1992-12-02

Mr. Gilbert Parent (Welland -St. Catharines-Tho-rold):: Mr. Speaker, as the labour critic for the Liberal Party and following the tragedy at the Westray mine, I have received many letters from the families who have been affected by the events. I would like to read one of the letters. It is from Mr. David Sample, a draegerman:
The inquiry is quashed, the federal government has voted four to two not to investigate the financing into Westray mine. Now the company wants to flood the evidence of the explosion. This reads like a cover-up.
The top seven managers of Westray seem to have all the rights. What happened to the 26 men? Is this of little importance? When they died did their rights die with them? Are other miners going to die because it was or is against some people's constitutional rights to find out the truth?
The wives of our deceased comrades were told in court by Westray lawyers that they have no legal standing as to whether or not the mine should be flooded. If they have no legal standing, who does?
We the miners, draegermen, and the family members will not be pushed aside. We will be heard and will not let this issue go until our questions have been answered.
I ask this House to demand an inquiry into the Westray mine disaster.


TAXATION
Mr. Guy Saint-Julien (Abitibi):: Mr. Speaker, in a study on sustainable economic development published in November 1992 the Cornell du Patronat du Quebec asked the federal government to drop a proposal in the 1991 Wilson budget whereby businesses would no longer be able to deduct provincial payroll taxes, which are used to finance health services, and provincial capital taxes from federal corporate income tax.
The Conseil du patronat commented that at a time when the economy is in bad shape, payroll taxes are a particularly regressive form of taxation because they mainly penalize labour intensive businesses. Implementation of this tax measure would inevitably result in a loss of jobs in Quebec.


NORTH AMERICAN FREE TRADE AGREEMENT
Mr. Lyle Dean MacWilliam (Okanagan-Shuswap):: Mr. Speaker, the public hearings on the North American free trade deal are a complete sham. The government has failed to provide Canadians the opportunity to debate the future of our nation. These hearings have been intentionally structured to limit public debate and scrutiny of this trade package.
At the subcommittee hearings this week in Vancouver participants repeatedly rebuked the government for its blatant attempt to stifle debate and minimize opposition of this deal. Participants did not have time to prepare detailed critiques. They did not have time to adequately present them. They could not even get printed copies of the trade agreement.
During testimony the interpretation by the telecommunications workers' union of a particular chapter arose and, surprise, surprise, committee members could not even get a copy of the agreement to refer to.
During the referendum Canadians demanded opportunities to learn about and participate in purposeful debate. Once again, this government is selling Canadians short by keeping us in the dark on the rewriting of our

December 2, 1992
economic constitution through the North American free trade agreement.


REPUBLIC OF SKOPJE
Mr. Gus Mitges (Bruce -Grey):: Mr. Speaker, at the upcoming Council of Europe meeting in Edinburgh there could be a tendency toward reversing the Lisbon decision which states that the Republic of Skopje would not be recognized if it insisted on the use of the word Macedonia as its name.
Macedonia is a Greek name. It has always been part of the history of Greece and of the Greek people. It is not to be usurped by others including the Slavo-Albanian country of Skopje which has neither ethnological nor historical relation to Alexander the Great's Macedonia.
A reversal of the Lisbon agreement would not only be dangerous but would also wound the European Community's credibility and prestige. It would also loosen the solidarity among its numbers and create greater destabilization in the Balkans.
However, the compliance of Skopje with the Lisbon decision not to use the name Macedonia in its name would go a long way toward the establishment of security and friendly relationships between the two countries, Greece and Skopje. Let us hope this will be the case.


BREAST CANCER
Mrs. Beryl Gaffney (Nepean):: Mr. Speaker, this past Saturday, Jill Jackson passed away after a courageous battle with breast cancer. She was 33 years old.
A co-founder of Breast Cancer Action, Jill was determined to do something about this dreadful disease. Those who knew Jill talked about her tremendous energy and optimism, and about her efforts to ensure that the government not only agree with the June 1992 report of the status of women subcommittee on breast cancer but indeed act upon its recommendations.
Jill helped design the ribbon I am wearing today. The tear-drop shape represents the tears shed when we or our loved ones are diagnosed with breast cancer. The rose pink colour represents the 15,000 Canadians diagnosed with breast cancer each year and the black lining is
in memory of the 5,000 women who lose their lives to this disease every year in Canada.
Today across Canada 40 women will be diagnosed with breast cancer and 12 will die. Thus, there are 52 families who are today devastated by this disease for which there is no prevention, no known cause, and for which the treatments currently being offered fail thousands of patients each year.
Breast cancer must be a national priority. In 30 years the probability of getting this disease has risen from one in 20 Canadian women to one in nine.
As Jill said: "The time for action is now".


VIOLENCE AGAINST WOlvlEN
Mrs. Marie Gibeau (Bourassa):: Mr. Speaker, yesterday The Toronto Star announced that a group of women were coming to Ottawa to prevent the Prime Minister from wearing the white ribbon symbolizing the campaign against violence against women. These women claim the government has not done enough to fight violence to earn the privilege of wearing that ribbon.
I would like to ask these women, who intend to invade the private residence of the Prime Minister and his family, where they were when the Prime Minister's own daughter was verbally assaulted in a local rag. Did any of these women come to Ottawa or demonstrate against this kind of humour, which is degrading and humiliating for all women?


An hon. member:: Not one.


Marie Gibeau: Before accusing others, these women should make sure their position is consistent. I would urge them to show some compassion and support for their sisters before preaching to their brothers.


MINING INDUSTRY
Mr. David Dingwall (Cape Breton-East Richmond):: Mr. Speaker, the massive lay-offs at the Lingan and Phalen collieries in Cape Breton have resulted in 1,000 miners out of work just before the Christmas holidays.
December 2, 1992

Given the urgency of this situation, it is absolutely critical that the Government of Canada work with the provincial Government of Nova Scotia and assist the Cape Breton Development Corporation in getting the Donkin coal mine in operation.
As an international coal supplier Devco cannot afford to lose any of its market.
The Donkin mine was launched in 1980 at a cost to the federal treasury of approximately $55 million.
I call upon the minister responsible for the Cape Breton Development Corporation as well as the Minister of Employment and Immigration to open the Donkin mine immediately and to put a program in place to assist the displaced miners who are affected at the Lingan colliery, to clarify immediately when exactly these miners will be in receipt of the unemployment insurance benefits they so desperately need.
At the present time, these workers have been receiving conflicting information with regard to their unemployment insurance.
The situation is critical. On behalf of the miners and their families, I urge the minister responsible to process these claims and get some money out to these men and their families before the Christmas holiday season.
* Sic *


THE ENVIRONMENT
Mr. Ken Monteith (Elgin -Norfolk):: Mr. Speaker, the Minister of State for the Environment has asked me to report to the House an unprecedented event that occurred last week in Aylmer, Quebec.
The federal government's green plan made commitments for protected spaces and species, including the completion of the national parks system by the year 2000 and the establishment of a national wildlife habitat network.
In the spring of 1991 there was a unanimous House of Commons resolution calling on the federal government to consider the advisability of preserving and protecting in its natural state at least 12 per cent of Canada by
working co-operatively with the provincial and territorial governments and assisting them to complete the protected areas networks by the year 2000.
In support of the foregoing and in recognition of Canada's 125th anniversary the Canadian Council of Ministers of Environment, the Canadian Parks Ministers Council and the Wildlife Ministers Council of Canada met jointly for the first time ever.
They supported ratification of the biodiversity convention and agreed on a plan to develop the Canadian biodiversity strategy. They endorsed a statement of commitment to complete Canada's networks of protected areas.
This meeting of three councils of ministers received support in their actions from the Canadian Council of Forestry ministers and representatives of the four major aboriginal organizations in the country: the Inuit Tapiri-sat of Canada, the Assembly of First Nations, the Native Council of Canada, and the Metis National Council.
The recurring theme throughout the session was the emphasis upon the need for co-operation and strong working relationships between all jurisdictions and interested parties.


CAROLINE TEGHISADEH
Mr. Dan Heap (TVinity-Spadina):: Mr. Speaker, Canada is again deporting genuine Iranian refugees.
Last year it took a public outcry to prevent the removal of a woman who was flogged in Iran because she did not wear the traditional veil.
Now Caroline Teghisadeh faces removal on December 7 because the IRB disputes her claims of torture and does not consider sex discrimination a ground for refugee status.
Amnesty International, the European Parliament and the United Nations Human Rights Commission have condemned Iran for public flogging and stoning of women in accordance with the Iranian Penal Code.
Sixty-two United States senators have written to the UN Secretary-General, Boutros Boutros-Ghali, condemning these gross violations of human rights in Iran.

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Oral Questions
In view of this public information, I call on the immigration minister to intervene in Caroline Teghisa-deh's case, stop her removal and land her in Canada.
I call on Canada's Parliament to protect women who have escaped from harsh discrimination against their sex.


VIOLENCE AGAINST WOMEN
Mr. Bill Attewell (Markham-Whitchurch - Stouff-ville):: Mr. Speaker, on Sunday I will be attending a candle light vigil at the Markham Peace Garden. I will be joining Jacquie Cushing-Dill and other people who have organized this annual vigil to honour the 14 women who were murdered in Montreal in December 1989.
All levels of government are working to tackle the insidious and widespread problem of abuse of innocent women. There is, however, much more to be done to alleviate the problem of violent and emotional abuse of women.
As a society, we must have zero tolerance for the mistreatment of women. We must eliminate this problem that touches the lives of so many Canadians.
My dream is that our daughters and granddaughters, the children of tomorrow, will be safer than our wives, sisters, mothers and children are today. We must not leave them with a legacy of brutal pain and violence.


INDUSTRIAL RESEARCH ASSISTANCE PROGRAM
Mr. David Berger (Saint-Henri-Westmount):: Mr. Speaker, when the Prime Minister first ran for office, he promised Canadians jobs, jobs, jobs. Elowever, it seems that what he really had in mind were lost jobs, lost jobs and more lost jobs.
In a speech two weeks ago the Prime Minister outlined a number of initiatives which he said would contribute to our prosperity. One such initiative would be to increase the budget of the National Research Council's Industrial Research Assistance Program. He said that this program has been judged an unqualified success especially for smaller firms and that it will be expanded.
This decision while welcome is long overdue. In 1985 the Neilsen report concluded that IRAP worked. Yet since then the program's budget has been frozen, its network of technology advisers cut back, and the real value of contributions to the private sector across Canada has declined by 30 per cent.
Seven years have gone by. Jobs, sales and exports have been lost. This is the real legacy of this government: lost jobs, lost sales and lost opportunities.


SMALL EXPLORERS AND PRODUCERS ASSOCIATION OF CANADA
Mr. Ken Hughes (Macleod):: Mr. Speaker, the Small Explorers and Producers Association of Canada represents 300 firms involved in oil and gas exploration and development based in Alberta and Saskatchewan.
This group, known as SEPAC, approached the Progressive Conservative Alberta caucus some time ago with a proposal designed to help small operators take advantage of current changes in the upstream energy business. Alberta MPs worked closely with SEPAC to refine these proposals.
We are talking here about firms with from one to ten employees which are part of the entrepreneurial small business backbone of the nation. These are the kinds of businesses led by men and women who are not afraid to take risks which will generate jobs for Canadians, generate wealth for a nation, and help lead this country into a strong and resilient recovery.
My colleagues from Alberta and I call upon the Minister of Finance to respond positively to these proposals in his comments later today.



ORAL QUESTION PERIOD


Hon. Warren Allmand (Notre-Dame-de-Grace):: Mr. Speaker, my question is for the Minister of Justice.
As we approach the third anniversary of the Ecole Polytechnique massacre we must recognize that our gun control laws are still seriously inadequate. Last year the number of Canadians killed with hand-guns doubled from the previous year.
December 2, 1992

Last week the mayors of Canada's largest cities recommended that the regulations on hand-guns be substantially tightened. They made specific recommendations including an operational principle that when in doubt officers issuing gun permits should say no.
To respond to the 80 per cent of Canadians who want better protection against firearm violence, will the minister implement the excellent recommendations made by Canadian mayors last week?


Hon. Kim Campbell (Minister of Justice and Attorney General of Canada):: Mr. Speaker, I think the comments made by the mayors and in fact their ongoing contribution to this file have been very constructive and very helpful.
With respect, I think the measure they are recommending to be put in place can quite properly be put in place by the provinces. It is not something that requires legislative change. In fact it is not something that really lends itself to a legislative or regulatory formulation although I am happy to examine that.
It is my view that it is more properly within the domain of the provinces. I am quite prepared to raise that with my provincial counterparts when I meet with them about a month from now.


William Warren Allmand: Mr. Speaker, the minister is quite correct in that this is a regulatory or administrative matter, and I would appreciate her taking some leadership.
The three handguns used in killing four professors at Concordia University last August demonstrate the continuing weakness of our present laws. Two of those hand-guns belonged to the killer's wife who obtained them for target shooting and then gave them to her husband. The third belonged to the killer who had also been issued a permit, although he had been refused on two previous occasions. Concordia University had warned the police about his threats.
Is the minister satisfied this is the best we can do in preventing violence with guns? There is overwhelming evidence that where guns are less available there is less crime with guns.


A. Kim Campbell: Mr. Speaker, as the hon. member will know, not all of the legislation and regulatory
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measures that this House has worked so hard in creating have been fully implemented.
The provisions with respect to the new firearms acquisition certificate and the capacity for very intense screening there, for example, will come into force on January 1.
What I am trying to do as a first priority is to get all those provisions implemented so that the gun control regime in Canada is what Canadians think it is, so that it corresponds exactly to what they have read about in Bill C-17 and its regulations. At that point I am very happy to look to see if there are other things we might do to make the system work better.
I know the hon. member would agree from his long experience with this file that it is an ongoing issue that has to be dealt with in the light of changing aspects of Canadian society. I will certainly continue to address it as minister.


William Warren Allmand: Mr. Speaker, according to a recent study 47 per cent of women murdered by their husbands were killed with a firearm, and 70 per cent of those firearms were legally obtained by these criminals.
Is the minister satisfied with this intolerable situation? Can she give us one good reason why an ordinary citizen who is not a policeman or a member of the armed forces can legally own and use a revolver? If not, why will the minister not accept the excellent recommendations made by the mayor of Montreal and other Canadian mayors?


A. Kim Campbell: Mr. Speaker, if I am not mistaken, the mayors did not recommend an outright ban on hand-guns. I agree that firearms are a problem where family violence is concerned.

In my opinion the provisions we have put into the legislation dealing with peace bonds and bail hearings in order to provide powers for the courts to make prohibitions of the possession of firearms in any circumstance, particularly the circumstance of domestic violence where somebody is seeking a restraining order or peace bond, I

December 2, 1992
Oral Questions
think will go a very long way toward taking firearms out of those very dangerous situations.


YOUNG OFFENDERS ACT
Mr. Russell MacLellan (Cape Breton-The Sydneys):: Mr. Speaker, my question is also for the Minister of Justice. The minister will know that youth crime has increased by 20 per cent in the past five years and in fact youth violent crime has doubled in that same period.
The minister has for more than a year been speaking with attorneys general across Canada to develop some changes to the Young Offenders Act. She promised that we would have these changes by September. It is now December and these amendments have not been brought forward. When is the minister going to bring forward much needed amendments to this very important legislation?


A. Kim Campbell: Mr. Speaker, it is a source of regret for me in this file and a number of others that the business of this House and the business of the government were interrupted by the referendum process, a necessary process but one which unfortunately drew attention away from some of the other ongoing files we were dealing with.
Obviously there is very little time left in this sitting to enable us to do this, but I hope in the spring to be able to do this. I will be announcing in coming days a very important national consultative process with respect to community safety and crime prevention that I hope will contribute measurably to the quality of what we bring forward with respect to young offenders and other issues concerning the safety of Canadians in their communities.


Russell Gregoire MacLellan: Mr. Speaker, with all due respect, we have been waiting two years for these amendments. While we did have the referendum with which to deal the House was not sitting and surely that would have given the department more time to work on this.
Also the important initiative the minister talks about is in March. If that was an excuse, which it is not, then that initiative would certainly be more relevant if they had something to consider.
We should not have to wait till the spring for these important changes. Canadians are concerned that they are losing the fight against crime. They want to be able to protect their homes and their streets. When is the minister going to realize that and do something to bring forward more meaningful legislation to deal with this problem?


A. Kim Campbell: Mr. Speaker, I will bring forward measures for this House to consider as soon as I am convinced I have measures that are the best considered and the best reasoned measures that will actually do something to change the situation in Canadian society and not simply satisfy those with an urge to make rhetoric on that subject.


THE ECONOMY
Hon. Audrey McLaughlin (Yukon):: Mr. Speaker, I understand that later this afternoon the Minister of Finance will make an economic statement to this House. Certainly Canada is in great need of hope when we see
1.6	million unemployed, 2.3 million people using food banks, and one in six of Canada's children living in poverty.
There is a tendency to blame the Minister of Finance for this solely, but a disastrous record like this takes a team effort to achieve so I would like to ask the Minister of Transport a question.
He will understand, I am sure, that the economic base of any country is an adequate transportation system to move our goods not just north and south, as his policies seem to indicate, but east and west and to the north.
When is the Minister of Transport prepared to bring forward a policy on transportation for this country not based on the crisis of the day, on the airlines, or on wiping out jobs in the rail sector, but a real transportation policy for this country on which the economic base can be built?


Hon. Jean Corbeil (Minister of Transport):: Mr. Speaker, I believe our transportation policy does provide that the transportation industry must give Canadians a system that is effective, reliable, competitive and safe.
December 2, 1992


Audrey Marlene McLaughlin: Mr. Speaker, it is clear the Minister of Transport does not have a vision for transportation in this country.
I would like to direct a supplementary question to the minister of trade. There is no doubt about the results of the Canada-U.S. trade deal. The statistics indicate that we have 350,000 more people out of work. There are plants closing and there are many effects of the trade deal on Canada. Yet the minister persists on proceeding with taking Canada into a NAFTA deal, taking the bad Canada-U.S. trade deal and making it worse. This is a strategy which is designed to move jobs out of Canada and to make it more accessible simply for capital.
When is the minister of trade prepared to bring in a trade policy based on job creation, not job loss?


Hon. Michael Wilson (Minister of Industry, Science and Technology and Minister for International Trade):: Mr. Speaker, I am surprised my hon. friend would ask that question. Yesterday the House in a resounding fashion approved the trade policy of this government which is to bring in the free trade agreement and then the NAFTA.
If my hon. friend would read the speech that I made in the House yesterday she would see that I said the exports to the United States as a result of the free trade agreement had resulted in an increase in exports this year of some 10.5 per cent. I do not know what sort of arithmetic my hon. friend would use if she cannot translate that 10.5 per cent increase in exports this year over last year and the $16 billion plus that we have had since the free trade agreement came in.
Every billion dollars of increased exports represent
15,000	new jobs. That is 225,000 new jobs. That is a job creating trade policy.


Audrey Marlene McLaughlin: Mr. Speaker, I would suggest that Canadians are much less interested in reading the hon. minister's speech than they are in having jobs. If the minister would go across this country he would see the job loss and the devastation being caused in this country because of the trade deal.

I have a supplementary question for the Acting Prime Minister. The Prime Minister told us that the basic
Oral Questions
elements of his economic plan are in place. The Minister of Transport says that deregulation is working. The minister of trade says that free trade is working. My question is: If all these things are working well, where are the jobs?


Hon. John McDermid (Minister of State (Finance and Privatization)):: Mr. Speaker, if the hon. member noticed, there has been growth in job creation in six of the last seven months. Full-time jobs are being created though not at the pace we would like them to grow.
I want to remind the hon. member of a number of things. "Canada is seen leading the G-7 growth" and "Economy starts to speed up", those are the kinds of stories that are happening now as a result of some of the measures we have taken at the federal level.
Later this afternoon the Minister of Finance will deliver an economic statement that I am sure in one hour's time the hon. member will be applauding.


PHARMACEUTICALS
Mr. Ron MacDonald (Dartmouth):: Mr. Speaker, my question is for the Minister of Consumer and Corporate Affairs.
Dr. Stephen Schondelmeyer, a world renowned economist, testified:
The cumulative cost of Bill C-91 from 1993 to year 2000 will be
$4 to $7 billion for each and every penny coming from the taxpayers
and health care systems in Canada.
How can the minister possibly pretend that he is protecting Canadian consumers when he is nothing short of an accomplice in a $7 billion drug heist?


Hon. Pierre Blais (Minister of Consumer and Corporate Affairs and Minister of State (Agriculture)):: Mr. Speaker, it is surprising that the opposition parties, which are always against free trade and the North American agreement, have used two Americans, one yesterday and another one today, to give Canadians a lesson.
In fact the Canadian system in place since 1987, with the foundation we put in place, lets Canadians have drugs for a third less than the Americans pay.

December 2, 1992
Oral Questions
What we have maintained with our very strict controls on drug prices will be reinforced as a result of the new powers being given to the Patented Medicine Prices Review Board, which means that from now on controls will be even tighter.
In the United States, the Americans are looking at setting up a system like ours, including a drug prices review board, and appropriate legislation is now being considered. I invite the Americans to keep looking at what we are doing and benefit from our experience.


Ronald MacDonald: Mr. Speaker, my supplementary question is for the Minister for International Trade. In exchange for giving $7 billion from the health care system in Canada this government has received only vague and unenforceable promises of some future investment by these multinational companies.
Why has the Minister for International Trade caved in to the multinational drug lobby in Washington, and why is a Canadian minister more concerned about the profits of these companies in Washington than he is with the integrity of the Canadian health care system?


Michael Holcombe Wilson: Mr. Speaker, my hon. friend is wallowing in such an incredible amount of misinformation about this legislation with his use of that $7 billion figure. He knows that the experts from the Department of Industry, Science and Technology have refuted that figure and last night gave the committee point by point reasons why that $7 billion figure is totally out of reality.
My hon. friend has not referred to this, but we also tabled last night a study which stated that the increased cost of the drugs would be $129 million over a five-year period.
Just to give my hon. friend some sense, and you, Mr. Speaker, about some of the-


Some hon. members:: Oh, oh.


Michael Holcombe Wilson: I just wanted to make sure I was addressing the Chair. There is an article in The Toronto Star today by Dalton Camp. He refers to increases in drug prices on about half a dozen drugs. Not
one of the drugs mentioned is subject to patent protection. All of them are off patent protection.
That is the difficulty we have in getting the true message out about why this legislation is good for the country, will create jobs, create research and development and will result in protection on price.


AIRLINE INDUSTRY
Mr. John Manley (Ottawa South):: Mr. Speaker, according to the terms of the loan agreement between the government and Canadian Airlines the government has demanded of Canadian Airlines that it restructure its finances, meet with the government and with Air Canada, and permit a representative of the government to sit in on its board meetings.
My question for the minister is this: What is the government doing to address the structural problems in this industry that prevent the companies from being profitable?


Jean Corbeil: Mr. Speaker, we have been very clear on this. A certain number of the problems experienced by our airlines over the past few years are exactly similar to the problems experienced by all airline companies around the world.
I mentioned in my statement last Thursday that we are examining the possibilities to make sure that after Canadian Airlines has restructured we will be in a position to put in place some calibration of the situation so that we can maintain a viable airline industry in Canada.


John Paul Manley: Mr. Speaker, if the minister thinks that the problems of the airline industry are going to be self-correcting he should not have put taxpayers' money at risk.
The minister talks about-and he used the word again today-recalibrating the regulatory framework. When is he going to stop using this bureaucratic mumbo-jumbo and translate it into plain language and real action?


Jean Corbeil: Mr. Speaker, again the hon. member, I presume not deliberately, is trying to mislead the Canadian taxpayers by saying that we have put money at risk. He pretends that he has seen the loan conditions. If he has seen the loan conditions he
December 2, 1992

should be telling the Canadian taxpayers that their government has taken care of their interests.


AGRICULTURE
Mr. Vic Althouse (Mackenzie):: Mr. Speaker, my question is for the Minister of Agriculture.
This year a lot of the grain produced on the prairies was frozen. Farmers are having difficulty with crop insurance because the value of that frozen grain is only about 60 per cent of what the coverage level was. The farmers have mostly produced the right volume; it is only a grade loss crop insurance should be paying. Crop insurance is offering 17 cents when the loss is more like 40 cents.
Can the minister report to the House any progress he has made in getting that loss ratio more realistic than what crop insurance is offering.


Hon. Bill McKnight (Minister of Agriculture):: Mr. Speaker, as the hon. member knows, and I agree it was and is a difficult year in grain production, one province removed protection for revenue insurance. Other provinces, Alberta and Manitoba in particular, have that protection. Each province has a contract that has a formula for assessing the quality loss under crop insurance.
The province of Saskatchewan put forward a suggestion that we change that contract retroactively. It would cost the Government of Canada some $60 million and the Government of Saskatchewan, $20 million. Saskatchewan also suggested that we should pass that on to the farmers in the form of higher premiums over a number of years.
I remind my colleague that not all farmers in Saskatchewan have suffered a quality loss. We have attempted to work with the province of Saskatchewan. I will provide $40 million in a yield protection program if the province will join us in making a contribution so that we can assist the producers in Saskatchewan. Alberta and Manitoba producers do not appear to have the same problem.


Victor Fredrich (Vic) Althouse: Mr. Speaker, a short supplementary.
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The minister will know that very little of Manitoba's crop was frozen. Alberta still has the problem. The crop insurance program is what we are talking about. That was not changed by Saskatchewan.
The minister should remember that these farmers, most of them in northern Saskatchewan received the frost but it did go into the south, have been paying their premiums for years and years and watching the benefits of those premiums go south into the drought zone. This is the first year most of these people have had a loss. They will barely collect their premiums back and he is telling us this is fair.
The only loss they have, and it is not going to change the loss register for those farmers a great deal, is on the yield. It is not a huge loss to the whole program but it is about $20 an acre or more to each of them. They have been paying assiduously into the program and never taking anything out of it. The first year they need insurance the minister disappears on them. Why does he not change it and make sure that 100 per cent of coverage is paid when they have 100 per cent loss? He is reducing it by $20.


William Hunter (Bill) McKnight: Mr. Speaker, the hon. member suggests that there were not any changes in crop insurance from 1991 to 1992.1 would suggest to the hon. member that going from 100 per cent coverage under GRIP down to 80 per cent coverage under crop insurance is a dramatic change.
Contracts were sold with a formula for quality insurance in crop insurance. I have offered, with the province of Saskatchewan, another way of addressing loss. The province of Saskatchewan is suggesting the way to address loss is to have us retroactively change the contract formula again and the federal government provide $60 million and the provincial government provide $20 million.
I am prepared to discuss changes with the provincial government so that the producers in Saskatchewan can have a program that gives them insurance and protection when they need it.


CANADIAN ARMED FORCES
Ms. Mary Clancy (Halifax):: Mr. Speaker, my question is for the Associate Minister of National Defence.

December 2, 1992
Oral Questions
The minister's advisory board on women in the Canadian Forces reported last week saying: "Harassment has been reported by women everywhere in the Canadian Forces". Is the minister, at the very least, prepared to implement the recommendations of that board today?


Hon. Mary Collins (Associate Minister of National Defence and Minister Responsible for Status of Women):: Mr. Speaker, I want to thank the members of that advisory committee. I specifically asked them to look into the issue of harassment, not just sexual harassment but broader issues relating to personal harassment and abuse of power. Their recommendations are going to be very helpful to us.
We have already put in place a number of changes that respond to those recommendations and over the coming months we will be addressing the majority of them.


Mary Catherine Clancy: Mr. Speaker, the women in the Canadian forces and women across Canada need something a little more concrete than that. To quote from the report itself: "The message that sexual harassment is unacceptable still has not been effectively transmitted to all male personnel after three years of a policy that clearly does not work".
Will the minister tell us what she plans to do? Does she plan to implement these recommendations or does she have another plan of action that will deal this dreadful situation a death blow and stop the at least 40 phone calls a day I have been getting from women in the Canadian Armed Forces?


Mary Collins: Mr. Speaker, I can assure the hon. member that the Chief of the Defence Staff has recently sent out a message to all armed forces personnel dealing with the issue of sexual and personal harassment, indicating this is not acceptable and that we are taking strong measures to deal with it.
Some of those measures include mandatory education for all of our personnel within air command and the establishment of independent assistance, people to whom personnel can go to lay a complaint. It is dealing
with a whole new policy which we are bringing forward in terms of enforcement and monitoring.
There are major changes taking place that are going to ensure that women and all members of the armed forces can operate in an environment that is free from all forms of harassment. Our goal is zero tolerance and we are going to achieve it.


PUBLIC WORKS
Mr. John Harvard (Winnipeg-St. James):: Mr. Speaker, I have a question for the Minister of Public Works.
All traffic lanes over the Lockport, Manitoba, lock and dam will be closed January 4. That closure would mean certain decimation of the business community of Lock-port and threaten over 400 jobs.
To prevent this disaster emergency repairs are needed now. It was understood that repairs could be made immediately if the province of Manitoba committed itself to negotiate with Ottawa on the federal divestiture of the bridge and dam.
I would like to ask the minister whether Manitoba has made this commitment.


Hon. Elmer M. MacKay (Minister of Public Works):: Mr. Speaker, we had the privilege of meeting with the Minister of Highways for Manitoba, Mr. Driedger, and other important officials from his province. I understand there will be a meeting taking place tomorrow with my colleague the minister of energy and the premier.
I can assure him that ongoing discussions are taking place. The preliminary engineering work is being done and I think we can reach a mutually satisfactory arrangement soon.


John Harvard: Mr. Speaker, a supplementary question. As far as we are concerned, Manitoba has already made its commitment and we are asking the minister to live up to his.
I have a letter which states that Manitoba is willing to consider federal divestiture and that it has promised to enter into meaningful negotiations, as requested by the federal Minister of Public Works. To me, Manitoba has met its commitment and repairs should now proceed. I ask the minister again, will he keep his commitment?
December 2, 1992


Elmer MacIntosh MacKay: Mr. Speaker, I do not think there is any question about us keeping our commitment. Of course we will. However, I have just told my colleague that there will be talks going on tomorrow and that preliminary engineering work is going on. I see no basis, frankly, for the tenor of the question at this time.


PORNOGRAPHY
Mr. Stan Wilbee (Delta):: Mr. Speaker, my question is for the Minister of Justice. Canadians everywhere are constantly sickened by the stories of sexual abuse of children. There is strong evidence all over the place that sexual abusers manifest these deviant tendencies very early in their lives and that most of these behaviour patterns are well set by the time the abusers reach their adolescent years.
It is also very evident that adolescent perverts or deviant sex offenders feed off pornography. I would like to ask the justice minister today just what steps we are taking to completely stop child and kiddy pornography and what has happened to Bill C-51 that was passed a few years ago to deal with pornography.


A. Kim Campbell: Mr. Speaker, I am not sure whether the hon. member means Bill C-51 or Bill C-15 relating to the sexual abuse of children.
I think it is Bill C-15, which was legislation proclaimed in 1988 which created new Criminal Code offences relating to the sexual abuse of children. Part of that legislation called for a review five years later. The Standing Committee on Justice and the Solicitor General is reviewing that legislation now. I am looking forward to its report on whether it has been implemented in any province. It may suggest new legislative initiatives.
With respect to child pornography, the hon. member will know that the Butler decision of the Supreme Court of Canada held that even explicit sexual representations that would not normally be considered pornographic would qualify as the undue exploitation of sex if they employ children in their production. That has expanded the scope of the existing law which referred to child
Oral Questions
pornography. I am now examining provisions I would like to go into the Criminal Code to make possession of such pornography an offence in and of itself.


INTERPROVINCIAL TRADE
Mr. Jean-Pierre Blackburn (Jonquiere):: Mr. Speaker, my question is for the Minister for International Trade. Regarding the elimination of interprovincial barriers to the free movement of people and goods, despite the failure of the Charlottetown constitutional accord the minister said that he intended to pursue the objectives set out in that accord and to eliminate trade barriers by 1995.
Will the conference this week in Toronto of the minister's provincial counterparts be exploratory or will it make decisions on eliminating certain trade barriers? Also, could the results of this conference have an effect on labour force mobility and therefore influence the conference of employment ministers on labour force training in January?


Michael Holcombe Wilson: Mr. Speaker, my colleague is correct. We are going to be having a meeting starting tomorrow with the Federal-Provincial Committee on Internal Trade to study this very issue.
I think the issue has a good deal of support among the provinces as well as many in the private sector. Our approach tomorrow is not necessarily to reach decisions. Where we can I hope that we will, but our approach is to try to see whether there is a way of dealing with the comprehensive nature of these interprovincial barriers and to deal with them within the time frame that the first ministers have indicated this past month that they would like us to.
On the question of labour mobility, my guess is that there would be some limited discussion on this but certainly no decision making and nothing that would conflict with decisions or considerations at the meeting in January.

December 2, 1992
Oral Questions CANADA POST


Mr. Rod Murphy (Churchill):: Mr. Speaker, my question is for the minister responsible for Canada Post and it is in relation to Canada Post communication plans on regional postal outlets.
The document talks about putting service at risk in rural areas, reducing many small businesses postal revenues by up to 13 per cent and 300 businesses refusing the new arrangements while others will go under.
Why in these tough economic times is Canada Post hurting small businesses and putting service at risk in many rural areas?


Hon. Harvie Andre (Minister of State and Leader of the Government in the House of Commons):: Mr. Speaker, I am not sure what document the member has but I can assure the House that Canada Post is continuing with its program of opening some 6,000 new retail postal outlets to better serve its customers. Indeed, there is a line-up of applications from small businesses desiring to have a postal outlet in their business because it attracts customers to their store. It is something on which surveys by the post office have indicated a 90 per cent approval rating.
I am not sure why the hon. member would be opposed to something approved by 90 per cent of the users and for which small businesses are literally knocking on the door to have.


