1991-03-06

Mr. George Proud (Hillsborough):: Mr. Speaker, following the closing of the Canada Games in Charlottetown, I feel honoured and proud to stand in the House and recognize all Canadian athletes who participated in the Canada Winter Games, 1991.
I am especially proud of our Prince Edward Island athletes for their fine performance. Prince Edward Island secured one gold medal in boxing, won by Mark Docherty, and three bronze medals, two won in boxing by Geriy Ryan and Trevor McAdam, and one bronze medal won in curling by the Sean Matheson foursome.
I wish to applaud all the organizers of the Canada Games, the thousands and thousands of volunteers who have established themselves as some of the most exceptional people in Canada.
I would also like to thank the Government of Prince Edward Island, the federal government, and specifically the Ministry of Youth, Fitness and Amateur Sport, for their efforts and support for the games.
Finally, I would like personally to commend each and every athlete who came, who participated, and who made this cultural and athletic event truly Canadian.
Yes, Canada, our youth are great. Yes, Canada, our athletes are competitive. Yes, Canada, we are a great nation.


TOURISM
Mr. Ken Atkinson (St. Catharines):: Mr. Speaker, as you know, tourism is Ontario's second largest industry. This sector of the economy has suffered significant losses in the last two years. I therefore welcome the announcement by the Minister of State for Small Businesses and Tourism that there will be an allocation of $4 million toward the promotion of southern Ontario as a tourist destination.
The southern Ontario advertising fund will be used to help tourist operators and other attractions throughout the region reach the American market in a way that will attract the most visitors. Instead of advertising against each other, they will be encouraged to co-operate and sell southern Ontario as a package.
In order for this plan to work, there must be co-operation and financial commitment from the province and the private sector. It is incumbent upon the province to make certain that it will commit the necessary funds toward revitalizing this important industry and take an active part in this effort.
I call upon the Government of Ontario and the region's private sector to give their enthusiastic support to this program in order that more tourists will view our region as an attractive destination.


HUMAN RIGHTS
Mrs. Beryl Gaffney (Nepean):: Mr. Speaker, Earl Pratt and Ivan Morgan of Jamaica have been victims of violations of articles 14 and 7 of the International Covenant on Civil and Political Rights. Amnesty International and I appeal to the Human Rights Division at External Affairs to intervene on their behalf.
Pratt and Morgan are scheduled for execution tomorrow morning in Jamaica. It is Canada's obligation to uphold and strengthen human rights instruments and decisions.

March 6, 1991
Would the minister for the human rights branch of External Affairs move immediately and appeal to the Jamaican Minister of Foreign Affairs to prevent this execution?


THE ENVIRONMENT
Mr. Ken Monteith (Elgin-Norfolk):: Mr. Speaker, the Great Lakes pollution prevention initiative announced yesterday by the environment minister is a major step in the revitalization of the Great Lakes. As a member of Parliament representing Canadians living and working along Lake Erie, I am pleased that every sector will have input in developing strategies needed to achieve major reductions of toxic substances that are polluting the Great Lakes.
I am also pleased that funding will be available to assist industry in introducing pollution technologies into its operations. Prevention of pollution is the key for a cleaner environment for all Canadians.


WAGE SETTLEMENTS
Mr. Ron Fisher (Saskatoon-Dundurn):: Mr. Speaker, yesterday, before the Empire Club and the Canadian Club in Toronto, the Minister of Finance said that "what we", the government, "are trying to do is break a cycle of wage and salary settlements that are 2 and 3 per cent-sometimes more-higher than inflation".
Last year the inflation rate was 5 per cent. I wondered what sector of the Canadian work force was receiving average annual wage increases of 7 per cent or 8 per cent.
Labour Canada says that private sector workers averaged a 5.7 per cent wage increase, public sector workers 5.9 per cent, and federal workers averaged only 5.3 per cent.
So who was getting 7 per cent or 8 per cent? Canada's executives, that is who: 7.8 per cent in Toronto, 7.3 per cent on average. A typical chief executive officer earns $450,000 a year.
The Minister of Finance would be better to target his friends on Bay Street, rather than to blame the workers on the shop floor for our current recession.
I hope the Minister of Finance sends a copy of his comments to the Governor of the Bank of Canada, whose salary has increased by as much as 21 per cent for each of the last three years.


THE ENVIRONMENT
Mr. Gabriel Desjardins (Temiscamingue):: Mr. Speaker, I must say that I was profoundly disappointed and very frustrated by the press release the Quebec government issued yesterday afternoon on a joint decontamination program for abandoned sites presenting a high environmental risk.
Imagine my surprise, Mr. Speaker, when I noticed not one of the five sites proposed by Quebec was in the Abitibi-Temiscamingue region, where most contaminated sites are found. For instance, the Duparquet site was deemed a threat to the environment and a high risk site by the Quebec government.
Today, I made my profound displeasure known to Minister Pierre Paradis and to the hon. Robert de Cotret and I urged them to give priority, and the sooner the better, to the abandoned and dangerous contaminated sites in my region.


GASOLINE PRICES
Mr. Bob Kilger (Stormont-Dundas):: Mr. Speaker, consumers in Sudbury and Ottawa who filed numerous complaints with the Competition Bureau of the Department of Consumer and Corporate Affairs over gasoline prices, cautiously welcome the news that the department has finally decided to take action and launch an investigation into possible gasoline price fixing in these two cities.
For several months, consumers from all across Canada have been suspicious of gas prices and the variety of reasons given for vast price differences throughout the country. The government, however, only promised to monitor the situation.
This investigation should have started earlier. Canadians deserve protection from being taken at the pumps. They want the government to assure them that gas prices

March 6, 1991

are indeed fair. It remains to be seen if this government can give such assurances.


THE ENVIRONMENT
Mr. Guy Saint-Julien (Abitibi):: Mr. Speaker, on November 2,1989, the Quebec Department of the Environment wrote the federal member of Parliament for Temiscamingue, Mr. Gabriel Desjardins, concerning contaminated sites called high risk abandoned sites. This letter mentioned sites in Amtfield, two in Duparquet, two more in Cadillac and one in Joutel.
Yesterday, the Quebec Minister of the Environment, Mr. Pierre Paradis, approved a federal-provincial decontamination agreement concerning high risk sites in Quebec which did not include these dangerous sites. And the sites covered under this agreement were those designated by Quebec!
Mr. Speaker, once again the Quebec Minister of the Environment forgot Northern Quebec in his prayer, and the people of Abitibi-Temiscamingue will end up in paradise, or in hell, because of these dangerous contaminated sites.


THE BUDGET
Mr. Bob Wood (Nipissing):: Mr. Speaker, the finance minister's latest budget is like 19th century literature: you have to read between the lines to understand its true meaning, for it is not what it says that is significant but, rather, what it does not.
Many communities in northern Ontario rely on either mining or lumber for their well-being. This government's high interest rate and high dollar policies have crippled these industries.
How is this budget going to help? By cutting back transfer payments and shifting an even greater burden to municipalities that have already been brutalized by the recession that the government created.
The Minister of Finance is forecasting an unemployment rate of 10 per cent. For most northern communities
the current rate is nearly twice that and is only expected to increase. How will this budget help the unemployed? By cutting $100 million from job retraining, by cutting social housing, health, and welfare. What does the budget say? Absolutely nothing.
For northern Ontario last year's budget, with its debilitating cutbacks, represented a Stephen King style massacre. This year's budget with its cryptic, silent approach is more along the lines of an Alfred Hitchcock terror; it just leaves one hanging.



Mr. Jim Karpoff (Surrey North):: Mr. Speaker, the Minister of Finance made interesting choices in his budget. For example, he chose to continue the business and entertainment tax deduction which cost $1.1 billion. In fact he made the deduction even better by extending the write-off to include the new goods and services tax. The Minister of Finance also chose to cut the federal contributions for health services by the same $1.1 billion.
Yet, here is what the Prime Minister said about health care in August 1983:
The Progressive Conservative Party is in favour of quality medicare,
universal medicare delivered to our citizens. Problems have arisen
because of a unilateral and arbitrary cutback by the federal
government to the provinces who are charged with footing the bill.
That's the problem.
Today Canadians want to know why the problem of 1983 has been greatly accelerated by the Prime Minister's own government. They want to know about the government's choices: the choice to attack medicare in order to protect the big businesses.


ACID RAIN ACCORD
Mrs. Edna Anderson (Simcoe Centre):: Mr. Speaker, President George Bush will be visiting Ottawa on March 13 and March 14 to sign the Canada-U.S. bilateral acid rain accord.
This accord commits both countries to permanently decrease acid rain-causing emissions to a level that will no longer threaten the Canadian environment.
The signing of the agreement on air quality between the Government of Canada and the Government of the United States of America marks the culmination of a

March 6, 1991
long history of this government's efforts to find a solution to the problem of acid rain.
The air quality accord, plus the measures contained in the Canadian acid rain control program and the U.S. Clean Air Act, will control the acid rain problem and provide a means to resolve other transboundaiy air quality concerns such as urban smog and air toxics.


Mr. Maurice Foster (Algoma):: Mr. Speaker, yesterday it was announced that another 400 mining jobs would be lost in Elliot Lake within the next few months. This will raise the total number of mine jobs lost since last summer to nearly 3,000.
The resulting impact on local small business, the municipal government, school boards, and the community at large will be extensive, resulting in estimated job losses of 5,100 which is over 60 per cent of the labour force.
Elliot Lake and the neighbouring north shore communities are making the tremendous economic adjustments needed to continue as a thriving community.
However, the federal government must respond immediately in the following way: by approving the $6.3 million Community Futures budget, by providing a CMHC loan guarantee to ensure the viability of the retirement living project, by approving the funding for improved navigational aids at the Elliot Lake Airport, and by decentralizing federal government departments and agencies to Elliot Lake.
Elliot Lake has the spirit to survive this crisis, but the support of the federal government is crucial to its success.


TRANSPORTATION OF GOODS
Mr. Jean-Pierre Blackburn (Jonquiere):: Mr. Speaker, today I would like to take this opportunity to express my concern about a matter that may have a serious impact on CN workers in Jonquiere. Let me explain, Mr. Speaker. For several months, CN and Roberval Saguenay have been discussing the possibility of letting Roberval Saguenay take charge of the transportation of goods in the Saguenay-Lac-Saint-Jean area. In itself, this may be a good deal for both parties. What worries me however, is that Roberval Saguenay, which is anxious to get a good deal, will come down heavily on CN workers. I have enough information to believe that the deal between CN and Roberval Saguenay would put about 30 CN workers out of work in our area.
Mr. Speaker, if the deal is closed on that basis, it would be entirely unacceptable. Roberval Saguenay must reject that option. I want to appeal to the directors of Roberval Saguenay and CN to inform our workers and our communities of the real tenor of current discussions, the various options considered and the real impact this will have on jobs.


TRANSPORTATION OF DANGEROUS GOODS
Mr. Iain Angus (Thunder Bay-Atikokan):: Mr. Speaker, there is an old saying that if you have a glass that is half full, all the pessimist sees is a glass that is half empty. Well, if the glass contained 18,200 pounds of chlorine, federal transport regulations see a completely empty glass.
That is the lesson from an investigation into a derailment in February 1990 in Brampton, Ontario. At the time CN officials told local authorities that one of the cars, a damaged tanker, was empty, containing only the residue of a chlorine shipment that had already been removed. It was not until they began loading the tanker on to a flat-bed car that they found out it contained nine tonnes of deadly chlorine.
The investigation blames contradictory federal regulations. The resulting confusion could have been fatal both for railway and emergency workers and adjacent residents.
It is absolutely clear that the government has to move immediately to clear up this confusion. We cannot tolerate slipshod relations when the safety of Canadian workers and residents is at stake.
March 6, 1991



ORAL QUESTION PERIOD


Ms. Sheila Copps (Hamilton East):: Mr. Speaker, my question is directed to the Prime Minister and concerns the Spicer Commission's total loss of credibility.
As we are nearing the debate on the Allaire report that will take place this weekend and the tabling of the Belanger-Campeau report, and at a time when several provinces have established parliamentary committees to examine the division of powers, why doesn't the Special Joint Committee of the Parliament of Canada have the right to examine the division of powers? Why is everybody across Canada examining this issue, except the Parliament of Canada?


Right Hon. Brian Mulroney (Prime Minister):: Mr. Speaker, the Official Opposition in the Parliament of Canada has every right to advise us of its opinions in that respect. We have the Spicer Commission and we have the Beaudoin-Edwards Special Joint Committee which is now sitting. I am sure the various commissions and committees would be glad to receive the comments and recommendations of the Official Opposition.
If, at a given time, it appears appropriate for this House to create a parliamentary committee to examine the positions of the Official Opposition and other political groups, we will of course take steps to initiate this process.
However, as far as the negative comments on the Spicer Commission are concerned, I may remind the Leader of the Opposition that the Liberal Member for Gatineau-La Lievre, Mr. Assad said a few days ago that this was no time to complain about the Spicer Commission because they hadn't had a chance to do anything yet. So, listen to your member before complaining about the Spicer Commission.


Sheila Maureen Copps: Mr. Speaker, I think the public will be the judge of the credibility of the Spicer commission. I am concerned about the role of Parliament.


Some hon. members:: Oh, oh.
Oral Questions
Mr. Speaker. The hon. member.


Sheila Maureen Copps: I am very concerned about the limited role of Parliament at this crucial time in our country's history.
Many provinces are looking at the issue of division of powers, but the Prime Minister has tied the hands of the parliamentary committee when it comes to a full public examination of this issue.
However, the Prime Minister has set up a committee of deputy ministers in secret to study and overhaul the federal powers. Why are deputy ministers meeting, again behind closed doors, to review the division of powers but the public parliamentary committee is not allowed to look at the same issues?


Martin Brian Mulroney: Mr. Speaker, my hon. friend says there is a limited opportunity for Parliament to examine this matter. I would be happy to hear from my hon. friend in regard to any suggestion that is reasonable and appropriate. I would be happy, as I have indicated, to undertake a dialogue which would give rise to a constructive discussion. I think the greater the input, the greater opportunity Canada will have to deal with this matter.
Perhaps my hon. friend could begin with the fact that the Official Opposition has nine Opposition Days in the House. Perhaps a good way to begin and to help the country might be for the opposition to take one of those days and set out with some clarity and some precision its ideas on how this might be accomplished.


Sheila Maureen Copps: Mr. Speaker, Canadians are painfully aware that secret meetings and rolling the dice have cost us dearly.
What we want to know now from the Prime Minister of Canada is this: Is he prepared today to announce an expanded mandate for the parliamentary committee to look at the specific issue of division of powers so that the Government of Canada and the Parliament of Canada can have some say on this crucial issue as it is being examined by provinces across the country? Will I get an answer?


Martin Brian Mulroney: Mr. Speaker, as I have indicated in the past, the government leader in the House of Commons is ready to meet with the representatives of my hon. friend at any time, or with members of the NDP, to examine this possibility. If it is

Oral Questions
constructive and helpful, we would be happy to proceed with an instrument that could be of benefit to Canada.
My hon. friend refers to a comment I made in regard to rolling the dice, thereby attacking me.


Some hon. members:: Oh, oh.


Martin Brian Mulroney: Perhaps I could refer to a comment she made on June 4, quoted in The Toronto Star. "Said Copps: "Jean Chretien, you have not understood Quebec and you are gambling dangerously with the survival of Canada. One does not find the future, Jean, by looking in a rear view mirror".


Mr. Brian Tobin (Humber-St. Barbe-Baie Verte):: Mr. Speaker, my question is for the Prime Minister.
The Prime Minister wants Canadians to believe they are being listened to in advance of the national government taking any position on renewed federalism. If that is the case, why has the Prime Minister instructed a powerful committee of deputy ministers, operating in secret, behind closed doors, to draft proposals on renewed federalism?
I ask the Prime Minister, is the Spicer commission a genuine public consultation or a public diversion while the Prime Minister, once again, orchestrates matters behind closed doors?


Martin Brian Mulroney: Mr. Speaker, my hon. friend cannot have it both ways. On the one hand, he asks for public participation and when we bring forward the Spicer commission, he leads the attack to undermine and denigrate the commission.
The Spicer Commission is functioning with a view to receiving as many opinions from Canadians as is possible. I think all members of the Spicer commission look upon their responsibilities very seriously. They are earnestly seeking out as many opinions as they can to be helpful to Canada. The Edwards-Beaudoin committee will be sitting the next seven or eight days through western Canada, inviting submissions from Canadians in regard to the amending formula, which is veiy important. They will then go to Atlantic Canada, throughout Ontario and then throughout the Province of Quebec.
It is our hope that the substance of the Spicer commission, along with the procedural improvements that hopefully can be made as a result of the Beaudoin-Edwards committee, will help all parliamentarians along
as we put together a formula and a matter of substance that Canadians will view with favour as contributing an important building block to Canadian unity and the building of a new Canada of which all Canadians will be proud.


Brian Vincent Tobin: Mr. Speaker, I hope all Canadians have noted that the Prime Minister has twice refused to deal directly with a question about the secret committee of deputy ministers operating behind closed doors. The Prime Minister is playing his cards pretty close to his vest, but it will not hide the fact that, once again, he is playing poker with the future of Canada.
Is the Prime Minister prepared to tell members of this House and, through this House, all Canadians precisely what is the mandate of this committee of deputy ministers and when is the Prime Minister prepared to share that mandate and their findings with all Canadians? Is he going to do it now so that Canadians can comment, or is he only going to unveil this master plan later when the so-called public consultation is all finished?


Martin Brian Mulroney: Mr. Speaker, there seems to be a serious problem with this nefarious committee. If it is secret, how does the hon. member know about it?
Let me put the anxieties of my hon. friend to rest. There is no secret committee; but I can tell him that if there was one, I would ask him to join.


FISCAL ARRANGEMENTS
Hon. Audrey McLaughlin (Yukon):: Mr. Speaker, my question is for the Prime Minister.
The finance minister stated in his budget that he is discussing new fiscal arrangements with provincial and territorial counterparts. There is a growing concern that these new fiscal arrangements will fundamentally impact on national unity and on the future relationship of the federal government with the provinces and the territories.
I asked the Prime Minister yesterday and I ask him again today: In these discussions on "new fiscal arrangements", what is going to be on the table? Are health care, regional development and social programs going to
March 6, 1991

be on the table? Are these fiscal negotiations, in truth, in reality, constitutional negotiations by another name?


Hon. Michael Wilson (Minister of Finance):: Mr. Speaker, these are not "constitutional negotiations by another name", to pick up my hon. friend's words. We have been having a number of discussions with the provinces over the past year or so on the question of equalization, a program which must be renewed in 1992, with the major transfers of Established Programs Financing and the Canada Assistance Plan, as to what the structure of those two programs should be, as well as on the question of the tax collection agreements. These discussions will continue at least over the course of the next few months.
What I was announcing in the budget was a broadening of that process, to invite some public dialogue on the question of how these transfers should be structured and what the tax collection agreements might be revised to.
But I should underscore the point that the discussions do not involve any discussion of the medicare program, of post-secondary education, of highways development, where the moneys might be used by the provinces. Those are not within our jurisdiction; those are within the provincial jurisdictions.


Audrey Marlene McLaughlin: Mr. Speaker, a supplementary for the Prime Minister.
The finance minister included in his budget speech that he was going to be talking about these new fiscal arrangements. Everyone knows that fiscal arrangements are a key part of the constitutional make-up of this country, and they do affect health care, social programs and regional development.
It does seem that the government is seeking to change some of these arrangements, which is simply different men at a different table, similar to what we saw in the Meech Lake discussions.
I want to ask the Prime Minister again: Is he trying to have his government and his finance minister negotiate new fiscal arrangements which are really a discussion for constitutional arrangements? Is the Prime Minister allowing the finance minister to negotiate fundamental
Oral Questions
changes to Canadian federalism before the people of Canada have been heard?


Martin Brian Mulroney: Mr. Speaker, the answer to that question is, of course, no.
I am quite surprised by the almost pejorative allusion that the leader of the NDP makes to both Meech Lake and the process. Meech Lake was widely supported and indeed applauded by her predecessor as leader of the NDP and almost every member of Parliament.


Audrey Marlene McLaughlin: Mr. Speaker, I have a supplementary for the Prime Minister, and it is quite straighforward. Does this government intend to negotiate fiscal arrangements which actually concern the Constitution more than anything else? Are those social programs, those national health programs on the table? The Prime Minister must be honest with Canadians. What is on the table?


Martin Brian Mulroney: Mr. Speaker, the answer is the same in English and in French. I just gave the answer in English. There are no negotiations on fiscal arrangements or social programs. It was clear in English and it is clear in French.


THE ECONOMY
Mr. Jim Peterson (Willowdale):: Mr. Speaker, for seven budgets the Minister of Finance has promised us that the Canadian economy would be more competitive.
In just two short years, Canada has lost 229,000 or 11 per cent of all our manufacturing jobs. This government is presiding over the deindustrialization of Canada.
Today, 1,300,000 Canadians have no jobs and the minister has promised that another 200,000 Canadians will lose their jobs. Just how far is this government prepared to go in deindustrializing Canada?


Martin Brian Mulroney: Mr. Speaker, my hon. friend, in his most cataclysmic tones, deplores the fact as we do that 211,000 jobs have been lost during the recession.
In this morning's Financial Post a result of a study by the Canada West Foundation, indicates that in the last

March 6, 1991
Oral Questions
recession when my hon. friend was a member of the government, 300,000 jobs were lost in the same sector.
My hon. friend never once rose to protest that fact against the government of which he was a member.


An hon. member:: There were lay-offs.


Martin Brian Mulroney: "There were lay-offs", he says. When you lose your job when the Liberals are in office, it is a lay-off.


Some hon. members:: Oh, oh.


Martin Brian Mulroney: My hon. friend knows full well that the recession is a serious one, that indeed there were 140,000 jobs lost in the last two months in the private sector in Canada, but interest rates have come down some 408 basis points since their high of last spring.
Investment intentions appear to be strong. Confidence is returning to the country as interest rates continue to drop, and the Minister of Finance has laid out a program for growth and economic prosperity which we believe will begin to bite in the middle of this summer. It will bring great advantages to all parts of the country.


James Scott (Jim) Peterson: Mr. Speaker, if the Prime Minister is saying that the loss of all of these manufacturing jobs is justified by something that happened many years ago, then this is what we are seeing from this government.
You cannot build an economic future for Canada on empty rhetoric.
This was a Prime Minister who promised Canadians jobs, jobs, jobs-but he delivered them to the Americans.


Some hon. members:: Hear, hear.


James Scott (Jim) Peterson: Mr. Speaker, when will this government realize that we will not be able to compete tomorrow unless we invest today in our young Canadians, in science and technology, and in research and development? Will the government commit today to make these critical investments in our future so that the jobs and the hopes of a generation of young Canadians will stop moving south?


Martin Brian Mulroney: Mr. Speaker, my hon. friend is quite right when he talks about the need for greater competitiveness and the
availability of better jobs. This is why some of the difficult structural changes that we have introduced, that have met with ferocious opposition from some of the protectionist comers of Canada-like the goods and services tax and the free trade agreement-are bringing about and will restructure the Canadian economy and render it much more competitive, and thereby bring benefits to Canadians.
For example, in the report to which I have referred, prepared by the Canada West Foundation, since the free trade agreement was introduced-and I quote directly from the report this morning- "Canada increased high-tech exports by $4 billion since the deal, while such imports from the United States fell by $600 million."


Some hon. members:: Hear, hear.


Martin Brian Mulroney: "In most sectors, bilateral trade levels were unchanged but Canadians exported more electrical machinery, aerospace, railway rolling stock, scientific professional instruments, special trade transactions, zinc and zinc products, precision metals and stones, et cetera to the United States. This indicates that a structural reform such as the free trade agreement is improving our competitiveness, enhancing our productivity-"


James Scott (Jim) Peterson: We have lost 229,000 manufacturing jobs.


Martin Brian Mulroney: -which is still not appropriate, but we are going the right way and we will pick up those job losses as we come out of the recession.


THE ENVIRONMENT
Mr. Paul Martin (LaSalle-Emard):: Mr. Speaker, in the absence of the Minister of the Environment, my question is directed to the Prime Minister. The Minister of the Environment told us that yesterday's announcement on the clean-up of the Great Lakes was in line with his Green Plan. Unfortunately, he was right: it was merely an exercise in public relations. For the clean-up plan to work, it must be carried out in consultation with the municipalities and provinces involved. My question is this: Is this another green balloon? Why did he make his announcement before finalizing the plan or consulting with the provinces and municipalities involved?


Mr. Lee Clark (Parliamentary Secretary to Minister of the Environment):: Mr. Speaker, I find the hon. member's question incredible. Yesterday, the Minister of the Environment announced a substantial clean-up plan for the Great Lakes, a plan that provides $25 million for the development of a strategy and for setting up a centre to fight pollution. The plan will be implemented with the co-operation of the industry and other levels of government. Therefore, I think the hon. member should rise to show his support for this government.


Paul Edgar Philippe Martin: Mr. Speaker, I want to congratulate the parliamentary secretary. Now I know why we have not had any meetings on C-78. The plan contained no targets. It had no programs.
At 10 o'clock yesterday morning the minister stated unequivocally that the goal of zero discharge, which every environmentalist wants to see and which is crucial if the plan is going to succeed, was absolutely scientifically impossible to attain. Subsequently, after lunch, and after a great deal of pressure on that, he suddenly reversed his position and said that the government's goal was zero discharge.
Will the parliamentary secretary please share with this House the scientific breakthroughs that occurred in those two hours?


Walter Leland Rutherford (Lee) Clark: Mr. Speaker, what I can share with this House is the fact that the issue of virtual elimination or zero discharge is far more complex than the hon. member would suggest in his question. I can indicate to the House that this government has a plan in place which includes a provision for zero discharge for eight chemicals which have already been identified. In other words, in the case of mirex and several other chemicals, the manufacturing, the use, the importation and the exportation is not allowed, in short it is zero discharge.
I would also note in the new pulp and paper regulations which are coming into place that there will be the virtual elimination of dioxins and furans, as I think all members of this House would wish.
Oral Questions
In the third case, the example in the mining industry, heavy metals such as in liquid effluents like copper and nickel, are being controlled to a level that is sufficient to protect the environment.
This strategy is consistent with the green plan. It is consistent with the kind of feedback that we got from Canadians in the largest consultation process that ever occurred in the history of this country. It is indeed the kind of strategy which will ensure that the environment for our children and our grandchildren will be protected, unlike any kind of policy which that party had in place when it was in power.


Ms. Lynn Hunter (Saanich-Gulf Islands):: Mr. Speaker, in the absence of the Minister of the Environment, I put my question to the Prime Minister. Yesterday, the Minister of the Environment doled out the next instalment of the green plan slush fund by announcing a $25 million public relations Great Lakes fund.
Canada agreed 13 years ago to a zero discharge of toxics into the Great Lakes. Under Canada's Environmental Protection Act the government has the power to act.
Will the government announce today a federally enforced ban on all toxic substances going into the Great Lakes?


Walter Leland Rutherford (Lee) Clark: Mr. Speaker, what I can do is read to the hon. member and to interested members the list of those substances which already are banned for which there is indeed zero discharge: mirex, polybrominated biphenyls, polychlorinated terphenyls, alachlor, lepto-phos, phosphamidon-there are times like this when I wish I was a chemist rather than an historian-cyhexatin and 2, 3, 4, 5-bis (2-butylene) tetrahydro-2-furfural. Those are all at present under the zero discharge regulations to which the hon. member referred.
Let me also include, Mr. Speaker, a statement from the agreement to which the hon. member refers, which is the Great Lakes Water Quality Agreement of November 1987, in which it states under Article 2, Purposes, Part A: "The discharge of toxic substances and toxic amounts be prohibited and the discharge of any or all persistent toxic substances be virtually eliminated".

March 6, 1991
Oral Questions
That is the same terminology which the minister used yesterday.


Mr. Ross Harvey (Edmonton East):: Mr. Speaker, I have a supplementary for the Prime Minister. In December, the green plan promised to almost double funding for energy conservation and alternatives. But last week the energy, mines and resources estimates cut funding for energy efficiency and alternatives for the seventh year in a row.
My question to the Prime Minister is: How does the government plan to restore the promised funding and thus avoid the impression of deceitful opportunism?


Mr. John A. MacDougall (Parliamentary Secretary to Minister of Energy, Mines and Resources):: Mr. Speaker, if you are a socialist in this country, you spend. If you want to deal with the reality, you work in co-operation with the industry, with the provinces and with the federal government. This is what this government is doing.
We are doing our utmost to co-operate and work with all on a future energy policy that will be unique for all Canadians.


SOFTWOOD LUMBER INDUSTRY
Mr. Reginald Belair (Cochrane-Superior):: Mr. Speaker, my question is for the Prime Minister.
For the last four years, we have all witnessed rampant sawmill closures, causing thousands and thousands of layoffs across Canada. The Canadian Lumbermen's Association puts the blame for this squarely on the softwood lumber export tax. The Canadian high dollar also serves to aggravate the situation. Lumber exports to the U.S. are practically nil.
Will the Prime Minister, in his meeting with President Bush next week, indicate to him that Canada is planning to cancel the softwood lumber agreement?


Hon. John C. Crosbie (Minister for International TVade):: Mr. Speaker, as the hon. gentleman should know if he reads the papers, we have been busy for a number of months in preparing our position so that we can approach the United States in order to discuss and, hopefully, have some action taken in connection with the memorandum of understanding on softwood lumber
entered into in 1986. Conditions since then have changed excessively.
Our position is not made any easier, of course, by the fact that the province of Ontario has never taken any replacement measures in connection with that memorandum of understanding, but rather continues to allow a 15 per cent tax to be imposed in connection with lumber exports from Ontario.
We have met with the Government of Ontario, the Government of British Columbia and other governments and we will be pursuing this matter in the coming months. It may well be, at some time, we will be calling on our Prime Minister who, because of his excellent relationship with the United States, I have no doubt will be very helpful in this matter.


Réginald Bélair: Mr. Speaker, indeed, I do read the newspapers. In the March 4 edition of a national newspaper, the reporter wrote: "Mr. Crosbie is not hopeful he can persuade Washington that changes are needed."
Will the minister finally realize and acknowledge the dramatic extent of the damage done to the softwood lumber industry and when will he finally stand up to the Americans and cancel the agreement?


John Carnell Crosbie: Mr. Speaker, I wonder if the hon. member has ever thought about this situation: What would our chances be if we had in power today or in the near future, members made up of his own party who have made their career on anti-Americanism and in trying to aggravate and irritate our next door neighbours? Luckily, he has in power a government which has a chance of success in this matter. There would be no chance if his own party was in power.


