Canadians who are impacted by the GST".
In my riding the people say that is a fair tax. In his riding, unfortunately, I guess they forget about mentioning that low income credit, and that is probably because in his riding nobody receives that kind of credit because it is a very well-to-do riding.


BUSINESS OF THE HOUSE
Alfonso Gagliano: On a point of order, Madam Speaker. I think you will find unanimous consent in the House for the following motion:
That notwithstanding any Standing Order on Monday the House meet at 1 o'clock p.m. and proceed to the business of supply.
Supply
I think there is unanimous consent for this motion. [English]


Mr. Jim Hawkes (Calgary West):: Madam Speaker, the government has no objection to the motion. There was an attempt to have discussions and we could not, unfortunately, get all the parties together. We have no objection to using the hour between one and two o'clock for Government Orders on Monday. If the opposition feels there might be good use of that time between one and two o'clock for some other purposes we would stand ready on Monday to agree to another motion at that point which might precede it.
At this point I am agreeing with the motion proposed by my colleague across the House.


Mr. Stan J. Hovdebo (Saskatoon-Humboldt):: I am
sorry but I did not hear the motion. What motion is being put before the House? I could not hear it.


Madam Deputy Speaker:: The motion was:
That notwithstanding any Standing Order, on Monday the House
meet at one o'clock p.m. and proceed to the business of supply.
It would add an hour of debate. The House has heard the motion. Is there unanimous consent?


Some hon. members:: Agreed.


[Stage Direction]
Motion agreed to.

[Stage Direction]
The House resumed consideration of the motion of Mr. Blaikie (p. 18859).
Stanley J. Hovdebo: Madam Speaker, I appreciate the opportunity to speak for a few minutes on this motion because it does give me an opportunity to talk about some of the issues which have been brought up in the debate in the last hour or two.
The motion states very specifically that rather than try and unload the deficit by having children subsidize part of it, that we should do it, as the motion says, through programs which accept the savings of children but fail to ensure that large profitable Canadian corporations and wealthy individuals pay their fair share.

March 22, 1991
Supply
Today we have had a number of members state that we in the New Democratic Party do not recognize who is wealthy and who is not wealthy. It is very interesting to note that if a survey was taken of the people of Canada who are members of the three political parties, it would show that the highest earning group in Canada are the New Democrats. We are always told that we represent the poorer people of the country, and we do, but we do that out of principle. We have become over the last few years the highest earners as far as the membership in the three parties is concerned.
I guess it proves that the people of intelligence who take a look at the issues, take responsibility for what is Canada and what makes Canada work, support the kinds of policies that we in the New Democratic Party have espoused over the years.
More than espousing, we have made them part of the fabric of Canada. Consequently, people say: "Yes. Regardless of how it affects us taxation-wise, we are quite willing to support that kind of policy."
We also know that over the past few years, because of the structure of the atmosphere under which businesses and farmers have had to work to take advantage of the protection that has been placed through corporations, a lot of us have decided it is worth while to accept the corporate structure.
It does protect us from the government and from other corporations. Consequently, we do so. Most of those corporations, which we do not consider wealthy as defined in this motion, are owned and operated by the same people. That kind of corporation is not much different than a small business that is not incorporated.
Consequently, it is not going to be affected by major taxation differences in the same sense that we are talking about in this particular motion.
We have indicated many times across the country that we think one of the changes should be on capital gains. In our policy, we eliminate certain groups from having to pay capital gains.
The aim of our policy is not to take the capital gains of that farmer who has spent his life building up a farm that
he thinks will be worth while when he finally does retire and can use the gain to keep him in retirement.
The same kind of approach has to be recognized in small business, which is quite often a family operation. Everybody's time and effort is put into the building of that business. Farmers probably do not have retirement plans, although they need them. We have exempted those people from capital gains.
We are aiming at those unearned capital gains which are part of speculations within share sales. The purchasing and selling of homes other than one's principal home or cottage at high prices are unearned capital gains. They are speculative gains.
There is not a great deal of sweat or effort. When we say that capital gains should be taxed in some way, we are talking about the kinds of capital gains which are almost unearned. They are speculative gains.
Farmers and small businesses, also, do not have the protection that wage earners have. One of the questions by one of the members in opposition was: What about the wage earner who does gather a lot of money, makes an investment and then can sell it at a higher price?
Most of those people are quite willing to pay capital gains on what they gain in that speculative process. During the period in which they were earning the money to put a payment down on that cottage, extra home or extra investment, they were protected by unemployment insurance which no farmer or small business has.
If one owns a business or farm, one does not have unemployment insurance to fall back on in those days when one does not get a crop or when business is really bad.
There seems to be a very bad recognition of what is meant by regressive and progressive taxation.
Progressive taxation means that if you earn enough money to have a good living and something extra besides, you should be taxed a little more on that extra than the person who just earns enough to survive. Any suggestion that the same amount of taxation should be paid across the board is a regressive sort of approach. Progressive taxation, in contrast is tax which takes an increasing percentage of the earnings of an individual.
March 22, 1991

The GST is a regressive tax, because if you spend $1,000 on goods and services, you are going to pay 7 per cent on that $1,000. That means you are paying 7 per cent of your earnings to the GST However, if you earn three or four times that much and you only spend half of it on goods and services, you are going to be taxed only 3-1/2 per cent on your total earnings. In other words, the person earning more is paying a smaller percentage than the person earning less.
That is regressive taxation. That is what we have been working against.
There have been suggestions made a couple of times today that because we are against the taxing of family allowance and the taxing of old age security, we are flip-flopping in the sense that they say that is tax against the rich and that we should agree with it because we are always saying that we should tax the rich.
We have to recognize that the thresholds established both in the case of the family allowance and the old age security taxes are such that now, and certainly within a few years, will be so low that a person earning a moderate income is going to have to pay more. In each of these cases we have to look at the unfairness. If one person earns $10,000 and part of it comes from the old age security or family allowance, and another person earns $10,000 and none of it comes from those, the first person will pay more taxes. It is unfair.
Supply
If the taxable portion of the salary of a person who is getting the senior citizen's allowance or the family allowance is the same as a person who is not, the former will be taxed more than the latter.
I could go on and tell of a number of things that we as New Democrats think should be put in place.
In the last budget the government had a number of choices. For instance, it could have increased the funding for social services. Instead of that, it cut the funding by $340,000 to the provinces but it did not cut very expensive tax deductions.
The record of the government over a long time shows very specifically that the choices which would have helped the poor groups of people in this country have not been made. The choices made were those choices which allow the higher level of incomes to retain those earnings.


Madam Deputy Speaker:: It being three o'clock, it is my duty to inform the House that pursuant to Standing Order 81(17), the proceedings on the motion have expired.
Therefore, this House stands adjourned until next Monday at one o'clock, pursuant to Standing Order 24(1).


[Stage Direction]
The House adjourned at 3 p.m.
[Stage Direction]
Monday, March 25, 1991