Mr. Jack Whittaker (Okanagan - Similkameen-Merritt):: Mr. Speaker, it seems to me that the minister is closing his eyes to the reality of the situation.
My question is for the same minister. According to Canada Post's own discussion paper, by making retail postal operators responsible for their own inventories and freight costs this policy will lead to the elimination of up to 300 of these independent retail operators and drastically reduce incomes of the survivors.
Since the government knows that small business creates most of the new jobs in Canada, why is it allowing Canada Post to proceed with a policy that will force retail outlets out of business while increasing the financial
hardships for small businesses, particularly in rural communities where service will be cut?


Harvie Andre: Mr. Speaker, I am sorry, service will not be cut. Obviously, the member had his question prepared before he heard my answer to his colleague.
The post office is opening 6,000 new postal outlets and small businesses are literally knocking on the door asking to be included. There is no question that the nature of some of the operations is being changed. If the hon. member has checked into any of these new franchise operations he will see that they have changed physically. They are much more attractive, and customers to the tune of 90 per cent plus like the new system.


ROYAL CANADIAN MOUNTED POLICE
Mr. Tom Wappel (Scarborough West):: Mr. Speaker, my question is for the Solicitor General and it concerns RCMP recruitment policies.
In his 1992 report, the Auditor General criticized these policies saying: "We estimate that training and salary costs were almost $2 million for members who left the force during 1989 and 1990 for reasons such as poor interpersonal skills, immaturity, lack of assertiveness and low learning ability".
What specific actions is the RCMP taking to correct these inefficient and costly recruitment procedures?


A. Kim Campbell: Mr. Speaker, I am appearing in the House today on behalf of my colleague, the Solicitor General. I think a question of that sort is a question that is more appropriate for me to take on notice on behalf of the Solicitor General who will provide an answer to the hon. member at the earliest convenience.


Thomas (Tom) William Wappel: Mr. Speaker, I thank the hon. minister for her undertaking.
The Auditor General has also recommended that the RCMP require applicants to know first aid, swimming, CPR, computer skills and take some basic college courses before they are accepted for basic training. He has stated that this measure could save Canadians
December 2, 1992

between half a million and one and a half million dollars in training costs.
I would ask the hon. minister to inquire as well whether the RCMP is going to implement these costsaving measures. If so, when, particularly in view of these tough economic times?


A. Kim Campbell: Mr. Speaker, particularly in light of the statement to be made today by the Minister of Finance, I know my colleague the Solicitor General would be grateful for any recommendations to reduce costs in the RCMP.


CONFLICT OF INTEREST
Mr. Don Boudria (Glengarry-Prescott-Russell):: Mr. Speaker, my question is for the Acting Prime Minister.
In the role of the Prime Minister as the minister responsible for the conflict of interest code, the Prime Minister's own appointee in cabinet in the other place has confirmed the hiring of a lobbyist on contract for the government at the same time as the lobbyist in question was lobbying the government on behalf of the communications giant, Unitel.
This is in clear contravention of the conflict of interest rules and the Treasury Board guidelines. I want to ask the Acting Prime Minister: What does the Prime Minister intend to do to ensure that his appointees in cabinet respect his own guidelines?


Harvie Andre: Mr. Speaker, the conflict of interest code is applicable to public office holders, not to contractors of the government.
However, as a matter of practice, professional service contracts in these circumstances normally contain a clause requiring those engaged in the course of carrying out the contract to conduct themselves in accordance with the principles of the conflict of interest code. Such a clause was included in the contract with N. J. Jamieson Strategic Consulting. There is nothing to suggest any of the code's principles have been breached in this circumstance.
Oral Questions


Don Boudria: Mr. Speaker, I hope the minister will table that document.
I want to ask a supplementary in response to what he has said. I quote here from the contracting manual of Treasury Board: "The particular clause must be included in every contract for the services of an individual 'Personal Services Contract' in regard to conflict of interest". Therefore, the conflict of interest code does apply. It says so in the minister's own rules.
What is this minister and what is this government going to do to ensure that the rules are obeyed for once?


Harvie Andre: Mr. Speaker, as I said in my answer to the first question, such a clause was included in the contract. There was no breach of the rules whatever, no breach of the conflict of interest guidelines.


THE ENVIRONMENT
Mr. John E. Cole (York-Simcoe):: Mr. Speaker, I would like to address my question to the minister responsible for inland waterways and fisheries.
The minister is aware of the proposal by the Government of Ontario to situate a huge mega dump to take all of metro Toronto's garbage in Georgina. The proposed site is located on prime agricultural land less than two kilometres from the shores of Lake Simcoe. Besides its devastating impact on the environment this proposal would also have a very negative effect on tourism in the area.
The underground and surface water from this area flows directly to the delicate, sensitive spawning grounds in the lake. Will the minister assure this House that a federal evaluation will be undertaken and that every possible effort will be made by the federal government to stop this proposal and eliminate the potential risk of destroying the fish habitat in this federally regulated, highly crucial body of water in southern Ontario, Lake Simcoe?


Hon. John C. Crosbie (Minister of Fisheries and Oceans and Minister for the Atlantic Canada Opportunities Agency):: Mr. Speaker, I suppose we will be lucky if, by the time the Government of Ontario is finished, the whole province is not a megadump.

December 2, 1992
Oral Questions
With respect to the hon. member's question, I know the hon. member is very concerned about preserving the purity of the site in question. I am advised that when the final selection of funds is made it is going to be submitted to a full environmental review by the province of Ontario.
As we all know, when the NDP is out of power it is a tremendous exponent of environmental reviews. So I do not see how the Government of Ontario could fail to have an environmental review. When it does, we will be vigilant under the Fisheries Act to ensure that there are no negative impacts on fish or fish habitat.
We will certainly do our duty. I thank the hon. member for keeping us informed of what is happening in his area. We shall certainly do our best to stop Ontario from becoming a mega dump.


B.C. SALMON FISHERY
Mr. David D. Stupich (Nanaimo-Cowichan):: Mr. Speaker, my question is for the Minister of Fisheries and Oceans.
As the minister knows, the B.C. salmon catch was half the average of the past three years. The canning season was the worst in decades, the pink run came in $13 million below expectations and the Fraser River was closed three weeks early. Some 1,500 fishermen, shore-workers and tendermen do not even qualify for UI.
Elas the minister considered offering for the west coast a program in terms similar to his November 25 Atlantic emergency response for UI qualifications?


John Carnell Crosbie: Mr. Speaker, as you know, when necessary there is an emergency response failure program that can go into effect to deal with catch failure situations.
There has been no catch failure situation in British Columbia this year, thank heavens. Although this is a low cycle year, I believe it is the best year in 80 years in a low cycle year, particularly with reference to the sockeye salmon.
There has been no fishery failure. There is a problem that certain workers did not get the necessary 17 weeks work which they need to qualify for UI in the lower
mainland because of the lower unemployment rate there.
Since there is no indication of catch failure in any of the four major Pacific fisheries I believe that the conclusion is that there can be no emergency response program. That situation is not comparable at all to the situation on the east coast of Canada where there have not only been catch failures but no fish at all, in connection with the northern cod moratorium.


David Stupich: Mr. Speaker, with answers like that, they will consign the large portion of the Tory caucus to that mega dump.
The Pearse-Larkin inquiry into the alleged disappearance of up to 1.2 million Fraser River sockeye was due to report to the minister by November 15 last. Can the minister assure the House that the report will be made public and made available to the fisheries committee prior to the proposed rising of the House on December 11?


John Carnell Crosbie: Mr. Speaker, with reference to the report of Dr. Pearse and Dr. Larkin, it has been received and is, of course, now being translated.
The report is a first-class piece of work in my opinion. It certainly explains what happened with respect to the Fraser River this summer.
I intend to be in Vancouver on Monday at which time the Pearse-Larkin report will be made public. Dr. Pearse and Dr. Larkin will be available to answer questions, as will I. I will give the reaction of the Government of Canada with respect to their report. I think the hon. member will find it a very interesting report.
The situation, of course, is not nearly as bad as had been painted during the summer. Nevertheless, there are steps to be taken to ensure that nothing of this sort occurs again next year.


AGRICULTURE
Mr. Maurice Foster (Algoma):: Mr. Speaker, my question is for the Minister of Agriculture.
December 2, 1992

The minister knows that tens of thousands of farmers are facing the worst cropping conditions in a generation. For instance, 90 per cent of Ontario's corn crop is still in the fields and this is December.
Is the minister willing to respond to the representations he has received from the Ontario Corn Producers and other groups to provide interest-free cash advances up to 50 per cent for unharvested grain, the same as grain in a bin?
Is the minister willing to provide this assistance to these producers who are facing a most desperate situation this fall?


William Hunter (Bill) McKnight: Mr. Speaker, I recognize the difficulties my colleague brings forward. We have had discussions with the Ontario Corn Producers. As my colleague knows, in the prairie cash advance payments program there is recognition for unthrashed grain left in the field after November 15. There is a cash advance that can be made on unthrashed grain.
Unfortunately, we do not have legislation under the Advance Payments for Crops Act for Ontario that is equivalent. I am working to try to have equivalency through the commodity group, the Ontario Corn Producers, that would provide equal opportunity for those producers who have not been able to thrash their grain, but yet still encourage taking grain off if possible.


POINTS OF ORDER
Michael Holcombe Wilson: Mr. Speaker, I rise on a point of order. I would just like to comment on a statement by the New Democratic Party.
It was complaining that a text is not available for the NAFTA. I would like to advise the House that since the House leader of the New Democratic Party raised this point in the House texts are available through Info-Export for anybody in the House or others who wish one.


CAROLINE TEGHISADEH
Daniel James Macdonnell Heap: I rise on a point of order, Mr. Speaker.
Routine Proceedings
I rise to correct part of the statement I made during statements by members concerning Ms. Teghisadeh of Iran.
When I sat down, I received a phone call saying that the minister had intervened last night on her behalf to land her. I congratulate the minister on his exercise of compassion.
The phone call was late after my statement because the minister's information to Ms. Teghisadeh's lawyer came after my statement and the phone call to me followed on that.
I thank the minister very much for his action.



ROUTINE PROCEEDINGS


[Stage Direction]
Mr. Jim Edwards (Parliamentary Secretary to Minister of State and Leader of the Government in the House
of Commons): Madam Speaker, pursuant to Standing Order 36(8), I have the honour to table, in both official languages, the government's response to 12 petitions.
[.Editor's Note: See today's Votes and Proceedings.]
 * *
Mr. Gabriel Desjardins (Temiscamingue):: Madam Speaker, pursuant to Standing Order 34, I have the honour to present to the House, in both official languages, the report on the 13th General Assembly of the AIPO, held in Jakarta, Indonesia, from September 21 to September 26, 1992.


Mr. Jean-Marc Robitaille (Terrebonne):: Madam Speaker, I have the honour to present, in both official languages, the report of the legislative committee on Bill

December 2, 1992
Routine Proceedings
C-73, an act to amend the Canada Post Corporation Act, with amendments.
[Editor's Note: See today's Votes and Proceedings.]


John Horton McDermid: for leave to introduce Bill C-98, an act to provide additional borrowing authority for the fiscal year beginning on April 1, 1992.


Madam Deputy Speaker:: Pursuant to Standing Order 68(2), the motion is deemed adopted.
Mr. McDermid (for the Minister of Finance) moves that the bill be now read the first time and printed.
Pursuant to Standing Order 69(1), the motion is deemed adopted.
Bill read the first time and printed.


PETITIONS
Mr. Nelson A. Riis (Kamloops):: Madam Speaker, it is my pleasure to present a petition on behalf of a number of constituents.
The petitioners point out that agricultural goods are included under the FTA. They also point out that section
22.01	indicates that water is in fact a clear element as part of the FTA agreement on which NAFTA is based. They point out that from their determination NAFTA includes FTA and FTA includes water as part of the trade deal.
Therefore, they are asking the Canadian government to reintroduce legislation that would prohibit the transfer of inner basin water to the United States.


Mr. John Nunziata (York South-Weston):: Madam Speaker, I would like to present a petition signed by a number of constituents. They point out that Canada ratified the United Nations Convention on the Rights of the Child and has a moral obligation to seek the elimination of child poverty in Canada.
The petitioners go on to say that the success of political commitment to eliminate child poverty in Canada requires public commitment and initiative among broad sectors of the Canadian population at local and national levels.
They call on the government to take the actions necessary to reaffirm its commitment to seek the elimination of poverty among children in Canada by the year 2000 and to develop a plan for the implementation of this commitment.


Mr. Derek Blackburn (Brant):: Madam Speaker, pursuant to Standing Order 36, I also have the pleasure of introducing a petition before this House which calls upon Parliament to take the actions necessary to reaffirm its commitment to seek the elimination of poverty among children in Canada by the year 2000 and to develop a plan for the implementation of this commitment.


Mr. Sergio Marchi (York West):: Madam Speaker, I have the pleasure to present three additional petitions, three of many that have come from my riding of York West, which address the drug plague that is unfortunately in the middle of communities in Toronto and across the country.
The petitioners call on the government to amend the Narcotics Control Act so that all the assets that are seized from drug seizures not only flow back to general revenues in Ottawa, but are shared with front-line operations like police forces and local organizations which are on the front lines of that battle in the hope that we will win the war.


Mrs. Shirley Maheu (Saint-Laurent-Cartierville):: Madam Speaker, pursuant to Standing Order 36, I welcome this opportunity to table a petition on behalf of the Armenian community in my riding and also on behalf of other residents of Montreal, Laval and Pointe-Claire. Further to a resolution passed by the Quebec National Assembly to acknowledge the importance of the anniversary of the Armenian genocide, the petitioners humbly pray and call upon Parliament to urge the government to express its sympathy to the Armenian people, and especially to Canadians of Armenian origin who servived the genocide of April 24, 1915, and to support interna-
December 2, 1992

tional pressure on the Turkish government to acknowledge the events of April 24, 1915.


Mr. Robert E. Skelly (Comox-Alberni):: Madam Speaker, I have a petition from a number of constituents.
The petition notes that Bill C-91 seeks to end the licensing of further no name generic drugs in Canada and also will allow brand name drug companies patent protection for up to 20 years. It also notes that Bill C-22 which allows 10 years of patent protection has already driven up prices of drugs to individuals and provincial and private drug plans.
They therefore call upon Parliament not to proceed with Bill C-91 and to repeal Bill C-22 passed in 1987 so that Canadians will have the full benefit of lower priced generic drugs and so that provincial and private drug plans can serve Canadians without being forced to charge higher fees or provide less coverage.


Robert Evans Skelly: Madam Speaker, a second petition notes that at the present time the Income Tax Act allows self-employed professionals and business people to make deductions for operating expenses and the improvement of their offices or businesses, but unfairly refuses to allow teachers deductions for the expenses which they incur in order to better their teaching abilities.
They therefore call on the Minister of Finance and the Minister of National Revenue to amend the present Income Tax Act to allow teachers and educational institutions to deduct the cost of their expenses in the course of their employment.


Guy St-Julien: Madam Speaker, I would like to table a petition from residents of Val-d'Or, Amos, Vassan, Sullivan, Val-Senneville and Saint-Ed-mond-d'Abitibi, stating that films depicting violence on television are dangerous and unacceptable because they encourage further violence.
Routine Proceedings
They also point out that all toys that are an incentive to violent games are unacceptable and that production of such toys should be banned. Freedom of the press should be restricted when reporting acts of violence. The repeated reporting of acts of violence on all television channels and on radio may encourage similar acts of violence.
Therefore the petitioners humbly pray and call upon Parliament to pass legislation dealing with the above, to wipe out violence in our society, protect our children and guarantee everyone in this country a better quality of life.


Madam Deputy Speaker:: The hon. member for Ottawa Centre.


Mr. Mac Harb (Ottawa Centre):: Madam Speaker, this petition concerns refugees who are suffering from personal economic hardship. Many of these refugees come from unstable Third World countries and they are trapped in the immigration processing backlog.
These petitioners are calling on Parliament to urge the government to exercise compassion and step up its action on refugee cases.


Lyle Dean MacWilliam: Madam Speaker, I have another in a long series of petitions. This one is signed by residents throughout British Columbia and Alberta who are concerned about the proposal by Multinational Resources to dam a portion of the flow of the North Thompson River and to divert that water through the Columbia River system into the California market.
These petitioners urge the government to state categorically that it will not permit our freshwater rivers to be dammed and diverted into the U.S.A. or into Mexico. It asks the government to state categorically that Canadian waters are not for sale.


Daniel James Macdonnell Heap: Madam Speaker, pursuant to Standing Order 36, it is my pleasure to present a petition signed by 111 people in the Trinity- Spadina area and nearby who are concerned with many of the proposed amendments to the Immigration Act in Bill C-86. In particular, they strongly oppose the provisions that allow decisions to be made retroactively. This would cause many individuals and families who have already relied on earlier decisions to be affected in a serious manner.

December 2, 1992
Routine Proceedings
Therefore, the petitioners call upon Parliament to urge the government to withdraw these amendments.


Daniel James Macdonnell Heap: Madam Speaker, I have a further petition from 59 people in the Toronto area who are very concerned with some of the decisions being rendered by the refugee board.
The petitioners point to UN decisions and UN guarantees of refugee status determination under the UN Covenant on Civil and Political Rights which requires that their rights be guaranteed without discrimination.
In accordance with UN principles, they call upon Parliament to enact legislation which would provide a meaningful appeal on the merits for refugee claimants whose cases are rejected so that they have appeal rights comparable with everyone else in Canada.


Daniel James Macdonnell Heap: My final petition, Madam Speaker, is from over 30 people who are concerned that there may be too long delays for people who are detained by immigration authorities. The petitioners ask for legislation which would provide for a detention review by an adjudicator within 48 hours, and with two further reviews conducted at least once in each of the next seven day periods and thereafter at least once every 30 days so as to ensure that no one is detained without unequivocal proof that he or she is a danger to the public or would not appear for immigration proceedings.


Thomas (Tom) William Wappel: Madam Speaker, the petition I am presenting today concerns Corrections Canada's announcement that one of four new prisons for women will be in the Kitchener-Waterloo area. I must say thousands of people have signed this petition.
The petitioners protest this decision primarily because of the failure of Corrections Canada to consult with the immediate community where that prison is going to be located.
They call upon Parliament to urge the government to move the proposed women's correctional facility to a location that will provide a more harmonious existence between any community and this particular correction
facility. I will repeat that there are thousands of signatures of people who will be directly affected by the location of this prison.


John R. (Jack) Whittaker: Madam Speaker, pursuant to Standing Order 36, it is my duty and pleasure to present a petition from a number of people throughout British Columbia and Alberta, and as a matter of fact from Ottawa, Ontario.
These people have one thing in common. They are all concerned about the intention of diverting waters from Canada into the United States, and particularly the North Thompson River diversion and the U.S. proposal under the North America Water and Power Alliance to divert Canadian waters into the United States and northern Mexico.
The petitioners are asking the government to make very clear its position that it will not allow the diversion of freshwater rivers into the United States or the damming of these rivers for diversion and to indicate to everybody that freshwater rivers are not for sale.


Victor Fredrich (Vic) Althouse: Madam Speaker, I have petitions from the communities of Bruno, Wakaw, Cud-worth and surrounding districts which point out that poverty of Canadian children will yield ever-increasing costs to the administration of health care, justice and social welfare, and poverty among children inhibits learning and preparation for employment constituting a cost to future national productivity.
The petitioners point out that Canada ratified a United Nations Convention on the Rights of the Child and has a moral obligation to seek the elimination of child poverty in Canada and calls upon the government to develop such a plan for immediate implementation.


Mr. Ray Funk (Prince Albert-Churchill River):: Madam Speaker, I have a petition signed by over 600 people from my constituency protesting the introduction of Bill C-91, the drug patent bill.
The petitioners are appalled that this government
would be ramming through a bill which will cost Canadian consumers, particularly the sick, at least $6 billion
December 2, 1992

over the next 10 years in exchange for some vague promises of a few jobs in a few places for a few people.
Therefore, the petitioners call upon parliamentarians to not proceed with Bill C-91 and to repeal Bill C-22 passed in 1987 so that Canadians will have the full benefit of lower-priced generic drugs and so that provincial and private drug plans can serve Canadians without being forced to charge higher fees or provide less coverage.


Mr. Rod Laporte (Moose Jaw-Lake Centre):: Madam Speaker, this government likes to brag about what it is doing for rural Canadians with respect to postal service and it is saying that rural Canadians appreciate that service. Well, that is not the case.
Certainly not in the town of Outlook, Saskatchewan, in my riding, where approximately 150 people have signed this petition because they are upset with Canada Post's policy of only providing residents of rural communities free delivery at the post office nearest to their place of residence. They say that this ignores the fact that for many rural residents the nearest post office to where they live may not be the easiest post office to travel to and may not be in the community where they conduct their other business.
They say this is a ludicrous policy. It does not cost Canada Post any extra money to allow people to go to the post office of their choice.


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


Madam Deputy Speaker:: Is it agreed?


Some hon. members:: Agreed.


James (Jim) Stewart Edwards: Madam Speaker, Notices of Motions for the Production of Papers No. P-15 in the name of the
Government Orders
hon. member for Saanich-Gulf Islands and No. P-20 in the name of the hon. member for Kingston and the Islands are acceptable to the government subject, to the usual reservations concerning confidential documents. These documents are tabled immediately.


[Stage Direction]
P-15-Ms. Hunter
That an humble address be presented to His Excellency praying that he will cause to be laid before the House of Commons copies of all memoranda and correspondence between the Department of National Defence, the Department of Fitness and Amateur Sport and the Commonwealth Games Society of Victoria, British Columbia, pertaining to Heals Rifle Range being designated as the official shooting venue for the 1994 Commonwealth Games to be held in Victoria, British Columbia.
Motion agreed to.
CONSOLIDATED MILITARY SUPPLY DEPOT P-20-Mr. Milliken:
That an order of the House do issue for copies of all studies commissioned or undertaken by or for the Department of National Defence in connection with the location of a consolidated military supply depot in Montreal as decided by the Minister of National Defence in April 1992.
Motion agreed to.
James (Jim) Stewart Edwards: I would ask that other Notices of Motions for the Production of Papers be allowed to stand.


Madam Deputy Speaker:: Is it agreed?


Some hon. members:: Agreed.



GOVERNMENT ORDERS


Hon. Don Mazankowski (Deputy Prime Minister and Minister of Finance) moved: that Bill C-98, an act to provide additional borrowing authority for the fiscal year beginning April 1, 1992, be read the second time and referred to a legislative committee in the Economics envelope.
He said: Mr. Speaker, this afternoon our country and this Parliament open an important debate on the future course of economic policy. In these times of challenge

December 2, 1992
Government Orders
and opportunity, it is most appropriate that full discussion be undertaken by all members of this House.
Parliament is where the diversity and complexity of Canada are brought together in one place by the representatives of the people from every region. This is where differing political and philosophical approaches can be put forward for public consideration.
Over the next two days I expect all members opposite to state clearly and directly what their proposals for economic policy would be. Canadians expect this of us and they deserve no less.
For my part, I will make it abundantly clear where the government stands. I will provide to the House and to the country an update on Canada's fiscal and economic situation, and I will announce a number of measures to contain the deficit and to enhance economic recovery.
This debate occurs at a time when our economy is undergoing profound change. A new economy is emerging around the world, offering new opportunities that require adjustment and restructuring.
In this environment, Canadians are seeking greater security and greater economic opportunity, for themselves and for their children. That is the overriding goal of our economic policies.
Our economic policy is to build confidence, enhance growth, create jobs, and help Canadians adjust to this period of transition and take advantage of new opportunities.
All of our efforts have been directed at investing in growth through sound monetary and fiscal policies, the opening up of markets, streamlining government, building the skills of Canadians, and encouraging private sector enterprise and initiative as the basis for economic progress.
In response, Canada's economy performed particularly well from 1984 to the onset of the recession in 1990. We led the G-7 in job creation and were second only to Japan in economic growth. However, our most recent economic progress has been slowed by a stubborn worldwide recession, and world recovery has been weakened by economic restructuring, excessive debt, and trade uncertainties.
All this has contributed to a painful adjustment which has slowed world economic growth from 4.3 per cent in 1988 to only 1 per cent this year, the lowest rate of growth the world has seen since 1982.
Canada is not immune to these realities. Next to Germany we are the major industrial country most dependent upon exports. When world growth slows, when commodity prices fall, when world unemployment increases, Canadians cannot escape these consequences.
As a result, far too many Canadians are without work. Far too many others fear for their future as economic restructuring takes place around the world. We need to act to restore confidence and to rekindle hope.
There are those who would have us believe that an economy weakened by too much government debt can be strengthened by creating even more government debt. This approach was wrong in the 1970s. It was wrong in the 1981-1982 recession. It would have been wrong last February. And it would be wrong today.
The simple fact is that large government deficits, federal and provincial, and high foreign debt limit our room to act.
We must act responsibly. That does not mean that we cannot respond. The essence of governing is choosing. There are choices to be made and we are prepared to make them in the best interests of all Canadians.
To make intelligent choices, we must face facts. We must deal with the world as it is, and not as we might wish it to be. We must recognize that globalism is a fact of life. This increases our choices in the goods and services we buy. It increases our opportunities in new markets that we can sell to. But it also increases our interdependence and our competition.
In this increasingly interdependent world countries that turn inward and cling to the old ways of doing business will finally have no future.
The new world economy brings intense pressure to compete. Those who can, will prosper. Those who cannot, will stagnate.
This is not an ideological statement. It is a fact. Some may think that competition is a dirty word, but if we fail
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to recognize reality we will miss new opportunities. We will sit on the sidelines while the world marches forward.
It is because Canadians can compete and win that we have a duty to encourage that competition. If we face facts, realistically, pull together, and address our challenges head on, we will continue to grow and to prosper.
As I have made clear, this government is not prepared to sacrifice steady, responsible progress for quick fixes that promise relief today at the price of misery tomorrow.
Canada's experience has clearly demonstrated that higher spending and greater deficits will not create lasting jobs. They lead only to higher interest rates in the short term and higher taxes down the road.
Our government will continue to work to put in place a sound fiscal structure and to address the issues of productivity and competitiveness. This is the approach that was recommended by the private sector task force on prosperity.
We will achieve this by continuing to invest in growth on behalf of all Canadians. We will continue to invest in policies to make our economy work better. We will further strengthen our investment in people. We will make additional investments in public infrastructure and we will continue to invest in open trading markets. We will continue to invest in sound monetary and fiscal policies, and we will invest in partnerships for growth with the provinces, with labour and with business.
These kinds of investments take time to bear fruit. They are not easy, change never is. However, there are pay-offs and they are starting to appear. At 1.4 per cent, we have the lowest inflation rate among the G-7 countries this year.
With productivity up by 2.6 per cent so far this year we have made major gains in controlling costs, and this improves our competitiveness. Our trade performance is showing the results. Canada's merchandise trade surplus, one of the keys to reducing our current account deficit, is up by almost $2 billion from last year.
We all recognize that recovery from the 1990-91 recession is painfully slow, not only here in Canada but around the world. Therefore, I expect average growth
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this year to be about 1 per cent. We know that we cannot have a powerful recovery when world growth is stagnating, but our investments in growth are positioning Canada for renewed world growth.
Some of the encouraging signs are as follows: real output increased by 1.4 per cent in the third quarter of 1992; domestic demand, including consumer spending, housing and investment in machinery and equipment, has increased by about 5 per cent; the composite leading indicator continues to improve; employment has increased in five of the last six months; consumer confidence is rising-it has now reached its highest level since the fourth quarter of 1989; real exports are up by more than 6 per cent over the first three quarters of this year; and exports to the United States are at record levels, up by 10.5 per cent this year over last.
However, we must interpret these signs cautiously. The world economy is still going through a difficult period. The recent instability in financial markets will hurt Canada's fourth quarter growth numbers. However, as the fundamental strengths of Canada's economy become more apparent the exchange rate should become less at risk and interest rates should come down considerably during the course of 1993, with short-term interest rates averaging about 6 per cent over the year.
Our improved competitive position, the easing in interest rates that our excellent inflation performance permits, a pickup in the U.S. economy, and the measures that I will announce today will contribute to stronger growth next year. I expect average growth of about 2.5 per cent for 1993.
I expect inflation will remain below 2.5 per cent in
1993.	I expect improved employment prospects with an increase of about 300,000 jobs over the course of the year.


Some hon. members:: Hear, hear.


Donald Frank Mazankowski: Mr. Speaker, I now wish to turn to a number of measures that I am proposing to assist economic recovery and invest in economic growth.
One of the things that we will continue to do is to make government leaner and more efficient. We have made government smaller and more supportive of the private sector in a number of important ways. For example, government operating costs after inflation are

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more than 20 per cent lower than when we came into office.
In the last budget 46 agencies, commissions and boards were eliminated or restructured. The Prime Minister has instructed all ministers to identify further candidates for action by February 1993. Since 1985 we have dissolved 14 Crown corporations and undertaken 23 privatization initiatives, and we intend to proceed with further privatization.
We have deregulated critical economic sectors to increase competition and we are modernizing all federal regulations. We are eliminating those that no longer serve a public policy purpose and we will streamline others so that they will not stifle creativity and efficiency.
Agriculture Canada, Transport Canada and Consumer and Corporate Affairs Canada were directed to review and publicly justify their regulatory regimes in the last budget. All three found ample room for improvement, and as an example Agriculture Canada reviewed 58 sets of regulations. Fifteen were eliminated in whole or in part, four are being sunsetted, and 38 will be modernized. Building on this result the Treasury Board has announced that 19 other departments, along with six agencies, will complete their own reviews by April 1993. What we are seeking in all of these areas is a lower-cost, more efficient government that can work in partnership with the private sector to benefit and serve all Canadians.
I now turn to tax reform. An important part of modernizing and streamlining government has been to modernize our tax system. For the long-run competitive health of our economy our single most important tax reform initiative has been the replacement of the outdated and economically destructive manufacturers' sales tax with the GST. The old tax favoured imports, hurt Canadian exporters and penalized new business investment. The GST has helped our manufacturers and our exporters.
The Canadian Manufacturers' Association reports that the GST has saved its members $3.5 billion. This is important assistance to activity and jobs in difficult times. The Canadian Exporters' Association reports that the tax has improved our competitive position. This has contributed to our strong export position. Major retailers
have confirmed that the prices of the majority of their goods dropped after the introduction of the GST.
The GST is not raising more revenues than the old tax. By law every penny of net GST revenue goes to the Debt Servicing and Reduction Account, where it can be used only to pay the interest on the debt and ultimately to reduce our debt. We are continuing to work to simplify the GST. Last week my colleague, the Minister of National Revenue, announced changes to streamline the administration of the GST. I will soon be announcing further measures to make the tax fairer and easier to comply with.
The government will also act to ensure that those who owe tax-both sales tax and income tax-make their payments, and do so in a timely way. We will give careful consideration to the Auditor General's recent comments in this regard.
Sales tax harmonization represents a major opportunity to reduce the burden of government on the private sector, particularly on small business. I therefore urge my provincial colleagues to join with me in a renewed effort to align our sales taxes, not only with each other but with the reality of the tough, competitive world in which our business people must operate.
I now turn to the small business sector. Small businesses are the primary engine of employment growth. Between 1979 and 1990 small business created more than 2 million full-time jobs. This is more than 80 per cent of the total created during that period. Over-all, Canada's federal tax system for small business is one of the most favourable in the world. Compared to the United States our tax rates are lower, our R and D incentives are more generous, and our taxes on dividends and capital gains on investments in small businesses are much lower.
Yet today the small business community is undergoing serious financial and competitive pressure. Much of this pressure, as I indicated before, comes from the need of the provincial and federal governments to get their act together, whether it is on the GST, other taxes, government spending, or regulation. Some small businesses are finding that the over-all regulatory and tax environment is friendlier south of the border and we must deal with that.
The fact is that much of what needs to be done to address this problem is in the domain of provincial and municipal governments, but the federal government can
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do something and we will assist small business where we can.
Therefore, I am proposing today a small business employment and investment package to help small businesses across the country modernize, attract financing, grow and create jobs.
For the next year I am proposing that most small businesses increasing employment will be able to do so with no increase in unemployment insurance premiums. New businesses starting up in 1993 will pay no UI premiums in that year. This assistance will reduce the cost of additional employees by up to $1,600 each. It will be delivered in a simple way with a minimum of paperwork. More than 900,000 firms, indeed 95 per cent of all firms in Canada, will be able to benefit from this measure. The government, not the UI fund, will finance this measure.
I am also proposing a new 10 per cent investment tax credit for small business. It will apply to investments in machinery and equipment for small businesses engaged in manufacturing, construction, farming, fishing, mining, oil and gas and long-haul transportation. It will apply to investments made after today and before 1994.
I am also announcing measures to help small businesses secure financing. In the February budget I proposed that the ceiling for loans to individual businesses under the Small Businesses Loans Act be doubled from $100,000 to $200,000. I am announcing today that this ceiling will be further increased to $250,000. As well, the government will work to broaden the application ol the act to include some forms of working capital.
I am also announcing changes to simplify and expand investment in small business by RRSPs and Labour-Sponsored Venture Capital funds.
The Small Business Financing Program announced in my budget last February will be extended for two more years until the end of 1994. This provides low interest commercial financing for viable small businesses in difficulty. I am serving notice to Canada's banks that I expect them to make a special effort to play a constructive role in ensuring the success of this program.
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We all know that small and medium-size businesses play an important role in Canada's home building industry. In my last budget I introduced a home buyers' plan to allow Canadians to use RRSP savings to help buy homes. This program has been an unqualified success, generating economic activity in all regions of Canada.
More than 130,000 withdrawals have been made under the plan. I am announcing today that in view of the positive response I am extending the plan for another year.
I am also announcing measures to assist activity in the resource sector. The first $2 million of Canadian development expense by junior oil and gas companies will be treated as Canadian exploration expense for the purpose of flow-through share financing, raising its write-off rate from 30 per cent to 100 per cent. This will be a welcome measure.
Changes will also be introduced to benefit the mining sector. New mines or major expansions of existing mines are now allowed to fully recover their capital investment before paying any federal income tax. The Income Tax Act will be amended to provide more flexibility for mining and oil and gas companies to utilize their noncapital losses. These measures will help to put Canada's small businesses in a better position to meet their competitive challenges, to grow and to create jobs.
I now turn to research and development. The Canadian Manufacturers' Association recently noted: "The next ten years will bring about more changes in the way business is done than we have seen in the past 50 '.
Therefore effective R and D will be a key to successfully meeting the challenges of the next decade and the next century. Canada now has more generous tax incentives for R and D than any other G-7 country. In my last budget I proposed to improve them even further, after consulting with R and D performers.
I am today announcing changes to allow the tax rules to better reflect how R and D is actually performed in the business community. As indicated in the February budget, they will provide additional support of $230 million over the next five years to Canadian companies undertaking research and development.