GOVERNMENT SPENDING
Hon. Roy MacLaren (Etobicoke North):: Mr. Speaker, my question is for the Minister of Finance.
One of the many aspects of the recent budget which has not been explained is the legislated limits on government spending of 3 per cent over the next five years.
Presumably this legislation can be repealed at any time during those five years. Can the minister explain what will prevent the government from simply altering its own legislation in the future? What does the government
March 6, 1991

seek by these legislative spending limits that it could not equally achieve by its own budgetary measures?


Michael Holcombe Wilson: Mr. Speaker, we have been able to demonstrate, over the past six and a half years, a spending discipline by holding our spending to a rate of growth of 3.7 per cent.
I think it is important for the Canadian people to have confidence that the spending record can continue and that is why we believe it is important to give Canadians that confidence by legislating the spending limits. In that way, they can be assured we can get our deficit down, we can take the pressure off interest rates and we can help the growth in this economy.
My friend asks what is going to stop another government in the future from changing these legislated limits? What will stop governments from changing these legislative limits is if the Canadian people put a priority on maintaining those limits and indicating clearly to their members of Parliament the importance they attach to that because we have seen from the past that excessive spending has resulted in increased taxes. What we want to do with this law is avoid that in the future.


Roy MacLaren: Mr. Speaker, the minister is introducing legislated limits at the very time the United States is giving up such broad measures. It is another part of the budget that has been unsubstantiated by any backup material.
Let me ask this. The minister has said in his budget that he will keep interest rates at an average of 9.5 per cent this year, almost exactly what they are today. This means that Canadian interest rates will continue to be much higher than those in the United States. How then does the minister believe that the Canadian dollar will decline to more realistic levels? How can the minister promise export-led growth when the Canadian dollar will remain at inflated levels?


Michael Holcombe Wilson: Mr. Speaker, my friend has talked about the Gramm-Rud-man targets in the United States. There is a fundamental difference between the approach that we are taking in Canada and the approach that they took under Gramm-Rudman. In Gramm-Rudman the targeted deficit objectives were based on assumptions of growth and interest rates. Our spending targets are based on precise num-
Oral Questions
bers. So there is a fundamental difference in the discipline that will be applied to government spending.
My hon. friend asks about the interest rate projections. As he pointed out it is 9.5 per cent for this year. We are at about 10 per cent now in the commercial paper interest rate. I believe that we can achieve that 9.5 per cent, as do I believe most other people in the financial markets who have commented on that projection. That will allow us to generate the growth, generate the possibility as well for achieving the 9 per cent interest rates for next year and that will allow a continuation of that growth. It is on that basis that we can see a good recovery starting in the middle of this year.


Mr. John R. Rodriguez (Nickel Belt):: Mr. Speaker, my question is for the Minister of Finance.
In the recent budget there was a cut in the federal government's share of medical care spending for next year in the amount of $1.1 billion, which is exactly the amount it cost the federal treasury for letting business executives write off their free martini lunches and entertainment.
The minister had a choice. Will he stand up and tell Canadians why he, Michael Scissorhands, chose to keep the executive tax deduction?


Michael Holcombe Wilson: Mr. Speaker, I have been called a lot of things.


Martin Brian Mulroney: That is one of the nicer ones.


Mr. Speaker:: Perhaps, the hon. minister could answer the question.


Michael Holcombe Wilson: Mr. Speaker, I thought you were going to call me Fidel, after the long speech.
In response to the hon. member's question, I have given this response to him on a number of occasions in the past. We have a tax system in Canada that we must maintain in a competitive way with those of other countries, in particular, the United States. This particular element of our tax system is directly comparable to that in the United States. It is done that way to ensure that the people who are generating business in Canada, salesmen who are generating business in Canada, are not going to be put at a disadvantage in relation to their counterparts in the United States, who are also trying to

March 6, 1991
Oral Questions
generate business. They want to create jobs in the United States and we want to create the jobs in Canada.


An hon. member:: You could create jobs by spending that $1.1 billion on health care, as well.


An hon. member:: Right on.


SALES TAX REBATES
Mr. Bill Blaikie (Winnipeg TVanscona):: Mr. Speaker, my question is for the Minister of National Revenue, who will be aware of allegations about a tax scam made by CBC Winnipeg to the effect that a little-known 1986 ruling by his department is allowing businesses to keep rebates of overpayments of the federal sales tax instead of passing them on to customers.
People who have come to know about this rule are alleged to have been taking great advantage of it. A1986 letter by the Minister of Finance, also quoted in the report, said that such rebates would be an unacceptable windfall for these companies if they did not pass on the rebates to their customers.
What is the government policy with respect to these rebates? If the policy is that these companies be allowed to keep such windfalls, what on earth is the rationale for this, and will the same danger be allowed to obtain with respect to overpayment of GST?


Hon. Otto Jelinek (Minister of National Revenue):: Mr. Speaker, first of all the passing on of the profits is between the business and their clients, but I am delighted to have the opportunity to respond to this question.
As the hon. member knows, the federal manufacturers' sales tax had not one loophole or exemption of this sort but had in fact 22,000 exemptions and loopholes. It is for that reason that this government chose, instead of trying to fix one or two of those loopholes, to eliminate all of the 22,000 and replace them with a fairer tax like the GST.


SPICER COMMISSION
Hon. Jean Lapierre (Shefford):: Mr. Speaker, my question is directed to the Prime Minister. The Prime Minister, who today is quite content to let Commissioner Spicer squander $25 million in our daycare centres, is the same guy who in 1984 condemned as "scandalous" the abuse at the Canadian Unity Information Office. He said a Tory would never do that. Tbday, in 1991, the same Prime Minister, with the approval of the President of the Treasury Board and the Fred Flintstone of Canadian politics, the Minister of Industry, Science and Technology, is busy setting up the same Canadian Unity Information Office he himself condemned and abolished in 1984. I want to ask the Prime Minister: What is the difference between a red scandal and a blue scandal?


Martin Brian Mulroney: Mr. Speaker, I am surprised at the hon. member's comments, because he started off by saying the Spicer Commission squandered $25 million in our daycare centres. I think you will agree, Mr. Speaker, that my hon. friend has a problem. Even when he has an excellent point to make, he exaggerates his case to the extent that no one can believe or understand him. Because $25 million in our daycare centres is entirely false. His statement that there is another commission on Canadian unity is false as well. And add to this his negative remarks about the Minister of Industry, Science and Technology, a real Quebecer, whose courage and dignity are admirable a truly great Canadian!


Some hon. members:: Hear, hear.


Mr. Speaker:: The hon. member for Shefford, on a very short supplementary.


Jean-C. Lapierre: Mr. Speaker, if his big proud Canadian says he is right, it is probably because he is counting on the impact of advertising and propaganda. Consequently, I want to ask the Prime Minister this: Will the Prime Minister say before this House, since his party recognizes Quebec's right to self-determination, whether he is prepared to let his government abide by Quebec's referendum legislation?
March 6, 1991


Mr. Blais:: Where were you in 1980?


Jean-C. Lapierre: Mr. Speaker, the minister there disturbed the Prime Minister-


Mr. Speaker:: I think the hon. member asked his question. The Prime Minister has the floor.


Martin Brian Mulroney: Mr. Speaker, I had trouble following the hon. member's agitated train of thought. If the hon. member is asking whether the government and the Parliament of Canada will take appropriate action with respect to any attack on or threat to Canada's unity, the answer is of course yes. We are all Canadian citizens. Your yourself are, fortunately for your sake. You enjoy the legacy of an extraordinary country. You are a Canadian Citizen. Are we going to defend the integrity and unity of Canada? This is one of the most spectacular countries in the world, and anyone with any sense at all would see it as his duty and privilege to defend such a magnificent country!


Some hon. members:: Hear, hear.


Mr. Speaker:: The hon. member for Winnipeg South Centre on a short question.


CORE AREA INITIATIVE
Hon. Lloyd Axworthy (Winnipeg South Centre):: Mr. Speaker, I have a question for the Minister of Western Diversification.
With the announcement this week that the core area initiative, a very vital economic development agreement for the province of Manitoba, will only be extended for one year without any further funding, it appears the government has given in to the troglodytes in its caucus who have been calling for the extermination-


Mr. Speaker:: I would say to the hon. member that given the time I am doing the best I can. I asked for a short question.


Lloyd Axworthy: Will the minister say today that he is prepared to reject this kind of negativism and have the federal government once again participate in this very important development?
Oral Questions


Hon. Charles Mayer (Minister of Western Economic Diversification and Minister of State (Grains and Oilseeds)):: Mr. Speaker, the hon. member uses some pretty strong language when he talks about extermination. Any of the discussions we have been holding with the various parties have been very rational, very lucid and very helpful.
I want to suggest to the hon. member that he stop using such extreme language, because we are in consultation, as I said, with the parties involved, trying to work out something that makes sense from all points of view to continue supporting that area of Winnipeg in a manner that makes sense for future needs, and that he stay away from this extreme language. It doesn't help any.


Mr. Speaker:: The hon. member for Winnipeg St. James on a straight question, very short.


AIR CANADA
Mr. John Harvard (Winnipeg St. James):: My question is for the Minister of Transport.
Air Canada confirmed with my office today that 64 non-unionized jobs will be wiped out in Winnipeg. Some 45 have already gone; 19 more will go next year.
I want to remind the minister of the commitment that was made by the government two years ago with respect to privatization of Air Canada.


Some hon. members:: Question, question.


Mr. Speaker:: I ask the hon. member to put his question.


John Harvard: The question is: Why won't the government stand by its commitments?


Hon. Doug Lewis (Minister of TVansport):: Mr. Speaker, Air Canada is now a private corporation and has to operate in the accordance with the revenues it gets in and the expenditures it must make.
Before it was privatized it had the benefit of being a Crown corporation. Taxpayers are no longer supporting the company. It is expected to make a profit and therefore, as my hon. friend knows, has to operate on that basis.

March 6, 1991
Routine Proceedings POINT OF ORDER


Mr. David Dingwall (Cape Breton-East Richmond):: rise on a point of order, Mr. Speaker. I am wondering if the Chair could perhaps be somewhat helpful.
Has the Chair contemplated, for the foreseeable future, that it might provide some guidelines with regard to Standing Order 31, and particularly Question Period vis-a-vis the number of questions which have been allotted to the Official Opposition, the New Democratic Party, and of course the Independent members in this House, as well as the timing of the answers which are being given by ministers opposite?
I do not wish to belabour the point in terms of a lengthy debate today, but I am wondering if you would perhaps reflect upon that suggestion and either we could pursue it on the floor of the House of Commons with all members participating or, again, we might have an opportunity to discuss this in detail with the respective House leaders.
There is some frustration by members, which I am sure you can appreciate, and I think it would be important to have this matter veiy clear so that all will understand and be able to abide by your rulings.


Mr. Speaker:: In response to the hon. member from Cape Breton-East Richmond, of course I am prepared to discuss these matters at any time with members of the House.
The hon. member raises the suggestion that perhaps some discussions could take place among all members of the House, and I of course would be very pleased to attempt to facilitate that.
I have to say to hon. members that there is only 45 minutes in the Question Period. There is more competition for questions than perhaps there ever has been in the history of the country.
It is not an easy task to deal with these matters every day as evenly as one would like. One hopes that over a number of days they work as evenly as is fair.
However, I certainly will accept the hon. member's comments. I would hope that he would begin some discussions immediately with some of his counterparts, and then of course I would be very pleased to meet with members.



ROUTINE PROCEEDINGS


John Carnell Crosbie: Mr. Speaker, I have the honour to table, in both official languages, the first annual report on Exports of Military Goods from Canada for the year 1990.


PETITIONS
Mr. Jim Hawkes (Calgary West):: Mr. Speaker, pursuant to Standing Order 36(8), I have the honour to table, in both official languages, the government's response to 49 petitions.
In passing, and following up on the member from Cape Breton, I would be only too happy to commend the British precedent to the House for its consideration in the context which was raised by the member.


PRIVILEGES AND ELECTIONS
[Stage Direction]
24TH REPORT OF STANDING COMMITTEE
Mr. Chuck Cook (North Vancouver):: Mr. Speaker, I have the honour to present, in both official languages, the 24th report of the Standing Committee on Privileges and Elections in relation to the November 6, 1990 order of reference from the House relating to the entire matter of the demonstration held in the public gallery on Wednesday, October 17, 1990, which is perhaps better known as the macaroni affair.
The report does not recommend that any specific action be taken with respect to the participants in this
[Editor's Note: See today's Votes and Proceedings.]



March 6, 1991

incident. However, the committee does recommend that any demonstrations or disturbances that take place in the galleries in the future should be taken very seriously so that demonstrators understand there are sanctions that will be applied and they must be sure they really feel strongly if they wish to demonstrate.


CORPORATIONS AND LABOUR UNIONS RETURNS
John R. Rodriguez: for leave to introduce Bill C-349, an act to amend the Corporations and Labour Unions Returns Act (salaries).
He said: Mr. Speaker, the purpose of this bill is so that those corporations that report under the Corporations and Labour Unions Returns Act would in fact report, and such report would be public to Canadians for all to see what are the salaries paid to its officers.
At the present time, one has to go into the United States of America to get that information.


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

Mr. Jack Whittaker (Okanagan-Similkameen-Merritt):: Mr. Speaker, it is my pleasure to rise under Standing Order 36 to present a petition with respect to the cutbacks in VIA Rail service.
The petitioners in this particular case state that the rail services carried on by VIA Rail are an essential means of transportation for many Canadians and that the cuts the government has made in the subsidy to VIA Rail will result in serious reduction in rail passenger service in Canada.
Among other things, they are asking Parliament to maintain VIA Rail, Canada's present national network; to upgrade VIA Rail with new equipment; and to give VIA Rail a sufficient budget to maintain its national mandate for passenger service.
Routine Proceedings


John R. Rodriguez: Mr. Speaker, I have the responsibility and the privilege to present a petition under Standing Order 36.
This petition is signed by 600 employees of the Sudbury Taxation Data Centre. These employees object to the fee for parking at the Taxation Data Centre.
In their petition, they point out that many of the employees live outside the city of Sudbury, that there is no public transportation to bring them into the city, and that they have to use their own cars.
The petitioners point to the lack of any day care facilities at the Taxation Data Centre. They also point out that the practice in the immediate area of private sector employers is not to charge for parking.
They therefore ask Parliament to instruct Treasury Board to exempt the Sudbury Tkxation Data Centre from its paid to park policy.


Mr. Jesse Flis (Parkdale-High Park):: Mr. Speaker, pursuant to Standing Order 36, I have the honour to table petitions from petitioners from Brampton, Mississauga, and the Toronto region.
The petitioners believe that Marie Sklodowska Curie's discovery of radium, being twice awarded the Nobel Prize and being the first woman to win a place in the history of science, deserves to be recognized by Canada.
We further believe Marie Sklodowska Curie, a great woman, must be honoured for her scientific contribution to humanity and that the gift of discovery of radium to heal the sick of the world deserves to be recognized by Canada by issuing a commemorative stamp on the occasion of the 125th anniversary of her birth, November 7, 1992.


Mr. Rene Soetens (Ontario):: Mr. Speaker, pursuant to Standing Order 36, I have the pleasure to present two petitions today.
The first is from quite a number of constituents in and around the greater Toronto area. They are concerned that there are many citizens who are affected by various

March 6, 1991
Routine Proceedings
food allergies. They also cite that restaurants and food packages are not required to disclose the contents within food.
The petitioners therefore call upon Parliament to enact legislation amending food and drug regulations in order to require manufacturers to list specific food ingredients and additives used in prepackaged foods in place of general classification now permitted. Further, require restaurants and food retailers to provide, on demand to customers a list of all food ingredients and additives in prepared food.


René John Soetens: Mr. Speaker, my second petition is again from a number of constituents.
In this case the petition concerns the Senate of Canada and it reads that the Senate now performs no useful function, is completely partisan and has proven after many efforts to be impossible to reform.
The undersigned request that Parliament abolish the Senate. I submit these two petitions.


Guy St-Julien: Mr. Speaker, I wish to table, pursuant to Standing Order 36, a petition from residents of Riviere-Heva, Amos, Malartic, Val-d'Or, all in Abitibi, who insist that the Government of Canada drop its plans for the development of Parliament Hill, which would cost $68 million and involve building a parking garage and shopping centre under the Parliament Buildings, and that the government acknowledge the need for preserving the natural environment and historical character of the Parliament Buildings and Parliament Hill in Ottawa.


Iain Francis Angus: Mr. Speaker, pursuant to Standing Order 36, the attached petition is certified correct as to form and content by the clerk of petitions.
It is signed by approximately 600 residents of the communities of Kenora, Upsala, Thunder Bay, Kaminis-tikwia and Keewatin, Ontario, all of which lost VIA Rail services well over a year ago.
The petitioners humbly pray and call upon Parliament to support the NDP plan to restore VIA Rail services cut on January 15, 1990; to maintain and, where appropriate, upgrade remote services on which many Canadians rely; to provide a legislative mandate for VIA Rail; and to make available to VIA the resources which it needs to become a modem passenger rail system in a class with those throughout the rest of the western world.
I might add that this campaign was endorsed resoundingly by 1,800 delegates to the Ontario NDP Convention this past weekend.


Mr. Nelson A. Riis (Kamloops):: Mr. Speaker, it is a delight to present a petition on behalf of a number of constituents from Kamloops, pursuant to Standing Order 36.
In their very optimistic way they point out that in spite of the fact that the GST is a reality they feel it is an inappropriate tax and a very unfair tax, and they are asking the government to reconsider it.


QUESTIONS ON THE ORDER PAPER
[Stage Direction]
(Questions answered orally are indicated by an asterisk.)
Frederick James (Jim) Hawkes: Mr. Speaker, Question No. 436 will be answered today.


Mr. Murphy: Are there any ministers who have dedicated telephone lines to (a)
persons (b) organizations outside the government and, if so, (i)
which ministers (ii) to which persons or organizations (iii) for each
minister, what is the cost?


Mr. Albert Cooper (Parliamentary Secretary to Leader of the Government in the House of Commons):: No.


The Acting Speaker (Mr. Paproski):: The question as enumerated by the government Whip has been answered.


Frederick James (Jim) Hawkes: I ask, Mr. Speaker, that the remaining questions be allowed to stand.


The Acting Speaker (Mr. Paproski):: Shall the remaining questions stand?


Some hon. members:: Agreed.
 * *


Frederick James (Jim) Hawkes: Mr. Speaker, I would ask that all Notices of Motions for the Production of Papers be allowed to stand.


The Acting Speaker (Mr. Paproski):: Shall all Notices of Motions for the Production of Papers stand?


Some hon. members:: Agreed.



GOVERNMENT ORDERS


[Stage Direction]
The House resumed from Tbesday, March 5, consideration of the motion of Mr. Wilson (Etobicoke Centre) that Bill C-97, an act to provide borrowing authority, be read the second time and referred to Standing Committee on Finance.
The Acting Speaker (Mr. Paproski):: When we ended debate last evening, the hon. member for Eglinton- Lawrence had finished his 10-minute speech, plus his five-minute questions and comment period.
I will now go to the hon. member for Thunder Bay-Nipigon.


Mr. Joe Comuzzi (Thunder Bay-Nipigon):: Thank you, Mr. Speaker, for allowing me this opportunity to make the comments on not only the budget that was presented last week in this House, but also the expenditures that are before us.
I spent the weekend in the riding of Thunder Bay-Nipigon conversing with many groups concerned about the progress and the direction that this country is facing. Some of the groups that I met with-and they were diverse-were from the ethnic communities, particularly the Lithuanians who were celebrating a particular event of freedom on Sunday. I spoke with some university
Government Orders
students who were concerned about the direction that this country is taking. I also spoke at one of the municipal conferences with a very important segment of our community today, that is, the mayors and reeves representing all of northern Ontario.
I said to those mayors and reeves that they may be the politicians who are most vulnerable in this next period of time. What we are seeing in Canada is a transfer of responsibility for all the obligations that most Canadians have come to expect. We are seeing this government transferring its responsibility from the federal government to the provincial governments and, I am sure, in turn to the reeves and mayors of the municipalities not only in northern Ontario, but throughout this country.
The crux of this is going to be that the municipal politicians, who deserve a great deal of respect for the work they do within their individual communities, are going to be the ones who are faced with the very hard decisions which I suggest this government should have taken. It should have taken the onus of responsibility off those municipal councillors.
What I heard from all of these different sources with respect to how the affairs of this country are being administered was: How can we possibly keep spending more than we take in? Other comments were: How can we run this government by continuing to go into a deficit, into a deficit, into a deficit, without ever having an accounting and without ever having to say to the Canadian people that it is time to catch up?
Other words I heard were: How can we continue to mortgage, not only first mortgage but second and third mortgage, the future of this country to our children and to our grandchildren, when there are absolutely no assets left in this country to mortgage at this time?
The fact of the matter is simply this: since 1984, since this government took office, the debt in this country was $140 billion. That is nothing to be proud of, but it was $140 billion and it was in serviceable and manageable proportions.
We were told and the Canadian people were told that this government which was elected was going to be able to cope not only with the debt, to bring the debt under control and to reduce the debt, but it was going to take into account the annual deficit. At that time it was around $34 billion. It was going to take the annual

March 6, 1991
Government Orders
deficit, reduce it accordingly, and get the financial affairs of this country under some kind of control.
Let us just look and see what happened in the last seven years. The debt is no longer $140 billion, it is now just a little over $400 billion, an increase of $260 billion in seven years. To service that debt in 1984 took about 12 per cent of the federal budget. Now it will be demanding at least 40 per cent of all the money taken in by the federal government.
We were also told in 1984 and again in 1988 that we have to bring our deficit under some kind of control. As we all know, the deficit in those years had been running at approximately $30 billion. What is the budget and what is the deficit that is presented to this House of Commons in the last period?
The deficit has not been reduced one iota. If anything, it has increased, in spite of the fact that this country has experienced seven years of the greatest industrial economic growth that any country in the world has seen. We have increased our taxes at least 17 times. We have almost doubled the amount of revenue brought into the federal treasury and yet we still end up with a deficit of over $30 billion. That is not responsible government and that is not fiscal management.
I am sure that the people of Canada will respond to that at the appropriate time.
Let us talk about some of the details of the budget. The word that I think is so important and the word that really hurts is that the government has brought this country into a recession and the correlative function of a recession, and that is the corresponding unemployment that all Canadians will be experiencing.
This government says freely that it is willing to live with unemployment figures in excess of 10 per cent. This is not acceptable. What it has failed to do, and the operative word which I think is lacking in this budget, is a word that we have heard so much about in the last little while on the international scene and that is linkage. What this government fails to do is link that employment statistic with not how are we going to treat those who are unemployed because of the recession that it has created, but how we are going to correct the problem of unemployment in this country.
The government has failed to link the means to create jobs in this country. I mean simply this. Since 1989, every job that was created in Canada was created by a small business venture. In 1990, that fact presented itself again and, in 1990, every job that was created in this country was created by a small business venture.
What has this government done with respect to small business and the linkage that I talked about? It has not helped small business in this budget. It has done nothing to assist the small businessman so that he could go out in the marketplace and create those jobs that are so vital to the future of this country.
What this government has failed to do is link the problem of unemployment with the problem of how to eliminate that 10 per cent or 11 per cent of unemployment, that linkage that is so necessary. Not only has the government failed to address the linkage, but it has also added to the problem of the small businessman by adding to his expenses, by adding another 24 per cent to his costs of operation, so that it is not only unfair, but it is really and truly an added expense the small businessman can no longer tolerate.
It is unconscionable how the government has avoided the responsibility of helping small business in this country.
I would like to enlarge a bit on larger businesses and some facts which I think are very important and which this government absolutely fails to realize. I hope in every response that I am able to give in this House, I will be able to bring the strongest message I can to the Canadian people and to this government. They are facts which I think we should always bear in mind, and it is perhaps one of Canada's best kept secrets, that forestry is the largest single industry in Canada. It is larger than the automobile and the petroleum sectors combined.
Forestry provides employment to 8 per cent of our Canadian labour force. It supports 900,000 forestry manufacturing and service jobs. One out of every seven manufacturing dollars in Canada is related directly to the forestry industry. It contributes more than $17 billion to Canada's net trade balance, which exceeds that trade balance created by agriculture, fisheries and mining combined.
Forestry accounts for close to $2.5 billion in trade within our country alone. Despite these impressive figures, they do not for one minute reflect what this

government thinks about the forestry industry. It has absolutely forgotten that the forestry industry exists.
Proof of that point is the 15 per cent export tax which is killing, not only the industries I represent, but industries my friends here represent in the softwood lumber industry. It is also starting to have an effect on those industries in British Columbia, in Alberta and our friends in the province of Quebec.
A reduction or elimination of the 15 per cent export tax, if this government was serious about helping Canadians, would not cost the taxpayers of the country one cent to eliminate. The government could eliminate that 15 per cent export tax simply by negotiating its way out of it with our friends in the United States and saying that it is no longer going to be operative.
The memorandum of understanding would be eliminated and section 9 would be invoked 30 days from now. It would give the forestry industry, at least, the opportunity to compete, not only within Canada, but in the United States on an equal playing field so that our forestry, our sawmills and all of those industries that are so important in this country at least have the fair opportunity to compete and be part of this economy.
I appreciate the opportunity of speaking on certain issues that this budget fails to address. I think it is important to address some of the issues that the budget did not address as issues that it did address.


Mr. Rex Crawford (Kent):: Mr. Speaker, I would like to commend the hon. member on a very sincere and factual speech and ask him a question pertaining to welfare in his riding.
He mentioned that he had been meeting and talking with the mayors and reeves. Being a past reeve and very interested in what is happening to different areas concerning welfare, I was wondering if he had any figures. At the present time in my riding of Kent, the county will have to raise the taxes 24 per cent to cover the welfare payments.
I was wondering if the hon. member could give me any figures from his riding of the situation since the transfers.


Joseph R. (Joe) Comuzzi: I thank my colleague from Kent for asking that question. I will say at the outset that I do not have the actual figures as to the increase in the welfare
Government Orders
payments that are necessary for all the communities in this country.
Having listened at that particular session in northern Ontario to all of the mayors and the reeves, they were absolutely and totally incensed that senior levels of government, both provincial and federal, would insist and persist in passing legislation that imposed the responsibility for payment on the municipality.
I have no problems with the social welfare system. But you cannot dictate the social welfare system in this country unless you are willing to contribute to its payment. To say how you are going to administer the welfare payment, hospitalization or aid to education or aid to post-secondary education without contributing any funds toward it is not being a responsible government.
I appreciate my friend's question. What I heard was that we can no longer legislate responsibility and leave the responsibility for paying for these programs to the municipality, to the real property owner, to the lowest level of government in this country in order to look after the needs we say are necessary. In my best judgment we have to have the responsibility and the integrity to say no, we cannot afford that program, and it should be done at this level of the government.


The Acting Speaker (Mr. Paproski):: Questions and comments are now terminated. Debate, the hon. member for Delta. Is the hon. member for Delta going to take the 20 minutes plus 10?