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In addition, there are several other areas where the tax system can be modified to help Canadian businesses adapt and grow. Some problem areas have been identified.
The first is the tax treatment of equipment, such as computers, that becomes obsolete quickly due to rapid technological change.
Second, the ability of some firms to use their R and D investment tax credits fully.
Third, the ability of Canadian firms to gain access to new technologies.
Fourth, tax based impediments to growth of small innovative companies.
These concerns have been raised in our discussions with the business community as part of the prosperity consultations. In consultation with industry, we will examine modifications to address these areas in the coming months and actions will be announced in the budget. I have set aside $400 million over the next five years to finance changes to address these issues.
In addition, funding will be increased for the highly successful Industrial Research Assistance Program which provides technology support and financial assistance to businesses. My colleague, the Minister of Industry, Science and Technology, will also be taking steps to streamline delivery and ease of access to federal technology programs and services.
Funding will also be extended for long-term research, building on the best of the results achieved under the networks of the Centres of Excellence Program, a very good program I might add.
We will strengthen our investment in people.
In a world where capital, information, goods and even services flow easily across national borders a nation's competitive advantage is increasingly being found in the skills of its people.
As has been recently noted, nations once competed for control over natural resources. Today they compete to produce the best educated labour force.
Keeping up with this competition is a major challenge. In one generation, Canada's young people have been exposed to more scientific and technological advancement than their parents or grandparents in their entire lifetime.
We have invested in skill development and training by setting up the Canadian Labour Force Development Board and by refocusing the UI system from passive income support to active skill building.
The $3.5 billion we spend on training and adjustment does make a real difference to the lives of hundreds of thousands of individuals across the country.
Our programs have helped individuals cope with change, while assisting the adjustment to new opportunities. A good example of this is the Northern Cod Adjustment and Recovery Program. The collapse of the northern cod stock in Newfoundland required a moratorium on fishing to rebuild the stock for future years. Over 20,000 Newfoundlanders were affected. The government is responding by supporting incomes in the short run, by helping individuals build new skills so that they can become self-reliant, and by helping restructure the fishing industry to put it on a sustainable basis.
As the Prime Minister recently announced, support for the Unemployment Insurance Development Uses Fund will increase to more than $2.2 billion next year from $1.9 billion last year and from a level of $500 million in 1990. This fund invests in people by helping them to upgrade their skills. This program has been a real success story. This year 450,000 people will benefit from the program. This will increase to more than 500,000 next year. The additional funds will be used to provide special services to workers who lose their jobs after a long-term attachment to the labour force.
I am announcing further measures today that will strengthen our investment in people and the future of this country.
To lay the foundation for a stronger training culture in this country we need the joint commitment of employers and workers to develop training strategies. To facilitate this the government will make funding available to help create permanent skill councils in particular sectors of the economy. Priority will be placed on the important task of developing occupational standards so that training will be more relevant to industry's needs. Government funding of $250 million over five years will be used strategically to lever a national private sector driven effort. The government will develop tax incentives to
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help defray the costs of training workers to meet these occupational standards.
My colleague, the Minister of Employment and Immigration, will be elaborating on the government's labour market initiatives later in this debate.
We will make additional investments in public infrastructure.
The quality of a nation's infrastructure can provide an important competitive advantage in the new global economy. Highways, rail lines, air services, communications and information systems can become critical factors in location decisions.
Further strategic investment will be undertaken in all regions to strengthen our national transportation systems and communications networks. In order to ensure work begins in 1993 the government will commit $500 million over the next two years to a strategic investment program.
Federal assistance will be provided for an immediate start on priority highway projects in New Brunswick and Nova Scotia. With the co-operation of these two provinces we anticipate a significant beginning can be made toward the development of the Atlantic expressway.
Advanced engineering and environmental work on the Prince Edward Island fixed crossing project will be undertaken to allow construction of this $800 million project to begin in the spring. This will directly create an average of almost 1,000 jobs each year over the construction period and will provide enormous spin-off benefits for the economy of Atlantic Canada.

Federal bridges in Montreal will be upgraded. In addition, funding will be made available for co-operation with the Government of Quebec on strategic improvements to the highway system in that province.

Federal roads and roadworks in western Canada's national parks will be upgraded.
Grade separations and other investments will be undertaken to improve the efficiency and safety of our national rail system, particularly in southern Ontario.
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Air navigation systems across the country will be improved. The federal government will provide resources for early procurement and the first phase of installation of microwave landing systems in Canadian airports.
Airports in the north will be improved.
The Prime Minister recently announced the government's commitment to developing one of the most exciting and most important infrastructure projects: a high speed national electronic highway. The government will set aside funding for the Canadian Network for the Advancement of Research, Industry and Education project, which will use fibre optics to allow the rapid exchange of vast amounts of information among Canada's scientists, engineers and educators. It will expand Canada's technological capabilities and benefit many sectors in the Canadian economy.
Over the next five years this initiative will result in investments in national infrastructure of more than $2 billion. It will directly generate 4,000 to 5,000 jobs each year.
In addition, we are ready to proceed with a successful proposal to upgrade terminals 1 and 2 in Toronto using private financing. This project will be undertaken at a pace which will not undermine the airlines' effort to return to profitability. This project is expected to create between 2,000 and 3,000 direct jobs each year throughout construction. My colleague, the Minister of Transport, will be providing further details on this important initiative.
We will continue to invest in broadening trade opportunities.
As we in this House all know, trade is our lifeblood. Exports generate 30 per cent of Canada's economic activity and account for one in four jobs. Our ability to trade successfully makes us a wealthier country, with greater choices available to Canadians.
Broadening our trading opportunities requires improved access to markets, under clear and fair rules.
The Canada-U.S. Free Trade Agreement has proven a success. Canadian exports to the U.S. have increased by $16 billion since the FTA was introduced and are now at record levels. This strong export performance was achieved in spite of slow growth in the U.S. economy and a strong Canadian dollar.

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The free trade agreement is providing opportunities for the industries of the future.
A recent study by the C. D. Howe Institute showed that Canada's export performance was strongest in those sectors which the FTA has already liberalized, with big gains in high-tech machinery and equipment and other value added products. Exports of manufactured products outpaced exports of resource based products, leading the C. D. Howe study to conclude that "many of Canada's manufacturing sectors seem to have performed remarkably well in the U.S. market under the FTA".
I am reiterating and strengthening our commitment to open trading markets.
The North American free trade agreement improves and strengthens the free trade agreement. It also gives Canadian exporters better access to the important Mexican market of 85 million consumers. We will take early action to introduce implementation legislation for the North American free trade agreement.
The GATT Uruguay round is one of utmost importance to Canada and to the world. The OECD has estimated that the reforms envisaged in the Uruguay round would eventually lead to annual income gains for the world economy of $250 billion. We can share in that economy and so it is important that this be proceeded with.
To protect our competitive position we must seek to lower costs wherever possible. One way we can do this is by lowering tariffs on goods that we import. In response to the recommendations of the Canadian International Trade Tribunal, I am announcing that the government will reduce textile tariffs effective January 1, 1993, bringing them more in line with those of other industrialized countries.
We will continue to invest in sound monetary and fiscal policies as the only basis for sustainable economic growth.
Not so long ago Canada had one of the highest inflation rates among the G-7 countries. This year we have the lowest rate. This means that the prices of goods and services we buy are rising more slowly than in other leading industrial nations. And that is excellent news for the Canadian economy.
Low inflation protects people's purchasing power. Here is an example: Between 1980 and 1984 food prices
rose about 8 per cent per year. This meant that a basket of groceries cost 40 per cent more in 1984 than in 1979. From January to October of this year the price of food has risen by only 0.8 per cent. At this rate it would take 40 years, not 4, for a basket of groceries to increase by 40 per cent.
Another example: Low inflation protects those on fixed incomes. A pension of $10,000 would be worth only $4,420 after 20 years of inflation at 4 per cent. With 1 per cent inflation it would be worth almost $8,200.
It is very clear our own history and experience in other countries demonstrate that there is no lasting trade-off between higher inflation and a strong economy. Nor is there a relationship with lower unemployment. While it takes time to adjust fully to a low inflation economy the continuing benefits make it one of the best possible investments in our economic future.
Our investment in price stability is paying off. Canadian interest rates moved down from a peak of 14 per cent in May 1990 to under 5 per cent in September as inflation and inflation pressures were reduced. These rates were among the lowest in the industrialized countries. Among the G-7 countries only the United States and Japan had lower rates.
Since September uncertainty in markets and downward pressure on our currency have pushed up interest rates, but they remain well below historical peaks. Continued good inflation performance is the clear basis for lower interest rates, and as pressure in the currency market subsides we should be able to achieve these lower rates.
Excessive government deficits, both federal and provincial, have contributed to a level of net foreign debt far higher for Canada than for any other G-7 country. This large net foreign debt, public sector and private sector, means that Canadians paid more than $22 billion in net interest last year to foreign lenders. That is money that Canadians cannot use to develop our own economy. This adds to the economic damage done by the higher interest rates and higher taxes that result from higher government deficits.
Lowering government deficits means that more of Canadians' savings are available for private investment. It means we can invest in our future without mortgaging it to foreign lenders. The way to reduce deficits is by controlling spending, not by raising taxes. Now is not the
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time for any government to raise taxes. Canadians can make better, more productive use of their money than governments can. The more we can leave in people's pockets, the better it will be for our economy. That is precisely why I cut spending in the February budget to reduce the personal income surtax by 2 per cent: 1 per cent last July, and a further 1 per cent on January 1,
1993.
This measure will add $1.8 billion to Canadians' disposable income this year and next. The January decrease will proceed on schedule, as will the reduction in the manufacturing and processing tax rate, from 23 per cent to 22 per cent. In total, the measures announced in February's budget will provide a timely stimulus of about $2 billion in tax reductions to support economic activity over the coming year.
We also took steps to provide additional assistance to lower and middle-income families with children through the new Child Tax Benefit program. Beginning in January, this initiative will provide $2.1 billion in additional assistance to families over a five-year period. This means, for example, that a working single parent with two children and an income of less than $20,000 will receive about $600 in additional assistance.
Consistent with this over-all approach, I am announcing today that the 1993 unemployment insurance premium rates for employers and for employees will be held to their 1992 levels.
We will manage spending to stay within the Spending Control Act limits. This will allow us to reduce the slippage in the deficit resulting from weaker revenues and to finance the additional investments in growth that I have announced today.
We have to keep our spending in line with our incomes. When our credit card bills get too high we have to cut back on our current spending. For Canada, the objective of this restraint is to preserve for the long term the benefits that we have all gained and continue to gain from this great land.
We are not cutting simply for the sake of cutting or because we think Canadians have not made real sacrifices. We know they have and we know that these cuts will require further sacrifice. We are asking everyone to
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do a bit more so that a stronger recovery and sustained growth can be shared by all Canadians.
For the current fiscal year, operating budgets of all departments are being cut by a further 2 per cent. This has resulted in many departments imposing a hiring and discretionary spending freeze.
I am also asking my colleagues to reduce the spending on their grant and contribution programs for the balance of the year where possible. Over the balance of this fiscal year, and the next two fiscal years, almost $8 billion will be cut in a broadly based expenditure restraint program.
Expenditures for a wide range of programs will be either frozen or reduced from planned levels. Let me elaborate.
Salaries will be frozen for the Governor General, the Lieutenant Governors, the Prime Minister, ministers, members of Parliament, senators, the federal judiciary, public servants and the employees of non-commercial Crown corporations for the next two years. Commercial Crown corporations will be asked to keep their wage settlements in line with this policy. In addition, appropriation-dependent corporations will be funded as if their wages were frozen.
Government operating budgets will be reduced by 3 per cent as of 1993-1994. Including the savings from the salary freeze, operating costs will be 5 per cent lower than planned levels in 1993-1994 and 1994-1995. These reductions are on top of the many operating cost reductions implemented over the last eight years.
Average unemployment insurance benefits will also be frozen. To do this, the UI benefit rate will be reduced for new beneficiaries from 60 per cent to 57 per cent in April
1993.	The effect of this reduction will be to freeze the average benefit per recipient.
As well, persons who voluntarily quit their jobs without just cause or lose their jobs because of their own misconduct will no longer receive UI benefits.
Grants and subsidies to most organizations and interest groups will be cut by 10 per cent in each of the next two years.
Some programs will be exempted. These will include programs for the elderly, the guaranteed income supplement, spouse's allowance, programs for the disabled, war veterans' allowance, and veterans' disability pensions.

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Canada will not reduce its famine relief around the world.
In addition, I wish to inform the House and my provincial colleagues that no further restraint will be imposed upon major federal transfers to the provinces. These programs are already covered by the expenditure control plan introduced in the 1990 budget and extended in the 1991 budget.
The actions I have announced today will bring the estimated deficit down to $34.4 billion this year and $32.6 billion next year. The slippage relative to the February 1992 budget is largely due to the shortfall of revenues caused by a weaker than anticipated economy.
With the actions announced in this statement, program spending over the next two fiscal years will be similar to that projected in the budget. The savings from the expenditure reductions, net of the initiatives for investing in growth, rise substantially each year through 1994-95.
This will mean that spending will continue the pattern since 1991-92 of being well below the limits set out in the Spending Con.trol Act despite the enormous economic pressures.
The expenditure reductions announced in this statement provide a considerable reduction in the structural component of the deficit. As such, the deficit should decline rapidly through the medium term on the basis of the tight control over spending in place and the stronger economic performance and the lower interest rates. It remains the government's objective to attain zero financial requirements over the medium term.
We must and we have to recognize, however, that Canada's deficit problem is a total government problem and not just a federal one. By far the larger share of government operating costs in Canada is provincial and not federal. Therefore, it is vital that all governments review their operations to cut costs, to reduce deficits and to lighten the burden on taxpayers.
Finally, we will invest in partnerships for growth with provincial governments and with the private sector. The recent constitutional discussions diverted attention from what the federal and provincial governments can do together to better co-ordinate economic policy in the interests of growth and jobs.
We will take a leadership role under the existing Constitution and urge better co-ordination of fiscal policies. We are prepared to act with the provinces to develop acceptable frameworks for public sector compensation, to eliminate waste, overlap and duplication, and to harmonize our tax systems and to reduce compliance costs on business and individuals.
The federal government has made specific proposals to achieve this in a much more co-ordinated and open fashion in its document of September 1991. These proposals do not require constitutional amendment and we are prepared to act on them together with the provinces as soon as possible.
As well, it is time-in fact it is long past time-for concrete, comprehensive action to reduce interprovincial trade barriers with a fixed agenda and a timetable.


Some hon. members:: Hear, hear.


Donald Frank Mazankowski: Mr. Speaker, the federal government has pressed provinces to remove all barriers and impediments to internal trade by 1995.
I am encouraged by the progress that has been set in place by the Canadian Ministers of Agriculture. Further progress across a range of areas can only strengthen Canada's position at home and abroad.
Our emphasis on a partnership approach with other governments and the private sector reflects the reality of the economic challenges facing Canada, but it also reflects the reality of the federal government's impact on the national economy.
The federal government accounts for less than half of the total government spending in Canada. This fact should be kept in mind by those who continue to pretend that the federal government alone can turn around Canada's economy. Not even a fiscally strong federal government could accomplish that by itself. That is why we must all work together more effectively to get our economy moving strongly forward again.
I am therefore tabling documents, including Notices of Ways and Means Motions. Details of the measures are included in the documents. I have introduced today a bill seeking supplementary borrowing authority for 1992-93.
I am asking that an order of the day be designated for these motions.
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In conclusion, the question that we must ask ourselves is: How can we best deal with economic change to ensure that Canada can meet the needs and fulfil the hopes of its citizens in the years ahead?
I believe the answer is clear. We must prepare ourselves to take advantage of the opportunities that the new world economy is bringing. That has been the consistent objective of the policies the government has followed in the past eight years. I firmly believe that Canada is now in a strong position to seize those opportunities.
We have all made a considerable investment in making Canada a country that can survive and prosper in a new world economy of the 21st century. This is a country where we can generate the wealth to sustain the social programs and the safety nets that are fundamental to our sense of identity and community.
There are those who would follow policies based on the world as they would like it to be rather than as it exists. But I challenge them to show how an inwardlooking Canada could help Canadians to gain new jobs and opportunities in a new world economy.
There are also those who believe that more government spending and higher government debt can solve any problem, any time, any place. I challenge them to show how deliberately driving up the debt that has weakened us can make us stronger.
Today I have announced actions that will help position Canada for renewed economic success and will assist economic recovery and strengthen the basis for sustained growth and job creation. Through these actions, we are expanding our investment in the growth and vitality of Canada's small businesses in research and development, in training and adjustment for Canadian workers, in improved infrastructure and in a sound fiscal and monetary framework. These actions will help us to deal with global interdependence, but we must also recognize our own interdependence as Canadians in business, labour, government and learning institutions in the continuing effort to modernize our economy.
I appeal to all Canadians for their co-operation as together we pursue the task of securing a positive and vibrant economy for the future for ourselves and for our children. That is, remains and must be our priority as
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Canadians and as Canadians' representatives in this House.


Some hon. members:: Hear, hear.


Hon. Herb Gray (Windsor West):: Mr. Speaker, in all my years in this House, I have never seen a Minister of Finance who so misunderstands what his job is all about.
At this time this minister's job is to attack unemployment, to attack the lack of economic growth and to attack the recession. Instead, what this minister is doing is attacking the unemployed.

Instead of attacking the recession and unemployment, the minister is attacking the unemployed and the jobless, those who suffer as a result of these policies.

The minister is attacking the jobless by taking $2.4 billion out of the pockets of unemployed Canadians through cuts in their unemployment insurance benefits. This minister is not getting more revenue from closing the tax loopholes identified by the Auditor General. Instead, he is literally reaching into the pockets of unemployed Canadians to try to achieve his budgetary projections which were so wrong in the past so many times.
This is not an act of courage or conviction. It is a vicious attack on those least able to help themselves. The Liberals will not stand for this and certainly Canadians will not stand for this.
What is the net effect of the minister's statement? Over the next two years the Minister of Finance will take some $7 billion out of the Canadian economy, but what is he putting back? He says he will have an infrastructure program of $500 million over two years. He says it will create 4,000 to 5,000 jobs a year. In one day last week we had announcements of losses of three times as many jobs as this minister says he will create with his infrastructure program. In one day. The announcement was a loss of
10,000	jobs at Canadian National, hundreds at Pratt and Whitney, thousands at Dofasco. In one day this minister heard how jobs are going to be wiped out, three times as many as he intends to create over years of his infrastructure program.


Some hon. members:: Hear, hear.

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Herbert Eser (Herb) Gray: Even at the minister's best in a previous existence he would have recognized that the latest mini model that he is trying to peddle of his failed economic policies has absolutely no wheels.
Getting back to his infrastructure program, we do not quarrel with the projects mentioned, although I must say they have all been announced before as far as I can recall. However, I ask the minister, where is the municipal infrastructure program that the Canadian Federation of Municipalities and Provinces has been calling for for years? Where is it? There is nothing in this program for municipal infrastructure, nothing for clean water, nothing for sewers. There is nothing to put people back to work almost immediately, using projects that our towns and cities across this country have on the shelf ready to put in place and ready to put people back to work right now.
This budget is so lacking in imagination it does not even present a good attempt at sleight of hand.
The minister talks about the budget and what it does for small business. He talks about creating a higher ceiling for government guaranteed loans to small business. Small business cannot get loans from banks now under the existing ceiling.


Some hon. members:: Hear, hear.


Herbert Eser (Herb) Gray: What good will the higher ceiling do? The minister should have listened to the Minister of State for Small Businesses who said just the other day in this House that the banks needed to be kicked in their assets. Is that not what the minister of small business said? I do not know why, if the Minister of Finance wanted to listen to somebody, he did not listen to his Minister of State for Small Businesses who in effect said that the proposal for a higher ceiling for small business loans guaranteed by the government is meaningless because the banks have not been lending the money. His weak-willed pleading today will not make one bit of difference.
Our regions are suffering from the effects of this government's weak and failed policies. Yet the government cuts hundreds of millions of dollars, $350 million, from programs for regional development. There are cuts for ACOA in Atlantic Canada. There are cuts for FEDNOR in northern Ontario. There are cuts for
western diversification in the prairie provinces. What is it doing for regional development? What a failure, what a flop.
There are cuts for farmers. There are cuts for transportation. There are cuts for the native people about whom the Prime Minister said they have such a great need for justice. Where is the justice in this budget for our native people?
There are cuts of $172 million in the green plan. That is the supposed miracle plan to help clean up our environment.
All these cuts mean lost jobs and lost opportunities.
A previous Conservative Minister of Finance promised short-term pain for long-term gain. But all this minister is offering Canadians is long-term pain for more longterm pain.
In this statement, over two years the government is proposing cuts for defence of $1 billion. I searched through the budget papers. I asked the officials in the lock-up and I could not get any details of these cuts. I was wondering if the minister of defence had lost the information about the details in his hotel room in his last trip to Paris, because the details are not there.
This suggests that there will be no cuts in the gold-plated helicopter program, but there could well be cuts in personnel. How can this government maintain its peacekeeping commitments, its current obligations, with these kinds of cuts? If this is not a correct understanding of what is proposed, then why were details not provided in the budget papers?
Two months after forming the government in 1984, the Prime Minister stated: "We have been in power for two months. I can tell you this. Give us 20 years and you will not recognize this country". It took the Prime Minister and his government only 8 years to change the face of Canada and the change has not been for the better.
Let us look at the Canada created by this government:
1.6	million Canadians are out of work; more than 2.3 million Canadians are on welfare; 3.8 million Canadians are living in poverty, over one million of them children; over two million Canadians are forced to rely on food banks.
The eyes and ears of these Canadians are watching and listening to this House on television across this country. They are looking to this government for constructive change. They are looking for constructive change and
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they are looking for signs of compassion and help and economic growth. What should have been a battle against unemployment and recession has turned into a declaration of war against the unemployed and those suffering the most from these failed Conservative government policies.
I want to ask again, as I asked in this House during Question Period a few days ago, if the Conservative medicine is so good, why is the patient, the Canadian economy, still so sick?
The Minister of Finance told Canadians in his February 1992 budget that real economic growth would be 2.7 per cent, the unemployment rate would be 10.1 per cent and the deficit would be $31.4 billion.
The Minister of Finance has failed to even come close to his projections. He admitted today the economy will grow at a rate of only 1 per cent. That is not enough to even have the economy move barely sideways instead of bringing the growth and jobs Canadians need.
The unemployment rate has surpassed 11 per cent for the last six months while the deficit, as he said today, has gone up to $34.4 billion. Even if his forecasts had been met they still would have painted a sad picture of this government's economic mismanagement and failure.
The minister was wrong. He missed every one of his projections and forecasts. Canadians will ask how the minister can be believed when his forecasts were so wrong last year and in earlier years. How can he be believed when he talks about what his policies will do next year and the year after?
Well, of course, we know that this government will not be here the year after next because Canadians listening to this budget will only be confirmed in their desire to get rid of this government at the first opportunity.


An hon. member:: Why wait for spring? Let's do it now.


Herbert Eser (Herb) Gray: Mr. Speaker, Conservative policies for economic growth and recovery have failed. The Minister of Finance's statement today is an admission of his failure. At the same time it is a plea for mercy from the Canadian people that will not be accepted by them.
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The minister boasts about the success of the trade deal and the GST. Canadians know better from their everyday experience and Canadians will pass a summary judgment on this government in the next election.
Both the United Nations and the OECD have recommended that governments of developed countries break the economic stalemate by loosening their purse strings. Japan, Australia and now the European Community are embarking on major capital and infrastructure programs to stimulate their economies out of recession.
This economic statement is lacking in many things but it is especially lacking in a commitment to strong economic growth and the job creation that goes with it.
The Minister of Finance seems convinced that there are no costs associated with inaction on the economy. But he need only ask himself why the deficit is nearly $7 billion more than he said it would be just last February.
Nobody needs a Ph.D. in economics to know that government expenditures on unemployment insurance have increased and government tax revenues are down because of the recession. Each individual unemployed Canadian is costing taxpayers $15,000 in unemployment benefits and welfare and approximately $7,000 in lost tax revenue. These are only the economic costs. The social costs are much higher in terms of the potential for increased domestic violence, increased crime rates, poor health and loss of individual dignity. The vicious cycle can only be broken by sustained economic growth, strong economic growth and the job creation that it brings.
For Liberals the ultimate objective of economic policy is to build a value-added economy that will create permanent jobs for Canadians and protect and enhance our social fabric.
This Conservative government has spent $500,000 on the Porter study and another $26 million on the prosperity agenda to study our competitiveness problems. Canadians and Canadian companies do not need more studies. They need a government that will act to create an environment that will foster economic growth and strong job creation right now.
This country needs a new economic vision, a vision of change that will create jobs for the future and revitalize our communities all across this country. We need a new economic course for Canada, one this government is incapable of giving, one that is responsive to people and

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to our environment. We need one that will provide the basis for rebuilding our industrial and resource base.
Top priorities for Liberals are job creation and economic growth with a more balanced approach toward inflation and the other economic variables.
High real interest rates have taken a heavy toll on the Canadian economy in recent years. If Canada is to compete on a global basis we must have monetary policy that puts Canadian firms on a level playing field with our major competitors.
We believe that instead of the limited, incomplete and likely failure of an infrastructure program proposed in this budget we need a real infrastructure program, a national one in partnership with provinces and municipalities, to help revitalize our communities all across this country and create substantial numbers of jobs in the near term.
We believe that the small business sector which is crucial for Canada's long-term economic health must be revitalized. It is the sector that has proven to be the source of most new jobs for Canadians.
We believe governments must assist individuals to deal with the restructuring going on in our economy and the world. This government must come through with its oft-made but oft-broken promises of massive adjustment programs.
We believe there must be a true Canadian economic union eliminating provincial barriers to movements of goods, services, capital and labour.
Liberals believe there must be a full and dynamic research and development strategy that would truly enhance Canada's ability to create and reap the benefits of new technologies.
Liberals believe that Canada must have a global trade strategy to aggressively exploit the potential for export sales to growth areas such as the Pacific Rim and Latin America.
Liberals believe that we must foster economic growth and foster economic growth as a priority. This will help reduce the deficit by creating more government revenues without raising taxes and by saving the government billions through lower unemployment and welfare payments instead of taking them from the pockets of those people who are unemployed.
This government is not up to the challenge of creating the better Canada of tomorrow. It is a government in a state of paralysis. It is a tired government incapable of dealing with the economic problems facing this country.

This government is incapable of preparing Canadians for the challenges awaiting them at the turn of the century.

For months, Liberals have been urging the government to present a new budget, to replace the minister's discredited and failed budget of last February. We wanted a clear signal from the government that rather than stay the course it would change course, but we what got today is nothing more than a rehash of tired old policies from a tired old government.
Now that I have heard this economic statement, I realize this country does not need another economic statement or budget from this government. What this country needs is an election that will allow Canadians to choose a better economic path for their future. They need a path that will bring them hope, confidence and change. They cannot get that hope or confidence or change from this tired and failed government.
Let us respond to what we hear across this country. Let us respond to the calls of Canadians for an election now to get rid of this failed government. Canadians cannot take much more of the damage done to them by the Conservatives. They want to get rid of this government and go on to elect a better one as soon as possible.


Mr. Steven W. Langdon (Essex-Windsor):: Mr. Speaker, if the shouting back and forth between those twin parties would cease we perhaps could offer some comments on this.
This economic statement today is terribly disappointing. It is a classic and complacent trickle-down budget. Its benefits are concentrated on businesses. The victims of this statement are the unemployed and some of
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Canada's poorest citizens who will be hit by cuts affecting the key programs that assist them.
It is made in the face of immense economic distress. There is 11.3 per cent unemployment across this country. There is long-run joblessness which has doubled in the past two years in this country. There is growing poverty. A report just this week said that 3.8 million Canadians were poverty stricken in 1990. The situation is worse in
1992.
By the government's own statistics income distribution is worsening. There are more than 2.5 million people on welfare in this country. Right across this nation human distress is getting worse and worse, and this government has presented us with a plan that does nothing. It does nothing except make life somewhat tougher for those who are losing their jobs.
By this plan which the government has brought forward today the officials of the government conceded to us that the unemployment rate will still be 11 per cent or higher by the end of the 1993-94 fiscal year. By the end of March 1994 unemployment will still be 11 per cent or higher. It is shameful that a government should bring before this House a plan for economic recovery which would leave us with 11 per cent unemployed in 1994.
This is not a solution. This is an excuse for inaction. This is a cop-out. It does nothing for the people of Canada except create more tears, more pain, and more human damage across this economy. Even in the government's own terms it is a massively irresponsible budget, almost a laughable budget.
The Minister of Finance rose in the House today and talked about the seriousness of the deficit problem. If he had talked about the seriousness of the unemployment problem maybe we would have seen something done about it. However, what he talked about was the seriousness of the deficit problem.
I have the statistics here. They are not from a budget two years ago or from a budget five years ago, they are the projections from the budget which this government brought down in February of this year.
Do you know what that budget said that the deficit would be for 1993-94? It would be $22.5 billion. That is what the deficit would be. Yet, the Minister of Finance
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boasted today that he is reducing the deficit to, get this, $32.6 billion for next year.
Perhaps the Minister of Finance missed an arithmetic course somewhere along the line. Perhaps, like Dan Quayle, the Minister of Finance is not very good at arithmetic. In the case of Quayle it was spelling.
The Minister of Finance must be kidding us when he says he has reduced the deficit from what it was supposed to be, $22.5 billion, to what it is now going to be, $32.6 billion. I would laugh except that this is not a laughing matter. This government has been in power since 1984. It cannot blame others for the deficit problem it has created.
At the end of 1992 we are facing a deficit for the next fiscal year as a consequence of this government's action that will be $10.1 billion higher than it projected just nine months ago. This is not a projection from some time in the past. As for five years ago, maybe it would be unfair to take one of the present Minister for International Trade's budgets and look at it. By his projections we were supposed to be down to a deficit of about $6 billion for next year. I am not even going to refer to his budgets.
I am just going to refer to the present Minister of Finance's budget which promised us faithfully in February of this year that we would have a deficit for the next fiscal year of $22.5 billion. In this economic statement that he expects us to endorse, what has he brought in? A deficit of $32.6 billion. Somehow he expects the House to take him seriously when he says that he is committed to reducing the deficit and putting finances on a sound basis. It was as much as his caucus could manage sitting beside him there in self-congratulatory poses not to break up laughing at that point.
It certainly was heard enough for us, with some respect for the truth, not to break down crying as we listened to the minister talk about reducing the deficit when what we saw in front of us was a government which through its own inept economic policies has taken this country to a deficit this year of almost $35 billion and a deficit next year that will be close to $33 billion.
I see the President of the Treasury Board sitting on the front benches and I see the Minister for International Trade who I know is concerned about these deficits. I am surprised that these ministers permitted a budget as

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irresponsible and laughable as this to get through the cabinet. I am surprised that this government would even be prepared to come before the Canadian people and expect to be taken seriously, having promised us nine months ago that next year's deficit would be $22.5 billion and now expecting us to cheer because that deficit has been brought down to $32.6 billion. This government must be made up of clowns to expect us to accept that kind of faulty arithmetic.
What should we have done? What should this economic statement have presented to the people of Canada? It certainly should not have presented an increase in the deficit.
We have reached a stage under the irresponsible financial management of this Conservative government and the previous Liberal government at which the deficit level in this country is simply impossible to sustain as a nation.
We should not have seen an increase in the deficit. Instead, we should have had a government come before us and say three things. This government should first have said that it recognizes that it has been financially irresponsible and it is going to plug those corporate loopholes, those tax escape hatches that have permitted this deficit to rise to such unsustainable heights. It should have come before us and said it has listened to the report of the Auditor General, who said there was upward of $1 billion in taxes escaping this government because of companies sending money out to tax loophole countries where they could write things off and then send dividends back to be untaxed in this country because of tax agreements we have with these tax loophole countries.
It should have introduced something to stop that from happening. It should have introduced something to deal with the immensely unfair escapes that wealthy people in this country have under the present capital gains tax loopholes which this government put into effect.
Over 60 per cent of the $3 billion in tax relief which is given to people by this capital gains tax loophole goes to people whose individual income, not family income, is over $100,000 a year. These are not exactly hard up farmers, hard-working small business people or people who are selling their only house, all of whom we would want to see continue to get exemptions from capital gains tax.
These are people who are taking advantage of our tax system. As a result we have a deficit in this country which is sky-high and unsustainable. It is causing massive income disparities and massive increases in the interest rates in this country. Frankly, this government looks like a fool when it comes before us to talk about a $32.6 billion deficit for next year when it promised a $22.5 billion deficit.
It should have closed the loophole for entertainment tax deductions. That would have given us another billion dollars in revenues. It should also have looked at the deductions that a Canadian corporation can make for interest payments on a loan it takes out here in Canada and uses to buy up new assets or create new jobs not here in Canada but in Germany, the Caribbean, the United States, or any place except this country.
That interest deduction loophole which exists in the tax system should have been closed. If it had closed these loopholes that in itself would have freed up something like $4 billion to $6 billion in new resources that we could use to get people back to work and to cut taxes, not for corporations but for working people and middle-class people in this country, the people who have been hit so hard by the goods and services tax of which this government boasts.
We could have done something about the family trust loophole about which my colleague, our tax policy critic, has been talking so effectively in the House of Commons. That loophole was supposed to run out as of 1993, but the Conservative government, as usual listening to its rich and wealthy friends, has decided to extend it. The Liberals started it. The Conservatives continued it. Only New Democrats will end it and give us tax fairness.
If we had this kind of tax fairness we would not have the deficit in front of us that we have at the moment. We would not have the number of people out of work that we have at the moment. We would not have the disastrous economic conditions which are damaging people from coast to coast to coast. We could have dealt with tax loopholes. That is one thing the government should have done in this economic statement.
The second thing it should have done was recognize what many countries in the world have come to see. The cold war is over. Having a defence budget for our country that is as large or larger than it was two years ago

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is simply senseless. We have a defence budget of over $12 billion. There is no way to justify a defence budget that is just as large now as it was when there was a supposed massive military threat from the Warsaw pact and the Soviet Union. The Soviet Union, in case the government has not noticed, has dissolved; the Warsaw pact has broken up. The various countries that we thought of as enemies are now our allies in many cases.
The threat to people in this country is not from the Soviet Union; it is from the government.
We needed to see in this economic statement a cut in defence expenditures which had some seriousness, a cut not of $200 and some million this year and $200 and some million next year but a cut of some $2 billion. That starts to give this country a defence budget of some significance, yes, but of some proportion to our size and what we can contribute in the world. We should have seen that in the economic statement.
We should also have seen a deliberate plan set out to reduce interest rates in Canada. If we had interest rates in Canada which were three percentage points less than they presently are we would free up resources to help with new jobs, to help in tax cuts, of close to $4.5 billion.
If we add these various possibilities-closing tax loophoLes, cutting defence expenditures and reducing interest rates-we would have had savings that could have been announced by this government of something on the order of $11 billion to $12 billion. I hardly need to say that $11 billion to $12 billion could have made some real reductions in the deficit. There would have been some money left over to provide tax breaks for people in Canada, some money left over to provide help for those who are out of work. We should have taken that $11 billion to $12 billion and used some of it for deficit reduction but used much of it for a real program of economic recovery.
It could have been a Canadian economic recovery strategy that stressed environmental upgrading for our cities and that stressed social housing for people who are so poorly housed in many cities throughout Canada. It
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could have been an approach that said: "Let us have some tax cuts as the first step to getting rid of the GST".
We do not need a goods and services tax in Canada. It is an unfair tax. It is a tax that hurts small business. It is a tax we can get rid of if we close some of those tax loopholes and get a fair taxation system.
We should have seen a national investment fund launched by the government, a fund which would do something to see to it that money actually got to small businesses that needed it and could not get it from the banks these days. We should have seen to it that money was available for communities to help keep companies operating which were facing problems and being shut down by their foreign parents in the United States. We could have kept those companies going. We could have kept them active and employing Canadians if we would have had in Canada a national investment fund to provide venture capital and to provide real help on an investment basis, combining both government help and private sector help to see to it that companies were kept operating in Canada instead of being shut down by their parent companies.
Instead of boasting about NAFTA and what North American free trade was going to do for us, the Minister of Finance should have stood today and said: "We suspend all further discussion of NAFTA. We are not going to damage the Canadian economy further in 1992". If we had seen that, we would have seen a chance for people, workers and even many small business people in the country to have felt some sense of security, some sense of potential in their businesses and in their jobs in the future. They would therefore have gone out and spent some money. They would have invested some money and we would have had extra jobs in the country.
We also need a new approach to trade that does not just see our role as a country, our future as a country in tying ourselves to the United States and tying ourselves to Mexico but sees ourselves as an internationally competitive country with a strategy to build up Canadian based operations to be able to export successfully throughout the world and be able to build up jobs in the country for Canadians.
We could have had it stressed in the statement by more examples of Canadian content being put into effect in various sectors of the economy.

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For instance, a group appeared before us this morning from McDonnell-Douglas aircraft in Toronto. It said that the government was prepared to help, if it was prepared to give money to Canadian Airlines to stay aflight then: "We are not going to argue with that, but if the government is prepared to provide money to Canadian Airlines", these people for McDonnell-Douglas Canada said to us, "it should be prepared to require Canadian to buy Canadian in terms of the aircraft it uses".
It could have been part of any loan agreement that was established. There are all sorts of other conditions in that loan agreement. It could have been part of the agreement that there would have to be Canadian content in every future aircraft purchase that Canadian Airlines makes.
I fly back and forth to Windsor every weekend in a Brazilian aircraft. I find it interesting. They make good aircraft. Frankly I would rather that aircraft were Canadian and providing jobs to Canadians than providing jobs to Brazil. If we are providing the money to Canadian Airlines, we should be insisting on conditions that mean jobs for Canada and jobs for Canadians, just as is the case in the present auto pact which has been important for my community and for other communities throughout Ontario.
When government itself makes purchases it should insist on making, wherever it can, its purchases of goods and services from Canadians to provide opportunities for Canada, to provide opportunities for some of those 1.6 million people who are out of work in this country to get back to work.
We must also recognize that many people in this country have been hard hit by this government's economic policies. We must see to it that we maintain the values and commitments to support those people that have always been part of the Canadian heritage. Instead of cutting back benefits to unemployment insurance recipients, we should be extending those benefits in this period of high unemployment so that those people have money and the money can be used to help this economy, to help small businesses and to help the rest of the economy as well.
The government has decided on a whole lot of different approaches. It has some measures to help small business. We support those. It is sensible to assist small
business. We have been calling for that for many years. I have to say it is a bit unfair when small business owners are told that they will get a premium holiday for new people that they hire as far as unemployment insurance premiums are concerned but the workers who will be hired are told that they will have to pay those premiums even though their employers will not. That is not even-handed and fair.
We have some tax changes to the RRSP system which helped the co-operative movement. My friend from Prince Albert will be particularly pleased to see those. I am pleased to see them too because we have long argued that there should be some fairness, some equity for people who are forming co-operatives.
There are as well some initiatives on infrastructure. It is interesting when we look through the initiatives on infrastructure that there are a lot in different parts of the country but it is very hard to find any in Ontario. I wonder if that could have anything to do with the quarrels about the nature of this infrastructure initiative that have been taking place between the provincial Government of Ontario and the federal government. I wonder if this government is not punishing Ontario for insisting on an infrastructure strategy that would be beneficial to the whole country, not just to parts of the country.
Finally, there are two parts of this package which are especially shameful. There is a reduction in unemployment insurance support at a time when there are more people out of work in this country, more people out of work in Ontario, than we have seen since the 1930s. Yet, what does the government do? It reduces the level of support for people receiving unemployment insurance from 60 per cent of their earnings to 57 per cent of their earnings.
It goes further. It says: "If people are dismissed for misconduct". Who decides what misconduct is? If they are dismissed for misconduct they will not get unemployment insurance. I look forward to various unemployed people coming to the Conservative members of this House and their constituency offices and saying: "I am out of work. My boss says that I was somehow guilty of some misconduct and the result is I cannot get any unemployment insurance".


An hon. member:: After you have paid into it.


An hon. member:: And the boss does not pay.
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Steven W. Langdon: After they have paid those insurance premiums for years and years and years.


An hon. member:: That is sickening.


Steven W. Langdon: Let these Conservative MPs explain to their constituents why they have put such a vicious, nasty hook into the unemployment insurance system.
What is the consequence of all this? The consequence is, believe it or not, an unemployment rate at the end of the next fiscal year which will still be 11 per cent or higher. That is tragic. The Minister of Finance spoke the other day about how we were in an economic recovery. How could he pretend to the people of Canada that this is an economic recovery if there is still going to be 11 per cent unemployment in March 1994? That is not recovery, that is still economic disaster for far too many people in this country.
The Minister of Finance has talked about a gentle nudge forward for the economy as being what he expected to provide with this statement. What he has done is kicked the people of Canada in the stomach with this economic statement. He has given the people of Canada a series of cutbacks that will cost 3,000 to 4,000 jobs in the Public Service and a series of vicious changes to the unemployment insurance system which will make life much harder for those who are out of work.
On top of all of that, he has given us the laughable arithmetic that tells us he has reduced the deficit from the $22.5 billion he projected in February this year to a remarkably miraculous level of $32.6 billion which he now says will be the deficit for next year.
This is a government that has seen its day. It is a government that has got to go. It is a government which for the sake of this country should be gone. It is a government which clearly, in bringing forth a mini budget, has simply presented us with mini ideas, presented us with no plan for the future, no plan for unemployment, and no plan for economic progress for this country.
There is no plan for a trade strategy that will help us to regain our independence, so much of which we have lost with the free trade agreement. This is a government which has given us nothing but pain in this budget.
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It has given us nothing but pain and a kind of tragic comic performance as the Minister of Finance tries to persuade us that he is being fiscally responsible when he has created this intolerable recession, hurt millions of people across this country and will leave Canada in far worse shape economically and financially when this government is defeated, as indeed it must be defeated in
1993.
There is an alternative. I have tried to set it out in some detail. It is an alternative which will work and, more important, it is an alternative which will get Canadians back to work. I urge this government to even today withdraw this laughable economic statement.
Tell us: "We are sorry. We apologize to the House for bringing this joke before Parliament. We will bring a new budget to you in December". In the meantime, let us adjourn this House of Commons. Let us let this government go and think for a while.
If it thinks things through right it may even recognize that the proper course of action for it to take is to stand up today and resign as the Government of Canada.


Michael Holcombe Wilson: Mr. Speaker, we have just heard two sorry responses from the NDP and from the Liberals. There has been lots of bluster, lots of rhetoric, and lots of hand wringing but no new ideas. There were no specifics but only a throw back to the policies of the 1960s and 1970s. They were vintage policies that have not improved with age.
The Liberal critic says he would spend. He gave us some ideas about how he would spend. He gave us some ideas about why he disagreed with the reductions in spending that we have brought in. That is the difference. He has opposed every way that we have proposed as to how we would keep this government's spending on track.
It would be folly to follow the approaches that the Liberals have set out because they would lead to an increase in the deficit, an increase in interest rates, a slam on business confidence and they would kill the economy.
He is saying he wants to have some compassion, some help and some hope but is that going to come for an economy that has been killed by high interest rates,

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because that is precisely the result of the policies that he is putting forward?
What is needed now is a vision of the future, an understanding of the type of world that we are in today. We need a vision of an economy built on greater training, greater research and development, greater investment, stronger small business and a greater opportunity to expand internationally.
This is what the Minister of Finance has put forward today. We have heard words from the Liberals and we have heard wishes, but we have heard no new ideas. This is a government that is dedicated to action. The Official Opposition is tired, it is devoid of ideas and that is a fundamental difference between the message from the Minister of Finance and the tired statement from the Liberal finance critic.
The response of the New Democratic Party is equally unrealistic. It is following the same policies which the New Democratic Party in Ontario foundshell", something we just heard now, "That would be a mistake", it says. "Even in a closed economy, a retreat to high taxes and high inflation would only make matters worse. But the world economy is growing ever more integrated: With capital and skills freer to move, Sweden cannot go back to its old ways without seeing both sorts of assets leak abroad. The third way, if it ever really existed, is no longer there".
We have just heard from the NDP about the third way. Both opposition parties simply do not understand what is happening in the world today. This recovery is slow. The Minister of Finance has acknowledged that. But it is slow because there is a significant amount of restructuring going on in the economy today and it is the same the world over as business changes and adjusts to the challenges of the 1990s and beyond. Stimulating the economy today through more spending is not the answer. Encouraging and assisting the change that must occur is the proper role of government and that is what the Minister of Finance has put before the House and the Canadian people today.


An hon. member:: Throw money at it.


Michael Holcombe Wilson: My friend opposite does not like me talking about this but the NDP in Ontario found that its policies did not work. Listen to Bob Rae today. He is saying: "I have learned a lot in government. I have learned that we cannot do all the things that maybe we liked to talk about in 15 years in opposition". Now we are seeing the U-turn. We are seeing the NDP in Ontario scrambling to cover its mistakes, cutting hospitals, cutting schools, cutting universities, cutting social programs, having to face reality because it started off on the wrong foot and had a 13 per cent increase in spending in its first year on top of five or six years of 10 per cent increases in spending by the Ontario Liberal Party.
It is no surprise that we are getting these policies from the NDP. They are still living in the past. The Leader of the New Democratic Party has written about this. She has talked in glowing terms about the successes of the Swedish economy, the so-called third way that the New Democratic Party has been championing, but more recently Sweden is coming back to reality as well. It has found that the real world is something that it cannot hide from.
I want to quote from the Economist of November 28: "Many Swedes may now prefer to go back to their old
I am honoured to be a part of this debate to talk about the government's vision for the Canadian economy in the 1990s and beyond and what is needed to get there. It is a vision of a new vibrantly competitive Canadian economy prospering in the new global economy. It is a vision that focuses on investing in growth for the long term as previous generations of Canadians have done for us, but it also takes account of the fiscal realities and the global competitive realities of the world today.
This is a vision that is shared by Canadians throughout this country. We found that in the 186 communities that the Prosperity Initiative visited over the course of the past year, and we listened to these ideas coming forth from Canadians. These ideas are represented in a large fashion in the message that has been delivered by the Minister of Finance today. This dialogue has resulted in a remarkable consensus about Canadians. Read the Prosperity Initiative. Read the steering group report. It sets out clearly the consensus that Canadians put forth to the steering group and that we have listened very carefully to and have reflected in the message today.
Canadians are telling governments to stop trying to direct the private sector and instead do our traditional jobs better by investing in people and making sure that we get it right so that all Canadians can enjoy the benefit of a high skill economy by creating the right investment

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climate, by building the public infrastructure that only governments can provide, by opening trading markets internationally so that we can compete and win on a global scale, and by investing in sound monetary and fiscal policies, by remembering that governments exist to serve Canadians and hence rediscovering our clients, the taxpayers, and serving them more efficiently.
Finally, we must stop the incessant quarrelling among our stakeholders and start collaborating, building partnerships, and finding the best way of doing things.
The economic statement we just heard today goes directly to the heart of what governments should be doing to improve the long-term climate for growth in this country. It is not enough for the opposition parties to bluster and wring their hands about weak growth and high unemployment. Those are facts of life in many countries of the world today. What we have to do now is find how we move from here in the most effective way possible because all Canadians and all people on both sides of the House are concerned about these problems.
The debate is about the respective visions that we have for the future of our country. Unlike the NDP and the Liberals today ours is not a vision of an economy that is force-fed by the government. It is a vision of an economy of the future where government motivates productive activity by entrepreneurs, innovators and people building their skills and by business people competing internationally.
This is the economy that we will build in the 1990s and beyond. It is an economy that is totally unknown, unfortunately for our friends opposite. They simply do not understand the reality of the world that we live in.
The prosperity consultations hammered home, hopefully in a way that even the opposition could understand, that there is a need to keep our fiscal house in order and to strive for a tax system that contributes to a dynamic and growing economy. The statement follows a fiscally responsible course because that is the only way we are going to get interest rates down in a way that can serve the development of this economy.
There are no new taxes in this economic statement and this is not the first time. There were no tax increases in
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the 1991 budget. There were tax reductions in the 1992 budget and again in this economic statement so that Canadians could invest in growth and see this country build.
The tax reductions that were announced by the Minister of Finance today will improve the competitiveness of Canadian companies. However, provincial governments have to build on and not offset these measures if Canadian companies are to adequately grow, prosper and create the high paying, quality jobs that we all want to see in this House. The difference on this side, though, is that we put in a statement the specific actions needed to create those high paying jobs.
It is particularly important for provincial governments to follow the same approach because there is only one taxpayer. As the federal government reduces the tax burden it would be particularly counter-productive for any province to raise its taxes in any form. This is a particularly strong recommendation that comes forward from the prosperity action plan.
Investing in growth has to start with small business. This is a vital sector of the Canadian economy. It has created some 80 per cent of the jobs created since 1984.
To encourage new jobs and expansion the government will pay the unemployment insurance premium costs for new employees for the vast majority of small businesses in 1993. That will save employers some $500 million to expand their employment and their production and to encourage investment and machinery and equipment. These are crucial areas for the competitiveness of small businesses.
There will be a 10 per cent tax credit from now until the end of next year. There will be a new small business financing program to help firms reduce their borrowing costs. That will be extended to the end of 1994. The Small Businesses Loans Act has been expanded in a way that will help these small businesses to expand.
The importance of research and development in the prosperity consultations was another thing that we heard about on an ongoing basis. People recognize that Canada has one of the most generous tax systems for research and development in the world today. However, this has to be put in the context of its importance for our future prosperity by shifting rapidly to high valued-added prod-

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ucts either in traditional industries or in new growth sectors.
In the 1992 budget we improved on this tax regime. However, we found since then, based on our consultations, that we could do better here. This is what the Minister of Finance has proposed by earmarking a further $500 million on top of the $230 million in the last budget. It is to improve the tax treatment of equipment like computers that become obsolete quickly due to rapid technological change and some other initiatives.
Innovation based on research and development and technology adoption needs more than just tax incentives. It needs new forms of infrastructure. Building and maintaining infrastructure is one of the government's most essential roles. Here we have some important announcements again from the Minister of Finance. The infrastructure includes roads, bridges and water treatment plants. It also means the new infrastructure that goes beyond physical capital and hardware and includes soft infrastructure like information and research networks.
Funding for the Canadian network for the advancement of research, industry and education, the CANA-RIE project, will enable the development of a state of the art, high speed, high capacity data communications network to transmit information across this country. It will be a true electronic highway of the future. This is absolutely critical for the research institutions of our country today and one of the recommendations of the prosperity action plan.
In response to the clear message that we heard in the consultations, the adoption and adaptation of technology by Canadian industry has to accelerate. We will extend the Industrial Research Assistance Program, or IRAP, offered by the National Research Council. That currently provides technical advice and counselling to roughly
10,000	firms every year and financial support to about one-third of those firms to introduce technological innovations to their businesses.
This is a particularly important program. We will consolidate the delivery of the government's technology diffusion programs within IRAP. That will go a long way toward the implementation of the vision that we have as a government of a national technology extension system.
This is particularly important for the small business community.
There is a commitment to total quality management here that is also important which I want to mention, because this commitment to quality must go hand in hand with the technologically advanced economy.
The response we have given here is consistent with what the prosperity initiative recommended to us. It is a national quality initiative with a Canadian network of total quality institutions. It brings together those people in the business and educational communities, plus the Conference Board of Canada, in a network to encourage the dissemination of these ideas in helping small business adopt these ideas and bring themselves into the world of quality which is absolutely essential to the competitive position of the Canadian economy.
In terms of regulatory reform, not all taxes are transparent or collected. There are other types of taxes and I am talking about the hidden tax burden of regulation. The Minister of Finance has set out very clearly what we have been doing here since his 1992 budget. Two hundred and fifty regulations have been reviewed and 50 per cent will be amended, sunsetted or eliminated.
The review has now been extended to 17 other departments and six agencies. There will be new rules for federal regulators and this will be done in consultation with the private sector in a way that will result in an effective reduction of this burden of regulation.
I will talk about opening markets for Canadian business. Tomorrow, I will be meeting with the provinces to talk about the reduction and elimination of the interprovincial barriers to trade. This is very consistent with what we have been doing in the NAFTA negotiations and the free trade negotiations as we open up our markets into the United States and into Mexico. We have done well under this.
I spoke in the House on Tuesday about how well we have been doing in increasing our business into that market. As the Minister of Finance has pointed out, it is the combination of access to that market and reduction in the costs to our manufacturers-such as the elimination of the federal sales tax and its replacement by the goods and services tax-that has been a very important part of that 10.5 per cent increase in exports that we have seen this year compared to last year. The C. D. Howe Institute has a very good report that I encourage you to read, Mr. Speaker, that shows how we have improved
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our performance in high value-added exports to the United States. It is those very exports that have been subject to the reduction in tariffs as a result of the free trade agreement.
We just cannot wish that we had high value-added goods and services produced here in Canada, as the Liberal finance critic said. We have to do things and implement policies to bring this about. This is what the free trade agreement and the goods and services tax have provided for us.
In NAFTA we will be able to extend these opportunities further into the Mexican market. That is a high-value, fast-growing market in the future that is going to be important for us.
Let me close with just a few words about my meeting tomorrow, because I am sure the House will be interested in this. We have committed, as the federal government and provincial governments, to eliminate burdens that are costing $6 billion to the Canadian economy, which is the interprovincial barriers to trade. There have been a number of reports on this, but these are not hypothetical things, these are specific impediments to trade: government procurement preferences, local content rules, restrictive hiring and trade practices, predatory business regulations, liquor regulations and other obstacles that hurt our workers and that hurt our businesses.
When we think of all we are doing internationally to open up markets it is particularly ludicrous that we continue to maintain these barriers within Canada and make it easier for some of our companies to do business into Canada from outside Canada, rather than doing it from other provinces where we can keep those jobs here within Canada.
In conclusion, these last few years have been difficult years, not only for Canada but for most industrialized countries. There are no magic solutions. There are no painless answers. The adjustments to the new global realities have been difficult. They will take time, but they are very necessary.
At the same time, we have to build a stronger, more competitive economy. This is what this statement has proposed for us today. It is a statement that is based in
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large part on the consultations that we have carried out this year that have produced many, many good ideas that have been implemented as a result of the statement today.
However, we must never lose sight of one of the most important messages that we obtained from the prosperity consultations. That is the need to work together as a country. If we are really going to create a stronger economic base and growing business confidence all Canadians need to seek out and build these partnerships in collaborative approaches to the problems that we are facing as a country. In a quickly changing world we have to be nimble, not numb. Adapting quickly to the rapidly changing global economy requires that teamwork
Teamwork and a sense of partnership within this House are what we are calling for so we can address these problems and do so in a way, as the Minister of Finance has pointed out, that will bring us into that new economy of the 1990s and beyond in a strong way. It will be in a way that reflects the wishes of Canadians and produces those good jobs and the security, hope and confidence that we can have in the future.


William Warren Allmand: Mr. Speaker, I want to ask the minister about a very specific matter in this economic statement which I find excessively cruel. It is the proposal that unemployment insurance benefits be cut back for those who are unemployed.
One might understand such a measure if there were a lot of jobs out there and the government was trying to encourage or force lazy unemployed persons to leave the unemployment insurance rolls and go out to seek those jobs. However, that is not the case.
In most parts of the country there are no jobs. The jobs that these Canadians need have been completely eliminated. Factories have closed or cut entire programs, which is also the case with businesses with white collar jobs. In many parts of the country there are no jobs to go to.
There are about 1.5 million Canadians unemployed with double digit unemployment rates in almost every province. Yet the government is cutting back the unemployment benefit which is meant to see people through their period of unemployment, to help them pay their rent, to buy their groceries, to pay for the essentials of life, their children's clothing, transportation and so on.

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I fail to understand this. Is the government saying that rents will be cut back by a similar percentage and that grocery prices will be cut back, that this cutback on their only income, their unemployment insurance benefit, will be paralleled by cuts in prices in other areas? How does the minister justify this excessively cruel proposal? I guess the other side of it is that the government is going to cut unemployment insurance altogether for those who leave their jobs without just cause or are let go for misconduct.
That would be all right and we would support it if misconduct was so clear or if leaving your job without cause was so clear. However, we all know that because of personality conflicts and all sorts of other reasons people are often forced out of jobs and it is very difficult to decide whether it is just cause or not. The Minister of Employment and Immigration knows that too because he has to deal with that. Who is going to decide what is just cause in leaving employment when a woman is harassed by her boss or when some other similar incident takes place?
I would like the minister to tell us how he, as a long time minister in this government, can justify these two proposals: cutting back on unemployment insurance benefits for people who are unemployed and totally eliminating, without any arbitration or conciliation proposal, unemployment insurance for people who have to leave their jobs?


Michael Holcombe Wilson: Mr. Speaker, I think my hon. friend will be hearing a fuller explanation of this from my colleague, the Minister of Employment and Immigration, in due course.
However, let me just respond directly to the points that my friend has made. We have, over the course of the eight years we have been in government, been fighting to maintain the finances of this government in a way that will get the deficit down, a deficit we inherited that was far too high.
We are not happy to cut these programs but it is a fact of life that if we do not cut them interest rates will go up and that will slow down the growth in the economy. If the economy slows down it is going to make it far harder for the people who are unemployed today to get their jobs back.
The program that we have proposed here is not just a one-sided program. It is a program that maintains the benefit level, the current beneficiaries are grandfathered so they will not be affected by this. The Prime Minister has also announced a $300 million special initiative for displaced workers to help give them the support they need to get back into the work force and get off unemployment insurance.
If my friend looks at the broad motivation here, which is to get the economy moving as quickly as we can through reducing interest rates but also trying to treat unemployed workers fairly by not reducing their benefit but by keeping it level for future years, he will see that this is a balanced approach to a very, very difficult problem.


Mr. Phillip Edmonston (Chambly):: Mr. Speaker, I was listening with a great deal of interest to the minister's comments. My question is a very simple one. It seems to me that the government is looking for ways that it can cut expenses and at the same time raise revenues. I am just wondering why it did not use the Auditor General's report as a kind of Rand McNally map to economic independence, to gaining revenue and to cutting down a lot of the money that is wasted by this government.
I would just like to ask the minister two questions which are closely related. The first question deals with the GST. Many of my constituents have written to me saying: "Why not simply apply the GST in the financial institutions sector, transactions between stockbrokers and investors and so forth?" I know that the minister comes from that sector. He must have a particularly keen insight into why we do not have GST on those kinds of transactions.
Second, and this comes from the Auditor General's report. Why not look to the creation of 10,000 jobs estimated by the Auditor General through more efficient management of the forest resources on Indian reserves? This is not just speculation. This is what the Auditor General says: "10,000 jobs".
I just asked two specific questions of the minister and I would appreciate two specific answers.
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Michael Holcombe Wilson: Mr. Speaker, a general comment in response to the hon. member. Every time the Auditor General's report comes out we study it from start to finish. Every department that is affected by the report is asked for a response. Many of the responses to the Auditor General's recommendations have been implemented. That is one of the reasons why, as the Minister of Finance pointed out, we have been able to reduce the cost of the operations of government by something like 20 per cent after taking into account the effects of inflation.
As for the two specific points that my hon. friend has made. First he asked: "Why not apply the GST to financial institutions?" In a word, because it is too complex to do it. There is no country in the world that applies a sales tax like the goods and services tax to financial institutions.
When I was Minister of Finance and when we were bringing in the GST we looked at a range of ways to do it and we found that they simply did not work. It is no surprise because no other country has been able to find a way to do it either.
On the second point, concerning the question of management of forest resources. As I said, we will be reviewing this as we review every other recommendation of the Auditor General. Either the Minister of Indian Affairs or the Minister of Forestry will be able to provide my friend with a more specific response in due course.


Mrs. Marlene Catterall (Ottawa West):: Mr. Speaker, my question is to the minister. Again we have a continuing decline in real salary for employees of the government as well as for members of Parliament, ministers and the Prime Minister. It is fairly easy in our salary range to take a salary freeze for three full years. However, it is not so easy for the tens of thousands of Public Service employees who are earning less than $20,000 a year.
I have these questions for the minister in terms of how much ministers and the Prime Minister are co-operating in this effort. Will ministers now be reversing the step they took a couple of years ago of doubling the number of employees they can take out of their departments and cut back from 40 to 20 to assist their departments in these downsizing and cost-cutting measures.
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Will minister's and the Prime Minister's operating budgets, expense accounts and various other means of compensating for a freeze in salary be reduced? Will ministers reduce their draw on the resources of their departments to serve the political purposes of the minister's office, such as advertising, polling and so on?


Michael Holcombe Wilson: Mr. Speaker, these are obviously very detailed questions. The President of the Treasury Board will be speaking to the House during this debate. At that time I encourage my hon. friend to direct those questions to him.


William Warren Allmand: Mr. Speaker, since there are so many members of the Liberal party who wish to speak in this debate we will be sharing our time. My time will be shared with the hon. member for Algoma.
The economic statement given to us today by the Minister of Finance was the ultimate in doublespeak and cynicism. On the one hand this Conservative minister speaks of compassion and caring. Great buzz words. The government says it wants to stimulate the economy, create jobs, improve productivity, help research and development, economic growth and so on.
The government says those things on the one hand, but on the other hand it continues with the same failed policy. It continues with the same supply-side, trickle-down policy that was just totally rejected in the United States. The policy that it is following, and unfortunately continues to follow, has been carried on for the past few years in this country, in Great Britain and in the United States. It has left nothing but disaster: the closing of plants and businesses all over the place and high and record levels of unemployment and bankruptcies.
The government speaks about giving assistance to certain sectors and it has. It does give some assistance to certain sectors in this economic statement but it is only token assistance and will not do much at all. When the minister speaks about alternative plans and when the minister for trade who just sat down speaks of alternative plans I would urge them to look at the plans and suggestions put forward by the Clinton-Gore team in the United States, which have been publicized for several years by Robert Reich and other American economists.

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In fact what it is doing is staying on the same old track when nearly everybody who has something to say about economics has said that it should be on a different track.
I will get to this in a second, but sure, it has said that we are in a recession. However, it blames that recession on everyone else but itself. Instead of adopting policies which would run counter to the recession it is continuing with policies which stimulate and fuel that recession.
In the statement the government blames the recession, the unemployment, the bankruptcies and the terrible economic situation that we are in on world market conditions, on world recessionary trends, and on a whole lot of things except its own policies.
If we look back over the last few years, let us just look at the GST. Economist upon economist and think-tank upon think-tank have said, even those that agreed with the GST, that it was the wrong time to bring in such a massive tax increase and change. These experts said that if the government brought it in at the time it did it would only make any recession that was on the horizon much worse.
In many cases it is the government's policies that have deepened this recession and have made it much worse. Yes, there is a world-wide recession and we would be facing recession in any case. However this government, contrary to the advice that was given to it, not only in this House but from many parts of the country, went ahead with measures which stimulated, deepened and made things even worse than they would otherwise be.
One could say the same thing about the free trade agreement, which is not just a free trade agreement. It is an agreement to export capital and to import investment in this country, to sell out the control of our industry and resources. A real free trade agreement means that we produce goods and services in this country and we sell them to the United States without any tariff or with low tariffs and it does the same with us. It does not mean that we move entire businesses to the United States, that we set up a system in which we move entire businesses to the United States. That is not free trade.
That goes much beyond free trade. A free trade agreement does not mean that we open up our country
so that the United States, in this case, can buy out and take control of many of our major businesses, close them down, consolidate them with businesses in the United States, supply Canada from American factories, and only set up and leave warehouses in this country.
The ills and the problems that we face were to a great extent made by this Tory government since it has been in power.
The government talks about a leaner Public Service. Of course, it does so at the expense of extremely bad service. All of us who are members of Parliament are faced with letters and telephone calls from people who telephone day in and day out, let us say to the unemployment insurance office or to the pension office, but they cannot get someone to answer the line because there are not enough employees or because the lines have been cut back. The service in many departments is terrible. There has been a loss of jobs.
Worse still, what this leaner Public Service means for the government is a greater opportunity to contract out to its friends. It spends money. It shows us the numbers in the Public Service and yes, they have been decreased.
However, the government takes the services previously carried out by public servants on a full-time basis and contracts them out. Those services could be cleaning buildings, accounting or whatever. The government contracts them out to its friends and those companies certainly make good profits out of those contracts. The people working for those companies and performing the services are, for the most part, paid at minimum wage, are without unions, have no pensions and no benefits whatsoever. That is the sort of leaner Public Service the government is talking about.
The most disgraceful part of the economic statement today concerned the provisions with respect to unemployment insurance. When the free trade debate was carried on a few years ago we said on this side of the House that this would lead to a harmonizing of American social programs with Canadian social programs. It would lead to a levelling down to what the American social support system was.
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In fact, that prediction is taking place in many areas. It is taking place with respect to our pension programs, family support programs and also with respect to unemployment insurance.
The government started on that road when it brought in this massive reform of unemployment insurance a few years ago. It withdrew total government contributions to the fund and put the fund totally on the backs of the workers and employers. It cut back on the benefits and made it more difficult to qualify. It also put a much harsher penalty on those who had quit or those who left for misconduct.
I have no problem with penalizing people who really quit their jobs because they just do not want to work any longer or because they are lazy. I have no problem with penalizing them. I have no problem in penalizing people who truly misbehave. I have no problem when they are truly fired for misconduct.
However, we all know that people quit certain jobs because it is impossible for them to stay in that job. Often it is because of serious personality conflicts with the boss. Sometimes for women it is sexual harassment. Sometimes it is because of other types of harassment and it is the same with misconduct. What one boss will call misconduct an independent arbitration agency may not call misconduct at all.
To leave these people without any unemployment insurance and no improved system to determine whether there is just cause in quitting or whether there was really misconduct or not in being fired is a disgraceful treatment of our unemployed Canadians.
I could talk for a long time about the terrible situation in Montreal but I only have three or four minutes left in this debate. In Canada we face the worst recession since the 1930s with more than 1.5 million Canadians unemployed and 2.3 million on welfare.
Every time the government cuts back on unemployment insurance what does it do? If there were jobs for these people to go to that would be one thing, but when they run out of unemployment insurance and there are no jobs they go on provincial and municipal welfare systems. This government shifts the burden for the unemployed to the provinces and in Ontario and Nova Scotia to the municipalities.
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Does that solve the problem? No, it does not. It makes it look good as a government because it says: "We are cutting back programs. We are cutting back staff". In fact the ordinary person in Canada who cannot find a job is shifted from unemployment insurance, which had been in the past a more substantial and a better program, over to provincial welfare schemes.
We still have 2.3 million people on welfare and 3.8 million people living below the poverty line. That includes one million children. We have now in Canada two million people who rely on food banks. Those are the national figures. The figures for Montreal are much worse than the national figures.
In Quebec, for example, the unemployment rate is
11.9	per cent, there are 405,000 people unemployed. Unemployment in Montreal is 11.8 per cent, there are
188,000	people unemployed. Welfare rolls in Quebec are growing at 3,000 persons per month. In Montreal 615,000 people, 15 per cent of the population of greater Montreal, live below the poverty line.
Bankruptcies have hit all-time record highs. The loss of manufacturing jobs and the loss of jobs in transportation and communications, which is a major industry in Montreal, are all at record levels.
I have only a few minutes left and I want to deal with the alternatives. The government asks us: "Well, what are you suggesting in place of what we are doing?" We are saying that we need a mixed economy approach.
This country prospered and the greatest days of prosperity in this country were when we had a wise mix of government action combined with private sector initiative. That was so in the United States.
The philosophy on which this Tory government stands, that the marketplace will take care of everything, has been shown to be a failure. It was shown to be a failure in Britain. It has been a failure in Canada. It has been a failure in the United States. They believe in this trickle-down theory, that if we help the rich, if we help the big businesses, it will trickle down and help the ordinary Canadian. But it has not done that.
The government is cutting jobs right and left, yet it continues on this same track. It will get the same treatment when the election comes that the tired Rea-gan-Bush bunch got in the United States. Government members will be kicked right out on their fannies because the policies they are adopting and continue to follow are wrong. They are wrong. They have been

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proven wrong on three continents and they had better get the message soon because people are not going to take it any longer.