Mr. Stan Wilbee (Delta):: Yes, Sir. Mr. Speaker, I certainly enjoyed listening to my colleague across the aisle as he was telling us his views. Yet I am surprised that he can come up with these figures when you consider the source of this debt we are dealing with today. I must confess I am unhappy about standing up and talking about borrowing money. It is contrary to anything that I believe in and I believe that most Canadians feel that way; that we have to borrow money in order to pay our bills in this country that is so rich in resources, rich in manpower. We have so many things going for us to see the situation that we are in.
Basically what this bill is doing is asking permission to borrow for this year $26.4 billion for the 1991-1992 fiscal year. This amount is equal to the borrowing requirements of $23.4 billion comprised of financial requirements estimated for 1991-1992 of $21.6 billion in

March 6, 1991
Government Orders
exchange fund account earnings of $1.8 billion and a $3 billion non-lapsing reserve to cover contingencies.
This is essentially the same type of thing that we have been borrowing for the last three or four years.
The previous speaker talked about the size of the debt when our government took over. We need to recognize that at the present time 80 per cent of the present debt is due to compounded interest on the debt which we acquired from the previous government.
My comments today are going to be primarily concerned with the government's plan to control that further debt, to control the deficit, and to look at the long-term financial interests of our country.
Since coming to office in 1984 this government has indeed waged a war against the deficit and attempted to restore the health of Canada's finances. Yet, I have not heard at any time any assistance offered by the opposition to cut our spending. Discussion of increasing taxes was immediately said to be wrong, that we could not do it. Any change in our assistance to business such as free trade was decried as something that was disastrous to the country.
I think that this government has been alone in the country in itself in assuming a responsible position. Many people know that last fall I had some problems with my own party and one of the major reasons was that I felt that we were not being tough enough in our financial situation.
When this budget came out I was delighted to see that we were not only dealing with the present situation but also that we were looking forward to the future. I have children, I have grandchildren, and I certainly hope that I will see my great-grandchildren, but I am concerned- and one of the reasons I went into politics was because of the financial situation that our country was facing. The best thing that any government in Canada can do at the present time is stop the debt from dragging down the economy. That means dealing with our annual deficit and getting our spending under control so that we are paying for what we are buying.
Any of our deficit reductions, any of our programs that will balance our budget, will certainly have my support.
I think all Canadians recognize the seriousness of the debt. They recognize that each one of us has to play our own part in solving this problem. It is not something which government can do alone. I think that Canadians want to know that government is doing its part to control expenditures and that each Canadian is getting a fair shake. What the government has done in this budget is to present a program in which everyone is carrying their fair share. In the 1989 budget, I believe the government presented a medium term fiscal plan. What I think we have done this year in the 1990-91 budget is start to look at the long term. I think we are reaffirming the things that we started back in 1984.
If we do have a fault, it is that we did not do more sooner. I would certainly have liked to have seen us take a better grip on that deficit so that our debt today would not be what it is at the present time.
We recognize too at the present time there are people in Canada who are in trouble. We recognize that our western farmers need aid. We recognize also that because of the temporary recession that those who are unemployed need assistance at this time, so the government has seen fit to increase expenditures in these areas of the budget. Also, the disabled are going to receive more benefits. There are going to be tax breaks for employers who make it easier for the disabled to work and to take part in Canadian life.
This country has been living beyond its means for the last two decades. We have been spending more than we have been taking in. In 1984 when this government took over the government was spending $1.33 for every $1 that it was taking in in taxes. In other words, every year we were spending 33 cents more on each $1. We recognize in our own budgets at home that there was no way that this could carry on and we are now reaping the adverse effects of that.
My friends opposite say: "You should have cut the deficit sooner". Yet we recognize that while they were in power that the size of the civil service was growing at 12 to 15 per cent a year. The budgets were growing at the same rate. It takes time to turn that around.
March 6, 1991

We are all aware of a great ocean liner or an air ship that you cannot just all of a sudden reverse these things and expect them to go in the opposite direction. I think that this is also true of government where programs and initiatives have been introduced, that you cannot just abruptly stop them without dislocating the economy. What we have been doing and we will continue to do, and I think at an even greater rate, is to solve these problems to turn the economy around and bring our country back to prosperity.
My friend across the way mentioned that the debt was $400 billion now. The fact is that it is not quite that bad but at some time during the year indeed it is going to reach the level of $400 billion or interpreted in another way, $15,000 for every man, woman and child in Canada. The interest alone on this debt, $43 billion, is unavailable for good programs and services in Canada. It is more than we spend on old age security, unemployment insurance and family allowances combined. We recognize what a crippling effect this has on the welfare of our country.
In this budget also the government is asking Canadians to share the burden. We as politicians are being asked. The Prime Minister's budget is being frozen. Cabinet ministers' budgets are being frozen. Senior civil servants are being reduced in number. This is not a particular group of Canadians that is being singled out but indeed all Canadians. As we mentioned earlier, there are exceptions. Those in need, those in times of need have been exempted from this program and we commend the government for that very human attitude.
If the government does not take these steps of fiscal responsibility of limiting expenditures, of limiting transfers to provinces where they can spend federal funds without any responsibility, if we do not do these things then that deficit is going to increase more and more as it has in the past.
We recognize that this government has reduced the deficit by about $10 billion. This year the deficit will be $30.5 billion. They say that this was far above the predictions of finance minister. He could not always predict the problems that western farmers have had, the $2.5 billion which was required to assist them. We just could not see those western farmers left alone. We could not foresee the funds that were required to assist our troops in the Middle East and to assist our allies and to make sure that Canada took its fair share of that
Government Orders
responsibility. Also, the unemployment insurance fund has required more funding than we had expected.
All of these problems have helped to increase that deficit which all of us are sorry about. We recognize that in the next year it will be similar, but after that we will soon start to see the deficit being reduced. This is what we are looking for, so that in the following year the deficit will be down to $25 billion and in 1994-95, in that area, the government will no longer have to bring forward these borrowing bills. We will be able to pay our way and that will be a day of great rejoicing for Canadians everywhere. I am sure they will recognize responsible government when they see it.
One significant thing the government has done is to control the growth in program spending which will be held to an average of no more than 3 per cent annually in the years after 1991-92, owing to an extension of the two-year expenditure control plan.
Also, the government will continue to limit the transfers of payments to provinces, the wealthy provinces, whereas those in need, the poorer provinces, will continue to receive the present amounts.
As I mentioned earlier, after 1993-94, the federal government will be able to stay out of the financial markets. This will allow interest rates in this country to come down. There will be less competition for the funds available and our own companies and industry will be able to borrow at cheaper rates. They will be able to produce more jobs, more manufactured goods, more services to supply Canadians.
I believe that this government does have a very good plan for economic recovery. I think we are going to continue on with that, to control spending that will help put government finances firmly on a course to a balanced budget.
Also in this present 1991 budget, there are certain other things this government has done. For example, it is going to change the way it manages expenditures. Very shortly the government will be releasing legislation which will impose mandatory limits on annual program spending for the next five years.
The other night one of my colleagues asked the question: What type of legislation is this going to be? I told him at that time that I do not know just what that legislation would be, but it will be constitutional because the budget program spending track will indeed be enforced by law. Flexibility will be confined to a very limited set of contingencies set out in the legislation. It

March 6, 1991
Government Orders
will not preclude new programs to meet new needs. In other words, if something comes up unexpectedly, the legislation will certainly allow the government to meet these needs.
The government is going to have to fund these new programs, but within a total legislated budget. In other words, if we acquire a new program, something else will have to be changed or altered to deal with that.
The other nice thing about this budget that I like and has to do with our deficit is the fact that any revenues from the GST above those projected will make a contribution to deficit reduction rather than provide the leeway for an expansion in discretionary government spending. During the GST debate we heard that the GST is nothing but a cash cow and after another election it will be raised 1 or 2 per cent. This legislation is designed to ensure Canadians that any revenue that comes in from the GST is going to go directly to debt reduction.
Many, many people, many businessmen, many senior citizens, many people on the street said to me: "If we were assured, if you could guarantee that the GST will not be used for further programs and frivolous giveaways, then we will accept and we will be happy to contribute to it".
One of the very positive things in this budget is the concept that any proceeds from the GST will be used for this purpose as well as the proceeds from privatization.
We hope that this program continues so that any funding from these sources will also be used to pay the deficit and the debt.
Also, I have been surprised at the number of people who have come forward with individual cheques and cheques from businesses and said: "We want to contribute to the reduction of the debt." So, this is a possibility where citizens themselves can take those funds and help to reduce Canada's debt.
First of all, of course, these funds would be used to service the debt. It would be nice if we could pay off the interest, but that is not the way finances work. We will
service the debt and then as the income grows and as the deficit reduces, we will be able to reduce the debt per se.
In the combination of this program with the proposed annual spending limits, this fund provides assurance that all revenues from the GST will be used to service and reduce the debt and not to fund new program spending. As I say, the people in my riding have said that this is the type of program that they want.
Another factor that was brought out in this budget which shows the clear goal of the government at this time is to set a very realistic limit on inflation.
The Minister of Finance together with the Governor of the Bank of Canada have set the goal of a 2 per cent inflation rate by 1995. This is certainly a very commendable and achievable goal.
In many years during my medical practice, I have lived and worked with older people. Many people had retired with what they thought was a perfectly adequate pension. It was not long before they were finding that they were no longer able to meet their needs.
As a matter of fact, just last night I was talking to a former patient who had phoned. She was concerned about the effects of the GST on her income. She got a rebate of $72 quarterly, so we know what income level she was in. Her furnace had gone on the hummer, and the washing machine and the fridge had problems. She had had to get these repaired, and the GST on top of the service bill was distressing her a great deal.
As we talked, we talked about her municipal taxes. She said that when she moved into the particular home, her taxes were $1,300. At the present time, they were $3,500. We talked about the price of groceries and the price of everything. She began to realize that it was not the GST that was hurting her, but it was the total cost of living.
In other words, the inflation rate, which had been only 4 or 5 per cent in the past, had been increased by the previous administration up to 20 per cent at times. Was it 15 per cent?
Even 5 or 6 per cent for people on fixed incomes is a disaster. I think this goal of the finance minister and the Governor of the Bank of Canada of 2 per cent is highly commendable. It allows businesses and individuals to
March 6, 1991

plan for the future. I think that that is critical in this very unstable world in which we live.
I believe that we, as Canadians, can certainly look forward to that.
This budget is a plan for economic recovery. I believe that the government is taking the action to establish fiscal responsibility and to strengthen confidence in Canada's future. I think that is something which we all need to know.
By reducing the deficit and controlling the public debt, the plan will help to set the stage for improved economic performance and increasing prosperity. It is something that we can pass on to our children in a country in which they can live, grow and prosper.
We can look forward in the hope that within a few years this borrowing authority such as we have to ask for today will no longer be required, or perhaps be substantially smaller than it is in Bill C-79.
I believe that this is just a small indication of the very positive direction being taken by this government and the benefits of the economy in the budget presented on February 26.


Mr. Joseph Volpe (Eglinton-Lawrence):: Mr. Speaker, after listening to the hon. member's debate on the merits of this budget and the merits of this bill, I wondered whether in fact he had listened to all of the other interventions by other members. One of us last night indicated that perhaps what we needed was a shuttle to go back to outer space and bring the finance minister down to earth because the situation is not nearly as he depicts it.
Quite frankly, we have given indications in interventions over the course of the day, and in the course of the debate over the last couple of days, that the circumstances that the Minister of Finance is describing may be true, but it is equally true that over the course of the last six years, under the administration of both that finance minister and that government, what we have had is an increase in personal income taxes to the tune of 9.03 per cent. We have also had a decrease of some 34 per cent in revenues raised from corporations.
No one on this side of the House is suggesting that that was a problem. What is a problem is the fact that the
Government Orders
finance minister is unwilling to acknowledge that perhaps that kind of largess contributed in any way to the competitiveness of our manufacturers, our corporate sector. Clearly, that has not been the case, because our corporate sector, if we take a look at the bankruptcies and the manufacturers that are moving down south as an indication, is clearly not as competitive as we would want it.
What do we have for that 34 per cent reduction in taxes in the corporate sector? What do we have in terms of a government strategy to make our corporations much more competitive? What do we have in return from the government with respect to making our manufacturers much more competitive on the international trade side?
As a bit of a digression, I remind the hon. member that what has happened over the course of the last six years, under the able administration of this government, is that there has been a 60 per cent reduction in balance of payments and international trade. If in fact Canadians have been asked-and they have been asked-and they have been willingly contributing to the government revenues in order to decrease the deficit and the public debt, then we have a right to ask the hon. member and, through him, the finance minister just how they have been managing our moneys.
I remind him that the interest payments on the public debt have increased by only 6.09 per cent over the course of the last six years. That is a grand total, in absolute dollars, of just over $16 billion. But from increased taxation, both from direct and indirect taxes, there has been a net windfall of some $37 billion.
Canadians have a right to ask: What have you done with that money? How can you, with unmitigated gall, come back before this House and ask us once again to contribute more in taxation and to cut back on programs that are vital to the structure of this country all, always, in the name of saying that we must reduce the deficit and the debt? What have you done with the money that you have taken from us in the last six years? And how can you expect us to believe that you are going to do anything worth while with it now?


Godfrey Stanley (Stan) Wilbee: The short answer to the last part of the question, Mr. Speaker, is that we are paying the debts that they left behind them when they left office in 1984.


Mr. Simmons:: Its not the honest answer, though.

March 6, 1991
Government Orders


Godfrey Stanley (Stan) Wilbee: My mind goes back about six months when I asked the hon. member a question after he had made a similar speech. I asked him to give me a specific way in which his party had helped to reduce the deficit, one measure that they had supported to reduce the deficit, or one tax change which they had supported in any way.
He never did answer the question, in spite of two attempts at pinning him down.
He asked the question about the reduction in corporation taxes. I think if he talks to any of his friends in business, if he talks to any businessmen, he will very quickly learn that businessmen and businesses are paying more taxes than they ever have before. This is one of the real problems that Canadian businesses have, namely, competing with those across the line where they have more beneficial tax structures. Rather than us giving away something and the poor Canadians having to fill in, we hear the opposite side of the story, that by closing the loopholes such as automobiles and cutting down on the luncheon expenses that we heard about earlier, and this type of thing, that indeed these people are spending more and more money in taxes.
If companies are going out of business, it means they are not making any money, and if a business is not profitable it is going to go out, and you cannot tax a company that is going out of business. Therefore, the important thing for Canada is to provide an environment that will encourage business, that will encourage investment, that will encourage the production of jobs which we need.
Somebody said earlier that 90 per cent of the jobs in Canada are from small business. They talk about one or two of the large businesses and the critical thing to me, for Canada's future and prosperity is that small businessman. These are the ones that are going to benefit from the lower interest rates that this budget is going to produce. Canadian business needs to have at the present time the ability to forecast, the ability to predict what next year's needs are going to be, and the ability to have a stable labour force.
It is true that we have increased income taxes, but again, as I say, we had to pay bills, and we still have a deficit in spite of those increased taxes. Therefore, the important thing is to stimulate, to broaden that tax base so that there are more people who are contributing to the economy. Rather than expecting just a few people
and a few businesses to pay the whole shot for the rest of the country, we all have to take our part.


George Albert Proud: Mr. Speaker, I rise today to participate in this debate on Bill C-97. I also want to express some thoughts and concerns that I have on this government's budget.
I believe that Canadians are increasingly worried about the outlook for their future standard of living. This government's budget has not tackled the problems regarding the finances of this country. The budget is a hollow document. Deficit reduction methods used by the government have been, and continue to be, failures.
The economy is in a recession. The government's deficits and debt levels have ballooned so large that they are growing out of control. The Minister of Finance in this budget, just like his last budget, is continuing on course in passing the buck to the provinces. The federal government has simply transferred the federal fiscal problem to smaller governments. The freeze on the Established Programs Financing will substantially reduced funds available to the provinces and by freezing these transfers to the provinces, the government is most definitely destroying Canada's health care and post-secondary educational systems.
Provinces cannot pay for these without federal support. The cumulative effects of the cuts in the EPF transfers to the provinces is estimated at $28.3 billion by 1995-96. Cutbacks in resources of this magnitude are unprecedented in the history of federal-provincial fiscal relations.
Let me be clear. The loss of federal support to the provinces and the municipalities is going to force them either to increase taxes or cut services. I feel strongly that the credibility of the finance minister's plans to bring the federal finances into a balanced situation, continues to be an annual failure.
I want to speak for a moment in my critic's role. The estimates for the Department of Veterans Affairs start with a 29 per cent increase in departmental administration, an unbelievable $8.94 million. Following this healthy increase in administration come cuts in transfer payments to the veterans affairs programs. Grants to health care treatments and related allowances suffered a 28 per cent reduction and economic support programs

were reduced as well. War veterans allowances and civilian war allowances were reduced by 12 per cent.
We must be aware that a freeze should still allow for the annual inflation rate, but instead specific programs were denied this necessary increase and will suffer. Some of these programs are: assistance in accordance with provisions of the Assist and Fund Regulations, the Army Benevolent Fund, the Royal Canadian Legion, Canadian Veterans Association-United Kingdom, Education Assistance to Children of War Dead, University and Vocational Training, Veterans Insurance, and Management of Property Contracts.
Why do these programs not have the standard 5.6 per cent inflation increase?
While veterans' programs are being cut, the departmental administration is on the defensive. The government, in fact, has effectively declared war on its own employees. It has started the scare tactics of labour unrest as each 1 per cent increase in wage settlements could lead to a loss of 2000 jobs.
The government has forced Prince Edward Islanders and other Canadians to fight to maintain a standard of living during this recession. The effects of contracting out and privatizing have eliminated and continue to eliminate federal government positions in the country.
Allow me to provide a clear picture of what is happening in my constituency. The loss of purchasing power due to wage controls will not only add to the unemployment rate of 16 per cent, but as Public Service employees lose purchasing power to rising inflation, their spending will plunge rapidly and small businesses in my constituency, my community will suffer.
The government has now cut the Canadian Jobs Strategy program. The promise of job retraining no longer exists. In a recent survey, 68 per cent of Prince Edward Islanders said they believe unemployment to be the most pressing problem in that province. Only five per cent say the deficit is the most important and another five per cent say the overall economy is the most serious problem.
Clearly, these statistics speak for themselves-jobs, jobs, jobs.
Government Orders
I strongly feel that this budget will not help our country in any economic way. Between April of 1990 and January of this year Canada lost 288,000 jobs, and since the famous free trade deal, in the manufacturing sector Canadians lost 229,000 jobs, and the unemployment rate keeps climbing.
In terms of trade with the United States: after two years of the free trade deal shipments to Canada are up by three to five per cent while Canadian shipments to the U.S. are only up two per cent. Once again, the scales between Canada and the United States are tipped in the United States' favour.
In terms of bankruptcies for the year 1990: a record total of 11,642 businesses and 42,782 individuals filed for bankruptcy; up 47 per cent from the previous year. In January of this year there were 5,999 businesses in personal bankruptcy, this is up 69 per cent from the same time last year.
In terms of the deficit: in spite of six years of economic growth, which the Minister of Finance himself has called extraordinary, and in spite of 33 separate tax increases, the accumulated public debt has more than doubled from $166 billion in 1984 to $351 billion in 1990, and is expected to climb to $389 billion this year. The people are paying the price.
My colleagues and I constantly talk of the reasons why our country is in a decline. It is declining because this government does not believe in its own people. Government cuts to Established Programs Financing in 1986, 1989 and 1990 will reduce transfer payments to the provinces for education by $8.94 billion between 1986-87 and 1994-95.
Again, the people are paying the price. The promises of training and adjustment to free trade have not yet been put in place. The government has cut all of its $2.8 billion contribution to the unemployment insurance program and has cut back its training programs from $2.2 billion in 1984 to $1.5 billion in 1989. Once again, I say, the people are paying the price.


Mr. Peter L. McCreath (Parliamentary Secretary to Minister of State (Finance and Privatization)):: Mr. Speaker, I listened with great interest to my hon. friend opposite as I always do. I wish to raise a question to him regarding veterans, which I know he has a tremendous interest in. He has speculated on the future of veterans affairs. Certainly, he raised the question, in particular,

March 6, 1991
Government Orders
with regards to a decrease in the budget for veterans allowances. He seemed to suggest that this was an inappropriate thing.
It could not help but remind me of the days 35 years ago, during the time of the government of Mr. St. Laurent, when they had horses on the payroll. In this government we do not believe in having horses on the payroll and indeed, we do not believe in having people on the payroll who are not there to receive it.
I think it is obvious, and I am sure my hon. friend would recognize that it is logical, that we should have an annual reduction in its budget simply because a number of those veterans are passing way.
We have in Canada over 600,000 veterans from the three conflicts in which Canada has been involved: World War I and II and Korea. Over 38,000 of those are women. We pay very generous benefits to our veterans, more so than any other country in the world. One in three men in this country over 65 is a veteran.
I think the commitment made by the minister the other day when he, if I may quote from page 17914 of Hansard, said at that time:
-I say to all veterans today that your valuable programs are untouched by this budget. Our level of commitment to you is undiminished. Canada will continue to have the most generous and compassionate veterans' programs and benefits of any country in the world. Do not let the critics make you think otherwise.
My question to the hon. member is: Since he has raised some reservations with respect to the commitment of this government, which I think has been demonstrated to be very positive, I would ask him to bring forth at this time any indication or any evidence he has to suggest that the commitment of this government to our veterans is any less than it should be?


George Albert Proud: Mr. Speaker, I thank the hon. member opposite for his questions and for his comments. Even though the number of veterans are becoming fewer and fewer I believe, as do many people connected with veterans, that the amount of the pensions, that the amount of money put forth by the government and by governments is never enough. I believe there are many more areas the government could be involved in, with benefit to not only veterans but the children of veterans and the wives of veterans who have not been able to qualify for certain things, and that many more programs should be brought about.
I also am concerned, as I spoke of the other day, about the future of this department. I have had many questions from veterans in my constituency and across the country as to what is the future of this department. I was assured by the minister the other day that nothing is going to happen to it in the near future. I certainly hope that is the case.
I do believe that we provide very good programs for our veterans, but we must continue to do this and improve upon it anywhere we can. We must improve for the veterans' families, their children, and their wives and husbands. We have to continue even though the numbers may be decreasing. We must expand the programs and make more money available to them any time we have a chance.


Roger Simmons: Mr. Speaker, I too would like to say a few things about Bill C-97. This bill would enable the government to borrow $26.5 billion. I believe before we allow it to go to the House or take a vote on it, we ought to hear from a number of members around this Chamber about how we feel about the government's budget. I rise in that particular spirit, because I have some fairly strong feelings on the budget of the government this year.
I regret that the gentleman from Delta is not in sight, but I am sure he is within earshot. In responding to my colleague from Eglinton-Lawrence he mentioned that the short answer, in his words, to the question put to him had to do with the legacy of debt, as he characterized it, left by the previous administration.
I am sure that for him, conveniently, that is the short answer. I think he would be the first to agree that it is not the honest answer though, because the honest answer is that the public debt that we are now dealing with is just over twice as much as it was in 1984 when this administration took over.
At some point it seems to me that the government, after six-plus years in office, six and a half years in office, ought to begin taking some responsibility for its mismanagement, for its inaccurate projections, for its wrong guesses.
These are just not words of mine. Let me give you the words of the Minister of Finance, the gentleman who indeed has been the Minister of Finance for this long tiresome, stretch since September, 1984. He has now brought down his seventh budget. Let us have a look at
March 6, 1991

some of his other budgets before we take at face value all the things he tells us with respect to this budget.
For example, in last year's budget, the Minister of Finance forecast that interest rates for last year, 1990, would be 11 per cent. We all know, of course, that he was way off the mark. They were not 11 per cent at all; they were 13 per cent.
Last year, the minister told us that the deficit would fall to $28.5 billion this year. That was his projection just a year ago, that the deficit right now would be $28.5 billion. It is actually $30.5 billion, two billion dollars more.
Let us go back a little further to his second budget, back in 1985. At that time, the minister told us that the deficit for this current year would be $18 billion and, as I just said, of course it is not $18 billion but $30.5 billion. That is a long way off the mark.
You might say that with that kind of lapse in time you can expect some changes. Of course you can. It is not I but the minister who undertook to project in the first place, and he projected five years before the fact what things would be like five years down the road.
We are now down the road that five years, and he is off by a tune of $12.5 billion. That is a fair error. That is a pretty large mistake to make.
I could go on, Mr. Speaker, and tell you about some of the other things that he forecast in previous budgets. Last year, for example, he said that personal income taxes would rise by $4.7 billion. Now he tells us they are going to rise by $7.9 billion.
There is an entire litany here of examples where the minister has said one thing by way of forecast and the reality has proven him to be entirely wrong.
If the minister were wrong only in terms of his ability to predict the future, you could not completely hold that against him. You would, I guess, score him for being so foolhardy as to try and make such precise predictions in the first place but, having made them, he ought to be able to stick by them.
That alone is not his cardinal sin, because we all make some errors when it comes to projecting, predicting, calling the shots on times down the road. But where I believe he is really out in left field, where he has done
Government Orders
something that is completely unforgivable, is in the area of making commitments on behalf of the government and then reneging on those commitments. In so far as my own constituency of Burin-St. George's is concerned, with its 158 communities stretched along 1,800 miles of coast line along the south coast of Newfoundland and up around the western comer, the minister will never, I say to him, ever be forgiven for what he and his colleagues did with respect to unemployment insurance; not only the changes, but the wrecking of the whole concept. He will know what I am talking about.
I am referring, in particular, to the commitment undertaken in this House. I challenge anybody opposite to get up and say this commitment was not made. I can point to the pages and the days in Hansard when it was made. It was made over and over again. The commitment to which I refer is the commitment at the time when the government wanted to keep its own troops in line to get Bill C-21, the UI bill, through this House last year. The commitment was made and repeated many times, that the benefactors of this program, the recipients of the UI, would not be asked to bear an unconscionably high increase in rates.
Indeed, there was a commitment made that there would be no appreciable increase in rates over the two or three years. The commitment was also made that in bad economic times the government would kick in. The statement was made again and again, that the fact the government was withdrawing its $2.8 million did not mean the government was out once and for all. In bad economic times, we were told, the government would ante up the difference.
That was the rhetoric last year when they were trying to ram the bill through and when they conned people on the Tory backbench over there into voting for something on the basis of a promise that the government obviously had no intention of keeping, the promise that the government would avoid having UI premiums escalate too quickly, particularly over the next two or three years.
Now we hear the Minister of Finance, less than a year later, say that in conscience they could not allow the fund to be underfunded, so the government had to make this dramatic increase in premiums. I say to the Minister of Finance and his colleagues, that is a classic example of duplicity, a classic example of where the government

March 6, 1991
Government Orders
made a commitment as late as last fall it clearly had no intention of keeping.
When you have in power people who practise that kind of wilful deceit, it is difficult for the electorate to believe a word they say, whether it is about projections of budget deficits or any other matter.
Mr. Speaker, I realize from your signal that my time has just about run out. In specific terms, the government decided to cut $100 million from the Canadian Jobs Strategy program at a time when the fishery is in collapse in much of my riding, both inshore and offshore, and at a time when people were depending on this program to keep the bread and butter on the table, to help them over the short term. For the government to cut $100 million from this program is absolutely and completely callous and unconscionable. I cannot understand where they are coming from in this particular respect.
Let me deal with the area of the Established Programs Financing, the medicare expenditures, the medicare votes to the provinces. I am thinking of my own province of Newfoundland. That is going to cause real problems for Newfoundland. Over the 10-year period since this government first began tampering with Established Programs Financing, and I am talking from about the 1985-1986 budget through until 1995-1996, this government's tampering with medicare will cost the Newfoundland provincial government treasury, $845 million. There will be a shortfall of nearly $1 billion.
It is actually $845 million over that 10-year period which, of course, is going to decrease and constrain considerably the capacity of the Newfoundland government to provide post-secondary schooling and medical care to the half million people who make up my province.
There are so many other things that I would like to say, but I see that my time is up.


Peter L. McCreath: Mr. Speaker, I listened as I always do, with great interest to my hon. friend from Burin-St. George's.
I could not help but be somewhat confused by what seemed to be a somewhat contradictory aspect to his
remarks. He referred to the growth in the public debt in this country during the last six years. I believe what he referred to was the fact that the debt has doubled during the last six years, which indeed is regrettable.
When this government and this Minister of Finance came into office, they inherited a $38 billion deficit, $11 billion of which was on program and operating and $27 billion was on interest charges.
That $11 billion operating deficit has now been turned into-I see in the budget-a $12.7 billion surplus. It is an improvement of $23 billion to $24 billion. My hon. friend says that that is not good enough and that the problem is that the debt has increased.
Mr. Speaker, when you inherit a $38 billion deficit and reduce it to $30.5, that is a tremendous bit of progress. You are still adding $30.5 billion to the debt every year.
The only way that this government could have prevented any growth in the public debt, as my hon. friend seems to suggest it should have done, would have been to wipe out a $38 billion deficit within months of coming into office.
In fact, what the government has done-I think to its credit-is gradually reduce that deficit to the point, as I said before, where an $11 billion operating deficit has become a $12.7 billion operating surplus. My hon. friend says that that is not good enough.
I wonder if he could share with the House how he would have, had he been Minister of Finance in 1984-85, got rid of the $38 billion deficit in one budget.


Roger Simmons: Mr. Speaker, my friend from South Shore is always a delight to listen to.
In his previous intervention, he reached way back into his bag of tricks to a former Prime Minister, Mr. St. Laurent, and talked about horses being on the bureaucratic payroll.
My well-known kindness prevents me from saying, of course, that they are no longer on the bureaucratic payroll, they are obviously on the House of Commons payroll, at least half of them.
He says that reducing the debt could not be done. Perhaps he ought not to wait until I am minister of finance. I hope he is better at predicting than his colleague, the present Minister of Finance.
March 6, 1991

Maybe he can do himself the favour of not waiting until I am the minister of finance, but he should get the job himself. He said something a moment ago that is very significant. He told us something that in all fairness he should have told the Minister of Finance five years ago. He tells us it could not be done.
The Minister of Finance did not know that five years ago when he was predicting that it could be done, when he was predicting that it was going to come down to $18 billion. That poor Minister of Finance, with this brain on the backbench, not having the benefit of his knowledge, keeping it to himself, holding the information when the Minister of Finance could have been made to look much more plausible had only the member for South Shore told him what he obviously knew. It could not be done.
Make up your minds, fellows. Is it the Minister of Finance who is right or is it the newly-minted parliamentary secretary. I congratulate him. I knew with all the bellowing he was doing in the House it was a matter of time before it would pay off. I congratulate him on becoming the latest parliamentary secretary.
If he could only become the Minister of Finance and bring the kind of knowledge he just displayed to the front bench. He asks what I would do. I will tell him one thing I would do. I will tell him one thing I would not have done.
I would not have put the public treasury and more to the point, the people of Canada who have mortgages, through those unconscionably high interest rates over the past year or so. Just look at what that has done to keeping up the public debt.
Now, months after we stood here, day in and day out, and argued that high interest rates were not the way to go, lo and behold they have discovered the pages of our book. Listen to the Minister of Finance these days talk about how we have to keep the interest rates down because that is what will cure inflation.
A few months ago the argument was the reverse, we cannot let them come down because that will cause great inflation. Now, fellas, which is it?
What would I do? I would not have allowed John Crow and the crowd over at the Bank of Canada to take over the Government of Canada in terms of fiscal policy and
Government Orders
keep jacking those rates up. They would have come down, our public debt would have been down and our deficit would have been down considerably. That is just one for starters, but there are many others. I would not have had 33 tax increases over the last six years. Does the member want me to go on?


The Acting Speaker (Mr. Paproski):: Questions and comments are now terminated.
Before I recognize the hon. member for Edmonton- Strathcona, a point of order, the hon. member for South Shore.


Peter L. McCreath: Mr. Speaker, there have been consultations of the usual manner involving the three parties as well as the independents, including the member for Beaver River, accommodating her interest to speak in the debate. I think you will find unanimous consent for the following motion I will put.
That, notwithstanding the Order of this House made March 5,
1991, upon completion of consideration of Bill C-97, the borrowing
bill, on Wednesday, March 6, 1991, a recorded division be deemed
requested and deemed deferred until 3 p.m. on Thursday, March 7,
1991.


Mrs. Marleau:: Mr. Speaker, in the spirit of great co-operation that we seem to be enjoying here in the House, I would like to say that we concur with this motion.


Mr. Althouse:: Mr. Speaker, the order, as read, complies with the agreement that was made and we agree.


[Stage Direction]
Motion agreed to.
Mr. Scott Thorkelson (Edmonton-Strathcona):: Mr. Speaker, I am appreciative of the opportunity to speak on Bill C-97, the borrowing authority legislation. This legislation flows from the budget speech which was delivered last week by the hon. Minister of Finance.
The budget's priority is action to create the essential conditions for recovery. We have chosen not to increase government spending. History shows that that approach has not worked. The key to recovery is lower interest rates. The plan for economic recovery will lead us to lower interest rates through a number of key actions.
First of all, we are setting out clear inflation targets. The result of lower inflation and lower expectations, which is very important, people's expectations of inflation, will result in lower interest rates.

March 6, 1991
Government Orders
Second, we are putting government finances firmly on the course to a balanced budget. We are removing the build-up of public debt as a source of inflationary concern.
The expenditure control plan announced in the 1990 budget is being extended for three years to 1994-95. The government is legislating mandatory program spending limits. We are establishing a Debt Servicing and Reduction Fund solely dedicated to offsetting the costs of public debt. This is something of which I am personally very appreciative.
My constituents, over the past year, have said that they would not mind paying the GST, that they are not adverse to paying taxes if they know the taxes are going to pay the deficit and the debt. People know that we must pay our own way. They know that spending more money than you have coming in creates inflation and inflation hurts everyone. The revenues from the goods and services tax and from privatization will go into this fund.
Third, we are strongly restraining the operations of government. As we all know, government operations are about $16 billion to $16.5 billion, which is about 18 per cent of the program budget. Most of the money that we spend in the Government of Canada is for statutory programs. But, nevertheless, we are severely restraining the operations of government. Operating budgets are being frozen at current levels and the wages and salaries of cabinet ministers, MPs, all Order in Council appointments and all federal public servants are being tightly restrained.
These measures show a fundamental commitment to strong, effective government management and control. This approach will serve Canadians well for years to come.
One other thing we are doing under government operations is moving the National Energy Board to Calgary. This move, I believe, will result in greater efficiencies. Ninety per cent of the business of the National Energy Board is with the oil and gas sector, and its clientele is in Calgary. So, the NEB will be able to interact and regulate the oil and gas industry much more effectively with lower cost to both the people of Canada and to the oil industry. For 15 or 16 years the oil and gas
industry has had to bear the costs of travel and accommodation expenses when they have come to Ottawa in order to do business and to follow the regulations of the National Energy Board.
The Government of Canada will eliminate new federal borrowing in financial markets after 1993-94. I would like to quote from an article written by Jeffrey Simpson last week, entitled "Mr. Wilson chips away at the debt left over from the nightmare years".
Ottawa became a fiscal cripple in the years 1975 to 1984, when the federal government accumulated nearly $200-billion of debt. Compounded interest on that accumulated debt cost another $120-billion by 1989-90. So the total bill for these 10 nightmare years of economic mismanagement, 1975 to 1984, is in the vicinity of $ 320-billion.
This is an impartial commentator, Jeffrey Simpson, from The Globe and Mail. He continues:
It was obvious by the time the Tbries took power in 1984 that, having spent a decade getting into an utterly untenable fiscal situation, Canada would need more than a decade to extricate itself from trouble.
And that is precisely my point. Our borrowing in the financial markets will cease after 1993-94 and by 1995 we will have achieved a balanced budget, roughly ten years after this government assumed office.
He also says in the same article:
Indeed, the entire budget might be described as a treadmill: Higher interest rates make deficit reduction more difficult, large debts make deficit reduction more difficult, recession makes deficit reduction more difficult. Hence, more of the same.
But the fundamental problem remains the size of the debt, close to $400-billion. If the debt were modest in size, say $150-billion, Ottawa's interest payments would be about $16-billion instead of about $42-billion, even at these high rates of interest.
I would like to conclude with this last quote from him:
The cost of paying the interest on this mountain of debt-let alone writing down the principal-would be the grim task of any federal government.
The member from Burin-St. George's decried the fact that we were spending a little less on retraining, and other members have decried the fact that we have been spending less on this program, this program, and this program. Well, the fact remains that even if they were in power-and they will not be because they have flip-flopped on so many issues that Canadians know they are being unrealistic; they know the situation that we are in-they would have to deal with the same sort of debt
March 6, 1991

that we have to deal with. And that necessitates taking hard decisions.
I would like to quote from an editorial in The Globe and Mail of last Saturday, entitled "Ottawa's deficit, in relative terms".
The yardstick by which his progress should be measured is the level
the deficit would have risen to if he had followed the free-spending
ways of his predecessors.
And that is speaking of Michael Wilson.
It goes on to say that:
The Finance Department estimates that, if the parameters of the
1984-85 budget still prevailed -
And I would like to point out that the members opposite would like those parameters to prevail, because they do not want to make any cuts; they do not want to take the hard decisions.
-the deficit would by now be $70-billion a year.
That is double what we now forecast, and $10 billion extra. I shudder to think of such a scenario.
It says that: "Mr. Wilson's current deficit is a considerably tamer beast than the one he inherited". The current deficit is 4.5 per cent of the gross domestic product, the best measure of the total volume of goods and services produced by Canadians.
In 1984-1985 the deficit was 8.7 per cent of the GNP. So, in relative terms of the deficit to the gross domestic product, we have cut that in half. That is a tremendous accomplishment.
It says also: "Nor is the beast as hungry as it once was. In the current fiscal year, Ottawa must turn to the public financial markets for only 15.7 per cent of its cash needs, compared with 27.3 per cent in 1984-1985."
That is a significant accomplishment. Once again, it shows progress. We have almost turned the comer to reducing our deficit markedly. The economy is more productive and in a couple of years our need for cash from the public financial markets will be reduced to zero.
Finally, Mr. Speaker, the editorial says; "In real terms, with the effects of inflation factored out, federal program expenditures have shrunk at an average rate of 0.7 per cent during his stewardship. This compares with a real annual growth rate of 5.6 per cent for the previous 15 years-"
Government Orders
This next phrase is significant: "-a period in which the keys to the vault were in the hands of Finance Ministers appointed by Pierre Ihudeau". And the Leader of the Opposition was one of those finance ministers.
Those figures are, of course, with inflation factored out.
That has meant that we have had to restrain expenditures in the program area because the costs of servicing the debt have been growing and have been so enormous. Just think what would happen, how much better off Canadians would be if we had no debt. We would have $16 billion extra a year to make the economy that much more efficient or to provide things like day care or training, or to address some of the structural programs in research and development where an investment might be necessary.
This choice was made by the Liberals in previous years. Because of the debt we have had to use whatever money that has been accrued to the government because of increases in productivity, and so on, we have had to apply that to the deficit and not spend it where it is necessary.
I would like to touch upon the productivity of the Canadian economy. We have seen a lot of productive growth, and this has been very good for us as Canadians. There are three ways in which one can reduce a debt; one is increase taxes, the second is to cut spending; but the third way, and that is the way we have chosen to go in most cases, to increase productivity.
That is what the free trade agreement is all about. That is what the goods and services tax is all about. The goods and services tax will add about $9 billion of productivity to our gross domestic product. That is a lot of income to the government to pay down the debt and in future years perhaps make investments in science and technology and other areas where we deem it necessary.
Our productivity is not as good as it could be. Our productivity performance, the measure of how efficiently we produce and services, has been deteriorating in the manufacturing sector. From 1974 to 1989, over-all productivity growth fell to a quarter of its average level in the previous 20 years. In the first half of the 1980s it did not grow at all. Over the past 15 years, Canada has fallen to fifth from second place among the Group of Seven industrial nations in manufacturing and labour productivity. In fact, over the past six years Canadian manufacturing productivity growth was the poorest among the G-7 countries, despite strong economic growth across

March 6, 1991
Government Orders
other sectors in our industrial economy. Competitors such as West Germany, Italy and France have caught up to and surpassed our productivity levels.
In the 1970s and 1980s Canada's policies were undermining its long-term productivity performance and needed to change course. The 1984 agenda for economic renewal outlined the competitive challenge facing Canada and subsequent actions helped to provide a better framework for restoring productivity growth. Today, as we well know, Canadians are increasingly concerned about their ability to compete. These concerns range from macroeconomic issues, such as inflation, interest rates and the exchange rate to structural problems with our productivity performance, effectiveness of investments, the burden of government and the business climate.
We, as government, have a responsibility to create an environment that encourages the growth of competitive enterprise. The 1991 budget announced actions to restore fiscal balance and to move toward price stability. This will lead to a stable macroeconomic environment, increased confidence in the Canadian economy and will strengthen our ability to compete in a tough economic world.
In working to develop shared approaches to basic economic issues, the federal and provincial ministers of finance are looking at the rising costs of government and at overlap and duplication.
I would like to quote another article from Diane Francis in this week's Maclean's magazine. She states:
Fortunately, Michael Wilson's budget last week continues the Ibries' attack on the debt problem, curtailing program spending to less than the rate of inflation and taking aim at civil-service salaries and transfer payments. The hated GST is a godsend, a money machine whose windfall profits will be legislatively earmarked towards paying the debt. Still, an inability to control interest rates or other government spending plagues Ottawa, with the result that both debts and interest rates are higher than they should be.
It is significant that the provinces in aggregate have a greater share of the economy than the federal government. So what we have done through this budget is we have said we must take a leadership role and we are
encouraging the provinces to restrain their spending to 3 per cent a year.
Diane Francis goes on to say, and this is one of the best descriptions of the debt that I have read:
The debt is frightening. One hour from now, we will all be $3.5 million deeper in debt. By tomorrow, add another $84 million. Ottawa's debt now tallies $388.5 billion, or $15,000 for each man, woman and child, up from $2,591 per head in 1976. This year, it will hit $400 billion. The collective provincial-municipal debt is more than $100 billion, or roughly another $3,850 per person, giving Canadians the dubious distinction of being among the world's most indebted citizens. Hopefully within one year, the deficit, interest rates and unemployment will be much lower, as the recession and the Gulf War end and the GST plus fiscal restraints yield a pay off in the billions.
I am hopeful that that will happen too, that our debt will recede, the recession will lift this summer, and by all means it should, and our policies that we have been putting in place for the last five and six years to make our economy that much more productive will take hold.
It is significant to note that the manufacturing sector shrunk during the 1981-82 recession by 5.5 per cent. During this recession it has shrunk only by about 2.5 per cent. The opposition says all the time: "This factory is shut down due to free trade". These are normal adjustments that happen in every recession and should not be attributed to free trade.
But free trade certainly will help us rationalize our manufacturing and increase our economies of scale and be that much more productive. There will be greater division and specialization of labour, which is very, very important.
So we have been doing the right things. We need to borrow this money to continue on the road which we have set out. We are managing the economy but yet we are looking out for those less fortunate. Most of the increases in this year's program expenditures, 6.9 per cent, which is a high percentage increase in program expenditures, will go to the elderly and to other sectors of society and the economy that need that help, people who have to weather out the recession.
I would like to close by saying that we are doing the right things. We are on a course of recovery. The recession will lift. This budget is a good one. We have learned the lessons from the past, that you cannot spend, spend and spend because that will increase inflation and
March 6, 1991

hurt everyone and drive the economy down to negative economic growth, and that is something we do not want to see.


Mr. Guy Ricard (Laval-Ouest):: Mr. Speaker, I listened carefully to the speech of my good friend. He says that his constituents are quite willing to pay taxes as long as they know the money is well used.
To achieve his goals, the minister said the other day that a special fund has been created for the GST. Can my colleague explain in a little more detail just how this fund is going to be administered and what moneys it will contain?


Scott Jon Thorkelson: Mr. Speaker, I thank my hon. colleague for his question. It is a good one. I, and I am sure he and many other members of the House, will be explaining to Canadians how this fund will work.
The fund will be a separate fund, a national fund, accounting fund to demonstrate to Canadians and to make a commitment to Canadians that revenues from the GST will be put toward the deficit. Revenues from privatization and individual donations that Canadians will make toward debt reduction, will be applied to the deficit.
Also, there is a commitment that this money from the GST is not going to finance more program expenditures which would then necessitate an increase in the GST. People are willing to make the structural change to replace the federal sales tax with the GST because they know it will increase productivity and because they know we are in a terrible deficit situation. They do not want inflation, they do not want negative or low economic growth because of what high deficits and high inflation do.
I remember one of my first town hall meetings after the last budget. A woman came up to me and she presented me with $100 and she said she wanted me to take this to Michael Wilson to apply against the deficit. This is someone that was very, very concerned about the deficit, that was willing to reach into her pocket. This is someone who is a single mother and had a couple of children, divorced from her husband, a teacher struggling to make it on her own; but she was willing to pay $100 toward the debt. I in turn handed that over to the Minister of Finance.
Government Orders
Now there is a place where Canadians can direct any money they want to apply to the deficit, with the assurance that it will go toward paying the deficit.


Mr. Phillip Edmonston (Chambly):: Mr. Speaker, just a comment here. I heard my colleague say that we have to stop spending, spending, spending. I am quite surprised, because if there is any government that has been spending, spending, spending, it has been this government. I can give him examples of what I call the credibility gap as far as the question of spending is concerned. We can take a look at our beautiful Senate where senators are paid $153 a day just for showing up. It is this government that has actually said: "Go ahead, we will give you the spending"-here is the key word-"increases that you need". It is just probably a paltry sum for the other side; $6 million or $7 million, but for our impoverished senators it is approximately $153 per day when they decide to show up.
It is a coincidence, but I believe I met the same lady in Chambly who met my colleague. She too gave me $100 for my election in order to get this government out of office.
I think it is important that we realize that this government has a credibility gap when it comes to what we would normally call austerity. I remember the night the finance minister was presenting his budget. I walked from the Confederation Building up to the Hill, and I had to weave my way through limousines. We had wall to wall limousines. We still have them, and I do not see any cutbacks at all in the limousine fleet. It is $6 million or $7 million for the Senate and $27 million for the Spicer commission. I know when the Prime Minister is asked, he says $27 million to save Canada is a small sum. Well, I think it is a large sum and I think it is a question of having money well spent. I would certainly welcome an investigation into the Spicer commission.
This is the last point I want to make. This government spent $40 million to make videos of such importance as "Meet your Minister of Defence, Mr. McKnight", which cost $15,000 as well as a video for our troops in Germany on how to drive, another $10,000. This government does not know how to stop spending. This government will only learn how to stop spending when the Canadian public kicks it out of office.


Scott Jon Thorkelson: Mr. Speaker, I am just sorry that my hon. friend from Chambly was not here to hear me say

March 6, 1991
Government Orders
that the Minister of Finance increased program expenditures at a rate of .7 per cent during his stewardship. This compares with a rate of 5.6 per cent for the previous 15 years. So we have hardly increased program expenditures.
Yes, you can if you want, pick across the range of $110 billion of expenditures every year. You can pick out little things where we have made mistakes or where we could tighten up expenditures.


An hon. member:: That is the problem. It is all little things.


Scott Jon Thorkelson: You talk about limousines as if they were stretch black Cadillacs. They are not. They are ordinary black Chevrolet cars with black wall tires. You get a big kick out of this, but it is a very, very small portion of the budget.


An hon. member:: Look what you gave to Ed Broad-bent.


Scott Jon Thorkelson: It is a very small portion of the broad range of government expenditures.


Mr. Len Taylor (The Battlefords-Meadow Lake):: Mr. Speaker, I rise today to speak to the government's request to borrow $26.5 billion and on the budget tabled by the finance minister February 20 this year, and at the same time address some of my personal concerns about the economic future of Canada.
These are not easy times, Mr. Speaker, as you know. In the northwestern parts of Saskatchewan where I come from, the urban and the rural population are feeling the pressures of the recession unlike most in this country.
Throughout the area that I come from, small business people who are still in business tell me that they have never seen things this bad. Consumer spending is way down in all areas. The retail stores, the service sectors and even our small but very important manufacturing sector are all looking for a way out of this economic dilemma.
Our problem in Saskatchewan is the same one that affects the economy in the rest of Canada. It is not a regional problem that requires a regional solution. It is a national problem that only actions by the federal government can correct.
The recession in Canada has been brought on by the high interest rates, the artificially high dollar and high unemployment, each of which exists because of decisions taken by this government under this finance minister.
During this past weekend while I was in my home constituency, I did a lot of thinking about the recession, the local economy and the minister's solution. I also read the newspapers. They provided me with quite a bit of information over the weekend. Perhaps this government has not taken the time to look over some of this important information.
I read The Western Producer among many other farm and rural newspapers. Despite the fact that this government does not understand the value of these farm and rural newspapers and is placing unfair and unreal postal demands on them, these newspapers are going to continue to provide rural people with valuable information. The government would do well to read them regularly.
Last week in the February 28 issue of The Western Producer, we learned that the Saskatchewan and Manitoba economies will fare the worst of all provincial economies in Canada this year.
Quoting from the Conference Board of Canada, The Western Producer said the poorer economies are the result of the general recession and poor grain prices. Again, I remind the government that even with all the diversification in the world, we are still an agricultural economy. To survive, we need improved and stabilized agricultural incomes.
The real decline in provincial output is projected at 0.8 per cent in Manitoba and 0.7 per cent in Saskatchewan. From my reading of the finance minister's budget, there is nothing here that even begins to address the deepening crisis on the prairies. Yes, there is a $1.3 billion tag for agriculture, but as I speak there is still no disclosure of what it is tagged for.
Certainly, the government spending estimates tabled Thursday did not give us any idea of the new priorities and neither did the agricultural ministers' announcement Saturday, following their meeting in Saskatchewan. In fact, the more we examine the announcements, it seems that the federal government's so-called new money is tied up in the GRIP and NISA programs, neither of which is expected to have any impact on the early part of this year's farm income picture.
March 6, 1991

My remarks on GRIP and NISA will have to wait for another day when the enabling legislation is reviewed and debated in this House.
Let me say this, my biggest criticism to date is that the federal government, with the help of Saskatchewan Premier Grant Devine, is selling GRIP and NISA throughout the west aggressively but without detail, without agreement and without legislative approval.
Before the legislation was introduced earlier this week providing the federal government authority to enter into negotiations with the provinces, the Saskatchewan government had already held some 40 information meetings across the province to discuss a package that they had not even agreed upon.
There is not a farmer in Saskatchewan as I speak who can tell you what GRIP will cost him or her in the coming year. Therefore, I ask: How can the farm person properly assess the short and long term effects of this very important program?
On top of this, Premier Grant Devine was quoted in Monday's Saskatoon Star-Phoenix. He was trying to blackmail farmers into signing up for the program. The lead in that Star-Phoenix newspaper story reads: "If farmers expect Ottawa to help them out this spring they'd better sign up for GRIP, says Premier Grant Devine." The is the lead of the story on the front page of Monday's Saskatoon Star-Phoenix.
Here we are trying to assess whether a very important and expensive federal government agriculture and economic initiative is as good as we are being told it is, and the two levels of government are forcing farmers to buy into it without details being announced and even before the legislation is introduced into this Chamber.
We cannot help but be sceptical in all of this. The snow is starting to melt on the prairies and in the near future the crops will be seeded for another year. The farm community has been let down by these governments, many times in the recent past by this government, and now with a Saskatchewan provincial election imminent the farm community is very much concerned.
Remember last year, Mr. Speaker, this federal government told Canadian farmers that they did not need the interest-free cash advance any longer. The government did their studies and they provided evidence to this
Government Orders
Chamber to prove that the interest-free cash advance program should go. Amid sound and reasoned articulate arguments to the contrary from this side of the House and from agricultural organizations the government decided to pass the legislation in any case, and they did away with the program.
Only they were wrong. The program was needed. It was essential and the government had to reinstate it later this fall. Low prices, low sales, and congested elevators, all those things that existed when the program was created in the first place forced the reinstatement of the program. There was a need.
It was not that long ago that the Western Grain Stabilization Program was tampered with by this government. Announcements were made about big pay-outs, and then there were premium increases foist upon the farmers, and the cheques went out and the farmers paid their bills, only to find out that Ottawa had overpaid the producers and that Ottawa was sending out bills of their own for collection on the overpayments. When it was all over the farmers who thought they were getting a stabilization payment and used it to pay their bills found themselves owing even more money to the federal government.
The new agriculture programs GRIP and NISA may indeed help the producer, but we should not as a nation be committing ourselves to it until we understand it in all its parts. The programs are too important not to be reviewed and all their faults debated, reviewed, and corrected without pressure or deadlines.
If a long-term program cannot be agreed upon shortterm financing and debt moratoria can bridge the gap until agreements can be reached on a proper and adequate program.
As for this years bridge, the finance minister's budget does not tell us anything, but we as prairie representatives want him to know and understand that we need almost all of that budgeted $1.3 billion for spring seeding this year, regardless of what happens to GRIP and NISA in the future.
Farm organizations such as the prairie pools and the National Farmers' Union are asking that the seeding payment be the equivalent of the loss in net income sustained by grains and oilseed farmers in 1990. This should mean by itself a payment in excess of $1 billion. A substantial program is necessary to carry farm financing

March 6, 1991
Government Orders
through until the much-needed farm safety net program is in place.
The farm population has come through nearly seven years of inadequate grain prices and have had to battle other rising costs, high interest rates, and decreasing government support.
Despite the fact that this government throws out huge numbers to woo farm voters, the reality is that the direct government support for farmers last year fell to as five-year low and caused the first national decline in farm cash receipts in five years.
Of course on the prairies, and in particular Saskatchewan, we had income declines for several years.
From 1989 through 1990 payments on the prairies for crop insurance stabilization and ad hoc programs dropped a whopping $1.1 billion, according to figures published by Statistics Canada in the last week of February. The decline in payments led to a drop of nearly 10 per cent in farm cash receipts in Saskatchewan. Crop insurance payments were down 38 per cent. Stabilization payments were down 70 per cent and ad hoc support program financing was down 34 per cent. Good crops, reasonable sales, low prices, and the loss of support programs have hurt.
As long as Canada values its food supply industiy and as long as the marketplace refuses to support price levels sufficient to meet production costs, the federal government has an obligation to ensure farm viability and that means price supports in the short and the long term.
The finance minister has produced seven budgets and presided over a national economy that has experienced much growth, but the people are poorer as a result.
The deficit and the debt are increasing, and regional disparities have grown. As long as we live in a country that allows personal income taxes to increase while corporate taxes decline, as long as personal tax bills increase but tens of thousands of profitable corporations continue to escape all taxes, we will continue to have economic problems, and that means greater social problems as well.
The finance minister has let us down. He has failed to address the real problems in Canada. He has ignored our needs and aspirations, and Canadians are the poorer as a result. There are alternatives. The federal finance minister would be well advised to accept them.


Mr. Blackburn (Brant):: I rise on a point of order, Mr. Speaker. My colleague spoke for 10 minutes and I will use the other 10 minutes.


The Acting Speaker (Mr. Paproski):: Yes, but first there are questions or comments.


Mr. Vincent Della Noce (Parliamentary Secretary to Minister of National Revenue):: Mr. Speaker, I would like to add my voice to the speech of the hon. member. I heard him speaking about his beautiful riding, and we want to do the same thing.

In my riding, Mr. Speaker, this budget was well received because it was reasonable. I was listening to my friend opposite speak on agriculture, and I could not help but think that he should give us the whole picture. What bothers me most with socialists, is that, when quoting figures, they are very selective and, with amounts of money, they quote only total amounts, without specifying whether it will be spread over three or four years.
My colleague here, the hon. member for Champlain, was parliamentary secretary to Agriculture at one time and I asked him a few questions during his speech. One thing is sure, this government has no lesson to take from socialists from anywhere in the country, considering all the income supplementation provided and the fact that the net farming income for 1987 totalled $4.4 billion. The federal and provincial governments provided some $6.5 billion in assistance, and those are small amounts.
Mr. Speaker, I have a full list of figures here that I could give my hon. friend. Exposed to crossfire in the trade war between the US and the EEC, Saskatchewan, the province he is from, is concerned directly by this. The Canadian government increased direct income supplementation by $2.2 billion each year from 1985 to 1989. And they want to come and make speeches and tell us what to do-Socialists are in no position to teach anybody a lesson on how to spend money.
March 6, 1991

I have been elected to this House in 1984. In those days, my NDP counterpart was Mr. Agnaieff, the national vice-president of the NDP and president of the Quebec branch. We both travelled by train, but, while I travelled coach, the NDP, the socialists, were travelling first class. That is NDP politics for you-

First class, that is NDP politics: help the poor and kill enterprise so that they have no more jobs. What you are saying is too easy; say the truth.


Derek Nigel Ernest Blackburn: Come off it.


Vincent Della Noce: Billions of dollars-


The Acting Speaker (Mr. Paproski):: There is only one minute for the hon. member to reply.


Leonard William (Len) Taylor: I sorry that I only have one minute to answer the member. There are lots of numbers out there, and you know the old adage about what you can use figures for and how figures can be used, Mr. Speaker. I will not go over that matter.
The member can throw out all kinds of figures, but where I come from the grain is stacked on the ground and the people are being forced off the land. The amount of money that has come from this government has been inadequate to meet the needs of the farm population on the prairies. It was inadequate under all of those circumstances, and the present programs are less funds than have been provided in the past. The decreases have existed, and more and more Saskatchewan farmers are being pushed off the land. They are being moved into the larger communities to unemployment and a different quality of life, and our food production in this country is declining as a result.
This government is also foisting upon the rural population increases in costs for RCMP services, mailing privileges for small community newspapers which allow for communications to exist between these communities, and emergency vehicle licence fees that allow for fire departments, police services, and ambulances to operate within the rural areas. Additional costs are being applied from this government on to those communities, and as a result they are not in any better shape than they have ever been.
Government Orders


Derek Nigel Ernest Blackburn: Mr. Speaker, I have a few brief remarks I would like to add to those that have already been presented here this afternoon on the borrowing authority, the $26.5 billion bill that the government needs in order to make up its revenue shortfall.
As well, I would like to make one or two comments in relation to the budget, because the two go hand-in-hand as we know.
First of all, I want to tell the House that I represent a constituency, the federal riding of Brant, that for the second time in 10 years-first under the Liberals and now under the Conservatives-is suffering terribly as a result of this government's fiscal, monetary and economic policies. We are going through one of the worst recessions in our history. Unemployment is mounting by the day. But, unlike 1981-82, 50 per cent of those jobs are gone forever; whereas 10 years ago at least most of them were called back after the recession was over.
The member opposite said: "What about all the money on job creation?" That is one of my points. In this budget the government is taking $100 million out of the Canadian Jobs Strategy program, at the very time, regardless of political persuasion, we all agree that retraining and teaching new skills out there in the work force is absolutely paramount if this country is going to be able to compete globally, as the Conservative government is always reminding us day in and day out.
Let me also say at the outset that there is nothing in the budget, and almost nothing in the borrowing authority that I can find, that will improve our research and development programs in this country in both the public and private sectors.
Recessions come and recessions go. People get hurt, other people do not get touched at all. If there is one thing that is clear today in terms of economic health in this country, it is that if we are to survive as a first world nation, if I can use that expression, we are going to have to pump hundreds of millions of dollars and a lot of sincere effort into improving the research and technology and scientific development, on the one hand, in our industries and, on the other hand, we have got to train a work force that can not only withstand recessions but can rise to the new challenges of that technology.

March 6, 1991
Government Orders
If this government does not do it, the next one will, because in another 10 years the money just will not be there and in another 10 years we will not be able to generate that capital.
The other devastating aspect to both the budget and the borrowing authority itself is the fact that, wittingly or unwittingly, this government is only adding to the divisiveness within the country by capping transfer payments, year after year. Incidentally, it began with the Liberals. I am not blaming the Conservatives for originating this heinous idea. It began with the Liberals, but by strait-jacketing the provinces and by capping transfer payments the provinces are having to restrict the outflow of their funds to the municipalities.
I do not for a moment believe that the property owner or the average Canadian out there-the ordinary Quebeckers, francophone and anglophone, the ordinary Ontarians, westerners, west coasters, wherever one lives in this country-thoroughly understands and appreciates what is going to happen to his property tax base in the next decade if this government continues its economic policies as they are enunciated at this time. We are going to be paying $5,000 or maybe $10,000 a year in property taxes, where we are paying about $2,500 now. Or, we can go the American route and keep our property taxes down but have our police departments falling apart, our fire departments falling apart, our streets full of potholes, our public school systems going to the dogs, and the criminals taking over the streets.
Those are the options that we have in order to prevent what is happening to the rotting inner cores of American cities. It is about time we took European countries as our model and not that blessed country to the south of us that does not know how to treat its people in the social envelope, does not know how to spend money on behalf of the public good.
If you take a look at the budget, who are the people who get off scot-free in the budget? Well, I will tell you who they are. They are friends, the big corporations, who came to the rescue during the free trade debate during the last election, and the free trade of course as we know has cost us a lot of jobs in this country.
This budget, for example, does not eliminate one single tax break for the rich. The rich, as a result of this, have access to other kinds of tax deferral programs that
the poor do not have. The government has not touched the windfall of an average of $1,175 in tax cuts that Tory "tax reform" has given people earning in excess of $100,000 a year.
The government has left the dividend tax credit intact. The government has left in place a subsidy of 5 per cent federal sales tax credit, the subsidy for business lobbying and other political activities, and the subsidy for Canadian multinationals investing overseas. There is no minimum corporation tax. There is no wealth tax. There is no succession duties. Real estate developers in particular can relax and continue to enjoy all the tax breaks that enabled so many of them to become millionaires at our expense, the expense of ordinary Canadians, back in the 1980s and before then.
But who are the people who are hurt? On whom are we trying to force a recovery? On whose backs are we doing it? We are doing it on the unemployed. We have cut $100 million out of the jobs strategy program. We are raising unemployment insurance premiums-they are going to hurt both those who still have jobs and the small business community.
We have cut back, and continue to cut back, on public housing, social housing, not one cent increase in a desperately needed social problem area within our country. In my own city of Brantford unemployment is now running at 15 per cent. The official rate is 9.7 per cent. Last month 7,068 people were receiving unemployment insurance benefits, 46 per cent higher than last year, and they take a look at a budget and a borrowing authority bill like this and they wonder what kind of insensitive government do we have here in Ottawa. There is absolutely no help whatever in either direct job creation or in upgrading the education and the work skills of our workforce.
Is there anything more stupid than to say to a person who is on unemployment insurance that that person cannot go back to school to improve himself, he cannot go out-unless he is chosen through the jobs strategy program-to learn a new skill at a community college or a high school because, why? Because he is on unemployment insurance.
Well, for God's sake, that is the time he should be back retraining. That is the time he should be improving his skills. That is the time he should be going back to school, and being able to collect unemployment insurance at the
March 6, 1991

Government Orders
same time because in all likelihood he is married and has two or three children.
This government's priorities are all backward. Yes, we have to fight that national debt and the deficit and, quite frankly, I am not opposed to say 50 per cent of the GST-although I am opposed to that tax in principlegoing toward retiring the deficit. But why not the other 50 per cent going toward job creation, or toward skill training, or educational upgrading?
Both the borrowing bill and, indeed, the budget itself were an absolute disaster for the vast majority of people in my constituency and I deplore it. I know that my time is up, but I sincerely hope that as this recession continues the government realizes that the Herbert Hoover approach and the R. B. Bennett approach of the early 1930s is not going to lift us out of recession. In fact it is going to make the recession even worse.


Vincent Della Noce: Mr. Speaker, I will be very brief. I am a great admirer of the Socialists, so much so that I sometimes wonder whether they are not leading us straight down the path to Communism. Earlier, the hon. member told us not to imitate our neighbours to the south, the Americans. That is what he said: Don't imitate the Americans.


Derek Nigel Ernest Blackburn: I thought the Soviet Union was an ally now. Where have you been for the last couple of years? Have you been on another planet?


Vincent Della Noce: Wait, do not get excited. It is coming. I will get to your planet, soon.

Mr. Speaker, when he says we should not imitate countries like the United States, when that country has an economic output of $7 trillion, does the hon. member mean we should imitate developing countries in Eastern Europe? Are we supposed to go and see how they manage? I will let the hon. member answer that!


Derek Nigel Ernest Blackburn: Mr. Speaker, now that the eastern European countries have shed communism and have decided to become democratic, I see absolutely no reason why we should not co-operate with Poland, with Czechoslovakia, with Hungary, in their efforts to improve their economies. I think it is an excellent idea.
I am just wondering why the hon. member is so reticent to assist countries that are desperately trying to turn their economies around and, during the last two years, have replaced communist dictatorships.
I do not know where he is coming from. I do not think he has been here for the last couple of years, or at least he has not read a newspaper.


Hon. Jean Corbeil (Minister of Labour and Minister of State (Transport)):: Mr. Speaker, it is clear that the national debt and the deficit are central to the debate on borrowing authority legislation. It is equally clear that as a government, we cannot afford to simply spend our way out of the current recession. This simple solution, recommended by followers of Keynesian economics, simply will not work when we have already had 20 consecutive years of deficits. It would be tantamount to piling debt on top of debt, and frankly, Mr. Speaker, we have had enough. We cannot continue on this path of progressive indebtedness because it is literally the road to ruin.
The Budget tabled by my colleague, the hon. Michael Wilson, opts for another route that leads to economic recovery and prosperity, thanks to measures designed to lower interest rates. At the same time, however, we must substantially reduce federal borrowing and spending if the drop in interest rates is to be more than just passing phase.
Mr. Speaker, perhaps I should recall at this point that the consultations that preceded the drafting of this Budget included business groups, labour unions and other groups. Generally, they strongly recommended taking steps to lower interest rates in order to stimulate the economy and help the government improve its financial situation. That is exactly what we are doing now.