Mr. Peter L. McCreath (Parliamentary Secretary to Minister of State (Finance and Privatization)):: Mr. Speaker, when the minister gave his remarks earlier today he said that he wanted to have the differences in philosophy brought out and that is what we certainly just heard.
Now, there clearly is a difference in philosophy between this side of the House and that side. Listening to my hon. friend from Notre-Dame-de-Grace I had difficulty telling the difference between his approach and that of his socialist colleagues a little further down the line. He calls it a mixed economy approach. What he left out was the other part of their economic approach which one might call ahead in the sand approach where they hide from the changes that are taking place in the world.
Now, the approach he advocates, which was the approach taken by the government of which he was a minister, was to drive the deficit as far as possible, drive it right up the line and leave the country burdened with a national debt that we are still trying to cope with.
Now we face a situation where the entire world is in recession. It is interesting to note that in 1988 world economic growth was 4.3 per cent. This year it is down to 1 per cent. Yet, what has been the impact of the approach this government has taken? We are looking at a little bit better growth. The most recent growth in the last quarter was 1.4 per cent. We have the lowest inflation rate of all the G-7 countries. Not bad. I would say he ought to be up commending the minister for that.
Productivity is up 2.6 per cent. That is not bad. Look at trade. They hide from trade policy. What has happened since we brought in the FTA that they so love to disparage?


The Acting Speaker (Mr. Paproski):: Order, please. If the hon. member does not put his question he is not going to get an answer. There is only one minute left.


Peter L. McCreath: Very well, Mr. Speaker. The reality is that my friends opposite try to blame the recession on this government and ignore what is going on in the
world. Maybe if I were over there I would too, but I think I have more integrity than that.
One of the things going on in the world is changing trade patterns and globalization. I would like to ask my hon. friend what his solution is for dealing with the new reality, the new globalism that forces countries not to go and hide in the sand, but to get out there and compete? How do we compete if we do not allow businesses to grow so that they can do it?


William Warren Allmand: Mr. Speaker, to begin with, of course there is a great difference in philosophy between that side and this side. There is no doubt about that. The minister asked about it this afternoon and there certainly is a difference.
With respect to the recession, yes, I said in my remarks that there is a world recession. But this Tory government did things which deepened the recession and it did them at the wrong time.
I can recall very well when the government brought in the GST. Even those who supported the GST in principle said that it was absolutely the wrong time to bring it in. It would deepen, broaden and stimulate the recession that was on the horizon, but it ignored that advice. I could refer to report after report after report, all of which said not to bring in the GST, not to add to the burden of ordinary consumers and taxpayers at a time when we were going into a recession.
The hon. member boasts about the inflation rate. There is bound to be a low rate of inflation when over 1.5 million Canadians are unemployed and another overwhelming number are on welfare. They do not have any money to buy.


The Acting Speaker (Mr. Paproski):: The hon. member's time has expired. I am going to be very difficult here on time because there are a large number of speakers. The next speaker has 10 minutes, plus five minutes questions and comments. If hon. members hope to get any more than one question they should shorten up their comments and put the question.


Maurice Brydon Foster: Mr. Speaker, I am glad to have a chance to speak in this debate on the supplementary borrowing bill that is for some $8 billion. It is interesting that $8 billion is just about exactly the
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amount by which the Minister of Finance underestimated his deficit.
Having the Minister of Industry, Science and Technology speak tonight was very appropriate because he really is the architect of the recession we have in Canada today.
It is the worst recession since the 1930s and is incredibly much worse than what we suffered in 1981-82. It is a made-in-Canada recession. It is a recession that has been going on now for over 30 months. It is an historic low as far as misery and difficulty for Canadians is concerned.
It was very important to have him here tonight because he went through the same gobbledegook he has been giving us for years with all the placebos the government has been using to talk about the recovery and so on. He described the recovery as being slow. In fact, the recovery is glacial. It really is not occurring at all. Our hope is maybe 1 per cent growth this year. With the growth in the number of people being unemployed it amounts to exactly nothing.
He talks about sound fiscal and monetary policy. Any Minister of Finance who would bring in a free trade deal, then impose the GST, and then hold Canadian interest rates at 4 per cent to 5 per cent above those in the United States and expect Canadian businesses and Canadian manufacturing to be able to cope with that really is living in an Alice in Wonderland world. It is little wonder we have had hundreds and hundreds of thousands of jobs lost during this recessionary period.
It was interesting when the former Minister of Finance spoke about sound fiscal and monetary policy. When this government came to power in the fall of 1984 Canada was launched on the greatest period of expansion in our history with six years of unprecedented growth.
The government loves to talk about deficits and how it has reduced the deficit. In fact, it has brought in 33 new tax measures during the period of 1984 to 1990. That includes the GST which cost almost $2 billion just to implement. Talk about spending money. This government certainly knows how to do it.
In any event, the minister talked about a sound fiscal and monetary policy. Yet during that period 1984 to 1990 the deficit doubled. Of course since 1990 it has been totally downhill. This is the worst recession since the 1930s. Look at the measures the government has put before the House today. Obviously ii these measures
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were of any consequence they should have been brought in at least 18 months ago. It is talking about spending $500 million for a capital works program. It estimates it will create some 5,000 jobs over a two-year period.
In one community in my riding, Elliot Lake, we have lost 3,400 heavy industrial mining jobs. We have lost at least another 1,600, perhaps 2,000. This infrastructure program that the government puts before us will create the equivalent of the number of jobs that have been lost in one relatively small city of 13,000, Elliot Lake in my riding, over the next two years.
Can we imagine? The government suggests that program is going to have any economic impact at all on the country is just about zip, just about equivalent to nothing. Granted there are some projects over the course of the five years of the program but clearly the next two years are the most important because we have to get out of this recession.
I do not think anybody will dispute that northern Ontario has had the brunt of this recession. Whether we are talking about the export tax the government imposed on softwood which has lost thousands of jobs, whether we look at the mining industry where we have lost at least 25 per cent of all the mining jobs in northeastern Ontario during the last three or four years or whether we look at the steel industry in Sault Ste. Marie which has gone from about 12,000 jobs 10 years ago to around 5,000 today, northern Ontario has clearly been hit more drastically than any other place.
As we look through this infrastructure program, we see that the only projects in Ontario are two projects at terminal one and terminal two at Pearson International Airport in Toronto. Clearly Ontario is left out of the whole project. It is not even clear from the data that the Minister of Finance made available today whether any of that money is even government money. It talks about paving the runway. It talks about reconstructing terminal one and terminal two but they are doing it in the private sector. It looks like Ontario, and clearly northern Ontario, gets absolutely nothing out of this infrastructure program.
My leader put forward a billion dollar program for municipal infrastructure, for sewer and water and municipal projects which would be shared three ways. The billion dollars that the federal government would put in would be matched by the provincial and municipal

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governments. There would be projects in every community.
The most important, active and busiest of buildings perhaps in Canada, Pearson International Airport, is where the money is going for this program.
In 1981 and 1982 we had a massive infrastructure program, a lot of airports, marinas, pipelines and projects throughout the country which really jolted the Canadian economy back into the prosperity which we enjoyed from 1984 to 1990. This program is simply too little and certainly too late by at least a year and a half. It should have been brought in a long time ago.
There are a couple of programs for small business which will be useful such as the 10 per cent investment tax credit. Most of the other projects and programs are extensions of existing programs such as the Small Businesses Loans Act and the small business financing program about which the minister of small business has already said the banks are sitting on their assets and are not really doing that much for Canadians.
This program that has been put forward today will have very little impact on the economy. At the same time, those thousands of people who are living on unemployment insurance are facing a drastic cutback of 3 per cent in their benefits. Others will lose out on their benefits.
It is certainly not a statement that is going to pick up the Canadian economy, put many people back to work, and get us out of this recession that we have been suffering from for the last 30 months.


Donald Frank Mazankowski: Mr. Speaker, I listened very carefully to the hon. member's comments and I think he made an unfortunate error. Perhaps it was an oversight, but he did say that our government doubled the deficit since we have been in office. If he thought about that again he would probably want to correct that. That is not correct.
Second, I take it from his comments, and I think I heard him correctly, that he likes the statement but it should have been brought forward earlier. I appreciate
his support in that regard. I suppose it is better late than never.


Maurice Brydon Foster: Mr. Speaker, the statement is so anaemic that the impact in most areas of this country-clearly the infrastructure program will have no effect. There will certainly be no joy in my riding. There will not be one road rebuilt, not be one new sewer line constructed, no town hall built and no people will be put to work there. There is no provision in the program for new direct employment programs such as the massive programs that were provided in the winter of 1982 when we faced the last recession.
Clearly the program is so anaemic that it will have practically no impact, especially in my constituency. We have people who are facing unemployment. We had
1,000	workers laid off last spring. The budget for the employment and immigration department in Elliot Lake in my constituency was cut from $2.5 million last year to some $600,000 this year. The department finally said that it would provide some training for some 75 workers and then it cancelled it and said that the local community had to come up with a quarter of the money, some $200,000, or there would not be any training money.
For the future there are no additional funds. The minister is simply not providing funds that I see will reduce the unemployment in my constituency by any amount this year. When the government was talking about a massive infrastructure program it talked originally of $2 billion and said that this would dip down into every community. In Ontario it is dipping down to provide something, we think, at the Pearson International Airport. For people living in the Algoma riding fixing Pearson International Airport does not have much impact on the unemployed on Manitoulin Island or in the north shore communities.
The recession has been unnecessarily long and deep because the government has had a tight fiscal policy. It has increased taxes with 33 different new taxes, including the GST, during the last eight years. It has kept interest rates so high that we have for the first time a made-in-Canada recession. All economists say that we have borne down so hard on the taxes in this country and the interest rates are so high that although inflation has been lower economic growth is just about zero.
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At the same time the Minister of Finance brings in a budget only nine or ten months later and he has miscalculated by 25 per cent. He talked about $28 billion last February and today he is talking about $34 billion. It is little wonder that the deficit of $179 billion in 1984 has skyrocketed to over $400 billion today. The minister is right that the deficit has not just doubled, it has more than doubled during that eight-year period.


Mr. J. W. Bud Bird (Fredericton-York-Sunbury):: Mr. Speaker, it gives me a sense of pride and privilege to have the opportunity to participate in this debate.
I think the Deputy Prime Minister and Minister of Finance has come into this House today with a great deal of courage and a great sense of responsibility, as is true to his character and his record. He addressed a situation that is extremely difficult. He had to tell this House that the finances of this country have deteriorated from an estimated deficit of $27.5 billion in February of this year to an estimate of close to $35 billion in the coming year and down only slightly in the following year. I wondered how he would do that because it is an extremely difficult task.
The realities are that his estimates in February for
1992-	93 and 1993-94 were based on the best information available at the time, based on a world economy we estimated had recovered from the trough of the recession. However, it has continued to lag and linger to the point that economic growth in this fiscal year will be 1 per cent. As one hon. member said earlier, that basically amounts to moving sideways.
Therefore, the budget deficit of $27.5 billion which had been forecast for 1992-93 is going to come in at $34.4 billion. It has resulted almost entirely from a shortage of anticipated revenue. As a matter of fact, the change in that budget position as a result of policy actions announced in February and today is actually a reduction of $700 million, obviously not nearly sufficient to offset the revenue reduction of $8 billion and the other public charges that accrue from that. The same is true for
1993-	94 when the estimated deficit is now going to be close to $10 billion more than it was estimated to be in February of this year.


An hon. member:: Fire your financial analyst.


John Williston (Bud) Bird: It is not as the hon. member says so glibly: "Fire your financial analyst". It is a case of dealing with a
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world in which the financial climate has become very stormy and unpredictable and very difficult to deal with.
I would like to use an analogy. I have had some experience in flying aeroplanes. Sometimes there are storms you just cannot predict and it is important to practice the fundamentals. It is important to keep your eyes on the instruments and keep your destination in mind and fly on the fundamentals. The finance minister and this government have flown well on the fundamentals. One great one has been the rate of inflation. The rate of inflation has been brought to 1.5 per cent, the lowest among all industrialized G-7 countries. That is a fundamental that will stand us in great stead as we commence to emerge from this recession. Another fundamental has been the control of government expenditures. This has been a direction which Canadians have prevailed upon us to take for many years now. This is a demand which the government has addressed and to which it has responded.
In the midst of these dramatically large deficits and constantly growing debt it is hard to keep a perspective on the fundamentals. The facts are that this government and this finance minister and his predecessor for the past eight years have kept the rate of growth in government spending at an average of perhaps only 3.9 per cent. I quote from an article in the Fraser Forum of November 1992 in which the author, Ken Gregory, points out that for the 15 years prior to 1984 governments were spending at a rate of growth on programs of close to 14 per cent. That figure has now been reduced to less than 4 per cent in the past eight years.
The result has been another tremendously important move in the fundamentals. The program operating account of the Government of Canada has been turned from a deficit of close to $16 billion in 1983-84 to a surplus of $10 billion in 1991-92. That is a turnaround of $26 billion in the program operating account.
It means that in the area of discretionary spending the government has exercised management of the fundamentals. Unfortunately the areas of debt, debt service costs and economic contribution of our revenues, the areas that are beyond our control, have come to us in unpredictable turbulence as a result of this stormy and

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difficult economic world climate. We can only deal with them as responsibly and as well as we can.
As I say, to use the flying analogy, we must keep our eyes glued to the instruments. We must stay the course. We must not ever forget the destination which is ultimately and hopefully in this decade a balanced budget and the beginning of the repayment of our national debt.
Canada's economic progress has been slowed by a stubborn world-wide recession. The pressures of the new global economic insecurity marked by restructuring and job dislocation have made recovery and growth painfully slow. The government's priority is to continue to build confidence, to enhance the beginnings and finally the fulfilment of recovery, and to create jobs. Its priority challenge is to help Canadians adjust to economic change and to take advantage of the opportunity which it brings.
That is why the wide-ranging initiatives announced by the finance minister today are designed to bolster public and private investment in economic growth while also reducing the cost of government. These actions build on the policies I have described which are already increasing Canadian productivity and competitiveness and are producing fundamental stability in the areas that are so important.
I would like to highlight some key actions as outlined by the finance minister this afternoon. He talked about support for small business. Canada's federal tax system for small business is one of the most favourable in the world. The small business sector is under serious financial and competitive pressure. To help spur growth in jobs the government is launching a special small business employment and investment package.
There was a publication in Atlantic Canada by ACOA last week that talked about the importance of small business. While it pointed out that most employment still resides with large companies 90 per cent of new jobs come from small business. If we are to achieve growth and if we are to solve our unemployment problems small business is the area of our economic sector that we simply must address. Under this package announced today most small businesses will be able to add new workers without paying additional unemployment insurance employer premiums in 1993. This will reduce the
cost of hiring additional workers by up to $1,600 per worker. Other actions in the small business area include a 10 per cent small business investment tax credit for machinery and eligible equipment purchases.
The rules on investment in small businesses by RRSPs and other funds will be simplified and investment options will be expanded. Programs that provide financial assistance are being expanded or extended.
Second, this afternoon the finance minister has addressed the challenge and the compelling imperative of research and development. Research and development is key to developing the new products and processes that deliver competitive success and growth in a global marketplace. Canada, as a trading nation, must be competitive in that world marketplace.
We offer the most generous tax incentives for business research and development of any major industrialized country and we have now introduced modifications to streamline and improve the system, which were promised in the budget of February 1992. These changes will provide additional support of $230 million over the next five years.
There are still areas where the tax rules could be improved to help business adapt and grow in an era of knowledged-based work and technological change. An example is the tax treatment of equipment such as computers that become obsolete so quickly as new technology emerges.
The government is examining further modifications to the tax system to solve these problems. It has set aside $400 million over the next five years to remove tax-based impediments to innovation and growth. We will also increase funding for the Industrial Research Assistance Program and will extend further the funding for longterm research, which builds on the best of the results achieved under the network of the centres of excellence program.
Another key area addressed by the Minister of Finance this afternoon is that of training and adjustment. It is increasingly necessary in a knowledged-based economy that Canada's economic prospects be bolstered by the skills of our people. The federal government is helping to meet this challenge with its support for worker training and adjustment being increased to $3.8 billion next year. As part of this, funds for developmental
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training under the UI program will go to $2.2 billion from $1.9 billion last year and just $500 million in 1990.
The government will also help workers and employers make learning and skills upgrading a constant priority. Priority will be placed on developing occupational standards so the training will be relevant to real needs. The government will provide $250 million over five years to help lever a national training effort driven by labour and business. It will develop tax incentives to help defray the costs of training workers to meet these occupational standards.
Another area addressed this afternoon by the finance minister is in the construction and resources sectors. This extends the successful home buyers plan introduced in the February budget where people can use their RRSP savings to help finance a home. This is being extended by another year to end on March 1, 1994.
We have also increased the tax write-off for junior oil and gas companies from 30 per cent to 100 per cent on the first $2 million of Canadian development expenses that are flowed through to investors. The Income Tax Act will be amended to provide more flexibility for oil and gas companies and mining companies to utilize non-capital losses.
One of the most exciting areas announced this afternoon is the new investment in Canada's infrastructure. Certainly for me, and other members of Parliament on both sides of the House from Atlantic Canada, the announcement of direct contributions at the rate of $200 million per year over the next five years to help with Atlantic projects is tremendously encouraging. This will go toward the Atlantic expressway and the completion of engineering and the commencement of construction of the Prince Edward Island fixed link that begins in the spring of next year
The nation's infrastructure, which includes national assets such as our highway system, communications and transportation of all types, can provide an important competitive advantage in the new global economy. Based on savings in other activities the government will commit an additional $500 million to pursue specific strategic investment opportunities across the country over the next five years that will total $2 billion and directly generate 4,000 to 5,000 jobs each year. As well, the
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Minister of Finance has addressed government efficiency. The government has worked hard in the past, as I have described already, to reduce the costs of government and to streamline its operations. As a result, the real cost of government after inflation is now 20 per cent less than it was in 1984-85.
The minister has also talked about easing the tax burden. The February budget announced cuts in personal income taxes applying to all Canadians. It also included measures to ease the tax burden on the important manufacturing and processing sectors of our economy.
Despite the pressures of the deficit the government will proceed with the second phase of tax cuts planned for 1993. These and other measures, such as the new child tax benefit, will provide some $2 million in economic stimulus next year. The government will also hold 1993 unemployment insurance premium rates for both employees and employers to 1992 levels.
We will continue with action to control the deficit. The deficit is a remarkable and devastating challenge. The key to deficit reduction is spending control. I have already outlined how, over the past eight years, this government has a record of spending control on programs that is three times, perhaps four times, as effective as the predecessor governments of the previous 15 years.
In this statement today the spending control measures announced will save nearly $8 billion over the balance of this fiscal year and the following two years. Here are some of the measures: For two years salaries will be frozen for public servants and Crown corporations will have proportional reductions made in their operating budgets. Salaries will be frozen for two years for the Governor General, the Prime Minister and all members of Parliament. Operating budgets of government departments will be cut by 3 per cent in 1993-94 and combined with the wage freeze federal operating budgets will be 5 per cent lower than planned levels over the next two fiscal years.
Following on the heels of the record of the past eight years that is a remarkable commitment indeed.
I would like to finish by saying that while these are discouraging times Canada really is not a country to be easily discouraged about.

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Over the weekend I had the opportunity to take a look at a new book by Peter Newman entitled Canada 1892, Portrait of a Promised Land. In the concluding pages he draws parallels between 1892 and 1992, 100 years later, and they are surprisingly similar. One hundred years ago Canadians felt that the 20th century would belong to them and as we look into the 21st century, despite the difficult challenges we face, I have no doubt that everyone in this Elouse has an even stronger conviction that Canada's time has come.
In 1892, as in 1992, those did not seem like impossible dreams. Yet the country was still very young, as we are now, still very large, still very diverse in both geographic and cultural terms, still an extremely difficult country to govern and still, particularly in current economic times, an extremely difficult country to stimulate economically and to manage financially.
Sir Wilfrid Laurier asked 100 years ago: "How long will the fabric last or will the fabric hold at all?" Yet, as Newman says, in surprising ways Canada has hardly changed in the last 100 years. Most of the concerns animating Canadians in 1892 are still with us and our hope must lie in the fact that however threatening these problems might have been they did not daunt us. We are still here to argue and implement the solutions.
He is right. That is what the finance minister has done with courage and responsibility and foresight this afternoon. He has addressed those problems. They did not daunt our forefathers then. They do not daunt us now. We shall meet the challenges we face. We shall solve the problems that beset us. We shall fulfil the promise that the future offers this great land and we shall do it together.


Mr. Dennis Mills (Broadview-Greenwood):: Mr. Speaker, I want to start off by saying that I respect the member for Fredericton-York-Sunbury. I listened to his remarks carefully. I do not want to be perceived as being negative in any way, shape or form. We are trying to be responsible here.
I want to focus on that part of his speech that referred to small business. I think that the Minister of Finance did a good thing when he increased the Small Businesses Loans Act from $200,000 to $250,000. I understand that eligibility for this small business loan may go from fixed assets to possibly working capital. That is a gesture of
understanding toward the needs of the million-odd small businesses in this country.
I want to say two things. One, we have taken almost a year to pass the legislation on the Small Businesses Loans Act, which all parties in this House supported. I hope that the amendment from $200,000 to $250,000 does not create further delay.
Having said that, my greater concern is the fact that most of the branch offices of the major financial institutions in this country are not aware of the Small Businesses Loans Act and what it means. I hear from many businesses across the country that when they go to their bank managers they are not aware of this legislation. They are not aware of the program.
I am wondering what the government will do to make sure that the intention of this amendment and the basic loans act that the Minister of Finance presented on the floor of the House today to the people of Canada will actually be implemented for the million-odd small businesses in this country.


John Williston (Bud) Bird: Mr. Speaker, that is an excellent question. I think the Minister of Finance this afternoon addressed that in very profound style. First of all, he called upon the banks of this country to get with it, heed the challenge of small business and to support it. He said it explicitly and clearly and I doubt that call could be ignored.
He also talked in his concluding statement about the need for partnerships, not just with the federal government and the provincial governments, but partnerships with business, labour, financial institutions and all Canadians.
We are in this together. This deficit circumstance in which we find ourselves is as a result, as I said, of turbulent economic times over which the world is having difficulty controlling.
In response to the question raised by the hon. member, it is clear that if we are to use the measure, the Small Businesses Loans Act that was amplified this afternoon, bankers have to start taking it seriously, but well beyond that, they have to start taking small business seriously. They have to start investing in the potential that exists. They have to start sharing the risk more fully than they may be prone to do.
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I am not in this statement knocking the banks. I am just amplifying the call to partnership that must exist among all Canadians. I think the Minister of Finance has made that call very clearly and very well today.


Dennis Joseph Mills: Mr. Speaker, I hope that the member's statement will come to reality. I am not saying this to be anything other than concerned. So often I have heard the Minister of State for Small Businesses state that this is a problem. I have heard the Minister of Finance state before that he will address this issue.
I hope for the hundreds of thousands of small businesses that really want to use this piece of legislation that his commitment will be lived up to.
My second question concerns that portion of the budget speech that deals with the unemployment insurance amendment. We read in the minister's speech that the unemployment insurance fund is going to be amended so that if someone is fired for what the employer would define as just cause that particular person is not eligible for unemployment insurance, or if someone quits on his or her own volition he or she does not get access to unemployment insurance.
I personally think that is a pretty extreme amendment. I just do not know where the government is coming from on that particular amendment. The member comes from business. I know he is a successful business person. There may be situations that could crop up where people may be put into a position where they either want to leave because they cannot live with the condition or for what is just cause. For these people not to have access to that unemployment insurance fund is a pretty Draconian amendment. I wonder if he could comment on that.


John Williston (Bud) Bird: Mr. Speaker, I am surprised to hear the hon. member raise this in the context that he does because I share the respect for the hon. member that he has expressed for myself and which I appreciate.
It almost sounds as though he is using this significant element of the minister's statement today as a political crutch. He is talking about the situation as though the glass were half empty instead of half full.
One of the greatest complaints that I hear throughout my constituency and this country is about abuse of the
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unemployment insurance program, of people quitting jobs because they do not like them, they do not like to work so hard at them or they want to take a holiday and they want to do it on the basis of the unemployment insurance program.


An hon. member:: Right on.


An hon. member:: That is true.


John Williston (Bud) Bird: I know you do not mean that. This afternoon the NDP, and I believe the Liberals as well, talked about patching up the loopholes in the income tax system. There is equally a cry across this country by those who do pay unemployment insurance and support the system to make sure that the system has integrity, that it is used where it is needed and that it does not get misused.
Probably one of the most profound statements the minister made this afternoon was that our wonderful unemployment insurance program, the best in the world, will not be subject to fraud.


An hon. member:: No, that is not what we are talking about.


John Williston (Bud) Bird: That is exactly what he is talking about. As I say, for those who may lean on their crutch and say we are being hard done by, there are ombudsmen and all kinds of ways for fairness to be achieved. There are references to be made.
I must say it was the first thing the entire opposition landed on this afternoon. It did not talk about the growth of the country, it did not talk about the economic circumstance, it did not offer anything positive in the recommendations. It said: "Oh my, someone is liable to lose their unemployment insurance for unfair reasons". That is not what the minister said at all. He said fraud and misuse of the unemployment insurance system will end and I compliment him for that.


Mr. David Walker (Winnipeg North Centre):: Mr. Speaker, I welcome this opportunity to join the debate. It comes at a very relevant moment, given the last exchange between the member on our side who well understands the need of the unemployed and the poor in this country and the members on the government side who have been sitting there for just too many months and too many years. They have lost track of what they are supposed to be doing here as a government.

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I would like to take us back in time just one week.
One week ago in this House we were raising questions on poverty. The National Council on Welfare brought to our attention the extent to which poverty has grown in this country. It noted that in some job areas, such as the service industry, 60 per cent of the people employed are living below the poverty line. It noted that in Manitoba
173,000	people now live in poverty.
These statistics were from before the recession began. It is now estimated that over 200,000 people in Manitoba are living in poverty.
Just take that report of last week, from a government agency, and then look at this budget. It is a budget. It is a pre-election budget. Does this government spend one minute addressing the issue of the poor and the questions raised only a week ago? No. Instead it built a budget around the prejudices of the people who think that there is such a thing as an undeserving poor.
One of the great arguments the opposition has against the child benefit package, and what annoyed us to no end, is that the government built on the assumption that those who are on social assistance, those who are under CAP, are somehow or other not as deserving of support as those who are working.
No one denies that people who work deserve every break. However, to make the other assumption in the depths of a recession, which in some parts of this country is a depression, that there are people who cannot find work and that they should be treated differently than those who can find work is a perversion of our history of being progressive in social policy.
This government and this minister have to be challenged on this statement today of continuing that distinction. This time it has seeped into the UI program. For the first time the government is saying that those who have quit, have severed from a job, are somehow or other to be treated differently even though they paid into the fund for years and even though we do not know why they separated from a company. Members of this House know that there are 101 reasons why people leave a company. These reasons are never stated. The act right now provides for that to happen in a polite fashion.
Now we are opening up a whole series of problems which have no need to be addressed. This government is making a distinction again between the so-called deserving poor and the undeserving poor. It needs to be challenged on this right here, today, and for the next few weeks over this legislation.
This is perhaps one of the most cynical documents that has been presented by a very cynical government. This was its opportunity, again heading in to a very tough winter, of saying to Canadians: We have finally gotten the message about what sort of situation we are in.
There has been all sorts of chatter in the public and it is no secret that there has been discussion of an infrastructure program. People representing municipalities in this country have come forward with ideas, not wild-eyed schemes, that can be implemented in the short term where the regulatory processes are set up so that they can get people to work over the winter. This government looked at them, turned around and walked away.
Take the example of western Canada. We all know that municipalities in western Canada have asked for a number of different ways to rebuild their infrastructure. We also know that across the country there has been a discussion about a roads program. What does this government say? It said it will provide funding for construction in New Brunswick and Nova Scotia for the Atlantic freeway. In western Canada there has been an enhancement of roads in national parks.
What is really meant when we read through all the documents, is that the Alberta members want to make sure that, to fight off the Reform Party, their roads in the national parks are rebuilt. Manitoba is not even mentioned. The commercial highways across western Canada are not mentioned.
Nothing is being done to rebuild the infrastructure. For example, in Winnipeg, where the core initiative has consistently been presented as a continuation of a first class infrastructure program, the government has ignored it and has pretended it did not exist.
Instead of having an attack on the basic questions of this country, the questions of poverty and of finding work, this government has ducked behind the language of its right wing ghost and wants to resurrect in the public's mind that it is concerned about the deficit. It has single-handedly created more debt in this country than
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we as a government were able to do in over 100 years. It managed to do that in eight years and then turn around after bankrupting the country and say: "We cannot help the poor; we are bankrupt". The guilt of the world is not upon us; it is upon the government. It deserves to pay the price for the hardship, the agony and the disruption of people's lives by continually undermining the confidence of this country.
This document does not rebuild confidence. It digs us into a deeper hole. As Canadians we have to give this government a message. Obviously what we see today is a government spending hundreds of millions of dollars to buy time. The government is going to start it in motion by punishing public servants as soon as possible by maintaining wage caps. It is then going to start with promises of getting involved with an infrastructure. It will probably tell us in the spring that it does not need a budget right away while it buys more time. As it gets more prepared for an election it will try to spring some other programs on us.
The reality is that the government is not going to be successful in an election. Someone else will come in, and instead of having a program that can be built upon we will have to dismantle all the assumptions of this government, dismantle all the destruction, tear apart the way that it has tried to ruin the infrastructure of this country and start rebuilding. It is going to take a long time before Canadians can look at a government and ask: "Are you really going to help us or are you going to continue to stand in the way of our trying to earn an income?"
There are other notes in this document that have not yet been addressed in the debate. The government discusses in a very ominous tone the Canada Student Loans Program and indicates that its revision, its "new financial arrangement", is expected to lower costs. Whenever I hear the government saying that it is to do more for social justice by lowering costs it just makes me shiver. Any time I have heard that before it has meant tougher conditions and that students somehow or another pay the price.
The government uses wonderful language. It is asking financial institutions to share in the burden of student debt. Has anyone ever met a bank manager when he is sharing the burden? They are wonderful sharers of debt. They sometimes open up their doors and talk at great
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length but in the end they are not negotiations in the language we have here.
If we look at the details in the economic and fiscal statement on page 15, who is it reducing grants to? In international assistance it is going to claim back $300 million. Does it turn to the richest people in the country, the richest people in the world? No, it turns to the poor people of the world. It is not only the poor in Canada who have to pay the price of this government; it is the poor around the world. Also, through Bill C-91 and what the government is trying to do there it is going to take away their inexpensive drugs and is going to add hundreds of millions of dollars to the world health bill.
What kind of strategy is that? We are almost at the anniversary of that famous day when the Prime Minister went out and patted children on the head and said how concerned he was. Is this the anniversary document? Is this another reference point that he wants to use in his legacy to the country?
It is also cutting back and saving money, $125 million, in regional development. What does that mean for western diversification?
The green plan is going to pay a price. I do not even know whether the green plan has actually ever started, but we know now that the government is going to cut it back. We also know that the government is going to take money away from aboriginal groups. On the one hand, we were congratulating aboriginal leaders in the last year for making such fine progress and being such great builders of the country, and then it turns around and says: "Now that you are not looking we are going to take away $28 million".
The contradictions in this document are endless. It was presented to us in a low key way, pretending that the media would not pay attention to the major changes taking place. But we in this opposition caught on right away. This is a destructive document that we will fight. These last four weeks have seen more destructive pieces of legislation presented to the House of Commons than ever before in our history. If it is a government in preparation for an election, it has a very perverse notion of what this nation is all about, and I can only wish it luck in this presentation.