March 6, 1991
Government Orders
Interest rates and deficits are directly related to that metaphorical ball and chain we call the national debt. Consider, if you will, the national debt, Mr. Speaker.
By the summer of 1991, our national debt will be $400 billion. Some people will say: What is a billion? Let me give you a simple example to illustrate what one billion means. If a person had put $1,000 a day in a plate, every day of every year, starting with the year one of our present calendar, by December 31, 1991, that person would have accumulated less than three quarters of one billion dollars. That same person would have to keep setting aside $1,000 a day, every year, for another 746 years, in other words, until the end of 2739, before reaching the one billion mark. As they say in French, a billion is not exactly a small beer. Our anglophone colleagues would say: It's certainly ain't peanuts.
This year, the national debt works out to the equivalent of a personal debt of $15,000 for each man, woman and child living in Canada.
Just imagine, every time a baby is bom is this country, it is saddled with a debt of $15,000. Assuming that interest rates remain at a steady level of 12 per cent annually, this means that when that baby is six, his debt will have increased to $30,000 and by the time he is twelve it will be $60,000. When as a student, he finishes high school, he will have a debt of $120,000 without ever having borrowed a cent.

That is the happy result of compound interest on the lending side, but it is the sad and brutal reality of compound interest if you must borrow money. It helps explain why our national debt, which was at the $200 billion level when our government took office in 1984, will reach double that figure this year.
More than 80 per cent of that increase can be attached to the compounding interest on the original $200 billion. It is also the main reason why the annual deficit is still at $30 billion in spite of the reduction in spending, and the increased revenue actions taken over the past six years. The interest costs alone on the accumulated debt this coming fiscal year will be $43 billion. That is $1,650 out of the pockets and purses of every Canadian.
It means there is that much less money available for medicare, research and development, job creation and many other programs that would be so helpful to
Canadians. We must get off the treadmill of debt. That means reducing the burden of rapidly growing interest payments.
To do this we must deal firmly with the greatest single threat to economic progress: high inflation. Lowering inflation enables interest rates to come down. Low interest rates allow existing businesses and new businesses to create more jobs, help our country to be more competitive, and contribute to increase our over-all prosperity.
That is the path chosen in the budget for bringing about a recovery of the economy, a recovery that will be sustainable over the long term.

Lower inflation, lower interest rates and lower annual deficits are each others complement and are all factors that tend to stimulate strong economic recovery.
Ever since we inherited this unyielding deficit in 1984, our government has made an incredible effort to reduce operating expenditures.
Spending on all government programs and services has been maintained at levels well below the growth rate of the economy and the rate of inflation.
We have reduced operating costs of government services despite an increased workload. The number of public servants has been reduced considerably. Budgets for travel by elected representatives and public servants have been cut. A number of government agencies have been wound up, and we have privatized several Crown corporations.
In the years to come we intend to continue our unceasing struggle against inefficiency and irresponsible spending.
When we took over the government of this country, the previous federal government was spending $16 billion more on operating expenditures than it received in revenue. As a result, we had to collect $130 in taxes to provide $100 worth of government services, and Canada had an operating deficit.
At the end of the last financial year, this operating deficit had turned into a $9 billion surplus. This means that during the first five years the Progressive Conservative government was in power, we managed to bring about a complete reversal of this situation to the tune $25 billion. Our government has engineered a basic
March 6, 1991

structural change by restoring a stabler balance between expenditures and revenues.
Mr. Speaker, the debt load will become lighter as the national debt takes less and less government revenues. But despite the positive measures that have been adopted we must admit that our priority objective-reducing the debt-remains beyond range unless we impose further restraints. The 1970s and early 1980s were highlighted by a carefree approach based on precarious abundance. This and the next decade will bring us back to stark reality.
If the servicing of the national debt continues to take an ever larger portion of the government expenditure budget, there will of course be less and less money available to maintain the programs which Canadians want because soon they will no longer be able to afford them.
Mr. Speaker, time has come for each of us to assume our collective responsibilities. There can be no reduction in our annual deficit and in our national debt unless we have a flourishing economy. Prosperity can only flown from lower interest and inflation rates. The best way to achieve this goal is to draw inspiration from the example of a government like ours which controls its own operating expenditures. Since a significant part of government outlays is accounted for by public service wages, we have decided to set strict limits on wage increases.
Mr. Speaker, hon. members should note that, generally speaking since 1984, federal government wage increases have been under the inflation rate and less generous than in the private sector.
The budget tabled recently by my colleague Michael Wilson re-affirms our government commitment to continue along that line by indicating just where the line has to be drawn.
As a result there will be no increase in the salary budgets of the departments for the next fiscal year, and raises will be limited to 3 per cent the two years after that. In addition the number of senior officials in the Public Service will be reduced by 10 per cent.
As hon. members already know, Mr. Speaker, the rate of salary increases for the Prime Minister, Cabinet ministers and all MPs has also been limited one way or another.
Government Orders
We are going to innovate by adopting legislation to limit the annual growth of government expenditures at 3 per cent beginning with the fiscal year 1991-92 until the end of 1995-96. This legislation will also indicate that any new spending program will have to be funded by reducing appropriations for existing programs.
The second major budget innovation is the creation of a special debt reduction fund made up of net GST revenues and monies from the privatization of Crown corporations.
In the budget the government indicates that it will cut the annual deficit down to $6.5 billion by the end of 1996 and do away altogether with the need to borrow on the financial markets by 1994.
Thanks to this so ably targeted action plan we can expect that, by 1995-96, the deficit will be down to less than 1 per cent of the gross national product compared to 4 per cent in 1990 and 9 per cent in 1984 when we inherited the disastrous results of the extravagances of the previous government members who seemed bent on spending as if money was going out of style.
When I talk about targeted action, Mr. Speaker, I am referring of course to the agreement between our Minister of Finance and the Governor of the Bank of Canada to bring the inflation rate down to 3 per cent by the end of 1992 and 2 per cent by 1995.

Let me remind all hon. members why we are taking these strong restraint measures. We are acting now in order to secure a better, more prosperous future. The key to improved living standards is continued increases in productivity. By restraining and reducing government's demand for borrowing, we can bring down interest rates and inflation. Lower interest rates encourage investment which in turn, will enhance our national productivity.
I want to comment on what my hon. colleague, the Minister of Finance, has called "the prosperity challenge". Countries all over the world, and Canada is no exception, are being forced to face up to rapid changes in the global economy, largely brought about by technological change. No country can afford to isolate itself from the global marketplace which is developing so quickly. To cut oneself off would clearly bring a terrible drop in a nation's standard of living. But to participate in the global market successfully, requires that a nation's

March 6, 1991
Government Orders
economy must be as productive and as effective as the best in the world.
For Canada, as for all countries, this means making many changes and adjustments so that we get the most out of our national assets and advantages. And the Canadian labour force is, I believe, the most important among all our national resources.

Mr. Speaker, I should like to quote from Chapter 7 of the budget document tabled in the House last Tbesday. It is entitled "Securing Canada's Prosperity: Building an Agenda for Long-term Growth in Living Standards". Under the heading "Better labour-management interaction" we can read this: "Even with the best technology and workforce skills in the world, our productivity performance would still depend fundamentally on how these are integrated in the work place. And that depends on management and workers".
Mr. Speaker, this essential fact must be appreciated at its real value. It stands to reason that we cannot achieve increased prosperity for every Canadian man and woman simply by implementing macro-economic policies designed to control inflation and keep interest rates down. We must also be concerned about the way we can work in association with others and the way we consult one another with respect to the definition of our economic goals.
Unfortunately the way human beings behave in their relations with others does not change as quickly as technology. In fact the attitudes, the human perceptions and the ways to communicate are probably the most difficult aspects to change for any one individual. Yet the significance and nature of these changes are vital.
As I see it, Mr. Speaker, the fact that we can work efficiently together and especially the fact that private sector workers and employers do manage to co-operate in harmony is the most essential aspect of our quest for future prosperity.
As a government our first task is to convince all Canadians that it has become imperative to control the deficit and to prove to them that all our energies and all our decisions will be aimed at that goal. I may have said
this before, Mr. Speaker, but I want to emphasize the fact that this government must take whatever radical measures are required to lower interest rates, inflation and the national debt.
In conclusion, Mr. Speaker, I invite all Canadians to read the guidelines of this historical Budget, that marks the beginning of a new era for us, our children, and our grand-children, because, first of all, as we have shown since we were first elected in 1984, we have never sheened our responsibilities, knowing full well that in the immediate future some of our decisions would not be very popular.
Secondly, the Expenditure Control Plan included in the Budget, and which freezes at current levels the wages and salaries of the Prime Minister, Members of Parliament, senior executives and all federal public servants, as well as the operating budgets, is an example all public and private executives throughout Canada should follow.
Thirdly, all the hard work our government has been doing to get rid of the annual operating deficit and reduce the national debt will generate the lower interest rate and inflation rate essential to our economic recovery and general prosperity.
Fourthly, greater harmony between employees and employers is essential if we are to increase our labour productivity, which will give everyone the opportunity to benefit from our renewed prosperity.
In fact, Mr. Speaker, this Budget marks out very carefully the way for our economic future. It clearly indicates what traps to avoid and what goals to achieve.
We are on the right track, and all Canadians will benefit from this new Budget.


@Acting Speaker: Questions and comments. The hon. member for Saint-Denis.


Mr. Marcel Prud'homme (Saint-Denis):: Mr. Speaker, thank you for your endless patience and courtesy.
I have a question for the minister who, as anyone familiar with the government's and the Conservative Party's organization chart, and especially the government's, would know, has the additional responsibility of
March 6, 1991

being the minister responsible for a substantial part of Quebec. Of course, being a member and a minister from East Montreal does, I imagine, entail certain responsibilities. In addition to being minister of this and that and the other, one is the minister responsible for East Montreal. Not West Montreal but East Montreal.
Could he perhaps inform the House whether he has any specific plans for dealing with the appalling situation so well described by the hon. member for Saint-Henri- Westmount in his speech on the Budget, when he said that there were more people unemployed in our city- because it is yours and mine, and also that of my good friend, my very good friend from Laval-Est who, I may say, did an excellent job in Rome. You see, all members have their non-partisan moments. He did a great job in Rome in connection with the return of Alitalia. I was there, so I can hardly say otherwise. It's true.
However, to get back to our subject, I want to ask you whether you have any specific plans for the economic recovery of this particular area which concerns us as members from East Montreal, where the situation is extremely bad, and I am referring to unemployment, housing, welfare and umemployment insurance? My office can't keep up with all the requests. I have never had this many, and I have been a member for 27 years.
Could the minister, besides talking about generalities and how important it is to control the deficit-we realize that is important-I know he is going to answer that the deficit was made by other people. Well, if it was, those people were judged by Canadians in 1984 and 1988. I think we should stop talking about that. The people passed judgment and said: You guys did the wrong thing so we are kicking you out. Go and do your homework. However, what I would like to know is whether you, as the minister responsible for East Montreal in this government, have any specific recovery plans so that once again Montrealers will feel proud of being part of a truly modem city?
Jean Marchand, a man who was such a wonderful example of what it meant to be a Quebecer in Ottawa, often said that Montreal was the economic heart of Quebec, unlike Ontario which has several industrial centres. However, in Quebec, if the engine is in trouble, the whole province suffers. So what can you tell us, what can you tell all those people who keep blaming you? I am afraid I must say that much of the blame is being laid at
Government Orders
the right door. So I want to give you a chance to tell us what wonderful projects you have in store to encourage Montrealers who have always taken great pride in their city. I realize you are from Ville d'Anjou, but to all intents and purposes, that is Montreal, it is greater Montreal. When we talk about Montreal, that includes everyone, I imagine. Is there anything specific? We don't see anything. We are not very optimistic. We have to answer people when they ask us, and I don't like to tell people who call: Why don't you call Mr. Corbeil at number so and so. Call Mr. Weiner. I have tried to answer, but I have no answers. I say: Listen, you felt we weren't good enough to govern, so go and see them. Ask them. If you get a good answer, come and see me, but they haven't come back yet.


The Acting Speaker (Mr. Paproski):: The hon. minister has two minutes to reply to all of those wonderful questions.


Jean Corbeil: Mr. Speaker, I thank the hon. member for Saint-Denis for his question. The hon. member for Saint-Denis is well known for his witty and spirited eloquence. I must tell him that I am extremely proud to be part of this government which has taken concrete measures over the past seven years,-ever since it came to office in 1984-to strenghten the economy of Montreal-East.
Mr. Speaker, mention should be made that between 1980 and 1984, the four year period before the Conservative Progressive Party came to office the Island of Montreal had recorded net job losses of 4,000. Since the Progressive Conservative Party came to power, several tens of thousands of jobs have been created. We shall continue in that direction by creating an economic climate attractive to businesses and conducive to economic prosperity. However, Montrealers can be sure that our party will never behave the way the hon. member for Saint-Denis' party did when it squandered money away and caused the situation which exists today. I understand that he just cannot stand hearing about the aggregate deficit for which his party is responsible. If we are compelled today to take such stringent measures, it is because of the situation we inherited when Canadians removed them from power in 1984.

March 6, 1991
Government Orders


The Acting Speaker (Mr. Paproski):: Questions and comments are now terminated.
Before I recognize the hon. member for Cochrane-Superior, I must advise the House that under Standing Order 74, we have completed the two hours and twenty-five minutes. All further speeches will be 10 minutes maximum with no questions or comments.


Réginald Bélair: Mr. Speaker, I appreciate the opportunity to speak on this budget and the estimates. I wish the Minister of Finance had presented last week a somewhat less stringent budget, especially in this time of recession. I suggest the moment was not right to present such a budget, the more so because Canada had experienced a very high rate of economic growth over the past five or six years. We could have then expected the Minister of Finance to present such a budget, but certainly not now.
In view of this high rate of economic growth and also the 33 tax increases, we must wonder where those dollars went? This recession which is due to the government's high interest rate policy is really hurting Canadians. I need only mention the number of bankruptcies which reached 54,000 last year, compared with 34,000 in 1982.
Let us talk also about unemployment. According to the Minister of Finance unemployment will reach 10 per cent in 1991 and 9.8 per cent in 1992.
Does this mean it will take another 18 months to get out of this terrible recession? We hope not.
Before he brought down his Budget, the Minister of Finance implied it would contain measures to help small businesses. We saw nothing of the kind in the Budget. I hoped to see the flow-through shares program renewed, since mining operations are down to 15 per cent of what they were five years ago. Just think, Mr. Speaker: It takes about eight years to develop a mine, from the day it is discovered to the day it becomes operational. Needless to say, in Northern Ontario we are very concerned about what will happen during the next 10 or 20 years.
Mr. Speaker, I also noticed that the Minister of Finance did not raise taxes for corporations, big companies and individuals with high salaries. When this government came to power, corporate taxes were at 13.5 per cent, while today, they are down to 9 per cent, which does not make sense, Mr. Speaker.
And let's talk for awhile about transfer payments to the provinces. During the next few years, we will be seeing cutbacks totalling $2.3 billion in transfer payments to the provinces, which will cause quite a stir in health care and education across Canada.
If people expect to get the same services they had before, they can also expect tax increases, both provincial and municipal. This means that the government has abdicated its responsibility, and that in the final instance, the taxpayer pays just the same.
I mentioned unemployment earlier. Unemployment insurance premiums will go up by 24 per cent next year, which means an additional $2.4 billion in revenue. At the same time, the Minister of Finance has cut $100 million in the budget for occupational training. I find it hard to see the logic in all this.
Occupational training is very important for Northern Ontario, because during the past 10 or 15 years, our young people have been leaving Northern Ontario in a steady stream towards the south, due to a lack of jobs. And what about our unemployed worker, 13 or 14 per cent, who would have liked to train for another job or go back to school or simply upgrade their skills. This $100 million cutback will affect us quite severely, and we find this extremely hard to take.
As far as housing is concerned, the government also intends to cut $35 million in programs for people on low incomes or people living very close to the poverty line. This cutback affects the neediest in our society, and I find it incredible that in a country as rich as Canada, there are still people who have to live in cabins without plumbing, and because of these cutbacks, when people ask for government assistance, they won't get it.

There is nothing in this budget to remedy the awful economic situation in northern Ontario. There are two main culprits: First, the export surtax on softwood lumber is killing the sawmill industry very dramatically. Second, mining exploration is down to 15 per cent in comparison to what it was five years ago. One only has to
March 6, 1991

remember that it takes eight years to develop a mine, from the day of its discovery to its first day of exploitation. Northern Ontarians do have reasons to be afraid for the future.
There is no program either for the industrial development of the infrastructure in order to attract businesses to northern Ontario.
To conclude, I could not finish my remarks without making reference to the natives who have to live in despicable living conditions. Housing is badly needed, and even then there are budget cuts. In some First Nation communities I have seen houses where there are 17 persons living there. In view of the fact that Indian self-government is in the works, there is nothing in this budget to spur economic development on reserves.


Miss Deborah Grey (Beaver River):: Mr. Speaker, Canada is now in a recession. Although there are already indications that the recession is going to be deeper than was expected initially, all Canadians hope that this recession is indeed short.
Periods of recession should be the time to increase spending, in order to help those who are unemployed and suffering hardships, as well as to prepare the country for recovery. However, because of the lack of progress which the government has made in its seven years in office, there is very little room to manoeuvre without doing more harm to the economy.
It is, however, extremely unwise to consider the two events, that is, first the recession, and second our fiscal difficulties to be wholly unrelated. In my last year's budget critique, it will be remembered that I questioned the wisdom of using interest rates and monetary policy to combat inflation without co-ordinating them with fiscal policy.
I have repeatedly asked the finance minister to present information on the inflationary impact of his budget policies. The finance minister's failure to ensure that the government's fiscal policies are co-ordinated with its monetary policies, is incompetent at best.
The facts are evident, as I predicted last year. The use of monetary policy on its own was the equivalent of throwing water on the entire country to put out a fire, a fire which in part the government was itself stoking. In
Government Orders
fact, the finance minister finally acknowledged this fact just this past weekend, saying that his tax reform proposals, while intended to make voters happy before an election, also fuelled inflation.
This year's budget attempts to lay the blame for the recession on inflation. However, inflation is not the big problem, which the government keeps saying it is. The big problem, as I stated last year, is that it is economically dangerous to deal with Canada's fiscal, monetary, interest rate, dollar trade and social policies as though they could be looked upon as mutually exclusive.
All of Canada's policies must be co-ordinated, to ensure that there is a coherent plan and that all government policies are working toward the same goal of strengthening Canada's economy.
During this government's term there have been changes to help ensure that Canada has the required economic vitality to enter the 21st century. At the same time, the government's policies of high levels of taxation, spending and borrowing, and the failure to deal with the long-run effects of borrowing approximately $30 billion annually, have affected domestic interest rates and the value of the Canadian dollar. These policies are working in fact at cross-purposes to our trade policies.
It is unfortunate that Canadians are seeing the negative and damaging effects of thinking that the government has a free trade policy, a social safety net policy, a fiscal and a monetary policy and that somehow each of these can be thought of and dealt with independently. The fact is that these policies are inter-related and trying to deal with them independently has helped to produce what has been called the first made-in-Canada recession.
The failure to get our fiscal house in order is seriously putting our economic strength, our international competitiveness, and even Canada's cherished social safety net programs at risk. Certainly a prime example of the lack of integration in government policy can be seen in its UI reforms under Bill C-21. We see that premiums are up 24.4 per cent this year to fund the increased payouts due to the recession. The increase in taxation will no doubt further hurt the competitiveness of employers whose cash flow and profitability are already hurt by the recession.

Government Orders
Of course the bottom line in this budget, even as we hear about the great cuts, even with $7 billion worth of additional revenues and $1.1 billion worth of cuts, the government is just managing to keep the lid on the deficit. Certainly the government has made steps in reducing the deficit. However, these steps needed to be taken much earlier.
I see, in fact, some of the initiatives announced in the budget are mirrored in Reform Party policy and my own statements. But even a mirror is only a reflection and certainly not the real thing.
For instance, I am glad to see the government has indicated its willingness to create a debt servicing and debt reduction fund, and also set legislative spending limits on itself. Several months ago I asked the government to set up a deficit and debt retirement fund when I announced my pay cut in September 1990.
These proposals are good initial steps to address the wish of the tax paying public that their tax dollars will be used to reduce the deficit and not to pay for new government programs prior to the next election.
However, now that the government has indicated its willingness to take these initial steps, I challenge the government to demonstrate its own sincere commitment by amending the Auditor General Act to require him to report on the impact of all new spending, including the incremental interest costs on the deficit. This will help to demonstrate that the government is willing to abide by its own spending commitments and not produce any new commitments.
The temptation to use any excess revenues for a good news agenda may well be tempting. I know already from my constituents that the remittances of the GST are improving the government's cash flow at the taxpayers' expense. Let that be enough of a benefit for the government.
Canada cannot afford another spending spree before the next election. Last year the finance minister predicted a $26.8 billion deficit for fiscal 1992. In 1989 the minister predicted a deficit of some $23 billion for this year, and in 1984, his first budget while in office, he predicted a deficit of approximately $10 billion by fiscal 1992. So we have a difference, a mistake or a discrepancy of $20 billion, and the debt is many billions of dollars higher than that.
I believe it to be self-evident that the government has for too long deviated from its course and should not again forget its way.
As I have said previously, the government should begin cutting at the top. However, a one year freeze in cabinet salaries and a cap on the growth in MPs' and senators' salaries is hardly a start or a major sacrifice, indeed not even a symbol.
Previously, I have called for cuts to the public service, in particular to the thick layers of middle management. When the Reform Party of Canada suggested a 10 to 15 per cent cut in this area, the government said it could not be done. The government had "cut to the bone already", it said. But now it is possible to cut 10 per cent in this budget. People would ask why.
Because, as with each time the government cuts- whether it is to sell the GST at seven per cent in December 1989, find $350 million to fight the war in the gulf in the fall of 1990, or now in the winter of 1991 to try to regain its supporters and credibility at home and abroad-it is not to reduce unnecessary and wasteful spending, but rather to meet the current crisis facing the country and the government.
That is the key to understanding this government's record on deficit reduction. Unfortunately, it has much more to do with crisis than with commitment.
I want to point out that a dollar that could have been cut in 1984, but which the government did not feel compelled to cut back then, has added approximately $10.40 to our national debt. That is $7 in principal and $3.40 in interest. That is the result of not taking the deficit and unnecessary spending seriously and the effect of not acting sooner. This fact, no doubt, inspired the Prime Minister to admit recently before a group of students, and I quote:
I do not want to suggest we could not have done more, because we
could have done more-Had we done more earlier, our problems
would be less, there is no doubt about it.
Commitment would have reduced the deficit in 1984; crisis reduces it now. Why has it taken seven years for government backbenchers to demand that their government cut wasteful spending?
Finally, I have concerns about the government further cutting conditional transfers to the provinces. The government maintains its own pet programs instead of cutting them and saving money, while it passes taxation on to the provinces. But, by cutting back funding to the provinces while indicating that the federal government will not only continue, but increase legislating in areas of
March 6, 1991

provincial jurisdiction, the government is heading toward a constitutional crisis which clearly neither the government nor the country can afford.
The government may claim that its current unpopularity is the result of making tough decisions. I claim, however, that for the most part the government has not planned these tough decisions, but rather they were thrust upon them by economic events dictating change, the result of having no long-term economic plan for Canada beyond the last election.
A journalist asked me recently how I would rate this budget on a scale of one to ten. I thought for a moment and said that I would give it a five. My snap judgement appeared to be right.
This budget is average. But unfortunately, an average budget is exactly what the government has given Canada for far too long.
For this reason, this budget critique is a eulogy for a government which has waited too long and only done the bare minimum in once again just holding the line. It has done that for seven years; held the line at about a $30 billion deficit. This was hardly enough, and we see the consequences of it now. The country and the government have only to ask what went wrong for seven years. Perhaps five years ago it would have been a good budget, but not now.
Unfortunately, it is too little because it is too late.
In conclusion, this is a budget which tries to win back to a government its supporters in the domestic and international communities and to raise its sagging popularity with the Canadian people. Canadians are looking at it and feeling a great sense of remorse and a feeling of eulogizing for this government.


James Scott (Jim) Peterson: Mr. Speaker, I am pleased to rise to comment on the government's recent economic initiatives. The budget of the finance minister is an incredible disappointment to all those in Canada who had hoped that he would deal with the real substance of the issue of Canadian competitiveness.
The minister has at last acknowledged that the deficit is a problem, and it is indeed when our national debt exceeds $400 billion. But what has he offered us? He has offered us simply the promise that in the future he will
Government Orders
be able to deal with it. But Canadians realize that we are not going to be able to tax our way out of the deficit; we are already overtaxed. And we are not going to be able simply to cut our way out of the deficit. The government has already slashed all sorts of programs and we have seen that it has had no impact on the deficit. It is still far above levels that he predicted years ago, levels he predicted even one year ago.
We cannot tax our way out of the deficit. We cannot cut our way out of the deficit. There is only one solution: we have to earn our way out.
The problem we face is that in his last budget the minister has denied to Canadian industry some of the tools that they used to have in terms of dealing with competitiveness. This is a government that has cut transfers for educational training, has put a cap on funding for export development and promotion, and has put a cap on science and technology. This government is denying to our industries some of the tools which they need to be competitive. As a result, in the last two years, the two years since free trade, Canada has lost 229,000, or fully 11 per cent, of all of our manufacturing jobs. This is a government that is presiding over the deindustrialization of Canada.
At the heart of this problem is a government which is not prepared to assume its proper role in the wealth creation process in Canada. At the heart of our economic dilemma we find a paradox, the paradox being a government that is not prepared to act like a government. It is a government that refuses to play the role that only governments can play, and which is played by every one of our major competitors, in terms of helping industries and working with industries to make them globally competitive.
I am not calling for a government imposed strategy. Rather, what is critical is that the government assume its proper role and bring to the wealth creation process the tools which only governments can bring.
It is easy to criticize this government for its record on many accounts, but I leave that up to others today. Rather, I seek to suggest to this House that there are positive ways in which we can proceed to get around the problem of competitiveness, a problem of declining competitiveness, which our finance minister has recognized but which he has refused to deal with in any

March 6, 1991
Government Orders
fundamental way. Let me suggest what some of these routes might be.
First, we need an entirely new spirit of co-operation in Canada. It is a long time gone. When we could have management fighting labour, fighting educators, fighting financiers, we are going to need the co-operation of all sectors of our economy working in harmony and working in harmony toward common goals.
Second, and I know this is going to sound anathema to some of my Conservative colleagues in this House, we are going to have to plan for our economic future.
Government must be able to bring the key players to the table to discuss what our future can be in five, ten and twenty-five years down the road and to plan for that future. If we do not plan for it, surely it is the ultimate naivety and surely it will not come about. Our competitors plan and even businesses plan for their long-term futures.
Third, I suggest that we cannot be the best at everything in the world because no nation is. We are going to have to build on the strengths that we have already in Canada. I suggest this involves industry such as transportation, communications, and a number of others which we all know, making abundant use of our primary resources, because it is such a squandering of our given wealth to sell those goods away to other countries without adding value to them here in Canada and creating the jobs here rather than having the jobs exported to other nations.
We are going to have to look at some of the industries of the future: biotechnology, specialty metals, many of these.
Fourth, we are going to have to concentrate on our human resources. We cannot have a strong economic future without having the best trained and best educated people. We need more scientists, more engineers, and fewer lawyers.
Fifth is research and development, science and technology. Under this government, R and D spending has fallen from 1.42 per cent to 1.28 per cent of our GDP. It is going in the wrong direction. This can be reversed. Why did they cap science and technology spending in this budget?
Sixth is foreign control. As long as more and more of our Canadian industries fall into foreign hands, we are not going to enjoy the benefits in Canada or the repatriation of profits of the R and D being done here, of the best jobs being in Canada. Besides, we are losing control over our own economic destiny.
Seventh is the monetary policy. Surely we cannot trust a finance minister who has promised us for many years that he will get interest rates down, that he will curb inflation, that he will get the deficit down, and rely on those promises that he is going to do it in the future. He has destroyed all his credibility. I hope he can do it, but for this year alone in his budget he has promised us interest rates just slightly below what they are today, 9.5 per cent. The Americans, against whom we are competing, have interest rates which are almost four points lower than Canada. We have got to get our dollar down to a level that reflects our labour productivity in manufacturing.
Eighth, in terms of infrastructure, for over a century and a quarter that Canada has benefited from its unique mix of public sector-private sector involvement in our economy. The building of canals, of railroads, of the Trans-Canada Highway, of the CBC, of national airlines and of aerospace industries has not come about by market forces or chance.
In summary, whether we like it or not, our competitiveness and our ability to create wealth in the future is dependent upon a government with a philosophy which says that we have a critical role to play in the wealth creation process in Canada.
We have a key role, the role of bringing the players together, of helping set plans, of producing the infrastructure, the educated, trained people, the research and development, the science and technology culture.
I am afraid that if the government does not learn to assume its proper role in the economy of the future that economy will not be ours.
As more and more jobs leave Canada and move south of the border so do the hopes of a whole generation of young Canadians. The bright light at the end of the tunnel is that there is another and better way to deal with our economic challenges but it requires a government prepared to assume its proper role.

March 6, 1991


The Acting Speaker (Mr. Paproski):: I would just like to bring to the attention of the hon. member for Chambly that we are now in the period of 10-minute debate with no questions or comments. The hon. member for Ontario has the floor for debate.


René John Soetens: Mr. Speaker, I do appreciate this opportunity to participate in this debate and I do have to commend the hon. member for Willowdale for what I think are some very appropriate comments. Maybe later on in my speech I will try to respond to some of those because I think he made some very valuable suggestions that maybe I can respond to in due course.
But before I do I would like to make some other comments on this borrowing bill, the fact that we need to borrow money, and I think the place to start is probably by an article that I read in The Globe and Mail on February 28. It relates to a speech that the premier of New Brunswick gave while he was in Toronto on a government mission. I would like to quote a paragraph from it: "Governments must conduct themselves like private citizens, borrow if necessary for capital assets such as a new home, but pay as you go for current expenditures like the groceries".
That was from Premier McKenna of New Brunswick. Further on in the article he went on to say: "The leaders of the 1960s and 1970s have placed a first mortgage on the future of Canada. The leaders of the 1980s and 1990s are placing a second mortgage on the same asset. There is no equity left. We must once and for all put an end to the suffocating debt load we are placing on the backs of our children".
Very interesting comments from a Liberal premier in this country because it certainly reflects a different view than we have heard in this House during the debates that we are presently involved in dealing with this budget and the borrowing requirements that emanate from it.
The reason I am pleased to participate in this debate is because of the very clear things that the Government of Canada is doing in trying to deal with the problems of debt and the circumstances that come from it.
I would like to explain why. I happen to represent the riding of Ontario. In my constituency, as I am sure happens in many other parts of Canada, the question is "what are we getting for all this money that we are paying and for all this money that we are spending".
Government Orders
I can understand fully why my constituents feel that they are not getting value for money. When they know the government is spending 35 cents of every dollar on interest, they know full well they are not getting a dollar's worth of value for the dollar in taxes they are paying.
For example I have here the most recent statistics that relate to income tax paid by my constituents. This is personal income tax. In the town of Pickering in 1987 my constituents paid $213 million in federal income tax. In 1988 they paid $248 million in federal income tax. And they can say: "What did we get for that $35 million more in income tax that we paid?"
One thing we know we did get-we got a debt that went up. We got a deficit that did not come down, and we did not get very many new programs, but we did get an awful lot of people screaming about the fact that some of the programs they wanted were being cut, et cetera.
I can tell you that the people of Pickering object to paying an extra $35 million. The people of Whitby increased the taxes they pay from $181 million in 1987 to $217 million in 1988. Obviously with inflation that number went up again in 1989 and in 1990. So the people of Whitby can say; well, what did we get for that extra $39 million? They have every right to ask that question, and have every right to be disappointed when they can say that all they got for it was an increase in the debt, no reduction in the deficit, with those appropriate spending increases.
Similarly, in the town of Ajax the same scenario happened, where they paid an extra $23 million in income tax, and yet all they got for it was an increase in the national debt.
So, this budget deals very clearly with an issue that is important to us all. The issue is, as Mr. McKenna rightfully points out, that we cannot leave this debt to our children to pay.
So, how have we decided to address it? Certainly in this budget one of the very clear things we have done is we have put a cap on spending. I happened to listen to the member from Beaver River a little while back who was saying that this budget rates a five out of ten, and she was very critical of the fact that there were cuts made today that should have been made maybe three or four

Government Orders
years ago. Well, like her, I am a reasonably new member of Parliament and I like to participate in what I think are appropriate cuts. I listened to her speech and all I heard her say was that we did not cut enough. Last year when I listened to her I heard her say that we did not cut enough but she did not have suggestions of what should be cut; but she did complain about some of the things that were cut in her part of Canada that she did not agree with.
We all have to look at it now. We have to come up with some very concrete suggestions, we also have to come up with methods of getting ourselves off this debt treadmill. Very clearly, because of the way the government spends money, the best way to get ourselves off this debt treadmill is to increase the over-all revenues-not by increasing the tax rate, as our friends in the NDP would have us do, not by spending more money, as our friends in both the NDP and the Liberal Party would have us do, but by increasing the wealth of Canada.
That is why I was kind of pleased to see the member for Willowdale talk about how we could increase the wealth of Canada.
I understand we are in a recession today. My riding, like every other riding in Canada, is experiencing that. It is not very comfortable when you talk to people who have, for one reason or another, been laid off or lost their job; these are difficult times. But so that there should be no doubt about the fact that spending does not solve the problem, if we go back to 1981-82, the Liberal Party, the government of the day, spent, spent, spent, and raised the deficit tremendously.
If spending is the cure, then in Ontario we should today be riding the biggest boom that could possibly exist in Canada, because for the last five years the Government of Ontario has done a bigger job of spending than the federal government did when they were last in government with the Liberal Party in 1981-82. The fact of the matter is that we suffer the recession in Ontario, even though we have the biggest spending government that ever existed in Canada, right in the province of Ontario-and we have not even got a budget from the NDP yet.
So, we will certainly see how to spend money, and it is certainly proven that that is not the answer.
The answer is to create wealth by reducing the inflation rate, by reducing the over-all impact of government in the economy, and by making sure that the money the governments gets in its revenue is put towards the debt and the deficit.
In our budget we have done that. We have established an expenditure control program to control how government spends money; we have put in place a mandatory spending limit on the government so that it cannot create new and wonderful programs; and third, we have made sure that all the revenue from GST goes to reducing the debt, exactly what Canadians want and ask for.


Philip Edmonston: Mr. Speaker, I listened to my colleague with great interest. However, what our colleague the Minister of Labour said in support of the federal budget seems of greater interest as former mayor of Ville d'Anjou, and as a Quebecer. I find that the budget the hon. Minister of Finance tabled is one that can be described as full of inconsistencies, thoughtless and showing incompetence. Those are not my words, mind you. They are from Le Devoir.
I find rather incredible to hear the Minister of Labour, a Quebecer, speak in support of a budget which, based on the information I have here and with the freeze on the transfer payments to the provinces, will affect mostly Quebec, particularly in the fields of health and postsecondary education. According to the Quebec Minister of Finance, Mr. Speaker, it is $732 million that we will loose over the next three years.
I hope that the Minister of Labour heard me, because he was suggesting that a budget stealing- I am sorry, Mr. Speaker, but that is the right word, "stealing" $732 million from the province of Quebec, and we have a Quebecer defending this Budget. I find that hard to take. I find that very hard to take, even if they don't agree, all these people on the other side, the Tory defenders of the rights of Quebecers: the right to be poor!
Another interesting point is that according to the same Minister of Finance, the Wilson Budget will cut about $153 million for the 1992-93 fiscal year alone. And who is that going to affect?


An hon. member:: Not the NDP?
March 6, 1991


Philip Edmonston: No. It is going to affect everybody. Oh, sure, the NDP too. How? But the NDP represents everybody! We represent Quebecers, we represent the people from western Canada and the people from Ontario. Even the Ontario Government will be affected.
I am going to try and get the attention of the former Minister of Labour, because I find it very interesting that a former mayor of Ville d'Anjou would agree with Mr. Wilson's Budget, when he knows perfectly well that every single municipality in Quebec will have to pay the bill, because the federal bill is being sent to the province and the province is going to send it to the municipalities. And all the mayors of Quebec's municipalities are up in arms. They are mad as hell at the government. And I don't blame them. I don't blame Marcel Dulude, the mayor of Saint-Bruno, who complained about these cutbacks which mean he will have to spend more and more money on public transit.
So if we can't pay the federal bill and we can't pay the provincial bill, we can't put all this right on the backs of the taxpayers, but that is what is happening.
I would like to talk about this Budget in connection with the Minister of Labour, because in fact, I can't see how, as Minister of Labour, he can defend a budget that caps wage increases in the public sector at 3 per cent. I would like to quote from an editorial in Le Devoir which says that Ottawa's fight against the astronomical deficit and inflation means that all governments must co-operate very closely. Co-operation, not the confrontation we have today.
We heard the Minister of National Health and Welfare, who said: Come on, we are not going to kill health insurance. We are not going to do that. And then we heard the Quebec Minister of Health, Mr. Cote, who said: It most certainly will kill health care- So I fail to understand how a Minister of Labour can say that wages of public servants should be capped, when he knows perfectly well that as mayor of VUle d'Anjou he would never have dared to freeze his employees' salaries at 3 per cent. But he is a minister now, so he can preach what he never practiced. I think that is incredible. Especially at a time when we have a government in Quebec that will never take the advice of the Tory government, which is saying: Now listen, we capped at 3 per cent so you do the same in Quebec. Come on! We have a little more compassion. We can't let the Public Service bear the brunt of the recession. That is just not right! I can
Government Orders
understand that the Minister of Labour has to stand by the government, but I was expecting him to display a touch more courage.
In closing, Mr. Speaker-I will conclude quickly, believe it or not, because time is running out-I was looking for the best way to illustrate tonight the iniquities and ill effects of the Wilson budget. What would the best illustration be?


Guy Ricard: This is the best Budget!


Philip Edmonston: Let me explain.
I have some change here in my hand. In 1950, the taxpayers share of each tax dollar-the taxpayer, that is you and me, Mr. Speaker-was 49 cents. The corporations were paying the other 51 cents. That was pretty good, 49 versus 51!
Tbday, I have to pay as a taxpayer 25, 50, 75 and 85 cents on each dollar collected by the federal government, while corporations are paying only 10, 11, 12, 13, 14 and 15 cents.
Mr. Speaker, the fact of the matter is that that ratio is now 85 cents for the taxpayers versus 15 cents for the corporations.


Guy Ricard: Mr. Speaker, I don't want to interrupt my colleague because he seems to be making a good speech, but is it permitted under the parliamentary rules to use objects in order to illustrate one's remarks?


The Acting Speaker (Mr. Paproski):: I cannot see from this distance whether he is using money or he was just saying it. If he is, I wish he would not do it. The hon. member for Chambly.


Philip Edmonston: Mr. Speaker, I will put my money away before the Govemement takes it, since it needs money. I will put my money back in my pocket, because I know that as long as Parliament sits, it won't be safe. So I take it that my colleague wanted to remind me that it could be dangerous to show my money, here, in the House of Commons. I promise that I won't do it again, because I understand the Government is hungry and that I could induce a kind of feeding frenzy. I don't want to tempt it this way.

Government Orders
More seriously, to conclude, I believe that these people must really have a lot of nerves to tell us such nonsense. They tell us it is the best budget for us, Quebecers. When I hear that, Mr. Speaker, and coming from peoples who told us: "You should elect us Conservatives in Quebec for it is we who will defend your interests", I think it is really going too far.


Mr. Stan Darling (Parry Sound-Muskoka):: Mr. Speaker, I appreciate having the opportunity to rise and participate in the debate on Bill C-97, the borrowing authority legislation. This bill is before the House as part of the legislation flowing from the budget speech delivered last week by my esteemed colleague, the Hon. Michael Wilson, Minister of Finance.
Before I delve into the main part of my presentation, I would briefly like to cover the main highlights of the budget.
All the money from the GST will be used to reduce the deficit and then to pay down the federal debt: no new taxes for new spending for five years, ceilings will be put on federal spending and guaranteed by a new law. this is a first. Wages of MPs, cabinet ministers, the Prime Minister and civil servants are being tightly constrained and I am quite sure that the Canadian public will jump for joy at that particular item in the budget.
Transfer payments to the provinces will be limited. There will be no federal money for the ballet opera house in Toronto, a saving of some $88 million.
There will be no money now for the proposed $45 million cultural centre in Montreal, and I know that will be widely acclaimed by most Canadians. There will be spending cuts of $15 billion spread over the next five years.
Hundreds of millions of dollars in grants and contributions to special interest groups and businesses are being cut. Inflation and interest rates will fall. The deficit this year and next year will be $30.5 billion, dropping to $6.5 billion by 1994. There will be new assistance for the disabled.
Civil servant wage increases are being capped at 3 per cent, and there will be a possible elimination of 6,000 more public servant jobs. There will be a 10 per cent cut in the number of executives in the government.
The government will attempt to create a partnership of all levels of government to deal with the rising costs of governments and attack unnecessary overlap and duplication.
The budget's priority is action to create the essential conditions for economic recovery. As a responsible government, we have chosen not to increase spending. Frankly, history has shown that throwing money at a problem or situation does not work.
My hon. friends across the floor on the Liberal benches would be more aware of that fact than any of us. After all, successive Liberal governments measured problem solving by how many of the taxpayers' dollars could be expended at any given time.
It was a practice that burdened the Canadian people with a $38.4 billion deficit in the last year of the Liberal regime in 1984, just before we came into office and formed the government. It is a practice that the February 26 budget is designed to remedy once and for all. In fact, for the first time in Canadian history, Ottawa is actually going to pass a law which puts ceilings on how much politicians can spend.
However, it should be noted that regardless of what the opposition parties tell the people, we are not a heartless government. Spending for the unemployed in the budget has been increased by $3 billion, by $1.6 billion for senior citizens, $1.3 billion for farmers in difficulty and another $600 million for our Department of National Defence.
Since being elected in 1984, our government has waged a long and determined battle to restore health to Canada's finances and stop the debt from dragging down the economy. In the 1990 budget, the government set out a medium-term fiscal plan to sharply reduce the deficit and curtail new government borrowing in financial markets by 1994 and 1995. The February 26 budget reaffirms the plan and introduces a program of expenditure control.
We have seen how living beyond our country's means can lead to a growing burden of public debt. In 1984, the federal government was handing out $1.33 in programs and services for every dollar it collected. That was certainly no bargain.
March 6, 1991

Today, our public debt is forecast to reach the staggering sum of $400 billion by mid-year, about $15,000 for every man, woman and child in Canada. The interest alone on the debt will eat up more than $43 million next year, more than we spend on Old Age Security, unemployment insurance and family allowances combined.
In the February 26 budget the government has asked Canadians to share the burden of further fiscal restraint. As a government we recognize the sacrifices that many Canadians have already made in the name of restraint. We know there is reluctance to accept the necessity for more of the same. But as bitter as the pill seems, if we took no steps to deal with this worsening fiscal situation, the deficit would be much higher than forecast over the next five years and an additional $25 billion would be added to the public debt.
I do not believe for one minute that Canadians really want to continue on a path which not only mortgages their future, but the future of subsequent generations. In the budget the government has taken the tough responsible decisions necessary to ensure Canada's finances become healthy again.
The government's plan for economic recovery seeks to ensure spending control that will help put government finances firmly on the course to a balanced budget. In fact, the 1991 budget includes measures providing Canadians with added assurance that these targets will be met. In a significant change that alters the way government manages its expenditures, it is my understanding that draft legislation will be released shortly which will impose mandatory limits on annual program spending for the next five years. The budget's program spending control measures will be enforced by law. Flexibility will be confined to a very limited set of contingencies set out in the legislation. Although the legislation will not preclude new programs to meet new needs, the government will fund new programs from within the total legislated spending ceiling of roughly 3 per cent per year.
The government will also introduce legislation to set up a debt servicing and reduction fund. The fund will receive the net revenues from the goods and services tax, net proceeds from privatization and earmarked contributions for debt reductions from individuals or businesses. These revenues will be applied first against the cost of
Government Orders
servicing the debt and as they grow over time they will be used to reduce the outstanding debt.
In combination with the proposed annual spending limits, this fund will provide assurance that all revenues from the GST will be used to service and reduce the debt and not to fund new program spending. The effort to reduce spending and the deficit is being reinforced by the government's decision to set clear inflation targets. These targets will serve as realistic goals to encourage lower inflationary expectations by all sectors of our economy: consumers, business, labour, investors and all levels of government. This will help us work together to better control the price and wage pressures that push inflation higher for us all.
There can be no denying the direct link between inflation and interest rates. Our economic history proves it. During the 1950s and 1960s, when inflation was low, averaging less than 3 per cent a year, interest rates were low also. When inflation surged in the 1970s interest rates also soared.
The rewards of lower inflation are clear and concrete. Interest rates will drop, economic productivity and competitiveness will increase, our standard of living will rise, and social fairness will be enhanced. The result will be a strong, more prosperous country that can ensure its place as an economic world leader.
Through the plan for economic recovery contained in the budget, the federal government is taking action to establish fiscal stability and strengthen confidence in Canada's future. By reducing the deficit and controlling the public debt, the plan will help set the stage for improved economic performance and increased prosperity. I believe the plan will result in a better balance between fiscal and monetary policy, and will provide the lower interest rates and greater confidence that will fuel our economic recovery.
With all this in mind, let me mention that Bill C-97 requests borrowing authority in the amount of $28.4 billion. While this is a very large amount, it is important to remember that without the strong measures contained in the budget, it would be some $4 billion to $5 billion larger.
I am pleased to support this bill on behalf of the government.

March 6, 1991
Government Orders


Mr. Gilles Duceppe (Laurier-Sainte-Marie):: Mr. Speaker, we are in a full-need I emphasize it-made in Canada recession, which is a world first. As a rule, we are dependent on the United States. The main motor of this recession is the same minister who presented this Budget, a budget detrimental to Quebec. Let us talk about the whole interest rate policy which is geared to Ontario.
In 1988-89, Ontario's inflation rate increased at nearly twice that of Quebec, 1.1 per cent compared with 0.5 per cent. The hourly rate of pay fell by 0.8 per cent in Quebec while it increased by 1 per cent in Ontario. Because of this horse remedy, Quebec lost 126,000 jobs and the level of employment returned to what it was in 1988. At 14.1 per cent, the City of Montreal has an employment rate higher than St. John's, Newfoundland.
Mr. Speaker, I feel that economically, Quebec is paying very dearly for belonging to Canada. And what are we told now? Against all expectations in this period of recession, we are faced with tax increases; an increase of 24.5 per cent in the premiums employees and employers will have to pay to the Unemployment Insurance Fund from which the federal government withdrew its contribution; $1.4 billion in new taxes on tobacco, that is, 75 cents on every pack.
In my own riding, the main employer is Macdonald, so that this tax may very well result in a great many job losses. This is a regressive tax which attacks rich and poor equally as though they had the same incomes, which is preposterous.
These cuts will also affect social housing programs. The 15 per cent cut in 1991-92 will mean a $32 million reduction this year, a $71 million reduction in 1992-93 and, all in all, some $411 million over the next five years. As far as the sharing of resources is concerned, if Quebec received some 23 per cent of the budget for social housing, this would mean a loss of $94.5 million over five years. In other words, a loss of 7,480 housing units by 1995.
This is the kind of thing this government is doing, while it can afford to spend for the effort $950 million. There will be also a $100 million cut in the Canadian Jobs Strategy. It is unbelievable! Cuts in Unemployment Insurance Benefits; cuts in the variable entrance requirements; cuts in the number of paid weeks, under the
pretense of spending that money on job training. But there are cuts there too!
Furthermore, we should remember that some agreements signed with Quebec which come to an end on March 31 have not yet been renewed. This is important, for in Quebec, everybody agrees, including the Conseil du Patronat, the unions, the municipalities, the Quebec government, the cooperative movement unanimously agree that the Federal Government not only does not spend enough in job training, but that the friends being paid are mismanaged and that all these powers should go to Qubec. There is a consensus on that.
On top of that, Mr. Wilson will ask civil servants for additional sacrifices. Their salary increases will be frozen at 3 per cent but nothing was done to the 100 000 $ capital gains tax exemption. The Minister of Finance would not want to hurt his friends.
In conclusion, I feel that Quebec should get out of this system. This year, the Federal system will increase Quebecers's debt by $7.6 billion. The Quebec Minister of Finance said there will be a $732 million shortfall over the next three years. Not only is this system ruining us, Mr. Speaker, but it even uses our money to promote Canadian unity, spending $27.5 million to support the Spicer Commission's efforts to indoctrinate elementary school children. As a Quebec woman put it this morning on a television program: Only nurseries and cemeteries are left. Not for long, I would say with such people as the Minister of Finance and the incomparable Benoit Bouchard.
The Centre for Canadian Unity promises us the same thing. Although Mr. Mulroney had promised never to do this kind of thing again, he is doing exactly what Mr. Trudeau had done in the past.
I conclude by saying that this government of irresponsible and incompet people will spend between $400,000 and $500,000 tomorrow to satisfy the whims of some nincompoops who want to move to another office. Imagine, the government will spend nearly half a million dollars to please them while at the same time, cutting back on many social programs.
Mr. Speaker, I suggest this is a fairly good picture of this government. When the time comes, Quebec men and women will make a decision not only on the federal system, but also on these people who are here supposedly to defend Quebec's interests but who in fact are but
March 6, 1991

the lackeys of anglophone ministers and are no longer of any use to Quebec men and women, or anybody else in Canada for that matter!


Mr. George S. Rideout (Moncton):: Mr. Speaker, it is a pleasure to rise and have an opportunity to speak in the debate this evening.
I think it is fair to say that Canadians recognize and realize that we have to grapple with the deficit, and that they realize that we have to grapple and renegotiate a new social contract with all Canadians. The problem is that Canadians have lost faith in this government and have lost faith in the ability of the government to handle the deficit. They are concerned because of the government's blatant politicizing of fundamental matters related to this country.
Make no mistake, this is more than a budget or a financial statement; it is a political statement of this government's view of Canada.
It is interesting to note some of the comments that have been made over the last four or five years by the Minister of Finance. In the budget for 1985-86, the Minister of Finance forecast that the deficit for 1990-91 would be $18 billion. Even last year he forecast that it would be $28.5 billion. We all know that it is going to be $30.5 billion. Last year the Minister of Finance forecast employment growth at 1.2 per cent, and now he tells us that it will shrink by 1.5 per cent. He forecast that unemployment rates would be at 8.5 per cent, and now he expects unemployment to be at 10 per cent.
This government promises jobs, jobs, jobs, with more than 1.3 million Canadians unemployed as I stand here in the House tonight. Is it any wonder that people become cynical when they hear these numbers.
In my own province, more than one out of every ten New Brunswickers is unemployed, and they are upset, for obvious reasons. To make things worse were the comments of the Minister of Fisheries in recent articles in The Telegraph Journal that, as far as he was concerned, the province of New Brunswick owed the federal government $52 million. Then he turned around two days later and said that he had made a mistake, that the province really did not owe any money at all, and took back his comments.
Government Orders
But The Telegraph Journal really captured the minister's callous attitude in its editorial, which I will quote.
"But there was also a perception that the federal Minister"-that is the Minister of Fisheries-"was all but rubbing his hands in glee at the problem a $52 million debt would cause Mr. Maher"-the Minister of Finance for the Province of New Brunswick.
The problem, of course, would not have been so much for Mr. Maher, but more seriously for the people of New Brunswick.
That is the attitude of this government. Because it is implicit in the minister's statement and in the conduct of this government that it is all right to pass the burden on to the provinces; it is all right to create different classes of Canadians; it is all right to have different educational standards for Canadian children; it is all right to have different levels of opportunities for Canadians.
Well, it may be all right for the Minister of Finance and it may be all right for the Minister of Fisheries, and it may be all right for the government, but it is certainly not all right for Canadians.
This budget will create different levels of health care in the country. It will create different levels of post-secondary education. It will make our universities and hospitals handicapped institutions as they try to grapple with the new medical and educational crises and opportunities that they will face.
The regions that can pay will have better health and education systems, and the regions that cannot pay will have to do without.
The budget has divided up federal powers. We are seeing a view of Canada in this budget, and it is something like the Allaire report coming out of Quebec. We can now see where the government places its burdens and responsibilities and, quite frankly, the burden has been passed to the provinces which is going to create regional government rather than a strong central government.
It is a sneaky budget, too. When people are waiting for a hospital bed, sitting in the out-patients department, waiting to get into university, or any of those sorts of things, they are not going to blame the federal government, they are going to blame the hospital, or the institution, or the provincial government, or a municipal government. That is why there is a sneaky side to this particular budget; it is a transfer of power, it is a transfer

March 6, 1991
Government Orders
of responsibility, and it is a transfer, in some cases, to provinces that can ill afford and do not have the resources to handle what will be handed to them.
The government says that the budget addresses two major issues or crises, the recession and national unity. Well, I would go one step further and say that the budget exacerbates the recession and contributes to the divisions within the country.
The cuts to education, training, research and development, hit the nation at a time when we must compete and create economic growth in the disadvantaged regions of this country. Those regions that are disadvantaged are trying to pull themselves up by their bootstraps and now they are not going to have the opportunities that other parts of the country have.
Moncton, New Brunswick, Nova Scotia, all those communities and provinces, want to be "have" provinces, want to invest in education, want to invest in their children, want to see positive things happen in their communities. This budget will eliminate, or at least curtail, those opportunities to citizens in the less advantaged regions.
The changes to unemployment insurance is another area where an added burden is going to be placed on the businessman, the small businessman at that, as well as the employee. The increase is upward of 15 to 24 per cent, as far as premium costs are concerned, and this will place additional pressures on the small business concerns in disadvantaged areas like the maritime provinces or the west.
The final hypocrisy, in my view, is to claim that a 20 per cent cut in the environmental budget is not a cut at all. We know full well that it is a cut and that it is a savaging of the environment budget. This makes it difficult for the environmental programs to function properly do the job that we all want to see done with respect to the environment.
In conclusion this budget is a sneaky budget. It passes on to the other levels of government the Mulroney government's failure to deal with its economic problems and its failure to come to grips with the deficit. In a time when we had such great success and rapid economic growth over the last five or six years, a time when this government could have done something, it squandered away that opportunity and now we are faced with even further problems.
The government's solution is to say: "Hey, it is not our fault. We are going to wipe our hands clean, and we are going to pass this responsibility on to the provinces and on to the poorer regions of this country". The Conservatives made this made-in-Canada recession and they are adding to the suffering of many Canadians, particularly in the Atlantic region. Now they are going to add even more. It is a sneaky budget. It is a bad budget, and it should be a defeated budget.


Mrs. Shirley Maheu (Saint-Laurent-Cartierville):: Mr. Speaker, we are witnessing an economic disaster in Canada. The Minister of Finance has declared war to the provinces and it will be fought on the backs of the people. The minister keeps passing the federal fiscal problems on to the provinces instead of dealing with them, and all the Canadian people will have to pay for that.
This budget continues the Conservative's shameful dismantling of national symbols and programs. Once again the Tories have slashed transfer payments to the provinces in real dollars through a freeze on EPF.
Many people are not clear on how cuts in transfer payments will affect them. They are confused on the linkage between federal money to provinces and essential services such as education and health care. People must realize that when the Conservatives cut transfer payments, they cut beds from hospitals in Montreal. When they cut transfer payments, they lower the standard of education in our universities. Let us not be fooled by this government and this minister again.
The public has a right to know how this will affect their everyday lives. They have a right to know how this government has abandoned any notion of fairness and equity and has abandoned any hope of a compassionate and caring Canada.
The Mulroney government is ruining the Canadian health care system. Transfert payments for health and education were cut by $2.3 billion. Unless the provinces can manage to pay the costs, all the Minister of Finance has to offer is weakened and therefore inappropriate



March 6, 1991

health care services. Again, we are faced with broken promises. We are witnessing the destruction of the most basic of things, things which characterize us as a nation and enable us to grow.
The Quebec Minister of Finance, Mr. Gerard-D. Levesque, said that the federal budget puts a heavy load on the government of Quebec by increasing its loss of revenues by $732 million for the next three years. And who will pay for that? The Minister of Finance and his friend the Prime Minister perhaps? How will the Mulro-ney government create jobs while, at the same time, cutting $100 million in the Canadian Job Strategy program?
Based on the government's own figures, the rate of unemployment will exceed 10 per cent nationally this year. Can the minister tell us how and when these unemployed can hope to go back to work if he is not seriously considering creating new jobs and strengthening the economy?
I wonder if the minister could explain what strategy he has in mind for Quebec, where the unemployment rate is presently 12 per cent?
Mr. Speaker, another big promise made by this government was to increase Canada's competitiveness in the global environment. Did they keep their promise and, more importantly, do they intend to keep it?
If the Mulroney government wants Canada to grow and become world-class, it must give the country the tools to achieve this objective and not deprive it of its capacities as soon as the costs rise. Development requires investment.
Mr. Speaker, if I do not sound very optimistic, blame it on this less than encouraging budget.

At this point I would like to quote a few Canadians who do not necessarily approve of this new budget. So the message to the minister just might sink in. I quote:
The federal government capping transfer payments doesn't
change people's needs.
Don Storch, Catholic School Service in Edmonton. I quote again:
Government Orders
The government clearly does not want to take responsibility for
their own made-in-Canada recession.
Gordon Wilson, President, Ontario Federation of Labour.
It seems that wherever we go, whomever we ask, the response is always the same: this budget is only a hurting budget, penalizing the middle and low classes of our society.
How can this government seriously say it wants to build unity in this country when it keeps creating tensions by cutting jobs, thus helping in the escalation of intolerance and racism?

Mr. Speaker, government members could answer that on the contrary they are working for harmony in this country. Three bills have been shelved since the fall of 1990, namely an Act to establish the Canadian Heritage Languages Institute, an Act to establish the Canadian Race Relations Foundation, and an Act to establish the Department of Multiculturalism and Citizenship.
In the years to come, Mr. Speaker, literacy and harmony in racial relations will be comer stones of the consolidation of this country, Canada. If we sincerely believe that together we must build a better world, the Mulroney government has to promise that it will not dismantle tomorrow what it is building today.

If the present budget seems fairly good for multiculturalism, one must not overlook the fact that it is not overly generous. While the amount of money may have increased over all, so has the number of groups asking for help. Everyone will end up with less, making it much harder to survive.
This may really be this government's hidden agenda. I have questioned its commitment to multiculturalism in the past. Just a few days ago, the Minister of National Revenue was quoted in a newspaper in Scarborough, Ontario as saying that he was against multiculturalism. What does this mean? Is this the government's new stance on multi?
The Minister of Finance has, if we look more closely at the figures, cut in funds to be distributed to groups and organizations working toward race relations and crosscultural understanding.

March 6, 1991
Government Orders
The minister could tell us there are now funds for the Canadian Race Relations Foundation and he would be right, but the grass root groups should not be penalized because of the creation of a new foundation.

Mr. Speaker, we must keep a close watch on this government, for it seems to have a tendency to rob Paul to pay Peter. We must make sure that Canadian multi-culturalism becomes a reality with which Canadian men and women from coast to coast can live in harmony. We will never achieve that through cut-backs. And all we can see now is the tip of the iceberg.
When will this government understand that this is not the way to keep the country united?
Mr. Speaker, the people have had enough listening to the same promises which are invariably forgotten the minute they have been made. They are tired of paying for the mistakes of others. The country is in the midst of a crisis and this budget does not do a thing to improve the situation.
As Le Soleil reporter Jean-Jacques Samson put it last February 27, "In so doing the federal government strikes a low blow against its partners, the provinces".

It is indecent that Canadians have had to support 33 increases in taxes. It is a miracle that Canadians have not revolted yet, or maybe they have. Maybe this is one more reason for Quebec to question this government.

Mr. Speaker, the Mulroney government advocates Canadian unity-yes, advocates-while at the same time it slashes into everything that is essential to achieve that unity and throws another 1.4 million people out of work. It increases unemployment insurance contributions but not the benefits, then it cuts $411 million off the social housing program. Again I repeat that in so doing the federal government strikes a low blow against its partners, the provinces.