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However, there are alternatives. We have consistently said there are ways of approaching the debt and ways of approaching the infrastructure and ways of rebuilding confidence. There are organizations that have long since worked for social justice in this country. For example, just a few minutes ago I heard from the National Anti-Poverty Organization and it can only declare its disappointment and dissatisfaction with the government for not being willing to deal with the questions of how to feed Canadians and house the homeless.
enough income to survive, to pay the rent, to pay their groceries, to-


The Acting Speaker (Mr. Paproski):: I think the hon. member should put his question, otherwise there will be no time left.

I end on this note. If you cannot once a year stand up and acknowledge that as a country we no longer feed people and we no longer house them then what has this Parliament come to?


Mr. Bellemare:: I would like to ask the hon. member for Winnipeg North Centre to expand a little on the welfare aspect because I think this is important, considering the prevailing depression atmosphere as the hon. member said, because this is not just a recession. So could he expand a little on the welfare issue?


Eugène Bellemare: Mr. Speaker, the hon. member for Winnipeg North Centre deserves to be commended for his excellent speech, which condemned the government's mini budget. As he pointed out, this budget is a disaster, a perversion and anti-Canadian in every sense of the word. The hon. member, who has always shown a keen interest in social welfare issues, saw today that what we have here is a financial catastrophe for the neediest and poorest members of the community.
Take unemployment insurance, for instance. A few months ago the Liberal Party voted against a bill that was passed by the government. The legislation introduced drastic changes in the benefits the unemployed were receiving from the Unemployment Insurance Commission. The government changed the legislation, so that from now on, unemployment insurance premiums will be paid only by the employer and the employee. This means the government is no longer contributing to unemployment insurance benefits.
Today, the government announced that even if employees were now contributing more, without the government's assistance, the UI benefit rate for new beneficiaries would be reduced from 60 per cent to 57 per cent. And we all know that in Canada the number of unemployed is now 1.5 million, and I am referring to those who are receiving unemployment insurance benefits. We also know that 2.3 million Canadians are on welfare. This means that 3.8 million adults in this country, at least most of them, have no jobs and not


David Walker: Mr. Speaker, I wish to thank the hon. member for Carleton-Gloucester for his comments and his question.

The reality is that if one looks at the change in the level that a person on unemployment is able to receive, the reduction from 60 per cent to 57 per cent, is a decrease of 3 per cent on paper, but in reality a 5 per cent decrease. We take the poorest people, give them a 5 per cent pay cut and say: "To what extent does that contribute to the stability of a family? How does that make people feel, after working and getting into unusual circumstances they now get a 5 per cent cut?"
The reason we have unemployment insurance is that we make the assumption in this country that most people want to work. I was very interested in the commentary by the member from New Brunswick who made the insinuation that the rules had to be changed because people were quitting UI. It was a very unusual comment he made. I see my time is up.


Mr. George Proud (Hillsborough):: Mr. Speaker, I rise this evening to speak against the Minister of Finance's mini budget. Yes, I am against this government's budget, and that is what it is. It is a budget put together in a panic when the Minister of Finance realized his earlier projections were way off base.
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Regrettably, the actions he proposes in this flawed document today will not position our country for the future. I fear it will continue to lead us further down the path to fiscal disaster. This government has been leading us down that road ever since it decided to stay the course.
Canadians will not be fooled any more by this government. Canadians, including those in my region, have learned that this government cannot be trusted to manage its economic affairs. It certainly is not the government to lead us through the rest of the 1990s.
As an Atlantic Canadian I know the impact this government has had in my own province of Prince Edward Island. I know the people of that province reject out of hand this government's whole economic program.
The tax increases have been unprecedented in magnitude since 1984. The increase in the tax burden in Canada was by far the largest among the G-7 countries, yet our deficit continues to rise. This is a government which took great pride in being competent managers, yet the decline in the economy has meant that despite the massive tax increases the deficit is now out of control.
The only way the government can fight the deficit and bring Canada back to its foremost place among the world economies is to finally set about creating those jobs, jobs, jobs that it has long promised.
Encouraging new jobs through small business is unreal. The cap the minister has just announced on UI premiums will not foster these jobs. The ceiling for loans to small firms under the Small Businesses Loans Act will not help small businesses.
Investing in people is a familiar buzz phrase to all Canadians. Canada's economic prospects depend more and more on the skills of its people and the government should pay heed to that. Where is the retraining, the educational development, the research, the development that has long been promised by this government? Why do we not have a long-term plan to help Canadians gain the competitive edge that this government has long been talking about?
In the interim, what about the long awaited infrastructure program that, while creating much needed jobs in
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the short term, would give Canada its much needed infrastructure improvement in the long term?
What we received from the government today was another half measure, point one-tenth of a per cent in our Canadian economy. Shame. Shame. The government is not even replacing one-half of the jobs cut at CN Rail with this feeble effort.
Today we hear more political platitudes. We hear again how well the government is doing in fighting the deficit. Today we hear again all those tired old phrases which are designed to convince the people of Canada that the Minister of Finance knows what he is doing.
The people in my part of the country know better. The people in Atlantic Canada have not done well under this government. I stated many times that the deficit cannot be fought on the backs of the poorest regions and the poorest people of this country. We deserve the same access to government programs and services as the rest of Canada and it is time for this government to realize that.
I hope the people of Atlantic Canada realize that all of the good things promised to them have evaporated during the depths of this recession. There seems little in the minister's statement which would give us further hope.
I do congratulate the minister on his announcement concerning engineering and environmental work on the Prince Edward Island fixed-link crossing which is to be undertaken so that the project can go ahead in the spring of 1993. However, the government is still not saying it is definitely a go. One of the bidders was asked tonight on television if they were drinking champagne. They said that no they were not. They do not know yet.
However, I am pleased that the federal government has removed some of the uncertainty which has long surrounded this project. We will now have to carefully examine the details announced by the minister in order to determine that all of the environmental and financial conditions have been met. I am also anxious to see if the conditions outlined by Premier Ghiz have been met.
I caution the minister not to think that if this project goes ahead it will cure all of the ills of that part of the country. We will still be looking for strong government support as we attempt to bring our area up to the economic standards of the rest of Canada.

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It is obvious that the favourite whipping boys of this government are the Public Service and public programs. Over the years this government has distinguished itself by beating Canadians over the head with more and more radical spending cuts.
Let me give some of those cuts. The green plan is cut by $172 million, regional and industrial programs are cut by $346 million, native programs are cut by $135 million, and there are cuts in grants and subsidies to most non-profit organizations. There are cuts totalling $1.8 billion.
It seems ironic that this minister is still at war with the government he and his party have led for the last eight years. Ever since this government was elected it has talked about its managerial abilities and the need to reduce the deficit.
Well, the deficit the government inherited has much more than doubled despite dozens of tax increases, including the GST. The deficit projections for the coming year show that its level of management is appalling. Its eight years in power have been marked by an ever decreasing economic performance in this country and its attempts to blame someone else are shameful.
The Minister of Finance and the other members of this government seem to believe that they can somehow convince the Canadian people that prosperity will flow only if they can attack and lay off a few more civil servants and assault the unemployed.
The Minister of Finance has decided that Canadians who lose their jobs will now get reduced unemployment benefits and Canadians who quit their jobs will no longer get unemployment benefits. This is not the answer.
People in all parts of Canada deserve the support that and can only come from a competent, well-trained, dedicated civil service. The people who work for the Government of Canada are second to none. I know that the people of Canada do not find these recurring attacks on our public servants a very suitable way to address the economic problems.
I look upon this financial statement, this mini budget in reality, this budget of my good friend the Minister of Finance with utter and sheer contempt. He comes before this House in a panic because he has been unable
to project within $7 billion how much the deficit of this country is going to be.
He, the Prime Minister, and the former Minister of Finance have staked a great deal of their reputations and the reputation of this government on their expertise. The economy of this country is in a shambles. The reputation of the government is in tatters.
I would hope that this government will soon have the courage to face the Canadian people and allow them to pass judgment on this terrible economic record.


Mrs. Edna Anderson (Simcoe Centre):: Mr. Speaker, I would like to ask the member across the way if he understands that with the operating costs of running this government in 1984 when we came into power we inherited $16 billion in the red. That is, we are overpaying by that much. The $16 billion was added onto the debt every year.
Since we have been in power we have reduced that $16 billion. We are down now. We are not in the red; we are in the black. Those are the operating costs of running this government. We are down now to between $6 billion and $8 billion below the line. So we have decreased the cost.
If people running a household are over budget they have to cut their costs. They just do not have that much money to spend, so they cut. It has been done, but every year anything over that which is the interest, compound interest is added to that rising debt which we inherited. It is a devil of a thing to stop its growth. Unfortunately, we have had a bad couple of years of recession, high unemployment and other costs which have added to that. Normally, had it gone on in the way we had anticipated, we would have been able to have stopped the growth of the debt. We are now in a position to do this with this new budget.
I would like to ask the member across the way, because I think this was the first statement today by the Minister of Finance, what would the opposition do in order to help this situation?


George Albert Proud: Mr. Speaker, I thank my hon. colleague for expressing her concerns and asking me my opinion.
The Conservatives inherited a debt, a debt which has continued to increase over the last eight years. We have seen several tax increases that were supposedly going to
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reduce this deficit. The debt and the deficit have not been reduced. However, we cannot use this old cliche of reducing the deficit at the cost of the poorer people of this country. I believe and I know this is what has gone on and on and on.
There have been tax increases. There has been the GST. Yet the debt and the deficit continue to rise. Yes, we have to get it under control. There is the financial deficit out there that we need to get under control. But I have heard people say that there is also a moral deficit out there. We have to bring that under control too.
There are more than 1.5 million people unemployed and there are people on welfare. We have to put the country back to work. We as members of Parliament have to give the people of this country the confidence that the government across the way will start this economy rolling again. The infrastructure program that was announced today is not enough.
I assume the government is waiting for the new President of the United States to start its economy rolling and hopefully this one will tag along behind it.


John Williston (Bud) Bird: Mr. Speaker, I would like to repeat the question that my colleague has asked him and ask specifically what would he do?
I am very surprised to hear an hon. member and a colleague I respect from Prince Edward Island damn a project of $800 million with faint praise such as he speaks of the fixed-link crossing. Frankly, I thought he would have regarded that as almost a miracle in this budget. There is almost nothing to match it in the way of a financial commitment right across the country. I cannot imagine anything that will have a more profound effect on the economy of the Atlantic region than that project and the similar commitment to the Trans-Canada Highway and the Atlantic expressway.
I heard the hon. member list the expenditure cuts in the Public Service. Most of the constituents I serve, and I am sure most of the constituents that he serves, constantly urge that government be reduced in size and that the federal government particularly gain control of its operations. He has criticized that. He has not proposed new revenue measures that would offset expenditure cuts.
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I just have to ask the member and his party what they would do if they would not cut expenditures. They are not really very happy with $800 million capital works projects in their own ridings. They do not have any other revenue areas of contribution to offer. What would they do except wring their hands and criticize?


Mr. Gaby Larrivee (Joliette):: Mr. Speaker, I welcome this opportunity to join in the debate on the economic and financial statement made by the Minister of Finance today, in economic circumstances that are extremely trying for Canadians.
The Liberal member who just spoke told us that we were doing very little and that this was not the way to deal with Canada's economic problems. However, these problems are due to the fact that we are in a world-wide recession and have only limited resources to fight off its effects. I say limited because Canada has gone into debt, especially since the seventies and the early eighties, to a rather irresponsible extent. Today, they tell us we often use this excuse. Unfortunately we do not have more room to manoeuvre because we spent too much. We have been spending irresponsibly for years, and today, with what resources we have, we are trying to turn around a situation that has gotten out of hand. We have a very high unemployment rate and, I repeat, very little room to manoeuvre.
In his statement, however, the Minister of Finance has offered a way to help Canadians and to restore their confidence in our economy by investing in growth. Of course, our economic progress has been slowed by a stubborn, world-wide recession. Tensions typical of a new world economy weakened by economic restructuring and job displacement have considerably weakened recovery and growth.
The government's priority is to build confidence, enhance recovery, create jobs and help Canadians adjust through this period of transition and take advantage of new opportunities. That is why we have announced a broad range of measures to stimulate public and private investment and economic growth, while cutting back on the cost of government activities. If we want to invest in economic recovery for the sake of growth we cannot afford to raise taxes because we are already overtaxed, and we cannot afford to increase the deficit because it is already far too high. These measures are supported by

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policies that are already helping to enhance productivity and Canada's ability to compete.
I would also like to emphasize some of the main initiatives described in the minister's economic and financial statement. First of all, support for small business, which is the primary engine of our economy. Canada's federal tax system for small business is one of the most favourable in the world. Compared to the United States, our tax rates are lower. Canadian small businesses enjoy a special deduction that reduces their federal income tax rate to 12.8 per cent, including the 3 per cent surtax, on the first $200,000 of business income. In the United States, federal tax rates for small business range from 15 to 39 per cent in the same bracket.
Canadian small businesses which are incorporated also qualify for the most generous incentives for research and development in the G-7 countries. In particular, let us mention a 35 per cent refundable federal income tax credit, replacing a general 20 per cent credit, that enables small businesses to receive funds directly.
The cumulative capital gains exemption encourages individuals to invest in small businesses. Capital gains of up to $500,000 made when shares in eligible small businesses are sold are exempt. Moreover, only 75 per cent of capital gains above this amount are subject to income tax.
So these are some examples of benefits for our small businesses in Canada. Nevertheless, small business is subject to major financial and competitive pressures. To help promote growth and employment the government is launching a program to stimulate employment and investment in small business. Under this program most companies can hire new workers without paying more employer premiums for unemployment insurance in 1993.
I think that is a considerable help, knowing the needs of small businesses and how little they can afford to hire personnel. This measure will reduce the cost of hiring additional employees by up to $1,600 each.
The other measures include a 10 per cent investment tax credit for small businesses that buy machinery and
equipment. We are aware of companies' needs to renew and update their equipment as a result of new technology; the tax measures will give them 10 per cent more purchasing power.
The rules for investments in RRSPs and other funds in small businesses will be simplified and the opportunities for financing expanded. Finally, the financial assistance programs for small business will be enhanced or extended.
We know how important it is to go further in research and development because our small businesses need to discover and develop new products in order to be more competitive. R and D is essential, so the government will help them compete and grow on the world market. Canada is the industrialized country that offers business the most generous R and D tax incentives. We have proposed changes to rationalize and improve the system.
As promised in the February 1992 budget these changes will result in $230 million more aid over the next five years. Nevertheless, the tax rules could be improved in some areas to help companies adapt and grow in this era dominated by knowledge and technological change. For example, the tax system as it applies to computer equipment, in particular, is rapidly becoming obsolete because of technical change.
The government is considering other changes that could be made to the tax system to solve these problems. It has set aside $400 million over five years to eliminate tax obstacles to innovation and growth. We will increase funding for IRAP, the Industrial Research Assistance Program. We will also extend funding for long-term research, based on the best results from the centres of excellence network program.
Of course, there is also labour force training and adjustment. In an increasingly knowledge-based economy Canada's economic prospects depend more and more on the skills of its work force. The federal government is helping to meet this challenge. Its assistance for worker training and adjustment will increase to $3.8 billion next year. As part of this effort, unemployment insurance funds for training and other productive purposes will rise to $2.2 billion. This will help meet the special needs of long-time workers who lose their jobs.
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Many other measures have been proposed in the economic statement made by our Minister of Finance but I think that the measures I just listed concerning research and development, training, and small-business assistance will enable our companies to make a greater commitment in those areas, and help reduce unemployment in our country, for the benefit of all Canadians.


Edna Anderson: Madam Speaker, to my colleague, the member for Joliette, I understand that the minister mentioned some changes today in unemployment insurance. I wonder if this is going to pose any particular problem in the member's area? I believe the minister had said this was in order to reduce fraud in that particular branch. Could the member please answer that for me?


Gaby Larrivée: Madam Speaker, my colleague wonders about the impact of these measures on unemployment insurance, since the Minister of Finance indicated, if I understood correctly, that in the future those who quit their job or who lose it almost voluntarily will not be eligible for unemployment insurance benefits.
In the last few years unemployment insurance has almost become a minimum income for some people. I believe it is absolutely normal in the present context that we make UI what it was meant to be: a plan to help workers who for one reason or another lose their job unexpectedly. The purpose of unemployment insurance, like any other insurance, is to provide reasonable conditions for these people and give them time to find another job.
Therefore, it is quite normal, as I think Canadians will agree, that unemployment insurance revert to its original role, which is to help those who lose their job unexpectedly and not to help those who leave their job or who lose it deliberately.


Dennis Joseph Mills: Madam Speaker, there seems to be a misunderstanding developing here. No one in this House condones abuse. We on this side of the House certainly do not condone the abuse of any part of the taxpayer's money.
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Our responsibility is not to speak for the advantaged. We are here to speak for the disadvantaged. In a situation such as this, where this act is amended in this way, there is going to be a potential for serious abuse of the person, but not the actual institution. It is our responsibility to point that out. It seems that when we try to be constructive and point out some of the good things in this budget they seem to have a thin skin over there. Is it not our job to point out flaws or mistakes that may be part of this package?
I have to repeat that we are not here to speak for the advantaged people in our country. There are a lot of disadvantaged people and we have to make sure we represent their views.


Gaby Larrivée: It is a pleasure, Madam Speaker, to make
the following comment. My colleague says that we should help the disadvantaged and this is precisely what we are doing. These measures are taken precisely to help people get back to work.
As I said at the beginning of my speech, in the past large amounts of money were spent to keep people unemployed. We just kept improving our Unemployment Insurance Program without dealing with the training issue, putting us into debt irresponsibly. Now, some would want us to continue in this way. That is not the way to go. We are acting in the most responsible way, to allow those who want to work to do so. We will take money away from those who do not want to work, those who quit their jobs-when they have a job and decide to quit it is reasonable to assume that they do not want to work-and we will use this money to train those who do want to work. The small businesses will benefit from the actions we are taking. This money will create jobs. We are not abandoning Canadians. Quite the contrary, we are helping the most disadvantaged members of our society.


Mr. Patrick Boyer (Parliamentary Secretary to Minister of National Defence):: Madam Speaker, the Minister of Finance today did not have an easy task to perform. No Minister of Finance in any jurisdiction these days does. The task was to try to crash through that invisible wall that confronts all governments, a wall that is made

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up of the fiscal realities that have imposed themselves on us. the burden of debt that has been accumulated over a number of years, the programs that exist and are committed to have expenditure under them, and the public expectation that all of this can somehow continue even in the face of the need to have spending restraint.
To begin in commenting briefly on a number of the points in his statement this afternoon that caught my eye in particular, I would like to emphasize the important reality that there are no new taxes. That is a fundamental beginning point because this country has had it, Canadians have had it, with being overtaxed. The burden of responsibility has been squarely shouldered today by the Minister of Finance in looking inward to the operations of government to find a way of dealing with the problem and not extending it further on to the taxpayers of the country.
In concert with that, many expenditures have been frozen, from the salary of the Governor General right down through all members of the House, ministers, parliamentarians, judges and the Public Service as well. That principle of freezing has even been continued in the provisions relating to unemployment insurance. The benefits there are frozen as well.
In addition there have been many other areas where spending has been reduced, generally by at least 10 per cent. That would apply to grants or subsidies to organizations and interests groups. They will be cut by 10 per cent in each of the next two years.
That is another point that is very important as we try to ensure in this society that we get a direct link between the people and their elected representatives. Many special interest groups and organizations that have come forward and positioned themselves around the government should find a way of financing themselves rather than look to the government for funding. That is a point of great importance.


Madam Deputy Speaker:: I cannot even hear what is being said by the member who has the floor. It must be difficult for other people. I can understand there is an ongoing conversation from one side of the House to the other, but I am told the President of the Treasury Board will be speaking shortly and there will be a period of questions and answers. I am sure the hon. member for
Kingston and the Islands will make sure he asks his question then.


Mr. Milliken:: Madam Speaker, I had hoped so but I am going to leave. That is the problem.


Madam Deputy Speaker:: I wish a nice evening to the hon. member.


Patrick Boyer: Madam Speaker, I was just emphasizing the importance of this reduction of 10 per cent in grants and subsidies this year and the coming year. I wanted to emphasize a further point, that those reductions have important exemptions to them.
I was quite disturbed to hear in almost a cliche fashion some of the criticism from the Liberal Party spokesmen in the House. They talked about these measures being carried out on the backs of the poor, as if the government was trying to squeeze blood from a stone.
It is very important to recognize that exempted from this is the Old Age Security program. That is very important for seniors in our country. Also exempted are the guaranteed income supplement, the spouses' allowance, programs for the disabled, war veterans' allowances and veterans' disability pensions.
The Government of Canada today made the commitment that we will not be reducing any of our efforts in famine relief around the world. I think that is a real tribute to the Minister of Finance, who in the face of the tremendous difficulties he is facing with the finances of our country still shows that compassion. We can seek efficiency in public funding and public financing but not lose the compassion for the people in our society who do need assistance, who do need some help and support. We have not seen a single cent of that reduced today and I want to pay a special compliment to the Minister of Finance for that.
Just three or four other quick points that are very important. The measures dealing with housing and the stimulus that we have already seen from the last budget relating to both the RRSP possibility for first home buyers and the reduction from 10 per cent to 5 per cent for the down payment have been working successfully. It is important that today that has been continued in terms of the RRSP for home buyers.
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Small business, which has been responsible for creating over two million jobs in the Canadian economy within the last decade, also finds new possibilities for higher levels of loans and working capital in today's financial policies announced by the Minister of Finance. This is going to be very important, particularly in areas like my constituency of Etobicoke-Lakeshore where there are a lot of small businesses in manufacturing and service which need that kind of financial assistance now that they are working their way out of the recession.
Another very specific measure that will apply also in our area is the grade separation program with relation to railways. That is something for which we have been looking for a long time and will have direct safety and employment benefit in our community, as will the efforts to upgrade the two terminals at Pearson International Airport.
I single that one out again to make tribute here to the Minister of Finance. What has to be appreciated is the change in the approach to government funding. This upgrading will be done using private financing. In short, we have come to the day where government does not have to row the boat and do everything, as long as government is steering the boat. We can now look for a more intelligent way of using limited dollars to accomplish public work in this country, such as this.
Finally, the point that I wanted to conclude with is on quite a different dimension. It concerns the electronic highway and the measures that were announced today for further funding for this new age. We are now in, the future that is already with us that relates to the information centres being established because of the fact that, computers, faxes, electronic transmission of data, satellites and all the rest of it together make up this electronic highway through which information is transmitted and received and analysed in our new world society. This is something tremendously exciting for a country like Canada, a country that has so much distance that separates us. This will be a great new unifying bond for the country. Again, I am happy to be supporting this measure because that is the way of the future. It is also a way to a far more effective and unified country through the new methods that we are living with currently.
In all these areas, right down to the provisions that have in so much detail been described by other members,
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this reordering this afternoon by the Minister of Finance of the nation's financial house, putting it in order in these very difficult circumstances, is something that warrants support. I am glad to rise and give my support to it.


Philip Edmonston: Madam Speaker, I was listening to my colleague talk about the electronic highway.

I have a real problem trying to understand how we can have an electronic highway when our government does not seem to have enough money to pay its electric bill. We are practically bankrupt. We are talking about the future. At the same time we are bringing forth a kind of mini budget that targets the most vulnerable people in our society, the unemployed. We are actually right now dealing with the unemployed in a way which is most cruel. Before they had certain benefits under the unemployment insurance scheme, but now they do not have those benefits. They have less.
Also, we have entered into a situation where they will be punished. They will lose the benefits that they have actually paid for if they quit their job or if they are fired or let go for whatever is defined as misconduct.
How can this kind of cruelty to the people who are most vulnerable be defended by a government which says that it is looking forward to the future, a government which says it cares about its citizens? I would especially like to attract my colleagues' attention to the fact that this could be used as a tool against whistle-blowers, people who are not in agreement with their company's policies which may be against the public health or the public good. It could be used as a tool to silence these people and they would never have unemployment insurance.
I am just wondering where is the compassion of this government. While we are talking about an electronic highway why do we not talk about what is real to most Canadians, and that is their unemployment insurance benefits.

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Patrick Boyer: Madam Speaker, I would like to take a minute to reply to my colleague who was inquiring about unemployment and unemployment insurance.
First of all, let me tell him that in my riding it is a real problem for small businesses when employees quit their jobs for the sake of taking advantage of a government program. Small businesses are hit hard by this kind of abuse of the system. Today, we are trying to address this problem.

He puts this also in connection with what I was saying about the electronic highway, as if to compare these two is somehow to deny the reality that we are already existing in a world where information is being transmitted this way. Whether they are changes to the telephone as we have come to know it, and all the transformation about that, through to the new ability to simply scan books and put that right on to computer or what is now being developed with fibre optics which will go straight from the publishing house to the data base in libraries and so on which will completely bypass the printers, the books, the book sellers and all those things that we know. That is not something of the future. That is something that we are currently living in.
It has been a rare day to see it even raised on the floor of the House of Commons. For the past two days there has been a conference going on here in Ottawa at the Congress Centre. I was the only MP who was there. It was on electronic democracy. It was talking about the whole new world that we are living in. It is fundamentally important to see this $600 million project get under way.
The same point I was making about the upgrading of the Pearson airport applies here. This is being done in a partnership with private business. It is not looking to just take public money to put into this.


Philip Edmonston: How about whistle-blowers?


Patrick Boyer: The hon. member is commenting about whistle-blowers. I do not know what the context of that is. I do want to say again that I support the changes relating to unemployment insurance. They are overdue. I support the approaches being taken with respect to the new world of our electronics society-past the industrial society into the electronics society-that we are living in
so much now because it is very forward looking, and many of the other temporal measures that we find in here will fade away over time.
This provision relating to the new age of communication is so far-reaching and fundamental for Canada, a country that because of our distances has always been at the pioneering edge of developing new methods of communication and transportation. We can be proud of that as Canadians because it is an area in which we have excelled. That is why all members on all sides of the House should be looking at that measure with a lot of support and encouragement.


Mr. Mike Breaugh (Oshawa):: Madam Speaker, I am going to share my time with the member for Nickel Belt. We are true socialists, we share everything.
There might have been a time, and there probably was, when governments on one side of the aisle would say: "We will just help our friends in big business and somehow they will, on the supply side, solve all of the economic problems of the nation". On the other side of the aisle somebody else would find the phrase: "We are going to kick start the economy". Maybe at some point in our history things were that simple. I do not really believe they are any more.
I regret some of what I have seen and heard in here today because it seems to me to be far too simplistic. I recognize that someone has gone to a great deal of effort to integrate all the politically correct buzzwords into the statements that were made in this Chamber today. All of the genuflexions at the altar of high technology have certainly been acknowledged.
I understand, having been in politics at just about every level there is now, that somehow if we can get somebody to put it on a piece of paper, and certainly if we can put a little logo at the bottom that says "Canada", then it gives it validity no matter what it is. If we can get somebody to draw a chart and put some numbers together, then it simply must be true.
However, I am still struggling with some fundamentals on this. I come from the old school where if we take a deficit from $27.5 billion and get it up to $34.4 billion, then we have not reduced it, you have increased it. I am sorry, but I have been struggling all afternoon with how that reduction occurred and how dramatically it has impacted on us.
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I admit that we are talking about billions of dollars. I do not usually deal in billions of dollars. Most Canadians do not have a real good understanding of how high they would have to pile that amount of money on the kitchen floor to get to a billion. I admit that we are into an area of the economy where the amounts we are talking about are staggering to most people. Still I am waiting for someone to explain to me how that could be portrayed as a reduction. Even if it is printed up in a little book, and if the little book is not good enough then it is printed up in another little booklet, and if that little booklet is not good enough then it is printed as a graph.
I admit it has got it all. The government has managed to get it on paper, it has the stamp of the Government of Canada on it and has a graph to boot.
Here are some premises that are important for Canadians to note, just to see at their kitchen table whether there is any truth in this kind of statement at all. It says here that the government is making government leaner and more efficient. Pause on that one for a while. Have we seen that lately?
I just walked in the front door and the leaner and more efficient limousines are circling out there, and if they are not circling the drivers are leaning against them. Where I come from that does not constitute lean and efficient. Where I come from if people are broke and you are out of a job, they are not real worried about how lean and efficient the chauffeur of their limousine really is, and they really do not care people whether he polishes the limo either, because the truth is they have not got a limo to bother about.
It says here that there is tax reform under way in this country. Tax reform. Hold on a minute. Where? For whom? For the vast majority of Canadians who pay the tax when they went to the corner store last night to buy something did someone say: "Tax reform under way here, there is no GST tonight''? When they put gas in their car this morning did somebody say: "Wait a minute, tax reform under way. Governments aren't going to tax gasoline any more"? When it comes to doing their income tax, does that mean there is somebody in this Chamber who actually understands the income tax form?
What I do not fathom at all about this is that when people do not need money everybody wants to lend them
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money. When they are wealthy, they can use all the investment incentives, those are the polite words, that this government provides to prevent them from having to pay income tax. But if they are poor, if they are struggling with their pay cheque each week just to meet all the obligations that they have as a family there are not any incentives for them.
I come from a part of Canada that was once considered to be the industrial heartland. We are changing our definitions about that these days. People used to refer to the area that I live in as the Golden Horseshoe. There is a lot of rust in the Golden Horseshoe these days. A lot of plants used to be there. It says in these documents that free trade is wonderful. Not where I come from, not in the plants that have closed in my area, not in the incentives that are present in any part of our economy. Our people are struggling very hard to try to turn that around.
It says in these documents that many people are being asked to take no increase. That is tough for all of us, all those in the cabinet, all those in the Senate, all those judges. I am asked to stand pat on $90,000 a year or a pensioner to stand pat on $25,000 a year, let me explain to who got the best of that deal. Not the pensioner. The fact that nothing was taken away from those who do not have anything in the first place is not exactly a noble act in my book. To try to portray that as something wonderful is not exactly fair where I come from.
I find there is a world here on the Hill that never meets the other world in which I live. I know that tonight the television cameras are out front of the doors of this Chamber and the Minister of Finance is out there giving an interview; Mike Duffy is holding forth on the bench on the stairs; and everything is going along pretty normally here.
Where I come from things are not normal and I had anticipated-wrongly again, I should have learned this by now-when I saw the municipalities struggle to get together and identify some things which could be done and should be done, would be productive in municipalities across Canada, that after that much effort this government would respond. It did not.
I saw a provincial government negotiating over the last six months or so with this government to identify things which could be done and should be done, which would be

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productive. I went through this booklet to find out what is happening in Ontario. Nada.
I phoned my friend Pink Floyd-of course I cannot get through to Pink Floyd anymore-and got through to one of his staff members I know and asked what was going on. He said they were still negotiating but were not sure they had been shut out completely. They were going to give the federal government the benefit of the doubt and see what happens.
It is certainly a strange economic statement, never mind budget, that attempts to do something about Canada's economy. It looks the heartland of our economic structure in the eyeball and says: "I'll tell you what we are doing for you. We are going to redecorate the airport in Toronto".
The Tories missed something there. They really did, especially when one of the three terminals at the airport may not have much business in the near future.
There is a change in this country that defies the old economic rules of what school people went to and what text book they read about economics. The change is that governments are more complicated now than they ever were. It is hard to imagine that governments once functioned in Canada without consultants. Not cutting back, not leaner and meaner-they did not have them. Government once went about its business in Canada without a big advertising campaign to tell everybody it was doing what it was paid to do in the first place.
Imagine my auto workers if they were given the kind of budget the Minister of Finance had. Here is my friend Derek Gandy making trucks today at GM. Look at Derek make trucks. We always felt that was why General Motors always paid Derek. Go down to the south plant and make the trucks, Derek. It does not need an advertising campaign to do that. Just go do it.
There are some remarkable things that have happened in government in Canada in the last little while, not all of which were helpful.
I read the Auditor General's report. I loved the one about the golden handshake where the gold transpired and sometimes the handshake transpired, but the job continued. It seems to me that governments at all levels really ought to take the Auditor General's report and not study it, just do it, without question.
It has already been studied. That is how it got in the Auditor General's report. The Auditor General even sends me a video. I cannot tell my personal reaction to getting a video cassette from the Auditor General of Canada. There are other video cassettes I would rather get than that one. He sends me the book. I can read the book. I really do not need a video.
Somehow in the process of governing this country we have patterns that I find strange and indefensible, particularly when I go home and sit down with some little old lady or some little old guy who is on a fixed income and try to explain at the kitchen table what life is like in Ottawa. It is like an alien planet plunked down here in the Gatineau. They have no concept of what it is like.
None of them have staff people saying: "Boy, you really did a great job today. What a snappy question. Could I write a speech for you?" They can all speak. They certainly do that to me. Somebody was here the other day prattling on about lobbyists' fees and how individuals would have to pay a fee to come to see the local member. Not where I come from. Nobody would have the stupidity to try that one there. They have a right to stop me in the middle of the Miracle Mart or the A & P Store and tell me their economic theories. They do that right by the kettles every time I am fool enough to go in there. They stop me whenever I go to the Canadian Tire and they tell me about the GST. They do not have charts. They do not have videos. They have empty wallets. Those are the facts as they see them.
What saddens me about this statement is that it was an opportunity for governments, instead of having a conference, instead of having a first ministers' meeting, to pick up that magic machine called the telephone without creating an electronic highway to do so, push some buttons and listen to what other people had to say. Governments should work together instead of working in splendid isolation.
I see a missed opportunity here. I do not care how nicely they dress it up, how many new global economies they bring into play, how many wonderful charts they have or how many videos they have. The opportunity was missed. Where I come from we are suffering and this ignores us completely.
I want to close by saying something that I kind of regret but I think should be said. This is all complicated stuff. Sometimes it comes down to something which is simple, a little vignette. I sat in this Chamber this
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afternoon when the minister announced the change to UI that had people losing their UI benefits if they were fired or if they quit without just cause.
I know how tough it is to establish what is meant by just cause, who is right and who is wrong. That is a tough thing to do. I remember thinking at the moment he announced that change: What difference does that make? Is that not a mean little vindictive thing to do to somebody? It is not going to save the national debt. That is for sure. Beside the Minister of Finance was the Prime Minister himself. He led the applause on that.