Mr. Steve Butland (Sault Ste. Marie):: Mr. Speaker, congratulations to my colleague from the Liberal Party because I concur with just about everything she has said.
We are speaking to the borrowing authority and we do not argue that the government has to borrow money with which to run the country, but we certainly disagree with the direction in which this government is taking us.
I read a very appropriate comment today from the Minister of Finance suggesting that he appreciates or feels for the people on welfare in Ontario, but he has no idea how the government is going to deal with those people. I suggest it is almost a Pontius Pilate kind of an attitude: We wash our hands; it is not our responsibility; we pass it to the province, and the province in turn will probably have to pass much of that load on to the municipalities and neither of which can really control or handle these financial responsibilities at this time in the midst of a recession.
This government has continually come out with budgets without any creativity, no positive initiatives whatsoever. It is a litany after litany of cuts. And what does a country want in a time of recession? It wants some optimism. It wants assistance from the government, some hope for the future. Instead the government says: "No, I can't help you. We can't help you". It is an abdication of all responsibility to the people of this country. It provides no direction except the direction which brings us into an ever deepening recession.
They say if it hurts now, wait until we bring in the budget. They have brought it in and it shall hurt ever so much more.
What is the role of the government in difficult times? Well, people look for this hope, for this encouragement, for optimism. This government is bankrupting us not only financially, but they are bankrupt in any concept of positive ideas. They have no imagination.
May I suggest-and I am not ashamed to be political at this point in time to say that the Ontario government has taken a different approach to the recession in Ontario- they have responded positively. They are spending $700 million in job initiatives in the province and in my
March 6, 1991

community of Sault Ste. Marie which is suffering. The largest employer in our community has a six-month reprieve and we hope that through the actions of everyone, including the federal government, that Algo-ma Steel will have a long and prosperous future.
But there are two concepts here. The New Democrats in Ontario are saying: "We are willing to offer you some help. We will create some jobs for you". This government says: "We can't. We cannot do anything for you in the difficult times".
I will tell you one thing they did do. They increased the unemployment insurance premiums by 20 per cent which people in my community will truly appreciate after having been on strike for 16 weeks and still almost having to go to the Supreme Court. In fact it was the Supreme Court ruling that eventually freed up three weeks unemployment insurance for those people who had been on strike for 16 weeks. So what is the government's answer to unemployment insurance? We will jack up the premiums. We mil make it ever more difficult for you to get unemployment, but we will also increase the premiums at the same time.
How about tackling unemployment. The government's suggestion is: "We will attack unemployment by reducing $100 million in the Canadian Jobs Strategy". That is a bizarre way of handling unemployment. How about putting a 5 per cent cap on the have provinces, the have provinces of which Ontario is supposedly one? For a long time we probably were but right now we are suffering more probably than any province.
If we take a look at the statistics of welfare in Metro Toronto in January, there were 73,846 cases of general welfare in Metro, representing 117,000 men, women and children. That is an 11 per cent increase over December and an 83 per cent increase over a year ago. Thank God we are one of the have provinces and not one of the have-nots.
This government suggested that we are going to take this revenue neutral revenue from the GST, the revenue neutral tax, and we are going to put it toward deficit reduction.
A lot of my constituents have suggested that is a reasonable idea. It is probably quite acceptable, but we say: "Why not take the moneys realized at this point in
Government Orders
time and tackle the recession to give people some hope?"
This government has done nothing but make us feel guilty. We are not competitive. We make too much money. We are not skilled. We are not efficient enough. We just cannot compete.
Is the answer for us all these negative initiatives by the government, instead of introducing anything positive? What have they offered in the way of hope? What have they offered in the way of help? An absolute zilch.
I like to turn to Tommy Douglas in every speech. I think he always had an appropriate comment, and this one I think is most appropriate at this point in time: "Surely if we can produce in such abundance in order to destroy our enemies, we can produce in equal abundance in order to provide food, clothing and shelter for our children. If we keep people employed for the purpose of destroying human life, surely we can keep them employed for the purpose of enriching and enhancing human life".
We spend $600 million in a war, but we cut $100 million from the Canadian Jobs Strategy. I do not think Canadians have any reason to apologize, to be abused or to be frightened about tomorrow's security. We are rich. We are proud. We did control our resources. We have our doubts now. We have lost much of what we had because of this government. This budget has in no way offered any assistance to any Canadians.
If we talk about the profligate waste of taxpayers' money, this government could not even put together a commission on unity in the country, despite the fact it is going to spend $27 million. Imagine forming a forum, a commission on unity that falls apart unto itself after having spent or will have spent $27 million.
This government talks about fiscal responsibility. That is total hogwash. It is total hypocrisy and it is not acceptable to anyone in this country.


Ms. Catherine Callbeck (Malpeque):: Mr. Speaker, I am pleased to be able to take part in this debate tonight on the government's borrowing bill and the general economic policy.
This year's budget comes a very critical time in our nation's history. Today Canada's national government is confronted not only with serious economic issues, but

March 6, 1991
Government Orders
also with grave political considerations about the future of our country itself.
Whether it is a question of Canada's deficit or of Canada's destiny, the people of this country are turning to Ottawa for leadership.
The government's budget is probably the best indication of what this government has in mind for the country. The Prime Minister can make all the speeches he likes. He can talk about national unity. He can talk about educational excellence and about the environment, but the real test is what the government offers Canadians in a 200-page document called the budget.
Since taking office in 1984, the government's speeches and its budgets have not squared. The Prime Minister talks about national unity while the finance minister makes cuts to CBC, VIA Rail and closes rural post offices across this country. The Prime Minister talks about putting people first while his finance minister cuts job training programs and provincial transfers for education. The Prime Minister talks about leaving a clean environment for the next generation while the finance minister makes cuts to the green plan by $600 million in the next five years.
When Canadians hear the Prime Minister talk about his vision of the future of our country, they need look no further than last Tbesday's budget.
This budget speaks louder than any opposition member of Parliament could ever speak about how this government is failing to deal with the problems that confront Canada today.
I want to state right now, for the record, that I certainly recognize the need for the government to achieve lower budget deficit, lower interest rates and a lower dollar. I agree completely with these aims.
What I cannot accept is the government throwing up its hands in the air, passing the problems onto the provinces, the sick, the unemployed, the homeless or the students who are in charge of our future.
Not only have Canadians been asked to make sacrifices, they cannot even be sure that the sacrifices this government is asking them to make will actually do as much good as the government claims.
There is plenty of evidence, in previous budgets for example, to suggest that this budget's projections for the deficit and the interest rate for inflation are a way off base. This lack of credibility makes it very hard for Canadians to accept the medicine that this government is forcing on them.
During January and February, the Liberal task force on the economy held hearings all across this country. We held hearings because we wanted to hear, firsthand, what Canadians had to say about the state of the economy, about their own particular situation and we wanted to listen to any suggestions they had.
We went to approximately 35 communities across this country from North River, Prince Edward Island to northern Ontario, from London, Ontario to Vancouver, British Columbia. We listened, we took notes, and we will use that material from these hearings as we develop our own economic policies.
The input this task force received on Prince Edward Island was extremely useful, providing what might be called a yardstick against which this government's budget may be compared.
This 1991 federal budget cuts across a wide variety of interests, from students to small business, from low income housing to the environment. The largest cut to my province of Prince Edward Island, in terms of dollars, was obviously in the transfer payments for education and health.
To give a little bit of background, the previous Liberal government in 1977 concluded an agreement with the provinces, whether they would pay each province so much per capita based on how the economy was growing.
Not long after taking office, this government decided that it would change that, so it limited transfers to the provinces at first by a couple of percentage points. Then, it froze the transfers of cash altogether. That freeze continues to this day and it will continue according to this budget until 1996.
This latest budget wipes out over $2 billion in support for provincial health and education. In terms of Prince Edward Island, the 1991 budget trims approximately $17 million of Prince Edward Island's potential budget for education and health for the next three years alone.
March 6, 1991

This lost revenue from Ottawa has to be picked up somewhere. The province has to do that either by increasing taxes, or by reducing services. It has to get the money somewhere. Maybe, it will mean that the universities will have to increase tuition fees.
More important than the money is what reduced spending on education will mean to the future of the province and the country. How important is education? I want to quote a well-known politician:
People are Canada's most important resource. That is why we are
going to focus more and more of our attention and resources on
long-term investment in people, education, literacy and the
upgrading of skills.
That is a quote from Prime Minister Brian Mulroney, speaking in Calgary, April 5, 1990.
I know that my time is getting short. I just want to end by saying that Canadians are looking to their national government for leadership and especially during times like this; times of recession and especially when our national future is at stake, this need becomes even greater. But what this government has shown again in the budget, is that it is unable to provide that leadership.
Canadians expect better. Canadian deserves better. After the next election and the swearing in of a new Liberal government, Canadians will receive better.


Mr. Simon de Jong (Regina-Qu'Appelle):: Mr. Speaker, I also wish to join the debate this evening on the budget.
This budget is a continuation of all the previous budgets introduced by this Minister of Finance and the government. I am afraid he was wrong when he first introduced a budget after being elected to the government in 1984, as he is wrong today. It is a wrong attitude; it is a wrong philosophy; it is a wrong direction. I think the results of each of the budgets have indicated how wrong the direction of the government is.
Rather than reducing deficits, we have seen our deficits grow until now, in terms of our accumulated deficit, it is well over $400 billion. We have seen our taxes increase, particularly the taxes of ordinary Canadian men and women. We have seen government services, public services being drastically reduced, budget after budget after budget. It is a downscaling of government. A tremendous redistribution of wealth is occur-
Govemment Orders
ring, because it means that ordinary working people are paying more and getting less.
As a New Democrat, I have no objection to fighting the deficit. As a New Democrat, I see the interest payments we pay every year as a redistribution of wealth to the more well-to-do. Because it is only the banks, financial institutions and those individuals who hold bonds that benefit from our deficit. We see a distribution of billions of dollars every year from the public coffers to those individuals. So fighting the deficit is no problem for me.
To be sure, it is a problem that was created by the Liberal regime, particularly when Mr. Tbmer was the Minister of Finance. They thought they would have the quick fix by allowing all sorts of tax deductions for large corporations, assuming that the extra wealth the corporations would get would be reinvested and create more jobs, expand plants and create more wealth.
We knew back then it did not work quite that way. Unfortunately, the Tories are even more so committed to the notion of the trickle-down theory, of giving special tax breaks and concessions to the wealthy and to the large corporations while fighting the deficit on the backs of the elderly, the young, working men and women, farmers and fishermen of this country.
It is wrong. It is morally wrong and it is economically wrong. It makes no sense whatsoever.
The Minister of Finance has charged that New Democrats just bicker and we do not have any solutions. Well, we do have solutions. I was on the finance committee when we went through the process of tax reform and, out of that process, the New Democratic Party presented a report on tax reform, which is our solutions to the problems.
At that time I also stated, both in committee and publicly, that if we are going to have genuine tax reform in this country, we must also have a measure of political reform. If we are going to have genuine tax reform it should be done by including all of the political parties, working together to come up with a tax scheme that would be fair and effective.
The Minister of Finance rejected our proposals, as he rejected the many excellent proposals of the finance committee itself. This Minister of Finance, in his stub-

March 6, 1991
Government Orders
bomness, his Department of Finance with the bureaucrats in their stubbornness, insisted that the proposals they had laid forward in tax reform were it or nothing else. In that proposal they made many projections.
I remember how the Minister of Finance assured us in committee that he had plugged up the loopholes that resulted in not one major life insurance company in this country paying a cent of tax for over a decade. He assured us that he had plugged up the loopholes that saw, for example, in a case in 1983 of one bank where a teller at that bank paid more actual dollars and cents in taxes than the bank did, even though the bank had over $300-some million in profits.
However, when the figures came in and the real world was discovered, the insurance companies and the banks had found other ways in and around his regulations and they were no good. He had to finally back down and accept some of the proposals that were made by the finance committee.
Had the Minister of Finance heeded the advice, and had we, on the finance committee, been able to come forward with a package of genuine tax reform, including the reform of the sales tax and the corporate tax as well as the income tax, it would not have been a package that all the Conservatives, all the Liberals and all the New Democrats would have been happy with, but it would have been a package that would have had the political commitment of all the political parties behind it and it would have been a package that would have ensured fairness in our tax system.
Instead, tax reform has been a dismal failure of this government. Rather than plugging up those loopholes, we see the amount of taxes being paid by the corporate sector, but particularly certain segments of the corporate sector, i.e. the financial institutions and the real estate developers still not paying their fair share of taxes.
Let me come back to the point I mentioned earlier. I have no problem fighting the deficit; indeed, we have to reduce the deficit. But let us reduce the deficit in a fair and equitable manner. The record of this government is its unfairness as it tackles the problem of the deficit.
We see in this budget a further erosion of medicare and further cutbacks which will affect our post-secondary education. These are investments in the country. These are investments in the future, particularly postsecondary education. It means that our youngsters will have less of an opportunity in the future. It means what this Minister of Finance calls down-scaling, passing on the burden to the provinces. The provinces in turn will cut back and pass the burden on to municipalities.
This country has developed marvellous social programs in health and education over the years. Often it was this party forcing the Liberals when they were in the minority situation to enact certain progressive steps. But the aim of this government is to destroy all of that. And for what? What are we to be left with? We have a country in ruin. We have political dissent and economic chaos. We have people unemployed. There is no sense of confidence in the economy of this country. Our infrastructure is being depleted. Our education system, our post-secondary education institutions are crumbling. There is no sense of hope and future and confidence by Canadians. That is the result of the budgets of the Minister of Finance.
For heaven's sake, Minister of Finance, for the sake of Canadians, for the sake of the future, resign.


Diane Marleau: Mr. Speaker, I am very happy to be here on this very nice night.
I want to speak to this borrowing bill which fits into this government's whole economic agenda. It is an agenda that is leading us down the road to deconfederation.
At the same time that peace in the Persian Gulf is around the comer, if it is not actually here already, this Conservative government has decided to declare war on Canada and the people of Canada, the unemployed and the regions of Canada that are really very hard hit by this recession.
This Conservative government has allowed Canada to drift. Not only has it allowed it to drift, but it has actually admitted to causing this first made-in-Canada recession, and this budget does absolutely nothing to help our economy back on track.
We understand that the deficit is a very serious problem and the debt is a very serious problem. We have no problem in dealing with that. But what we are worried about is how can one deal with that kind of a deficit and a debt when there are no jobs, when corporations, especially small businesses are all losing their shirts, they are

Government Orders
not paying any tax and, therefore, the deficit will grow even larger.
This government has practically strangled employment opportunities as a result of maintaining high interest rates and a high dollar. This government has introduced the GST, an expensive and very complex tax which is also very regressive, especially for the regions of the country. It increases inflation. As a matter of fact, in January we had a very massive increase in inflation.
Now that this government has brought us into this recession-by its own admission, they tell us it was a planned recession- it has turned its back on us. At a time when the government predicts that unemployment will rise to 10 per cent, the government has cut spending on job creation and has increased unemployment insurance premiums. If there was one area in which I would have liked to have seen some government interference it would have been in job creation projects.
I come from the riding of Sudbury. In the early 1980s when this country went through a very serious recession, we probably were the hardest hit of all the regions of the country. We had unemployment rates in excess of 28 to 30 per cent of our population. I was a business person in the community at that time. They were terrible, terrible times. But I must say that the government intervened; government helped us out. Today, Sudbury is a very viable community; actually, we are probably one of the bright spots of the country.
I would say to the people on the government side that that is because the government invested dollars, and the dollars invested at that time have now produced tremendous benefits. We are now paying our own way now and we are very happy to do so. The thing that bothers us is that we see this government turning its back on other areas that might need it very much.
Ultimately, it is the Canadian taxpayer who will pay for the Conservative mismanagement of our economy. Canadian employees and businesses are being made to pay more in unemployment insurance premiums now that the government no longer contributes to the unemployment insurance program.
In addition, the provinces and municipalities will either pass on the pain to their taxpayers or they will drastically reduce services that the federal government is now refusing to pay for.
The Minister of Finance now expects Canadians to trust his budget and his fiscal policies to bring Canada out of the economic doldrums and into prosperity. After almost seven years in office during which Canada shared with the rest of the western economies almost unprecedented economic growth and despite having resorted to 30, 32 or 33 different tax increases, paid largely by the middle and lower income Canadians, the Minister of Finance has failed in bringing the deficit under control. In fact, he has managed to double the federal debt while at the economic control.
This is the same Minister of Finance who told Canadians in 1985 that the deficit in 1991 would be $18 billion. Last week, he announced that he was really doing a good job because he was going to hold it at $30.5 billion over the next couple of years. How can we believe his prediction? He says one thing, but the next year he revises all the time.
This is also the same Minister of Finance who told us the GST would have a minimal impact on inflation. Inflation in January jumped to 6.8 per cent, the largest increase in inflation in 33 years. Now he expects Canadians to believe that inflation will be at 3.2 per cent in 1992 and he predicts interest rates at 9 per cent. How, pray tell, can he have inflation at 3.2 per cent if interest rates are still that high?
The Minister of Finance continues to insist that his fiscal policies are necessary to ensure Canada's competitiveness in international markets. How can Canadian businesses compete under this Minister of Finance's high interest rate, high dollar economic policies? What happened to the Prime Minister's pledge to invest in Canada's future?
Canada's future lies in research and development, and in the education of our young people. How can we compete when the government is cutting funding for post-secondary education, and research and development? The Tories have attacked the bonds that hold us together as a nation. Our social programs are among the only things that bind us together now from coast to coast.

March 6, 1991
Government Orders
At a time when the government should be strengthening national unity, it is weakening what is considered to be one of the best national social safety nets in the world.
It has made drastic cuts to national institutions such as the CBC, and now the Prime Minister seems prepared to give away more and more of the federal government's powers to the province.
Let me get back to the CBC. The government always tells us that it is cutting these things to save money. Now, we have just heard with the Supplementary Estimates that it is going to cost $48 million because of the cuts that it made last time around. It is not really saving any money. It is just destroying the country, because everything it does seems to cost a lot more than it predicts.
The only thing that this budget has succeeded in doing is to pit public servants and Canadians in general one against the other. Someone once said that the true moral test of government is how it treats those in the dawn of life, the children. There is nothing in this budget for the children. In fact, it will increase their poverty. There is no day care. There is absolutely no consideration to these people in our community.
The true moral test of government is how it treats those who are in the twilight of life, the aged. This government has clawed back on old age pensions. Name it. It would do much worse if the Canadian people had let it. Because of one lady in particular who said: "No more, Charlie Brown. No way, Charlie Brown," it decided to change its mind. It is still continuing when we think of medicare. That will really hurt those who most need it.
The true moral test of government is how it treats those who are in the shadow of life; the sick, the needy, the disadvantaged. Just think in terms of what this government is doing to things like welfare programs. It may not be doing it directly, but it is asking the provinces to do its dirty work for them.
It is asking the civil servants to turn against their own co-workers, to decide whether they should have an increase in their wages. Heaven help us. We are all faced with the same increases; they are also. They have to choose between giving themselves an increase or firing their brother. What kind of a government is so heartless that it would ask someone to do that, instead of doing
and making the decisions itself. I would think that this government would have the guts to stand up and say that it perhaps does not need this particular department. If that is what it wants to do, then do it.
This government has 46 ministries. Why does any government in Canada need 46 ministries, or 43 ministries, or whatever the number is? In the United States they have 10 or 15 ministries and they have a population that so far outranks ours that it is unbelievable. If they can do it with 10 or 15 ministers, why can't we? Let's practise what we preach and let's do something for Canadians and not just the idea of what Conservatives can do for themselves.


John R. (Jack) Whittaker: Mr. Speaker, it is my pleasure today to speak for a short time on the borrowing bill. What I would like to do is to attack this from the perspective of a number of other speeches that I have made in the just over two years that I have been a member of this House; and that is from the angle of what is happening to our country, what I have seen happening to the country, and what the people that I have spoken to across the country have told me is happening to the country, in their minds.
Let me quote from the budget speech, starting where the Finance Ministers tells us right off the bat that:
- this is a strong budget-a budget for economic recovery.
He then goes on to say that:
Our Plan for Economic Recovery is different from those in previous recessions.
And he finally concludes by saying:
We all wish to see a strong, united and prosperous Canada. Our Plan for Economic Recovery will help us achieve that goal.
It saddens me to have to say that what I have seen in this budget is a continuation of those policies that have ripped the guts out of everything in Canada that all of us have grown to love and cherish.
I would like to read some sections from an article in The Globe and Mail, written by Geoffrey York. In that, the Roman Catholic bishops warn that:
An economic transformation is turning Canada into a "deeply fragmented and polarized society" whose people are divided against themselves.
I will come back to that statement in a couple of minutes. They further say that:
March 6, 1991

The shift to low-paying, part-time jobs is transforming Canada into a society polarized "between rich and poor, urban and rural, women and men, older and younger workers, white and non-white".
They further say that:
This is worsening the phenomenon of the gap between the rich and the poor.
And finally, Tony Clarke, director of the social affairs department of the Catholic bishops, said:
-ordinary Canadians have felt one blow after another. This week's federal budget will probably worsen the situation for working people in Canada."
They said the government has "largely abandoned job creation efforts, while cutting social programs and reducing transfer payments for health, education and social assistance."
The bishops in that are dead on the mark. That is exactly what we have seen in the three budgets that I have debated in this House. It is the policies that started with the Conservatives taking power in 1984 and have continued, where the policies of this government are established by the wealthy, the 5 per cent of the wealthy, the poor get poorer and the middle class, as has been shown by StatsCanada in a recent study by the Fraser Institute, are paying more and more in taxation. Their actual after-tax income is dropping substantially. Everything points to the widening of that gap.
I said that I would return to the shift to low-paying part-time jobs. What we have seen, and we talk of job creation when we come to this place, we hear the government constantly telling us how many jobs they have created, and what seems to be happening is more and more of the industrial jobs seem to be either drying up or moving south of the border. More and more we are getting into the service-oriented jobs, the "McJobs", the jobs that are lower paying. The incomes are falling. The young people with families are having a harder time getting employment that is able to keep their family to any type of a standard of living. Some of these younger families are forced to have two jobs, three jobs, and four jobs just trying to keep up with their every day and day-to-day expenses.
What this government has done is heap upon them the goods and services tax. Now in this budget after getting hit with that we have increases in unemployment insurance, cutbacks in the Canada Assistance Plan, capping of that particular plan, the Established Programs Financing. All of these filter down, part of what has been or appears to be the plan, and has been the plan I would suggest, for the six years that this government has been in power.
Government Orders
What happens when the unemployment insurance rates go up? What happens when there is capped funding on the Canada Assistance Plan or the Established Programs Financing? Well, we either cut back on the programs or we force the provinces and the municipalities to increase their taxes.
Once again, who gets hit by those taxes? Who does not have tax breaks? Well it is the middle-income and the lower-income people. If the province passes these on to the municipalities then it is the property owners who end up paying once again.
Interestingly enough, the unemployment insurance increases hit directly at those property owners and renters in all municipalities across Canada and particularly in rural Canada. The biggest employers in small towns such as Osoyoos, Oliver, Okanagan Falls, Penticton, Summerland; places in my riding, Grand Forks, Princeton, Merritt, are the hospitals, the school districts, and the municipalities.
They have to get their money. They cannot deficit finance as the federal government has done. They have to have their money up front and they have to get their money through property taxation. Who foots the bill for the property taxes in rural Canada? Well, it is usually the middle-income and lower-income people through rent and through property taxes, once again whittling that away.
Also getting hit in this is the small business community and I think as we all know, as has been said time and again in the House and by others, 80 per cent of the employment over the last 10 years has been created by the small business community.
And what has happened to them in this budget? Once again, falling to them will be increases in unemployment insurance. The GST has hit them and hit them strong and hard.
In my riding tourism is a major industry. We know that tourism has already started to fall off and will fall continuously. In the area next to the border the perception that is out there of the added cost is forcing people down below the borders to shop, again hurting the small business retailers in the riding of Okanagan-Similka-meen-Merritt, all through the Okanagan as a matter of

Government Orders
fact, and I would suggest all across Canada within 100 miles of the border at least.
One thing that hits hard and hits hard at all of us is cuts in Canadian Jobs Strategy. These are programs that we have used well in rural Canada. They have helped us at times of high unemployment. In my riding the unemployment rate is approximately 17 per cent adjusted, unadjusted substantially higher than that. But we use these programs and use them very effectively to assist people in retraining, to re-enter the job market. That is being cut, and being cut substantially.
What we have seen in this budget is more pie in the sky. Our Minister of Finance tells us: "We are going to get inflation down. We are going to fight inflation. We want to see a strong and united Canada". Well, what we have here is a formula for failure. A formula for failure politically. A formula for failure economically and a formula for failure socially.
We will continue to speak out, present alternatives and speak out very strongly against this government's attack on the middle-income, low-income earners and on the poor.


Mrs. Sheila Finestone (Mount Royal):: Mr. Speaker, I really appreciate this opportunity to address the borrowing authority bill before the House. It really is a mechanism that begins the process of implementing this government's policy, this government's budget policy and this government's expression and vision for the future. In a sense, when you see and read this budget, it expresses the narrow ideological, market-driven agenda of this government. It does not in any way, even pretend to respond to the real needs of the ordinary people out there in the countryside; the woman who is concerned about child care, the women who is on the job market and worried about whether she is going to still have a job, the man in his mid-forties to early fifties who has built a career and now finds that his job is gone and he is out of sync with the needs and qualifications called for in the marketplace. That is the ordinary bread and butter issue. Can I pay my mortgage rates? Can I meet my car payment? Have I enough money, if I am in a different bracket, to pay for my RRSP? All the ordinary things that ordinary people think about and worry about and we
often forget about, standing here talking in this House of Commons.
At some point, in the few minutes that I have, I want to address some of the issues around the cultural sector. I just wanted to bring to the attention of the House that it is unfortunate, but this is not a budget of hope. It is not a budget delivered at the right time with the right message. It is a budget that tries to put the brakes on an economy that is already in a tailspin. It is a budget that steps backward in many, many areas, and fails to address, as I say, the ordinary needs of the people of this country in a balanced way and deal with the social inequities that have come about through a number of issues; whether it was the free trade agreement that has not given us a level playing field, whether it is the made-in-Canada recession or whether it is a very poor tax policy that has increased taxes unconscionably on middle income earners, pushing them down towards the lower-income level.
When you have a policy that has a high interest rate and has kept our dollar ridiculously high and then expect to have our people compete, both nationally and internationally, and do not give people the skills they require, I ask: What is expected and what kind of a message is this government sending to the country?
The lack of investment in Canadian research and development, the lack of any kind of commitment to transfer of technology when we deal with countries which come in here to do business, without any commitment to put back into this wonderful society that this government inherited, is a pretty sad lack of vision and condemnation of the lack of foresight of the leadership across this floor.
How are we supposed to be dealing with these social inequities in this budget? The last seven years have been really nice, healthy growing years for the economy and for business. People have done well. Yet, during this time of prosperity, we have not been able to work down our national deficit and accumulated debt. When we were not able to do this in the fat years, if I may call them that, and now we want to try and do it during the lean years, it seems to me that there is a peculiar mental block in this government about figuring out the priorities at the right time and in the right way.
March 6, 1991

If the government could not address the social inequities at a time of prosperity, do you think this is the time to do it? If it did not address them then, when will it?
The budget was the opportune moment to right some of the wrongs this government committed. I fear that the moment has been lost. It has not in any way indicated any desire to rebuild the infrastructure that it has cut to pieces-VIA Rail, Air Canada, Petro-Canada, all those things that linked this country-or the CBC, which it has systematically destroyed over the last seven years.
Then we move to the GST, a tax that the Canadian people did not want. They said it time and time again; every Gallup Poll showed they did not want this tax. It was not the idea of taxes. People understand that to have social programs, to have social contracts, to do certain things in arts and culture, they have to pay taxes, that the money has to come from somewhere.
To have the money come from imposing a tax that is so regressive, that is so hurtful, that brought about increased inflation, that is ridiculous in some of its in and out administration, that put 3,000 new people in there and has caught the eyes and ears of the world, how on earth can Canadians have any confidence in a finance minister and a government that plan in this way?
I say to you it has imposed a tax that is unconscionable. In supplementary spending estimates there is a requirement for $180 million to complete the implementation of this tax. In fact, if you look at the $559 million extra in supplementary spending that was just tabled by the minister, you will see that the biggest chunk of new money is for the GST.
The Department of National Revenue receives an extra $153.5 million for planning and administering the tax, while the Department of Public Works receives an additional $24.5 million to provide GST related office space, and the Department of Finance receives an extra $2.3 million for GST inquiries and communications. Add that to the $365.8 million in GST related spending in the Supplementary Estimates last November, and yesterday's estimates bring the cost of planning and implementing the GST and the related tax credit for low income Canadians in 1990 to a total of $546.1 million.
Government Orders
That is more than double the estimate of $260 million in GST administration costs that were included in the February 1990 budget. I think it is absolutely scandalous.
What do we have from the seven-year term of this Conservative government, as reflected in this budget, but a national debt that has now doubled, as I already talked about, and very high inflation.
This government said that it, when it took power, would make the economy more competitive. But we have slipped dramatically in the OECD ratings and lost hundreds of thousands of manufacturing jobs, including hundreds, maybe thousands in my own riding.
There is nothing new in this budget to give people who are hurting any hope. The food banks are busier than ever, people are losing homes and businesses, and families are struggling to make ends meet; and this government has the nerve to tell us that Canadians ought to toughen up, stay the course, tighten their belts. It makes me wonder what world the government is living in.
I had wanted to address the government's cut of $100 million to the Canadian Jobs Strategy program, to talk about its watering down of the funding for the green plan-so much for environmental commitment, which is the concern for tomorrow. I wanted to talk about the 15 per cent cut in social housing, which I consider heartless, and the increase of UI premiums again-that is a tax increase. I think it is up 24 per cent, although that could be an inaccurate figure.
To top it all off, this has followed six years of prosperity. All in all, I would suggest to our young people looking to go into the marketplace that there is not much hope at this moment. We have cut money in all those areas and we have cut investment in research and development. This budget dashes hopes for many, many thousands of Canadians.
Let us look at the cultural dossier for a couple of minutes. Looking at it you can really become heartsick. Canadians deserve better. The culture of a country defines it on the international map, on the global world stage.
The cultural community is in the forefront of the development of all nations, this nation no more and no less than any other nation. It is an area for innovation, creativity and resourcefulness. I suggest to you that this

Government Orders
is what is lacking in terms of the vision this country should have, that this budget should have for cultural development.
I am not going to talk about the savaging of the CBC. It goes without saying. There is $45 million in the budget to help with the severance pay. Telefilm, which allows us to see ourselves on film, has been cut to the tune of $28 million over the next five years. Canada Council is frozen, and they have lost close to $20 million over the last four or five years. The ballet-opera house lost the federal government's promise of $88 million. The Edmonton concert hall, and the Montreal concert hall, those have also been cut.
I am not the least bit sorry about the $45 million in the cultural research institute because that could have gone another way.
Other budget items have been of serious concern to all of us. That $100 million from the Canadian Jobs Strategy is unconscionable at this time.
The last point I want to make is the fact that prior to the budget of the Minister of Finance the federal government had earmarked $50 million for training in the cultural sector. What is happening? What does that mean for our arts and our cultural institutions? I think that it is very sad.
I would just quote Jay Stone of The Ottawa Citizen who said: "You can tell a lot about a government by how it spends it money. In fact you can tell everything. Just follow the dollar signs to the heart of policy and a dark heart it is for those of us with some passing interest in culture, dark and mysterious, and with a slight, little murmur that might be the faraway sounds of public opinion dropping gently on the ground". It is a sad day for Canada.