Madam Deputy Speaker:: I must interrupt the hon. member. I know he said he was sharing with his colleague from Nickel Belt. I can tell his colleague from Nickel Belt that even though I did try, he will have eight minutes remaining after the five minutes of questions and comments.


Mr. Stan Keyes (Hamilton West):: Madam Speaker, I am almost tempted to ask unanimous consent of the House for the hon. member to carry on for another 10 minutes. It was not just eloquent; it was kitchen table-ish. It sounded like sitting down with somebody at the kitchen table and actually getting the goods straight from the individual sitting across the way.
I will relate a story for the hon. member for Oshawa in the simplest of terms. There is someone in my riding who owns a restaurant and is doing pretty well. He wants to expand that restaurant. He wants to make sure the opportunity is there to double the space in his restaurant. He is pretty darn sure he can get a lot more people to come to that restaurant. He went to the bank and asked for the money to expand his business and the bank said: "Sorry, Charlie".
In the document today the Minister of Finance announced measures to help small businesses secure financing. He doubled the ceiling of small business loans from $100,000 to $200,000 and today he added another $50,000 to raise the ceiling to $250,000 on small business loans. What good is it if they cannot get the money even at $100,000?
Does the hon. member for Oshawa have that kind of an experience in his riding?


Michael James Breaugh: Yes.
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Eugène Bellemare: Mr. Speaker, I want to congratulate the hon. member for Oshawa on his excellent speech. He mentioned that if a person left his job voluntarily he would not be entitled to unemployment insurance benefits. I think some people leave their jobs for very good reasons. I imagine there usually is a good reason, and they do not leave because all of a sudden they feel lazy or they want to stop working. Some people leave their jobs because of sexual harassment. Take the woman who is harassed by her boss, has no way to defend herself and does not know where to turn. She has no choice but to: leave her job. Perhaps the hon. member for Oshawa would care to comment on the case of a woman who was a victim of sexual harassment, and had to leave her job but would not be entitled to unemployment insurance benefits.


Michael James Breaugh: Mr. Speaker, I would tell her simply that she has become a victim of this government. She ought to get herself into a good union or get a good lawyer really quickly.


Mr. Larry Schneider (Regina-Wascana):: Madam Speaker, I sat here and listened with more than just a casual amount of interest to what I refer to as Brooklyn banter. It was fairly basic kitchen talk. It was so basic that the last question I heard in relation to the last answer I heard obviously told me that neither the questioner, with all due respect, nor the answerer had the essence of the bill that the Minister of Finance related to us today.
Quite simply put, if a person does leave their job because they feel that there was sexual harassment, that does not include them in this measure. They are exempted and as a result would continue to receive their unemployment insurance.
Therefore, there is a lot of misinformation that floats around this Chamber. I simply wanted to bring that to the attention of hon. members. There is a list of excuses or reasons that people can use legitimately to leave their place of employment which does not render them victims of society or, for that matter, victims of this bill. It is a logical bill and I would just hope that the hon. member

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for Oshawa would apprise himself of that. I just wonder if he has.


Michael James Breaugh: Madam Speaker, I do not mean to try to straighten anybody out on that side but there is no bill before us. What we had was called a statement.
We will take the member's veritable words and the wonderful advice that he just gave. For the person who comes into my office who has been fired and is not a member of a union or another bargaining unit and who has to go through the federal or provincial labour code to try to determine whether the hiring or the firing was justified it will be some comfort for them for the six months it takes to determine whether it was justifiable or not. The hon. member said that I do not understand what is going on here. At the end of the six months he or she will understand, I will understand and I hope the member does.


Mr. John R. Rodriguez (Nickel Belt):: Madam Speaker, I am glad my hon. colleague from Oshawa is not the finance minister. The way he just nickled and dimed me out of two minutes I would hate to see what wonders he would have brought on the economy of Canada today.
Prior to the statement today, the press was carrying a statement that the Minister of Finance was going to give the economy a gentle nudge, a coup de pouce, a petit coup de pouce. I want to say that he looked the economy right in the eye and he did not give it a gentle nudge, he gave it the back of his hand. That is what he did today.
I want to make that point and I want to show how he does that. I looked at page 30 in his paper Investing in Growth. Listen to this. The minister asks this question:
Are Canadians getting less service for their tax dollars?
Here is the answer. Imagine that the Tories put this answer down:
Some feel that they are now getting less service for their tax dollar
than in the past. They are right.
There is such honesty. He then goes on to say:
But there is no choice.
This is what he says in the statement on page two under the heading of maintaining responsible, balanced policies:
The essence of governing is choosing. There are choices to be
made
That is right. This minister had choices. He could have made choices. He had to make choices. Unfortunately, he chose his friends. He chose to slap in the face the people who can least defend themselves in this economy.
He cut back the unemployment insurance program. Imagine next year taking $550 million out of the pockets of beneficiaries and in the year after that, $1 billion. Everybody was looking to the consumer to rescue this economy. What kind of cockamamie politics and economics is this? One takes money out of the pockets of the people who are supposed to rescue the economy by opening their wallets and spending. The ones who are least able to defend themselves are the victims of the economic policies of this government.
About four years ago we were running at an inflation rate of about 6 per cent. The governor of the Bank of Canada, John Crow, is cruel and hard-hearted. He embarked on a policy of fighting inflation and wrestling it to zero. He did not care who the victims were. The unemployment went up and up and the the inflation, of course, came down. It did not affect his salary or the salaries of his friends over at the bank. It is easy to fight inflation on the backs of workers by slowing the economy down and turning up the unemployment rate.
What did this government cut back? It cut programs that service the victims. We are talking about the rape crisis centres getting cut back 10 per cent in each year for the next two years. We are talking about all of those centres that service people who have some kind of drug dependency or need co-operative housing. There is a whole host of services cut back, which will mean reduced services to people. The minister says they will get less service for the buck it collects from them. He is absolutely correct. Then he also cut back the spending programs.
I know he is saying: "Well, we have to get this deficit under control, so where were we going to get the money? How could we leave them alone?" I have some suggestions for the minister.
It always makes me wonder what is going on. When Standard Trust went down the tubes the government did not have a billion dollars but it sure as hell got the billion dollars and bailed out the depositors of Standard Trust. It put the taxpayers of Canada on the hook for Central Guaranty Trust to the tune of about $4 billion. If any of them went down the tubes at the Toronto Dominion
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Bank where is the government going to get the money to bail them out? It has guaranteed them.
It guaranteed the Westray Mine and the Bank of Nova Scotia collected its $80 million today. If CPA goes down tomorrow, where is it going to get the money to bail it out? Yes, it has choices to make and it has made those choices. Stomp on the families of Canada. Stomp on the unemployed. However, it bailed out its friends in the financial sector. It bails them out all the time. Standard Trust cost us a billion bucks.


An hon. member:: It did?


John R. Rodriguez: It certainly did: $1 billion. There is more to come and it is going to find the money for that.
I could have told him where he could get money. For starters, he could look at the Auditor General's report. Why not close the loopholes he pointed out. Look at the setting up of those offshore shelters for wealthy corporations that make money in this country and do not pay their fair share of taxes. Why do we not start with the family trusts that are worth $70 billion? Since the Liberals set up the shelter for them they have not paid one penny of tax. This government is going to bring in a bill that extends it another 20 years, so that they will never pay one penny of tax. Who pays?
Its friends do not pay, but ordinary Canadians pay. The unemployed pay and the poor pay. Look at that. It is nickel and diming $300 million out of people who quit their jobs. There are some jobs that have to be quit. It then reduces the limit. I have no problem with absorbing the premiums for UI for small businesses for a year. That is a good idea. I think it is also equally a good idea to absorb the premiums for the employees for a year.
It seems to me that we must be even-handed. It does not absorb the premiums for 1993 for the employees. It absorbs it for small businesses, which is a good idea. How about giving the workers a break for a year? They create jobs too when they spend the money they earn. Maybe it is not through the heads of the Conservatives yet but they are probably the best investment, instead of pouring money into all kinds of shysters. In fact, when Northland
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Bank went down it not only bailed out the insured depositors, but it bailed out everybody, for God's sake.
There are other places the government could find money. I have more suggestions for the government. What about the helicopters? There is $4.4 billion. Put the $4.4 billion off and forget that. Look at interest rates. Most of national debt that we have accumulated is a result of the compound interest. Most of that is compound interest. We are running about 4 per cent higher, in real interest rate terms, than our competitors in the United States. We are double the normal difference. Why would we not lower the interest rates? Why did this government allow the interest rates to rise? Why? It is because it has to keep its international banquiers, or casino players, happy.
You have to feed the lion. When the lion is hungry you have to keep stuffing American dollars into his mouth. I am sorry but I have to stop.


Madam Deputy Speaker:: I thought the hon. member was going to thank me for giving him the extra two minutes. Questions or comments. The hon. member for Joliette.


Gaby Larrivée: Madam Speaker, the hon. member for Nickel Belt is very colourful and puts a lot of passion into what he says, and he is even funny. However, I am concerned because we are talking about unemployment and other problems we are experiencing in Canada and he is proposing solutions that would be hard to implement.
He would like to see us beef up our unemployment insurance programs. He would like us to give the unemployed who do not have jobs, for obvious reasons, more generous unemployment insurance benefits. He suggests that the government get the money by taking steps against the industries that are taking advantage of the situation. He never said that industries create jobs. He never said that industries give Canadians a chance to work. No, industries are taking advantage of the situation, and he would like to see us introduce measures to make these industries get up and leave the country and go to places where conditions are more favourable. On the other hand, and this is typical of the New Democrats, they say that we should protect our borders and not have an agreement with our neighbours. It does not make

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sense, all these contradictions. Today, the Minister of Finance proposed a number of measures to help businesses create jobs and all I have heard from the hon. member is that we should not encourage businesses and we should beef up our unemployment insurance programs.
Does the hon. member for Nickel Belt not have any suggestions for creating jobs at the same time, since that seems to be his main argument, to protect the little guy, with a lot of grand gestures? He says we are crushing the little guy, but we want to create jobs for people who are on unemployment insurance. I would like to know whether he has a more acceptable method for correcting our unemployment problems.


John R. Rodriguez: Madam Speaker, I welcome the opportunity to respond. First of all let us get something clear. These UI programs-let us understand very clearly, let us put the deck on the table.
The employers and the employees pay for the unemployment insurance program. This government removed itself from participating in the unemployment insurance program so that any benefits which are in the program are paid for by the employers and the employees.
I have no problem at all with industries and with putting a climate in place that encourages industries to invest and expand. However, if I were the finance minister I would not allow industries to take advantage of scams and loopholes in the income tax system to avoid paying their fair share of taxes.
If the hon. member is suggesting to me that because some other country allows its industries to do that sort of thing we should get into the mug's game then where will it end? The looser its tax system becomes with respect to its taxpayers the looser ours should become?
That is reducing the economy to the lowest common denominator not raising it to the highest common factor, if that is the kind of mug's game we want to get into.
Creating jobs, yes. If this document that was read today made creating jobs the focus I would have taken off my hat to the minister. I would have kissed his hand. I would have kissed his knee. I would have stopped there. If it did that I would have applauded him.
In the statement he took great pride in saying we brought inflation down to less than 2 per cent. We never heard in great detail the projections about unemployment. After all of this pain the unemployment rate will be 11 per cent or more; 11 per cent. Imagine the productivity that is lost with over 1.5 million unemployed in our country.
There are things we can do that are investments in the country, such things as an infrastructure and renovations. The best way to go is to train and educate. These are investments. They are expenditures but they mean jobs for the future.


Hon. Gilles Loiselle (President of the Treasury Board and Minister of State (Finance)):: Madam Speaker, I appreciate the opportunity to speak during this debate on the actions the government has announced to improve the state of public finances and to restore our economy. In doing so I would like to indicate what the government sees as the future of the Public Service in supporting Canada's economic competitiveness.
This government has attempted in each year since 1985 to reduce the cost and increase the efficiency of service delivery. In budget after budget, and often in between, reductions have been imposed on the planned operating expenditures of departments. Today's measures affect programs delivered by public servants as well as transfers to individuals and grants and contributions to organizations and business.
I want to underline the fact that the government could not have made the reductions that were necessary and continued to serve Canadians adequately were it not for the professionalism and dedication of the employees of the Public Service of Canada.
The cost reduction measures outlined in today's economic statement are substantial and, given the cumulative effect of the cuts over the past eight years, represent a major challenge for those who deliver the services.
The 2 per cent reduction in operating budgets for 1992-1993 has been introduced two-thirds of the way through the fiscal year. Many departments are having to impose their own freeze on hiring and virtually all discretionary expenditures to achieve the required savings. The cuts in 1993-1994 and future years amount to
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approximately 5 per cent of planned expenditures on operations and require even more severe measures.
The economic situation that led to these measures is not unique to the Canadian federal government. The world economy has been weaker than expected and growth projections for most countries have been revised downward. This in turn has reduced revenues and increased pressures on public expenditures.
Fiscal responses have varied but in all cases they took the form of severe expenditure reductions. For example the Governments of Italy, Sweden, and Great Britain have in the past few months all announced fiscal restraint packages, some of which include wage freezes and all of which include program reductions and increased delivery of services by the private sector.
In Canada provinces are also feeling the pressure on their deficits owing mainly to revenue shortfalls. Five provincial governments have announced expenditure reduction measures in the last month alone.
What are the fiscal requirements for limiting wages? The Canadian government program expenditures, other than those for unemployment insurance and transfers to the provinces, have remained well within planned levels. Flowever, the revenues available to the government have declined relative to the projections in the 1992 budget by about 6 per cent in 1992-1993 and 7 per cent in 1993-1994.
The economic statement calls for reductions in the operating costs of government from the levels announced in the last budget of $1 billion in 1993-1994 and $1.4 billion in 1994-1995, exclusive of the special reduction of $250 million in defence spending in 1994-1995.
This requires on average a reduction of about 5 per cent of the operating costs of government below the planned level; about 4.3 per cent in 1993-1994 and 5.5 per cent in 1994-1995.
Approximately two-thirds of operating budgets are devoted to personnel costs. Since in most departments operations and maintenance expenditures have not been increased for inflation since 1985 these non-salary components offer limited scope for further reductions without serious impact on service delivery.
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This means that in 1993-94 the over-all wage bill will have to be brought down from planned levels by approximately $800 million on total personnel costs of $19 billion.

The question then becomes that of the best way to achieve the approximately $800 million reduction in the wage bill with the minimum effect on delivery of services and minimal layoffs of public servants.
In weighing the options the government decided that the most effective way of achieving this result would be a combination of a wage freeze and a reduction in planned Public Service employment to a degree that could be achieved mostly through attrition.
Legislation will be introduce to freeze federal public sector wages for some 390,000 persons in total, including all cabinet ministers, MPs, senators and their staffs, employees of the House of Commons, Senate and Library of Parliament, employees of the Public Service, Order in Council appointees and members of Canadian Forces and the RCMP.
Employees of Crown corporations that are dependent on appropriations and that are not in competition with the private sector, such as the museums corporations, will have their wages frozen. Crown corporations that are dependent on appropriations but are in competition with the private sector, such as VIA Rail, will be funded as if their wages were frozen. All other Crown corporations are being asked to keep their wage settlements in line with the wage policy.
One can ask how many jobs will have to be cut. As all departments will be managing under the new operating budget regime next year each will be able to determine the mix of savings between salary and non-salary dollars to best meet their requirements. It is, therefore, not possible to forecast with precision the over-all employment implications. However, some rough estimates can be made at this time.
For the 235,000 employees in the Public Service for whom Treasury Board is the employer, which does not include the military and uniformed RCMP, the required reduction from planned levels in the wage bill is about two-thirds of the $800 million, or just over $500 million. The government had planned for an increase of up to one per cent in employment in each of the next two years

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so the net reduction in the wage bill for 1993-94 is just over $400 million from the 1992-93 levels.
The savings from the wage freeze on these employees will look after all but about $190 million, which must be found through reductions of 3,000 to 4,000 in employment levels. We believe that most of this can be achieved through attrition. The current rate of attrition, mainly through retirements and resignations, in the Public Service is four per cent, or 8,000 to 9,000 people per year. Most departments were planning for roughly stable employment levels for the next two years but some were already planning for decreases, and a very few were planning for increases to meet significantly greater demands.
Arrangements will be made through the Public Service Commission to facilitate the retraining and transfer of employees to departments that would otherwise be hiring from outside the Public Service. If an over-all reduction of 3,000 to 4,000 in employment levels can be achieved next year then further employment reductions would not be necessary in the second year to reach the target reductions in operating budgets.

The government recognizes that in freezing salaries it is asking its employees to take a reduction in their real salaries. This creates a reduction in living standards for loyal employees who have no control over declining revenues during a period in which they are continually asked to perform their duties with fewer resources. The government recognizes this and asks Canadians in turn to recognize the contribution its employees are making to help get the country's public finances in order.
Over the next five years, the government will be introducing, in phases, a new job classification system with a gender-neutral evaluation plan. This plan is being designed with extensive input from Public Service unions, the Canadian Human Rights Commission and outside experts to ensure it respects the principles of equal pay for work of equal value.
Once this is completed it will be necessary to find the best way simultaneously to satisfy the equal pay provisions of the Canadian Human Rights Act and to negotiate collective agreements that are sensitive to Canadian labour markets.
The Human Rights Commission's equal wages guidelines allow for wage differentials that respond to labour shortages in particular occupations or geographical areas. The government will consult unions and other employers on the fairest and most effective way to meet both objectives during the next round of collective bargaining.
The measures set out in the economic statement were not discussed with the Public Service unions before they were announced. The government carefully considered whether it would be in the public interest to try to negotiate wage levels that were affordable. In light of the experience in the last round of bargaining, which culminated in the strike by the largest Public Service union in September 1991, it was decided that it was not in the interest of the public nor of employees to enter into negotiations facing a fiscal situation that virtually guaranteed the government would be unable to meet union demands. This decision, was not taken lightly.
The government hopes that at the end of the period of extreme fiscal stringency covered by the proposed legislation collective bargaining could resume in a normal way. In the meantime, consultations can continue through the national joint council on non-compensation issues during the period of the wage freeze. As well, I have established a joint committee to undertake a full review of the management of Public Service pensions.

Reductions of 5 per cent in planned operating costs of government will inevitably have an impact on the level of services that the government can provide to Canadians from their tax dollars. In the short run, it will simply not be possible to do more with less. The Public Service has been successful in achieving effective productivity improvements each year as increasing demands have had to be met with ever more constrained resources.
Since 1985 the government has been providing services to a more diverse population that has grown by 8 per cent with 2.3 per cent fewer employees and operating and maintenance expenditures that, for most departments, have not been increased to take account of inflation. Although there have been some reductions in certain service areas there has been growth in such areas as
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native programs, the green plan, the drug strategy, AIDS research and immigration. In broad terms, the Public Service has been achieving productivity increases of at least the rate of general productivity growth in the economy. This is an achievement for which Canadians and their Public Service employees can be proud.
While the growth in demand anticipated for the next year will vary from program to program the growth in population is probably the best comprehensive indicator of the change in demand for services. It is projected to be 1.2 per cent annually over the next few years. This increase in demand has to be addressed with fewer employees and reduced operations and maintenance expenditures. Of necessity, some services will suffer. Departments are being asked to find as much as possible of the cost reduction through streamlining of internal administrative processes and to maintain essential services, particularly those pertaining directly to the health and safety of Canadians. However, many departments will have to reduce levels of service in areas that are important but not absolutely essential.
Some rationalization of the delivery systems will be required. This may involve consolidation of offices and alternative forms of delivery, such as greater use of telephone services and new forms of automation.
There will be administrative innovation to achieve the saving in administration processes and support and the government has undertaken a series of initiatives. The operational review of the five government departments and agencies concerned with internal administration have now been completed and savings of at least 5 per cent will be achieved without noticeable effect on service to the public.
The Council on Administrative Renewal, led by the Comptroller General of Canada, is reducing the cost of government administration. It is looking at alternative methods of delivering administrative services, at re-engineering current processes and at possibilities for sharing systems government-wide. This applies to areas such as financial management, materiel and property management, human resources and information management.
There will be some consolidation of administrative support functions between departments. A substantial portion of the federal government's operating costs are devoted to regulatory and enforcement activities. Some
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savings are anticipated from the extensive regulatory reviews launched in the last budget.

Investing in people and technology, the government believes that to ensure a healthy economy it must maintain an innovative and professional Public Service. While the government has been forced to make hard decisions on wages and operating budgets it will continue to promote improvements to the way in which the Public Service is managed, and encourage innovations in the work place. As an example, the Treasury Board recently announced a pilot policy on telework that will help some employees better balance their work and personal demands. Through Public Service 2000, departments are fostering creative approaches to management that empower employees and create a more open and participative work environment.

As I said in my opening remarks, the expenditure reduction measures announced by the Minister of Finance are very severe and far-reaching. The government is calling on federal employees to make greater sacrifices in their standard of living than at any time in recent memory. Similarly, we are calling on the Canadian public to understand why there may be reductions in some of the services they have grown accustomed to receiving. The service level may not be all we would like to provide but it will be the best the country can afford.
We will continue to work with our employees and their bargaining agents and consult with client groups to modernize government operations and to provide cost effective service to Canadians. I am confident that we can achieve the changes in government operations required to meet these spending reductions.
As President of the Treasury Board I have been exposed on a daily basis to the ways in which employees have vigorously met the challenges of restraint. I am certain that we can continue to pursue new ways to deliver programs and enable the Public Service of Canada to remain a vital national institution.


Mr. Rey Pagtakhan (Winnipeg North):: Madam Speaker, I rise to indicate that today's economic and fiscal statement by the hon. Minister of Finance earlier this afternoon lacks a plan of action to eliminate poverty and to attain full employment. In fact, it lacks social con-

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science. It is a blueprint to penalize the unemployed, the poor on social assistance and the small businesses facing the credit crunch. I again remind this government of the stark social realities: 1.5 million unemployed, 2.3 million on social assistance, 3.8 million are poor, of whom 1 million are children, and 2 million rely on the food banks. Does this government care about them?
I ask the minister to explain how his government can indicate that the average benefits will be frozen and yet the only thing that will happen will be a reduction in benefits. Where is the arithmetic? How can an average figure be frozen when the only thing that will happen is a reduction and there is no suggestion of any increased benefits in any arm of the program? I cannot follow the arithmetic.
Will the minister, who has said public sector employees will be asked to accept a reduction in real take-home pay, not admit that it would be more compassionate and fair to reduce the size of cabinet today?
Would it not be better management to stop the illegal awarding of contracts to political friends to the tune of millions of dollars? As recently reported by the Auditor General, in the health and welfare department alone, 22 out of 23 contracts to the tune of millions of dollars were illegally awarded. Why does the minister not have a budgetary projection of savings by avoidance and cessation of illegal mismanagement by this government?


Gilles Loiselle: Madam Speaker, the hon. member says that this government lacks a plan of action to eliminate poverty. Then he states the numbers that are indeed very worrying: The number of unemployed, the number of people who are in difficult straits. My answer is that we have to provide real solutions for these people. It is very easy to say that there are problems and then to run away from solutions.
The reality is that unless the government puts order in the fiscal situation of Canada, which is threatened by the lack of revenue because of the recession and the slow recovery, all these programs are threatened.
It is not running away from these problems when we deal with that. This is more difficult than being easy and throwing money that we do not have, borrowing more which would cause the debt and the cost of the debt servicing to go up again and prevent us from having the money to help these people. It is precisely because we want to protect these programs that we are taking these very difficult measures.
The hon. member says he does not understand the freezing of UI. He has to understand that UI benefits are given based on the income of the people who lose their employment. The projections are that these incomes will indeed grow and the benefits will be frozen. Therefore, there will be a difference between the two.
He also talked about the size of cabinet. One could discuss this at length. It is possibly an illusion to believe by removing some ministers or many ministers-I will give him his choice-we would have huge savings. There are maybe many ministers to manage an administration which provides air traffic controllers, which provides health inspectors, and we hear the opposition saying there are not enough of them. The number of people will be the same with fewer ministers but we have a saving of a few million dollars and we have billions of dollars of problems. This is an illusion of a solution again.
He talks about contracts referred to by the Auditor General not being given in the proper way. The Auditor General has reported on a budget of $160 billion and he refers to some questions on $5 million. This is again an illusion that the hon. member thinks that these are the solutions to the real problem.
The Canadian government has to manage the economy at a difficult juncture. We have been very proud to be in government during the seven years of highest growth in the history of Canada. There is a difficult world-wide environment.
We are dealing with it by making the necessary adjustment. The government is not the solution to all the problems. It takes money and then redistributes it. We can take more but the member does not want us to raise the taxes so we have to borrow it. We pay our bankers. It costs more money which is not available for the poor people. We have to strike a balance. This is what we are trying to do and it is not easy.
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David Stupich: Madam Speaker, my question is for the President of the Treasury Board.
I believe it was two weeks ago yesterday that the United Nations International Labour Organization criticized the Canadian government for having abandoned true collective bargaining with its employees and urged the Canadian government to get back to the bargaining table with its employees. They were further asking the Canadian government to keep the ILO informed of progress toward the resumption of true collective bargaining.
I wonder if the minister would like to comment on that.


Gilles Loiselle: Madam Speaker, a sub-committee of the ILO did consider that legislating wages as we have done is not the proper way to function in a normal environment. I do not disagree with that at all.
We are taking this difficult measure and we are doing it again, but not because this is the way we would like to do it. It is because we have to solve a problem. If it is not solved it will be our work force that will suffer from it.
The government can let things go until such time as we have to pay $50 billion instead of $41 billion in interest on our debt next year.
Listening to only those proposals made in the last few days on that side of the House, municipal infrastructure for this or for that, I counted about $25 billion. I do not mind spending it. We would be very popular.
However, what would happen? The rate of interest would go up. The government would not be able to find money to finance it. It would be a total disaster. Then we would have to fire hundreds of thousands of civil servants. This is not what the government wants to do. It wants to protect them by managing the affairs of the country in the best possible way.


Mr. Gilles Duceppe (Laurier-Sainte-Marie):: Madam Speaker, there is a lack of measures that I think would reduce government spending, but which have been discussed or debated. I am thinking for example of the administrative agreement with Quebec on manpower
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which would save between $250 million and $300 million.
I also wonder whether we should not implement many of the recommendations made by the Auditor General, who says some practically scandalous things about the way this government manages the taxpayers' money.
I am also thinking about the paid trips for immigration officers to take people who have been denied admission by the immigration department back to their country. Remember that these officers have no jurisdiction outside Canada airspace. Their trip is paid, two per refugee, and I submit that very few refugees think of leaving the plane between take-off and landing. Nevertheless, two people are regularly paid to spend three or four days in Paris, New Delhi and so on.
I am especially thinking of the De Cotret Report which proposed reducing the number of departments and therefore the number of ministers. If I understand correctly, the minister said his colleague's report was an illusion. I would like him to explain his colleague is the victim of an illusion.


Gilles Loiselle: Madam Speaker, I did not say that my colleague's report was an illusion. I said that it is illusory to think that doing away with 10, 15 or 20 ministers will solve Canada's financial problem. It would save several million dollars, but the deficit is $32.6 billion. So it is a useful exercise and I agree with everything that can improve the way the country is run. I will always agree to support such measures but that is not a solution.
Of course the people who are deported cannot leave the plane but they can cause problems on board and that has happened very often. Airlines require that they be accompanied.
Third, on the administrative measures, the hon. member thinks that simplifying the management of manpower programs would save $250 million. That is totally absurd. Do we pay $250 million for administration? No, we give it to the beneficiaries. In any case, it is spent for their benefit. So how could we go about it? By taking it from the beneficiaries? This money certainly does not go to the officials but to the beneficiaries.
Treasury Board did a study of duplication in all governments in Canada, and I suggest that the hon. member read it. There are many examples.

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Of course we could combine those programs under one roof. There are some savings to be made. But on the whole, it is like the parks service. The National Parks Service provides some programs and the provincial parks provide other types of programs. They can indeed be combined under one administration and we would save a little, but we still need wardens and people to receive the public. It does nothing to change the costs. Detailed studies have been done with the provinces. I would ask my friend to read them. There are savings, but it is illusory to think that would solve the multi-billion-dollar problems we have. We must not look for solutions in the wrong place. That is what is so tremendously frustrating. We could well cut 20 ministers, but it would do nothing to change Canada's deficit.


Mr. Joseph Volpe (Eglinton -Lawrence):: Madam Speaker, the minister in his speech used the words "illusion" and "illusory" at least six times.
What is illusory is the government poor attempt to try to create an image of credibility, of being able to manage this economy and this country responsibly. I say it presents an illusion because its credibility is much it at slake.
headed in the right direction and even makes some grandiose claims about the value of the GST. Good Lord, I did not know whether I was in the same place or whether the minister had just fallen from the clouds.
If there is a tax that is hated by Canadians everywhere, it is the GSt. It would not be that bad if the government would at least admit that even on its predictions with the GST it made enormous miscalculations.
The government thought it was going to produce in its first year $25.5 billion in revenues to replace the $18.5 billion normally collected by the manufacturers' sales tax. What was collected? This year it was $15.5 billion.
This is a tax that the minister in a bold-faced approach today says is satisfactory to manufacturers. Retailers are vaunting the fact that it has led to a depreciation in prices. I do not know whether the guy ever gets out of his chair. The reason there is a depreciation in prices is because there are no buyers. The buyers that do exist are going across the border to pick up their goods.
The GST has depressed consumer confidence. It has made the government much more intrusive in the affairs of small businesses and the lives of Canadians everywhere. Worse, it has driven a substantial portion of our economy underground.
What is illusory is its ability to predict, its ability to perform, and its ability to fashion out a vision for this country.
If we can take a look for a moment at its ability to predict, just from February to December of this year, in 10 months the Minister of Finance has indicated that he was off on his predictions of revenue.
First he predicts $132.1 billion but now it is $124 billion. He is off by 7 per cent. He is off on his predictions on the deficit, which he claimed would be only $27.5 billion, but in fact today is $34.4 billion. He is off by 25 per cent. He is wrong on the debt, which is $10 billion more than he predicted it would just last February.
I am limiting myself to just this year because the record of the finance ministers who preceded him over the course of the last seven years has been even worse. Yet he comes to us with a claim that the government is
Yet the minister talks in favourable terms about the direction he is taking this country. He says we are still going to lower the deficit and we do not do that by raising taxes but by controlling spending.
Let us judge the government according to its performance. We do not need to raise taxes. Personal income taxes between 1984 and 1988, in four years and arguably four of the best years from an economic point of view in Canada, went up by 59 per cent. There was a 59 per cent increase in personal income taxes. They went up a further 22.6 per cent between 1988 and 1992.
He talks about easing the tax burden in order to generate some positive confidence in the economy. Hie man has to be telling an untruth-I was going to say a bold-faced lie, but I cannot say that-of the greatest variety. Total direct taxes were increased between 1984 and 1988 by 46.2 per cent. They went from $49.9 billion to $73,097 billion. In the following two years, 1988 to 1990, they went up an additional 17.5 per cent.
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We cannot believe these people any more. They do not even read their own statistics. We are going to judge them on their performance because these are great managers, as the minister just said, and they have to manage the economy in this country responsibly.
Let us take a look at what the Minister for International Trade said with great pride, almost with a sneering condescending attitude, when somebody dared to criticize what he had to say. Let us take a look at the performance of our export market, our international trade, under the great managers opposite.
Between 1984 and 1988 our merchandise trade balance went from $19.8 billion to $10.1 billion. That is a drop of 96 per cent. Great guys. Give them your investment portfolio. You will be penniless before the day is out. From 1988 to 1991, the period following that great advancement on free trade with the United States, what happened to that merchandise trade balance? It went from $10.1 billion to $7.4 billion. Thank the Lord it is still positive. However, the drop is a further 27 per cent. I am being kind.
I could have started with the current account balance. The current account balance under these great directors of the economy went from a plus $3,437 billion in 1984 to, in 1988, after their first term in office, a negative of $13,883 billion. We went into a deficit in four years when this economy was booming by everybody's standards.
What happened after 1988 to that current account balance? We have free trade when the government sold us another bill of goods. In three short years that current account balance went down a further 92.9 per cent to a negative $26,789 billion. Does the Minister for International Trade ever read his own statistics? Or does he just look in the mirror and say he is right and everybody else is wrong?
We are judging them on the basis of their performance in good times. Let us take a look at what they do in bad times because they are fond of comparing a program and performance of the previous government in 1982 in the recession. Yes, in 1982, the worst year of the recession, there were 10,265 bankruptcies in Canada.
In 1991, not yet the worst, there were 12,952 bankruptcies. This under the direction of those who know business like nobody else knows business.
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The Minister for International Trade said we do not live in the real world. They do. We saw an increase under their great management in poor times of 26.2 per cent in bankruptcies.
Let us translate that into dollars. In 1982 those bankruptcies represented a loss of $1.9 billion, not an insignificant amount of money. In 1991 the value of those bankruptcies was $4.9 billion, an increase of 257.9 per cent in value to the Canadian economy.
The Minister of Finance, now that he is before us, says the government is going to do great things. His buddy, the guy who sits right beside him, says they know the marketplace, that we do not have a clue. They do not believe in an economy that is force fed by the government-I think I quote him correctly-but they believe in one that is driven by Canadian entrepreneurs free of government interference.
Let us take a look at what they are doing. They have a bill before the House, Bill C-91. What they are going to do with this bill is kill Canadian entrepreneurs dead in their tracks. The generic drug industry, according to government statistics, has 10 per cent of sales in drugs.