Mr. Lyle Dean MacWilliam (Okanagan-Shuswap):: Mr. Speaker, this is not a budget. This is a political indictment against the aspirations of working men and women in Canada. It is an attack on the very foundations of this country and an assault on the pillars of our Canadian way of life. This budget attacks our system of universal health care, it attacks the foundations of our post-secondary educational institutions and it attacks our whole system of income assistance.
The Minister of Finance when he announced the budget said there were no new taxes. But this budget itself is a hidden tax on all working Canadians because it is a pass the buck budget. It passes it over to the provinces and it lets the provinces and the taxpayers of those individual provinces deal with the difficulties that this budget has caused. The government, through this budget, is relinquishing its own authority, almost through default, by passing its responsibility to the provinces.
With respect to unemployment insurance, last year the government announced that it was getting out of the unemployment insurance program. It passed over the responsibility of funding that program to the small business community and to the workers. When it passed the buck to the businesses and to the workers last year, the minister promised that should there be future shortfalls in the funding the government would make up the difference. But this budget puts the lie to that promise because the workers and the business community now find that they are going to have to make up that extra cost.
One hundred million dollars out of the Canadian Jobs Strategy, which is a program that works well. As my colleague from Okanagan-Similkameen-Merritt was saying earlier, it creates a lot of job opportunities in areas like the interior of British Columbia, and it is a program whose funding, the minister last year assured this House, was secure. Another broken promise.
There is a lot of big talk by this government about the need to be competitive. Yet at the same time it neglects the job training skills and funding for job upgrading that will allow our workers and our young people to get the kind of training they need to be competitive in this global marketplace.
The capping of the extended program funding will force the provinces again to make up the difference. The financial assistance to the provinces for health care services and for post-secondary education was traditionally provided by the federal government. This program has been attacked time and time again in a succession of Tory budgets. In B.C. alone over the next five years we are going to lose $911 million out of post-secondary and health care funding because of the continual erosion.

The finance minister has said that a steady declining federal contribution will greatly exaggerate and aggravate the provincial problem of funding these programs.
Extending the Canada Assistance Plan 5 per cent ceiling is again passing the buck over to the provinces, forcing the provinces to make up the difference.
Some $600 million was stolen out of the green plan initiative, an initiative heralded by this government as being its commitment to environmental integrity in Canada. Now it is watering it down once again, with another $600 million being taken out of it.
There seems to be no bottom line with this government when it comes to expenditures for war, but there is certainly a bottom line for everything else. That $600 million, I understand, is going to fund the cost of the Department of National Defence in both the Oka crisis and the gulf war crisis. But why did it have to come out of the environmental initiatives?
The only sector in this country that has not been asked to make a sacrifice on the altar of restraint is the corporate sector. Not one tax break has been discontinued. Not one loophole has been closed. Not one initiative has been taken to get the corporate elite of Canada to pay its fair share.
If we had simply disallowed the deduction for business lunches, the three martini lunches, we could have saved over a billion dollars in revenue for this government. Introducing a minimum corporate tax could have reclaimed billions more.
In 1987-and these are Statistics Canada figures-93,000 profitable corporations in this country paid no taxes whatsoever on combined profits of some $27 billion, with a capital b, no tax. The government continues to be oblivious of the need for real tax reform. It does not care that the burden has been shifted to the shoulders of ordinary working men and women in Canada.
I want to point out that in 1950 individuals and corporations across this land contributed equal amounts, 50/50, to the taxes, toward Canada's coffers. Since that time the corporate share of taxation in this country has dropped to 14 per cent, whereas the tax burden for working men and women in Canada has increased to over 84 per cent.
Government Orders
When this government's friends in Canada's corporate community demand a reduction in the deficit, they never talk about shouldering more of this tax burden that they have been relieved of since 1950. No, they talk about the need to cut social spending, the need to trim health care, income assistance and unemployment insurance. The Tory government, time and time again, falls over itself in attempts to accommodate them.
Cuts to health care, cuts to unemployment insurance, cuts to post-secondary education, cuts to job training, cuts to income assistance, cuts to environmental initiatives, cuts, cuts, cuts, but never one corporate loophole closed. It is a Tory corporate agenda to harmonize our social and political system by taking it down to the market driven level of our U.S. neighbour.
When a business gets public money or a corporate bailout is needed to save another megacorporation, they call that a vital incentive, but when a single mother gets public money to help feed a child, that is a welfare frill.
Last year alone, over 160,000 jobs vanished in our manufacturing industry. Trident Limited, an auto parts manufacturer, accepted a $2 million giveaway, a grant from the federal government to help create Canadian jobs. Then what did it do? It flitted down to Tennessee and thumbed its nose at Canada in light of the free trade agreement.
From 1970 to 1975 corporate profits in this country grew 100 per cent. They more than doubled again from 1975 to 1980, and they grew by half again from 1980 to 1985. In the decade between 1975 and 1985 corporate profits in Canada totalled over $305 billion. Now they shoulder only 12 per cent or 13 per cent of the total tax burden.
What happens at the first whiff of a recession? Profits are transferred to foreign parent companies and are paid as dividends to foreign shareholders. This increased by 150 per cent the last time the economy took a tailspin. Canada is being bled by the haemorrhaging of our tax dollars to foreign investment firms.
I know my time is limited. I just want to say that there is no question at all that we have a serious debt problem in Canada. There is no question that we have to deal with it, but who caused the debt?

March 6, 1991
Government Orders
Since Confederation to 1980, our total debt was $77 billion. Four years later, under the Liberal administration, that debt had grown to $187 billion. In the last six years alone, that debt has more than doubled to almost $400 billion. There is no argument that serious efforts have to be made in debt reduction, but this government has decided in order to make that debt reduction to ram it down the throats of ordinary working men and women in Canada. Canada to this government, just in summarizing, has become a marketplace; nothing more and nothing less.


The Acting Speaker (Mr. Paproski):: The hon. member's time has expired.


Ms. Ethel Blondin (Western Arctic):: Mr. Speaker, I am honoured to rise in the House this very day to speak to matters of the economy of particular importance to my constituents.
As always, I am pleased to have the opportunity to speak, particularly on not just matters that are of concern to my constituents, but to all Canadians.
When the budget was tabled over a week ago, I thought of how the government has mismanaged the economy for seven consecutive years. Ibday, the standard of living in Canada has subsequently declined dramatically.
I sent a communique to my constituents on February 26 shortly after the Minister of Finance presented the budget, and I told my constituents that the budget had no surprises. Indeed, services will be decreased, programs will be cut, Canadians will be paying more in taxes, and the majority of the responsibility will be placed on the provincial, territorial and municipal governments, on small businesses, on consumers and on individual Canadians least able to pay for the federal government's mistakes. The government was spending out of control during the good years when the economy was expanding and is cutting back at the worst possible time, in the midst of a deep recession.
We still have that huge deficit. None of that jiggery-pokery, the so-called high falutin fiscal policy this government has put forward, has worked. It is a shame. Even this severe Conservative agenda has not worked.
I spent the week before the budget was presented in the west and in the north, in both the Northwest Territories and in Yukon, meeting with people as part of the Liberal task force on the recession and the economy. I am privileged to have shared first-hand the concerns and struggles which Canadians are having in their effort to survive another Tory budget. It is this information that I want to share with members in this House tonight. I will put that information in perspective with this seventh consecutive budget of no hope. I feel this especially in the north since we have the highest cost of living and no initiative to boost the economy of the north.
I would like the Minister of Finance to explain to Canadians why the deficit is still increasing and public debt is now out of control. All this government spending has produced nothing in new initiatives. There is no National Energy Strategy, no areas for job creation which would help to stimulate the economy, the environmental green plan is being delayed-this will have a detrimental impact on the north-there is no child care strategy-a promise Canadians have been waiting for since 1984, there is no regional development plan, and no money for training, nor research and development.
There are wage controls at a time when the cost of living is at a record high. This will be hard on northern workers. Trade unions will be threatened with job losses. The Arctic environment strategy will be delayed as may be the Canadian Polar Commission. Social housing and CMHC programs are reduced which will directly affect aboriginal people across Canada. Health programs and welfare and post-secondary education moneys are reduced. As usual, the poor people, the aboriginal people, and those unable to afford these reductions will be punished.
The budget does nothing to tackle the recession or to stimulate economic growth, and it does nothing for northerners. There is no recognition of the potential that the Arctic can contribute. The desperate need for northern infrastructure and the excessively high cost of living in the north have been ignored by the Mulroney government for the seventh budget in succession.
In the north the north engineering sustainable economic development in small northern communities is an enormous problem. Last night my colleague from Nu-
March 6, 1991

natsiaq delivered his debate on the budget and described the monumental economic problems that northerners are confronting on a daily basis, really as a way of life.
My riding is the largest in North America, second only to my colleague from Nunatsiaq. In mid-February we travelled together from the small community on the Beaufort coast where I lived for many years, Tbktoyak-tuk, in the Nunatsiaq riding, and then to a nearby town in the Mackenzie Delta, Inuvik.
In Tbktoyaktuk the people told us their town was broke. There were no jobs.
We went next to Inuvik which is in the Western Arctic riding, my riding. We then travelled on to Whitehorse and met with business people, miners, and trappers. From Yukon's capital we went to the capital of the Northwest Territories, Yellowknife, and finally to the southeast comer of my riding, a town at the beginning of the Mackenzie River, Hay River.
All told, the two territories encompass an area of 3.9 million square miles covering 40 per cent of Canada. The two territories are home to 79,000 Canadians living in some 100 communities.
I want to take a few minutes to quote from some of the northerners who made presentations to us about the state of the northern economy. In my mind no one says it as well as the people out there who are carrying the burden of a failing Canadian economy and particularly burdensome in the northern part of Canada where there is an extremely high cost of operating if you are in business, an extremely high cost of living if you are trying to eke out an existence in the rather remote parts of the north.
First of all in the town of Inuvik, Mr. Dick Hill of the Inuvik Chamber of Commerce said:
There is a need for additional northern research support for responsible northern government and organizations so they can collect data and make creative decisions on projects with potential benefits. Effective environmental quality standards need to be set and enforced rather than setting up new commissions to fight projects. Arctic College should be involved to provide objective information collection and analysis. The federal creation of a Polar Commission staffed and based in the south does not make sense to polar residents.
The Hon. Gordon Wray, Minister of Economic Development and Tourism in Yellowknife, said:
Government Orders
There remains a significant requirement, however, for federal investment in infrastructure to ensure the north can realize its vast potential.
Three, the Union of Northern Workers, Jim Evoy, stated:
It is reported that Michael Wilson is considering wage controls in the Federal Public Service. We call on the Liberal Party to oppose such legislation. Wage controls in any sector is exactly the wrong policy to fight the recession and serve only to camouflage the problem. The working people of Canada will not stand idly by and accept the erosion of their income.
In the town of Inuvik, Mayor John Hill stated in regard to grants in lieu of taxes:
If you take a million dollars out of an operation of our size, and yes, that could create bankruptcy. Or it could create a situation where we can't manage our affairs properly. It is unseemly that the federal government should be so irresponsible.
In the community of Hay River, Chris Brodeur stated:
There's no land available for people that want to develop agriculture that requires land, chicken farms require relatively small pieces of land. And we need quotas. And those are two areas directly in the federal government's lap.
He also indicated: "We want the Canadian Coast Guard operations for the western Arctic located in Hay River and not in British Columbia."
Shirley McGrath of the Chamber of Commerce in Yellowknife indicated:
What do we need? Government spending policies that will be supportive of local business without eliminating the competitive element; leadership in actively developing the economy of not only Yellowknife, but of the whole of the NWT; support for selfsustaining industries; opportunities to invest in the north and to keep our money here.
The Dene nation president, Bill Erasmus, said:
My particular membership feels that within our treaty the federal government has a fiduciary responsibility to continue protecting that economy because our people are under the impression that government made the deal with us to continue our way of life.
Last but not least, the Association of Municipalities and the city of Yellowknife under Mayor Pat McMahon indicated:
The Minister of Communications has unilaterally cancelled the public sector rate for municipal radio licences. Simply put, on that day, the federal government decided to levy a massive tax on health and public safety.
A local businessman in Yellowknife, Ron Williams, concluded by saying: "The land claim issue must be resolved so development can take place".

March 6, 1991
Government Orders
These are the things that northerners have indicated to us during our travels into various parts of the north.
There are many issues that northerners feel strongly about; the 24 per cent increase in premiums for unemployment, the cut to the Canadian Jobs Strategy. There is unemployment in the north that reaches the levels of 40 per cent to 60 per cent in some communities.
In relationship to that, we have a subsistence economy of hunting and trapping which has gone down the tubes because the animal rights activists have taken a grip on the whole situation and have turned it into a very brutal public relations campaign against the trappers of Canada. This has had a very detrimental effect.
Any kind of cut in the north, including the Land Use Planning Commission which hurts communities has really been detrimental on the north.
These are the concerns which northerners have. I wish I had more time because there is much more to discuss.


Mr. Ian Waddell (Port Moody-Coquitlam):: Eventually these provinces will have to turn to the only source of funds they have, the citizens of the province, my constituents. So my constituents still get it in the ear. I asked people to look at this matter very carefully. The question is the deficit that I raised before. People say, "Where are we going to get the money?"
I remember Tommy Douglas, who was a great member of this House for many years, telling me when I first came to the House, he said he was in the House during the Second World War and there was a depression before the war. And the government said, "We can't do anything. We do not have any money". Suddenly the war came and they had to do something. They sure raised the money fast enough. They brought in a fair system of taxation and raised the money.
I am also concerned that we are not looking at bringing in a fair system of taxation. It seems to me that is the way of tackling the deficit. I am afraid that the worst is yet to come. We saw a free trade deal with the United States which is hurting Canadian industry and some Canadian industry is moving south of the border. This is happening in the lower mainland of British Columbia. We are losing some of our manufacturing industry, the little bit that we had.
We are now going to sign a free trade deal with Mexico. That means our workers are going to have to compete with workers who are making $1.25 an hour. You cannot compete with that. So we are going to have more industry moving to the States for cheap labour, where there are bad environmental standards, cheap labour, and exploitation of working people. The government says that there will be better jobs in Canada for Canadians. The problem is that there will be more high-skilled jobs in Canada for which you will have to have more high-skilled people. So what does this budget do? It cuts $100 million out of the Canadian Jobs Strategy program.
Mr. Speaker, I think that is a mistake.
I have heard the Liberal Party in this House be critical of the government, as I have been tonight. But the Liberal Party is a divided party. They always have two positions on every issue. I am proud that in the New Democratic Party we have been very consistent in our attack on the government and in the positions that we have put forward.
Government Orders
So I want to put forward some very positive solutions as to the way I think the government should have acted in the budget.
The first thing we need is a fair system of taxation. Why should a bank teller pay more in taxes than the bank? We still have not cleared that system up. We need a fair system of taxation.
Second, I think we should set goals. We should set goals for deficit reduction. I would like to see it become crystal clear that all of the GST, the Goods and Services Tbc, be put into deficit reduction.
There should be no more frivolous expenditures. I stood up in the House of Commons the other day and asked a question of the Minister of Communications. I asked him why he would put $45 million into a cultural study institute in Montreal. What a waste of money when when no one wanted it. And I am pleased to see that the government eventually backed down. It is this kind of expenditure that is making the government look bad and is so wasteful.
Third, we have to clean up our constitutional position in this country, the stalemate. Let's get this over. Let's make a decision: either Quebec stays or goes. We get a new constitutional position in shape and we tackle what really matters to this country, and that is the future.
Finally, I think that a smart government would invest in education, would invest in health, would invest in the environment. These are the great investments. Common sense dictates that. The people in my area have a lot of common sense, and if they were here tonight in the House of Commons that is what they would be telling the government. And I am pleased to do that on their behalf.


Mr. Tom Wappel (Scarborough West):: Mr. Speaker, tonight we are here to debate Bill C-97, which is an Act to provide borrowing authority. Of course, Bill C-97 is inexorably intertwined with the budget, as has been so often said by so many speakers.
Bill C-97 asks this House to allow the government to borrow $26.4 billion. Where does that figure come from? The Finance Minister and the government have come up with that figure based on certain assumptions. Those assumptions are stated in the budget, and they are assumed to be correct.

Government Orders
The Tories take delight in reviewing history whenever they talk about the Liberal Party and in reminding us about their revisionist view of what the Liberals did. Well, this is dreamland. I want to talk about facts. So, I am going to ask us to go back factually and examine how the Finance Minister's assumptions have fared-factually, not fancifully.
Let's go back to November 8, 1984 when the Finance Minister delivered an economic statement. At that time he promised "to put our fiscal house in order so that we can reverse the massive build-up in public debt".
Mr. Speaker, he was wrong. The debt has ballooned from $168 billion to almost $400 billion in the six years that he has been Finance Minister. He predicted then that in the 1984-85 fiscal year the deficit would be $34.5 billion. He was wrong.
Seven months after that prediction, which was wrong, he admitted it was wrong. He announced in the budget of May 23, 1985, his first budget, that the deficit would be, not $34.6 billion, but rather $36 billion. Speaking of where to find additional revenue, he said, and I quote:
Ultimately, we would be forced to find money through drastic cuts in government services and major tax increases. Many government programs would be in jeopardy. This is also unacceptable.
Mr. Speaker, can you believe it? This is the finance minister saying on May 23, 1985, that it is unacceptable to him to have drastic cuts in government services and major tax increases. Yet, what did he do? In fact, he cut government services. The government is now out of the unemployment insurance plan. He cut VIA. He gutted the CBC and he has imposed the most massive tax grab in Canadian history, the GST.
February 26, 1986, along came the second budget, and what does he say? I quote:
This budget will reduce the deficit to $29.8 billion in the coming fiscal year and by the end of the decade it will be cut to $22 billion.
He was wrong, because last week he said, not $22 billion but $30.5 billion.
He said, and I quote:
Our national debt will no longer be growing faster than the economy.
He was wrong.
The federal debt as a percentage of Gross Domestic Product has risen from a debt equalling 46.4 per cent of the Gross Domestic Product to a debt equalling 57.3 per cent of the GDP in 1990-1991. This is an astounding 10.9 per cent increase and while doing this 10.9 per cent increase, totally contrary to his predictions, he has driven us into a made-in-Ottawa recession. He said, and I quote:
The amount we must borrow each year to pay the bills will be cut
from 28.3 billion in 1985-1986 to $17.9 billion in 1987-1988.
He was wrong. Today we are talking about Bill C-97 where he is asking us to borrow, not $17.9 billion, but $26.4 billion.
February 18, 1987, his third budget, and I quote:
I am also announcing today that in our third year we will get the
deficit down to $29.3 billion.
He was wrong.
In his seventh year as finance minister, it is not $29.3 billion. No. It is $30.5 billion.
February 10, 1988, the fourth budget, and I quote:
For the current fiscal year, I said we would cut the deficit to $29.3
billion. We will meet that target.
Current-he is talking about 1988-1989. He was wrong. He repeated the same thing two years in a row, and both years he was wrong and he is still wrong today.
April 27, 1989, the fifth budget, speaking about the debt, and I quote:
It is now more than $320 billion.
This was a rise of $152 billion more than when he gave his economic statement back in 1984. In five years, there was a $152 billion increase in the national debt. The government is not reducing the debt. It continues to balloon.
Speaking of the deficit, he predicted that he would, and I quote:
-reduce the annual deficit to $30.5 billion. Next year, it will be
reduced to $28 billion.
He was wrong. Do not forget that in his second budget in 1986, he predicted that the deficit would be $22 billion. In his fifth budget, he revised it to $30.5 billion and he was wrong. He then said that the year after it would be $28 billion. We know he was wrong.

February 20, 1990, the sixth budget of this finance minister. What did he say? I quote:
We will reduce the deficit to $28.5 billion this fiscal year. We will
cut it in half to $14 billion in three more years. And we will reduce it
further to $10 billion in the year after that.
He was wrong. Today, by his own admission, it is $30.5 billion. It will not be $14 billion in 1993, as he predicted because he knows he was wrong. In his present budget, he predicts it is going to be $25 billion.
In that sixth budget, he said the following, and I quote:
- the debt is still growing faster than the economy-faster than our ability to pay.
This surely is proof of his inability, since in all his previous budgets he assured Canadians that he would reduce growth of debt to less than the growth of the economy. Yet, he admitted the debt was growing faster than the economy.
We turn to the seventh budget. He has been consistently wrong for one economic statement and six budgets. Quite an unimpressive track record. This is despite 33 separate tax increases, despite imposing the GST, despite the fact, or perhaps because of the fact that wealthy Canadians are paying less tax than in 1984 while middle and lower income Canadians are paying more tax.
With this type of record, only two things are certain. First, the minister's budgetary predictions will be wrong again. Second, lower and middle income Canadians will continue to pay higher taxes to a government that has been consistently wrong in its fiscal and economic projections.
Finally, a Minister of Finance who has had seven chances and has consistently failed to achieve his objectives should do the honourable thing: resign.


Mr. Jerry Pickard (Essex-Kent):: Mr. Speaker, I am pleased to take the opportunity today to be able to speak on Bill C-97, the borrowing authority bill.
This bill flows directly from the Minister of Finance's budget delivered on February 26 of this year. The government's budget, the seventh of this administration, is yet another crystal-ball budget with the Minister of Finance as the fortune-teller for Canada.
Government Orders
This budget and the past six budgets make future promises and blames current failures on previous governments, but neglects to reflect on past budget deficiencies, of which there have been many, many, many.
How does this occur? Well, let us review. Let us reflect upon the promises and predictions of the past. In 1985, the Minister of Finance predicted an $18 billion deficit in 1991. Now, it is $30.5 billion. He predicted $18.5 billion, he delivered $30 billion more deficit.
In 1984, the Prime Minister promised jobs, jobs, jobs. Today, 1.3 million Canadians are unemployed and soon, by government figures, 1.5 million or 10 per cent of our work force will be unemployed.
Last year, the finance minister forecast 11 per cent interest rates, but the rates still remained at 13 per cent. When first elected this government set certain priorities. The debt, the deficit and the economy were the highest priorities of this government. Tbday the deficit is still $30 billion annually. The debt has well over doubled to $400 billion and the economy is in a recession. Boy, have they delivered on their highest priorities in their years in government. So much for reflections of the past.
Let us say today what are the priorities in this country. I think anyone who is looking at Canada certainly realizes the recession has to be number one. We all realize national unity is certainly among the top priorities. And the problem the government has struggled with for so many years, the debt is twice as bad as it was when they came in.
But does this budget deal with those priorities in any substantial way? Has it done anything to help the farmers, the business people, the people that I see daily in southwestern Ontario? I do not see anything there. Does it do much to help national unity? We have heard person after person rise in this House and talk about the difficulties, the cutting of all of our programs, freezing, restraining, shifting burdens to the provinces, cutting Canadian Jobs Strategy, cutting social housing. We have heard that, one after the other, after the other.
This government is shifting a financial burden from itself to the provinces and municipalities. What is the reasoning it uses? Very clearly it said: "They don't owe as much as we do, therefore they should pick up a bigger portion". I think that is pretty weak logic when you stop and consider the builders of the debt and deficit were the Tbries. They doubled it. They promised, and promised,

Government Orders
and promised a reduced deficit but delivered a deficit of $30 billion consistently for seven years. They have not been innovative. Their policies are hampering the national government in dealing with national issues, dealing with national institutions, such as health care, education, training, safety nets.
We are being criticized by many in this country who are saying possibly programs should be delivered at the provincial level. We are splitting in this country over some of these values and yet our federal government in this last budget is negating its responsibility for many of the programs which hold our nation together.
We must look to what is happening, not put our heads in the sand and say: "We'll reduce the debt. A crystal ball will make that happen for us". This government continues to blame past governments for its failures. Seven years of putting budgets together should bring IT to the reality that the problems are its own. This government has caused this recession. This government has caused high interest rates. This government has caused the negative effects of the high Canadian dollar and has caused today's dilemmas.
We heard not six months ago the Minister of Finance bragging about how he kept the dollar rate up to fight inflation. He was warned at that time he would drive us to a recession but he did not heed the warnings. He put us in a recession. He said he was cooling the economy off. We said he was driving us to a recession. His crystal ball is broken.
The government has made predictions for the future. Are they to be believed? Their past track record says no. Yet, the government wants Canadians to believe in these facts, in 2 per cent inflation in this country. We almost did that 2 per cent in one month of this year and yet it is predicting 2 per cent inflation shortly down the line.
They want us to believe that we will lower our interest rates. Well, we have followed very clearly the lowering of interest rates in the United States. Canada has not independently moved beyond that. Canada has only followed the U.S. and the difference in interest rates remains very steady, 4 per cent to 5 per cent difference between Canada and the United States.
The government has said job creation is a high priority and yet it has cut, cut, cut. It said we would have a good economy, but look what it has done to our economy at this point. The businesses that are leaving Canada today will not be returning. Canadians' memories are not that short. Canadians will remember that these are the same things the finance minister has said for seven years: all good things will come; the economy will improve; the deficit will be lowered. Consistently saying it.
Canadians now realize he did not have workable plans. He could not see into the future and he certainly led us down a terrible pathway. The scenario that the Conservative governments are better managers than other governments is totally unacceptable. Every year we are told the next year will be better. Every year we hear the next year the deficit will come down. The fact is, the next years have come and gone and the predictions never come true.
In 1984 the government revenue was $70.9 billion. Today it is $128 billion, an increase in taxes of $57 billion or 81.2 per cent. Yet the deficit still remains at $30 billion. Annually the government revenues have increased more than inflation. Still we have a huge deficit, a huge debt, doubled. The public debt as a percentage of the gross national product is growing. The interest charges on the debt have grown slower than the increases in revenues. No matter how you calculate it, seven years of growth, 81 per cent higher income taxes, yet more than double the debt from $168 billion in the second half of 1984, to its point today, $411 billion. It has not dealt with the major issues in this country. I think every Canadian deserves a better role than has been issued to them today.


Mr. George S. Baker (Gander-Grand Falls):: Mr. Speaker, just a couple of words. I certainly will not require 10 minutes in the closing moments of this debate on the borrowing authority.
I would like to point out two things relating to the borrowing authority and the federal budget, two points that have not been made by anybody, have not been mentioned by the news media and certainly not mentioned by the Government of Canada.
The first point is a rather technical point. I was looking a few moments ago at the fiscal equalization payments for this year. Mr. Speaker, I noticed that your province
March 6, 1991

will be getting a big zero in fiscal equalization because, of course, your province does not receive any funding. The people of British Columbia do not receive any money. Ontario also receives zero. That is to be expected because the formula is based upon the ability of a province to raise revenues through taxation, as you know.
Then when I looked at the other provinces, I looked at Saskatchewan and it is up to over $500 million. Manitoba, coming east, is up to over $900 million. It is increasing this year coming up. And then I looked at Quebec and it is increasing by $53.7 million, up to $3,886 billion.
Then I came to what we regard as being the poorer provinces of Canada, and I noticed that New Brunswick was up $26 million. That is interesting, just $26 million. I noticed that Nova Scotia is up $22.1 million, a little bit less. I noticed that Prince Edward Island is up $4.2 million. Now we are really getting down, are we not, to zero? Then we come to the Province of Newfoundland and Labrador. Do you know, Mr. Speaker, that it is receiving-and these are the official figures from the Department of Finance-less $16.9 million less than it received last year.
We hear speakers in this Chamber, the Minister of Finance, the President of the Treasury Board, the Prime Minister and other members say: "Well, there wasn't really a cut. There was a less than normal increase in these equalization payments". I do not want to give the impression that they were telling fibs, because in fact they were not.
When I look a little bit closer I discover that the federal government is subtracting moneys that are owed by these provinces, it claims, from three years ago. In fact the federal government, according to its audit which was done in January, said that those governments received more money than they should have received back in 1987, 1988 and 1989.
I make this point simply because in our estimates of expenditure we forgive moneys that are owed by foreign banks to the Government of Canada. We forgive moneys that are owed by foreign nations to the Government of Canada. But this government will not forgive money owed by our developing provinces of Canada.
Government Orders
The Newfoundland government is presenting a budget tomorrow afternoon at three o'clock. You can imagine, Mr. Speaker, the attention on that budget tomorrow with these equalization payments to the Government of Newfoundland actually decreasing over last year. Imagine, tomorrow the attention of Newfoundlanders will be riveted on one channel to the budget and probably on the other channel to the Brier in Hamilton, because we have an excellent team there headed by a young fellow, John Boland, who I think is going to become victorious on the weekend.
Between our learned premier, our excellent premier, and our excellent John Boland curling team, we will probably hear a not so excellent budget in the background, delivered by Dr. Kitchen, Ph.D. Next to him is Dr. Gibbons, Ph.D. Next to him is Dr. Warren, Ph.D. I think we have more Ph.D.s in the Newfoundland government than in any provincial government in the history of Canada.
But no matter how learned you are or what a great economist you are, you cannot create something out of negative figures. That is point number one. Point number two is this: I examined the cuts to the departments and I found one interesting thing. We are all politicians in this Chamber, but sometimes-and I looked for this specifically and I found it this morning-I wonder where were the politics in these cuts. I went through the figures and I verified them after with the Department of Finance.
I saw every major development fund cut in this country. ACOA is cut in eastern Canada. The Western Canadian Diversification Fund is cut in western Canada, but the Quebec Development Fund is up $20 million.
The minister in charge of that is of course the minister of industry and it is his decision to make. But I challenge the minister to explain to the Canadian public tomorrow why that fund went up $20 million and every single other development fund in this country actually went down by more than that figure.
Those are two points in government reductions. I can guarantee that that does not do anything for Canadian unity. That does nothing for Canadian unity.

Government Orders
I notice that the press did not pick it up and members did not pick it up. Maybe nothing else will be said of it. But I am going to ask the minister tomorrow to take this transcript and to say something to the members of the House of Commons as to why he used his ministerial authority to override Treasury Board and to transplant an enormous increase into the one major fund and cut the other two major funds in this country.
I say that it is not all as clear as it seems, as it is presented by the Government of Canada. Sometimes we have to look between the lines and we have to ask a lot of questions. And we discover that the Government of Canada has not been forthright. It has not come forward and presented what it has done.
Mr. Speaker, I see that my time is up. I trust that these few words were interesting to you.


The Acting Speaker (Mr. Paproski):: There being no further members rising in debate, pursuant to the order made earlier this day, the question is deemed put on the motion of Mr. Wilson (Etobicoke Centre) and recorded division is deemed demanded and deemed deferred until three o'clock p.m., Thursday, March 7, 1991.
It being 9:07 p.m., pursuant to the order made on lUesday, March 5, 1991, this House stands adjourned until tomorrow at eleven o'clock, pursuant to Standing Order 24(1).


[Stage Direction]
The House adjourned at 9:07 p.m.
[Stage Direction]
Thursday, March 7,1991