An hon. member:: Legitimate ones.


Giuseppe (Joseph) Volpe: The generic drug industry has 25 per cent of the assets. It has built a critical mass of Canadian expertise and Canadian investment opportunities. It is going to advance in the world, but the government says: "No, no, no. We cannot have that. We do not want to interfere in the marketplace so we are going to bring forward legislation that will stop you dead in your tracks and transfer that money that would normally come into the Canadian economy to those who have the patents".
The predictions of these people cannot be believed. On the basis of their performance, these people cannot be believed, and they cannot be believed on the basis of the legislation they put in this House that kills Canadian businesses. Instead of accepting this kind of legislation that is force fed to us we have to defeat it, and if it passes we should rescind it the moment that we throw this bunch out.

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Mr. Alex Kindy (Calgary Northeast):: Madam Speaker, it is with great interest that I listened to this speaker. He spoke with such eloquence.
I wonder whether it is really the Minister of Finance who is responsible for the predictions. If we look back in history we see that the Minister of Fisheries and Oceans had predicted Canada's deficit in 1985 would be $2.1 billion. In reality it turned out to be $34 billion.
Mr. MacEachen had said, for instance, that by 1983-84 the deficit would be $7.5 billion and in reality it was $32 billion.
Mr. Lalonde had another prediction. In 1983 Mr. Lalonde predicted that the deficit in 1986-87 would be $17.2 billion. In reality it was $30 billion.
Now we know what the Minister for International Trade said because I sat with him for quite awhile on the other side of the House and he was predicting as well that he would balance the budget, he would reduce the debt of Canada. What happened? We see in this year, for instance, the prediction was that the deficit would be $27.5 billion. In reality it is $34.6 billion.
I wonder whether the ministers, when they make those predictions, look back on the former statements and say it does make sense or it does not make sense because they have a very poor record of predicting budgets.
I think what really happens is the department does the predicting and the minister is that just a trained seal.


An hon. member:: Is the word you are looking for a figurehead?


Alex Kindy: A figurehead. He just reads the speech in the House and everybody seems to be very impressed because he reads a nice speech. He does not address the fundamental problems. The fundamental problem is that Canada is today in a very sad situation.
Canadian Airlines and Air Canada are on the verge of bankruptcy. Air Canada's asset to debt ratio is one to nine. It is a bankrupt company and this government had appointed all the directors of that company. I wonder what the directors were doing? Were they checking whether the company was prospering, were they checking to see whether the company made right decisions, or they were just travelling around the world because they could travel with a pass.
Those directors were appointed by this government and they were friends of the government. The minister should be addressing those problems. He should address the problems with the Royal Bank that tells us today that 67 per cent of its outstanding loans are not being paid; $3.5 billion. Does he address that problem? No. Maybe the hon. member could comment?


The Acting Speaker (Mr. DeBlois):: I am sorry for the hon. member, but surely he expects the answer from the hon. member for Eglinton-Lawrence.


Giuseppe (Joseph) Volpe: Mr. Speaker, you know that what I would do is give an answer that would only be complimentary to the government's record. I am glad he gave me the opportunity to compliment him on having the wisdom to change his position from that taken by that side of the House to that taken by this side of the House. By so doing he recognized the error of the government's ways.
Does the minister and do his other colleagues in cabinet ever take a look at the performance of their predecessors, the predictions of their predecessors, the state of the economy? Do they read the reports of their advisers, their bureaucracy, or even casual historians who have taken the trouble to research the performance of the economy in our country? I guess the answer is no. It is that simple. There is nothing in today's statement that would address the issues concerning the residents of my own city, which pays about 44 per cent of all federal and provincial taxes collected in this country.
Mr. Speaker, do you know what has happened to the economy of my city of Toronto? We can see it in the
240,000	unemployed. Nothing is going to be done in this economic statement for the welfare of those 240,000. That is the size of most major cities in this country. It is not going to do anything for the livelihood of the 680,000 people on welfare rolls in the great engine of Canada's economy.
The hon. member for Calgary asks if the government does its homework. The answer is obvious from its performance and its inability to predict. It is a resounding no.


Mr. Joe Comuzzi (Thunder Bay-Nipigon):: Mr. Speaker, I appreciate this opportunity to respond to the supply bill before us today in the amount of approximately $8 billion, an amount that just by chance is the amount of the additional deficit first reported in February of this
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year and reported by the Minister of Finance as being almost $34.5 billion this afternoon.
The message that this report gave today is that we are having difficulty controlling our spending, that the economy is beyond our control and that as a government we cannot create the wealth that is so necessary in order to pay for the programs we need.
In addition, it is obvious that the government is having great difficulty creating jobs. That is the main issue. I would like to use the little time I have to speak on this bill to discuss the creation of jobs as it relates to the small business enterprise system.
I would like to say to the Minister of Finance that this is not a partisan issue. This is an issue that is on the minds of the 295 members of this House of Commons. It is an issue on which we should all put our minds together to try to address and combine our efforts to try to come up with a satisfactory solution. Everyone in this House must work toward a solution.
The creation of jobs by small businesses in Canada is a necessity. The Minister of Finance today in his opening remarks, and several times throughout his address, said he was going to be seeking the co-operation and assistance of all members of the House to devote ourselves to this very important function.
He outlined some of the plans he has for small business. I will restrict my remarks to that area. I compliment the minister for starting the thought processes going on that small business area. I must say that I do not think the plans went far enough and that I do not believe they will come close to fulfilling the responsibility we all have.
The facts are simply that we have 1.6 million people unemployed in this country. That number is growing. We take it as a given that large business is creating the problem today rather than helping us solve the problem. [DOT]
Tike a look at CN and its announcement of 10,000 lay-offs. We do not know how many people will be unemployed in the airline industry. Who knows how many people will be lost in the GM empire in the
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Oshawa area. Take a look at Abitibi, where thousands of people are unemployed and there are more to come.
We also take it as a given that those in governments, quasi-governments, hospitals and educational institutions can no longer afford to create the jobs that are necessary. Therefore, the only prospect for job creation in this country is through the small business enterprise system. If we agree with this premise, and I do not think anyone can disagree with this premise, the question simply is: "What do we do to create a climate for business to help the small businessman and to hire some of those thousands of people who are on the unemployment rolls in Canada today?"
We all know the grease that makes a small business enterprise grow is money. Some of us who were small business before we got to this House know that it is called working capital. The Small Businesses Loans Act that was referred to today by the Minister of Finance is not an operative document. With respect, I say that the increase from $100,000 to $200,000 and now to $250,000 might as well be $5 million because I know very few businessmen in this country who know anything about the Small Businesses Loans Act.
Second, I do not think banks are interested. I think the Minister of Finance alluded to it today. Banks are not interested in advising their clients that small business loans are available for their enterprise. Why do we say this? We say it because in section 15 it spells out that the rate of interest that can be charged under this plan is the prime rate plus 1 per cent. We all know that banks are not interested in granting loans at prime plus 1 per cent, especially to the small business enterprise.
Therefore, that is not a very operative document. Unless this government and this House can get this message out most small business people in Canada will not have any knowledge of this particular plan.
Today the Minister of Finance referred to the regulations and said that the government was embarking on a program to make the regulations more simple and more easily understood. I happen to have all of the regulations relating to small business loans today. There are some 35 to 38 pages here. There are regulations 140, 151, 396, 369, 591, 891 and so on. I agree with the minister when he says that the government must clarify the regulatory system with respect to the small business person and

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make things understandable for people in that enterprise.
I am a lawyer and I defy anyone to understand all of those regulations and make any sense of them. Therefore, I applaud the effort to make small business loans and all of the regulations pertaining to small business understandable to those who need it, namely the small business people in our community.
After we talked about the small business loan then we got to address the other problem that we are having, which is that we do not have a financial institution in this country that is interested in doing business with the small business person and yet we have the institution in place. We presently call it the Federal Business Development Bank. I am suggesting to the minister that we take this Federal Business Development Bank and rename it the Small Business Bank of Canada. Then as the Small Business Bank of Canada we change its terms of reference and let all small businessmen in this country know that they have a bank they can go to that is willing to support them. The Small Business Bank of Canada will be a bank of first resort for the small business community in this country rather than a bank of last resort, which is what we have today.
I am sure with that added competition within our community and with the chartered banks knowing that there is some competition out there they may open their doors and be more receptive to assisting the small business communities in our country.
Once we have established a climate to make capital available to the small business community, and once we have established that it is profitable, then we can get down to the essence of what we want the small business community in this country to do, which is to hire people.
When we ask the small business community in this country to hire people we are saying in essence: ''If you hire someone from the unemployment rolls we understand that naturally you have to train these people and retrain them". Rather than sending them through the formal retraining process at the colleges and universities we will have on the job skill development in the small business he is hired by. He will learn that particular skill in that small business.
In order to do that we have to assist the small business enterprise, either through tax incentives or some other
way that says: "We will pay for the skills development". That goes along with the UI benefits that were announced today.
Now we have a small business community that is willing to rehire and hire those people off the unemployment rolls and retrain those people. We all know, those of us who have ever been in small business, that the most valuable thing in small business today is a good faithful employee. There is not a small business person in this country who is willing to give up that valuable asset.
Once we have trained that person-let me just put the numbers together. There are 1.6 million people unemployed. There are 900,000 small businesses in this country. If we could get each small business to hire two people, on average, off the unemployment rolls then we will have not only solved the problem of unemployment but we will be looking for 200,000 more people to fill the job spaces. That would be creating wealth. That is what this government should do.
I know my time is running short but I-


The Acting Speaker (Mr. DeBlois):: Order, please. Your time has now expired.


Philip Edmonston: Mr. Speaker, I was really interested in hearing my colleague from Thunder Bay speak about the effects of this kind of mini budget on small and medium-size companies.
One of the comments I have, which is going to be followed by a question, is that one of the major complaints of small business has been the GST. This government has said it would try to make it easy for small business to live with the GST. I know it has not.
The comment I have about the whole question of small business and the GST is that that there are several things that small businesses have complained about. One is that they have to pay GST but financial institutions, stockbrokers, banks and so forth pay nothing. It is perhaps just a coincidence that the Minister of Finance comes from the financial institution sector. It does not pay anything. Small business people, those 900,000 businesses that my hon. colleague was talking about, pay but others do not. That is one thing.
I would like to know how he sees this. Earlier I asked the former Minister of Finance why he did not tax these financial institutions and he said: "I cannot do it. It is too
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complicated". I have never seen anything too complicated for this government, but that is beside the point.
The other question I would like to raise with my hon. colleague is that his party says that it would renegotiate, that it would rearrange or do something with the GST. Would that something be, or at least would he want that something to be, an imposition of a tax on these financial institutions to make it a fairer tax?


Joseph R. (Joe) Comuzzi: Mr. Speaker, I thank my colleague for that question. Concerning the first issue about the GST, as a result of the imposition of the GST we have 900,000 tax collectors in our country. It is a terrible expense on behalf of the small business community to collect this tax and it is very expensive. What I am suggesting and what I would hope our party would suggest-I am sure we would get a lot of support-is that if you are going to have someone working for you, you should pay them. If you are going to collect the GST, let us reimburse those who are responsible for collecting the GST and let us pay those who are responsible for keeping the GST in a trust account in order that those funds are available whenever they are required by the government.
The banks, stockbrokers, everybody should be paying the GST.


Giuseppe (Joseph) Volpe: Mr. Speaker, I know that my colleague was interrupted right in the middle of a suggestion with respect to a positive approach to small businesses.
Coming as he does from that great metropolis in northern Ontario, Thunder Bay, that has a history of producing gentlemen and other members who are very proactive when it comes to creating jobs, managing the economy and doing things that are appropriate from the government management point of view, I wonder if my colleague could share with the House some of those suggestions.


Joseph R. (Joe) Comuzzi: Mr. Speaker, I thank my colleague from Eglinton-Lawrence. I just wanted to say we had a member of this House who could be used as a model that worked. I happened today to be involved in something else that was very important but I wanted to refer to him. It may answer my colleague's question.
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He entered politics from Thunder Bay in 1935 and became a minister of transport and started Trans-Canada Airlines, which became Air Canada. He became the minister of munitions and supplies and took on the task of running Canada's war production. After the war he succeeded brilliantly in working beside a group of businessmen who came to appreciate his efficient and daring conduct on economic affairs. He returned the Canadian economy to a free enterprise system with minimal government controls.
The example the House should follow is that of the great Liberal C. D. Howe who brought this country to its highest point of employment and its highest point of producing wealth. That is the kind of leadership we need. That is the kind of leadership that the Liberal Party has given to this country over many years.


Mr. Robert Wenman (Fraser Valley West):: Mr. Speaker, there are parts of the statement I might agree with and parts I might disagree with. However I would like to repeat at the beginning a couple of the strongest parts of this particular economic statement that need to be heard certainly in my riding of Fraser Valley West and throughout Canada.
"Trade is our lifeblood". It is a generality but it is the truth: 30 per cent of Canada's economic activity and one job in four. My constituents are concerned about jobs. If trade is the place to find those jobs, we want to see that continue to expand and grow.
"The Canada-U.S. Free Trade Agreement has proved a success", $16 billion. Now $16 billion is a lot of jobs, a lot of taxes and is a lot of hope for Canada. That bears repeating at this time when Canadians are looking for hope.
North American free trade will give us 85 million new consumers, whose lifestyle and life quality are going up already, even without the agreement, and provide more opportunities for Canadians. There are hopes from the GATT and other opportunities.
It is very important that we should see Canada in its global context and its global interconnection around the world as a major issue of this Parliament and the next Parliament of Canada. In particular I would like to see a new Canada in a newly urbanizing global world. The pace of change continues to accelerate exponentially. Canada must see itself and find its place in this new globe. Among the global megatrends that are of concern

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are population growth, rapid industrialization and urbanization.
It took the world over 2,000 years to get to 1650 and a population of about 500 million people, over 2,000 years from the beginning of our history. But it only took 200 years to double that population, from 1650 to 1850. It took only 100 years to double that, population again, from 1850 to 1950. It took only 40 years, from 1950 to 1990, to double that population again. The next doubling of the world's population of 5.3 billion people may be in 20 years. That is a new world. It is a new world for Canada to find its place and its opportunities in.
However there is another amazing trend. Within the massive population explosion of the world, another major trend is that in 1980, 1.8 billion of the world's people lived in major cities of the world, but by the year 2000 that will have increased from 1.8 billion to 3.2 billion. Over 60 per cent of the world's population is going to live in the large cities of the world.
Canada is no exception. Back in 1851 only 13 per cent of Canadians lived in cities. In 1981 76 per cent, and now over 80 per cent of Canada's population is living in cities. What does this 80 per cent of the population mean? It means that 80 per cent of the people we represent are living in cities. I am wondering if we are giving them 50 per cent, 40 per cent or even 20 per cent of the attention that the rapid growth of cities needs, not just in Canada but throughout the world.
I know what it means to people in the Fraser Valley where I live. It means that 30 years ago when I settled in the Fraser Valley every morning I would get up and see Mount Baker glistening in the sun or across it Golden Ears. If I was driving into town I could drive into Vancouver comfortably in half an hour. Vancouver did not get farther away, but now it is an hour and a half away. It is getting worse and worse.
This means that people who dreamed of this higher quality of life in our cities moved there, as I did and as most people in this Parliament did. They hoped for this better way of life. For the average commuter from my area-the average person commutes into Vancouver and out each day-it is getting longer and it is getting harder. Every time he commutes back and forth he is driving in his car and his car is pumping carbon monoxide into the
air. Now by noon we often cannot even see the mountains. It is another kind of Los Angeles.
Our air is getting harder and harder to breathe. The quality of our water and water supplies is threatened. I am embarrassed to say that Victoria is still dumping raw sewage into Puget Sound that floats down to Seattle, the other part of our megacity of 4.5 million people. Whether it is the disposal of waste, the quality of air or the lack of rapid transit, these kinds of things are taking the choice of Canadians for lifestyle and denigrating it.
Have we seen any kind of an emphasis from senior governments in this area? I regret to say in most cases it is a matter of downloading. I am not just speaking about Canada. I am talking about the world. The mayors of the cities of the world met in Curitiba and agreed it was a problem all over. They are getting all the population, all the people, all the growth, without the tax base to improve the infrastructure.
I am very pleased to see in this speech the issue of infrastructure. As a Canadian I certainly want to support infrastructure building wherever it can be done in Canada. I am very pleased to support Prince Edward Island for $800 million where we will connect 130,000 people to the mainland, connect an island to the mainland or an island province to the mainland of Canada.
When we look at priorities there are more people travelling in the morning to work over the Port Mann Bridge than there are in all of P.E.I. There are 1.7 million people on the lower mainland and another
400,000	in the Victoria area. We would like to have a land bridge to connect that too but we do not even ask for it because we see other priorities.
I am pleased that there is a thought of infrastructure here, but I wonder if it might better be spent, or some of it might be better spent, on infrastructure like rapid transit in our cities. That is the kind of thing we have to think about.
I was talking to the Minister of Finance the other day. He grew up in Vegreville, Alberta, and I grew up down the road in Maidstone on the Yellowhead Highway. They were wonderful places to grow up, great towns, great cities-Vegreville is a small city-and good places to live. I have not seen any traffic jams there for a long time, but
December 2, 1992

I live in one every day in my riding and so does everybody else. We need a little help.
The Port Mann Bridge is across the Fraser River. Maybe we need another bridge across there too. There is so much need that I am not even sure that is the correct need. Rapid transit is probably a more important need and a more important use than another bridge because we need to get people out of their cars to sustain the quality of life that we choose in Vancouver and to make sure that pollution does not just keep roaring out the valley. Not only is it coming from that valley but now it is coming from Seattle. It is all one big city. We must work and plan. That area is the fastest growing area of North America, in both Canada and the United States.
We need to work to accept that we cannot stop the doubling of the population over the next 20 years or 30 years. I do not know where it is going to go because we have mountains on one side and the ocean on the other. We have to plan how to sustain that city and that city will be sustained through improvements in infrastructure, communications, transportation, light rapid transit and these kinds of things. But how will it be financed?
We cannot finance every city in Canada but we have to recognize that most people in Canada live in Montreal, Toronto and Vancouver. These issues are big issues there and we cannot just keep downloading on those systems as do both levels of government not only in Canada but throughout the world.
We will need to find in the Speech from the Throne following this economic statement new ideas and thinking in new ways. We have this fuzzy warm feeling that Canada is a rural nation. Yes, agriculture is terribly important and some people in Canada still live in the rural areas but 80 per cent live in the cities. If we want to keep this warm fuzzy image of rural Canada with rural values which are great values and my values, that is fine; but let us live with the reality that 80 per cent of our people live in cities and let us get on with developing sustainable city programs.
Our Prime Minister and Minister of the Environment showed great leadership at the earth summit in Rio. They recognized in agenda 21 the human settlement problem of cities. They had ideas. They said: "Let us establish a sustainable development commission". While
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the rest of the world is going to proceed with these kinds of things, where will Canada be in the follow-up to Rio, in the follow-up to how we will sustain these megacities because the world is becoming a series of city states? Just as we must connect the cities of Canada we must connect the city states of the world.
How do we change this thought from rural Canada to urban Canada and then how do we help our Minister of Finance see those needs, recognize them and turn them into programs? I think Canada should demonstrate this to the world. If we have the highest quality of life in the world, and that highest quality of life is found for our people who are living in cities, obviously, then how do we sustain that high quality of life? Can we lead and show the world that Canada knows how to sustain its cities?
Our cities are among the most magnificent. Mayor Dore of Montreal showed great leadership at the United Nations and had a great world conference in his city. Toronto had a similar conference and showed the way. Vancouver had the global parliamentarians conference that so many of us attended, and where a resolution was passed that said: "Urbanization is a world problem. Let us do something about it".
In British Columbia Mike Harcourt talks about his Georgia Basin project. He saw this coming for a long time. We have to take the city in the context of its bioregion. They are working together with Seattle and with the U.S. Congress.
These are the kinds of visionary programs where we look to the way we are and almost all of us are urban dwellers-and then we try to find ways to sustain and improve that quality of life.
I appreciate this economic statement and the need, as I have said, to connect to the world through GATT. We are having successes there. I applaud the government on those things. I applaud it on Rio and the earth summit on the environment.
However, if we cannot breathe the air, drink the water and dispose of wastes in these types of megalopolises and if we cannot move comfortably around them then what are we working for? We need to hold new values and bring them forward as we work toward the Speech from the Throne and toward the next generation of urbanizing ideas.

December 2, 1992
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In addition, we also need to recognize that the power of the world and the power of the world's relationship with Canada is where the power is. The power is in Pacific Asia. In 1984 we looked at Pacific Asia and we gave it a good push. We are developing economic relationships. Japan is the number two trading partner for Canada now. If we look at the top five or six we will find China, Taiwan, Hong Kong, Singapore, Korea and the ASEAN groups. This is the future of Canada. That future is building upon the ideas that are in this statement.
We have a North American free trade agreement. Through APEC this can be expanded to cover the entire Pacific region. It is important that we should not see another bloc in the Pacific, as is being proposed by Malaysia. It would be an Asia-only trade bloc, similar to an Europe only trade bloc. I hope our minister will take the innovations of the North American free trade agreement and expand very soon, perhaps, to South America. However, let us keep going around the rim and keep this concept of one free-trading world.
I quoted the minister's 30 per cent figure, which means one in four jobs and $16 billion in the free trade agreement already. This is where our future lies. Let us not run from crisis to crisis. Let us help in Europe and Somalia. Let us help build the critical, tough areas of the world. I have always supported that and participated in that. Let us not be diverted from the future of Canada in the Pacific Asia region.
I have my concerns that this has diminished in its importance. I urge members to think, between now and the throne speech, once again about the Pacific and the reality of Canada as an urban nation.


Donald Frank Mazankowski: Mr. Speaker, I enjoyed very much the hon. member's address. I noted his comments about the infrastructure issue and how he would foresee that some of these funds would be directed toward mass transit.
The objective here is to essentially invest in strategic infrastructure development that would improve competitiveness and improve the productivity of the Canadian economy.
We have a number of specific proposals or projects in mind, particularly those that fall within federal government ownership. We will be sitting down with the provinces to determine what their priorities are and to try to work out the appropriate sharing arrangements so that we can move ahead on these projects.
While it is not clearly defined in the background documents or in the speech itself, there is provision to ensure that we will open that dialogue with all the provinces to try to see if we can work toward fulfilling some of their goals and objectives that would enhance the economy and productivity and therefore the competitiveness of our country.


Robert Lloyd Wenman: Mr. Speaker, I want to thank the minister for those comments very sincerely. I sense that the minister heard what I said.
I know that the Government of British Columbia is very anxious to talk about their needs on infrastructure. They are not mentioned here in particular, but remember that you said they should be focused on something that relates to making us more competitive.
I am an advocate for parks and tourism and so forth. It is very important, but really we might look at the airport system in Vancouver. That is going to increase our competitiveness. The bridge in P.E.I. is important politically and I am sure it is economical. I am not sure how it will improve our competitiveness, but I can think of three or four other bridges in three major cities of Canada with which we might improve competitiveness.
I certainly want to be for the maritimes and for all of Canada, so wherever we are spending this money on infrastructure, I am in favour of it. I am just saying that we have to watch the priorities.


Alex Kindy: Mr. Speaker, I listened with interest to the member for Fraser Valley West. I know that he is concerned about the environment and about developing Canada to be a prosperous country.
I wonder what his opinion is about transportation somewhat. I see this government has abandoned railways. It has abandoned air traffic because our companies, such as Air Canada and Canadian Airlines, are going bankrupt.
Does he believe that our country should have a railway system. It is efficient and less polluting than cars and trucks, especially since we have a very bad climate. I
December 2, 1992

really feel badly when I think about all those truck drivers going through the Rockies and going across Canada, not on a four-lane highway but on a two-lane highway, burning rubber and fuel. They are naturally are a danger to everybody on the road and to themselves. What are his feelings on this?


Robert Lloyd Wenman: Mr. Speaker, in order to be competitive, some rail lines are going to become redundant and they should be cut. Some highways will become redundant and we may not need them in the same way. Infrastructure changes continually. This is a review of infrastructure.
It might be more important to put a rail link between Seattle and Vancouver. That is two hours there. You are right. Take the cars off the highways there. What is 4.5 million people now is going to be 10 million in 2010.
Certainly we have to readjust the priorities. They may need an intermodal rail yard in Surrey. There is a very heavy demand for infrastructure. Let us look at any place that can use rail, which is clean, efficient and appropriate. It is particularly good for freight and that kind of thing.
Yes, I would support the improvements for infrastructures on rail, but we have to do it in the context of urbanization and in terms of the context of global interconnection between ports and those kinds of things.


Philip Edmonston: Mr. Speaker, I was very much interested in listening to my colleague tell me this. I agree with him that the infrastructure repairs are not a panacea. It does have its limitations. He wanted to see the government, in addition to dealing with repairing the roads, improving water quality and bridges and other things, also invest in rapid transit. Here is the point I would like to make. A lot of people who listened to this mini budget or statement by the minister today are not totally convinced, I am sure, that the government really has decided to work in their favour or to actually change its direction. It seems to be more of the same.
I would like to ask my hon. colleague this. In addition to urban transit, there is a need for more serious reform in the sense of tax reform and the GST, for example. It could be changed so it is fairer to all Canadians in effect. Is it not evident that this budget that we have had today
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is not a Cadillac budget? It is not a Chevrolet budget. I am referring to automobiles because I understand the Minister of Finance once was a dealer in automobiles. It is more of a Lada kind of budget. It is there, it is a vehicle, but it is dysfunctional. It does not really respond to our true needs.


Robert Lloyd Wenman: Mr. Speaker, I have been in politics for 27 years and I suppose I have never seen a budget or an economic statement that suits perhaps the priorities as I see them. Certainly the minister and the previous ministers of finance who are now making Canada competitive internationally, are in fact on the right track.
I think this budget is very much on the right track. In 27 years, if there is anything that I have felt supportive of, it is the Mulroney government's economic policies that have brought sanity back and have given opportunities to make Canadians more competitive. That in the long term means more jobs, more opportunities and a higher quality of life for all of us.


Hon. Roger C. Simmons (Burin-St. George's):: Mr. Speaker, the first question is whether this is an economic statement, a mini budget or a maxi budget? What is it?
I suppose one could go to maxi skirts and mini skirts for the parallel. We must ask ourselves what this budget is trying to cover up or reveal. If it is in that particular context, then I would submit that it is a full-blown budget and probably a maxi budget.
We cannot see an awful lot of the government's over-all strategy. Yet we can see a little. We can see some. We can get a glimpse of what the government is up to. I submit to the Minister of Finance who I am delighted to see in the House this evening, that the underlying and double-barrelled premise here, cynical as this sounds and cynical as I believe it is, is that the government has taken a couple of basic political decisions.
First, the poor and the unemployed are never going to vote for this government again. That is not just me saying this as a statement of fact. It is me pretending to be the government coming to that conclusion. The government has said: "We know one thing for sure. The poor and the unemployed are never going to vote for us again, so we need not worry about them".

December 2, 1992
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The second part of the double-barrelled premise concerns the business community that came to the rescue of the Tories in other elections. Given the right circumstances, it can be depended on to vote for this government. That is the double-barrelled premise. First, the poor and unemployed will never, ever again vote for this crowd. If the government came to that conclusion, it is absolutely right. The second part of the premise is that given the right circumstances, some people in the business community with enough plums and incentives and things dangled in front of them could be induced to vote for this government again.
Accept for the moment, at least for the purpose of debate, that those are a couple of parts of a double-barrelled premise on which to build a budget. Just follow through on what this government and the Minister of Finance have done today. He has socked it to the unemployed, to the low-paid worker and the poor and he has dangled a few plums in front of the business community. That is the basic strategy. Everything flows from that. Everything in the budget flows from that basic premise, as cynical as it is.
One of my big disappointments about this budget-I am not completely surprised by it but I am certainly disappointed by it-is the double-talk, the untruth. Listen to this statement on page 12 of the minister's statement today. It states:
The actions I have announced today will bring the estimated
deficit down to $34.4 billion this year.
Bring the deficit down to $34.4 billion. I suppose there is a way in math to state that as a downward trend. What would it be, a minus reduction? We could call it a minus reduction. He has gone all the way down from $27.5 billion to $34.4 billion. That is a drop, a real precipice, an absolute 90 degree cliff. Bang, straight down from $27 billion to $34 billion.


Marlene Catterall: I call it a 25 per cent increase.


Roger Simmons: I call it double-talk. I say to my friend from Ottawa West, I call it double-talk.
The same minister, also with a straight face because I sat here and watched him today, also said that the growth next year was going to be 2.5 per cent.
Now, Mr. Speaker, I ask you and I ask the minister who does he expect will take him seriouly when he had trouble predicting six months ahead? Now he is going to tell us what things are going to be like next year, 12 to 18 months from now. In February he was standing here telling us: "Don't worry, folks, we have got it down to $27.5 billion. Don't worry about it". Nine months later he marches into this House, less than a year later, and says: "By the way, I made a slight error. If I cut out another $8 billion from the expenditures, I might have her all the way down from $27 billion to $34 billion".
Therefore one could argue, if we add on the $8 billion that he has cut today in expenditures plus the gap of $6.9 billion, that in nine months his call was $14.9 million out. He was out by $15 billion. Now if you are going to get a crystal-bailer, Mr. Speaker, I suggest you not spend your money on the gentleman from Vegreville, the Minister of Finance. He does some things well but one of them is not crystal-balling.
I know the argument that things have changed. I guess they have changed. One of the things that caused them to change was the interest rate policy of this government. Any fool knows that if you keep allowing interest rates to rise, it is going to cost you more to service the public debt and your figures are going to be thrown out of whack. You have heard the lawyers tell us, I am sure, Mr. Speaker. I have a lawyer friend in Newfoundland, not a lot of them but I have one that I still admit to. He happens now to be the Minister of Justice. I used to be in his caucus when he was leader of the party in Newfoundland, Ed Roberts. Ed was known and is known-


An hon. member:: A good fellow.


Roger Simmons: Yes, he is a good fellow I say to my friend from Willowdale. Ed is known for this one. He would often say: "It reminds me of the fellow who had been convicted of murder, having gone out and killed his mother and father and then when he appeared before the judge for sentencing, he pleaded for mercy on the grounds that he was an orphan".
The minister finds himself somewhat in that kind of situation where he has been the perpetrator of the deed. He is a large part of the reason why we have a projected deficit now of $34.4 billion. Do not sit, Sir, on the edge of your chair because that could change at any time. Whether it is $34.4 billion or $25 billion or $60 billion, we will let you know eight or nine months from now, as we have done in this particular case. Between February and
December 2, 1992

now the difference in real terms, as I just demonstrated, is of the order of $15 billion off the mark in effect.
The minister by his policies and the policies of his administration having perpetrated the deed he now comes to this House looking for mercy. He now comes to this House and asks for some understanding. Frankly, we are running short of understanding. When I say we, I speak for many of the people in my particular riding.
I got your signal, Mr. Speaker, and I realize that my time has almost run out but I hope not before I get a chance to address one other issue on this same page, page 12 of the minister's statement.
I would submit to him, to this House and to the people of Canada that by far the most cowardly and at the same time the most dastardly statement ever to appear in a budget speech anywhere at any time has to be the following:
Persons who voluntarily quit their jobs without just cause, or who lose their jobs because of their own misconduct, will no longer receive UI benefits.
Follow it through. Put aside for the moment that some people quit without cause. They quit because they figured out how to milk the system. I understand one of the things the minister is alluding to. But he uses a sledgehammer to get at a mosquito here, a very terrible sledgehammer. He must understand it. This is something in his budget that he has to go back on. He has to take that statement out in the interest of basic human rights and basic decency. What he has here is hearkening back to the sweat house days of pre-industrial England.
This is what William Booth who started the Salvation Army was talking about in darkest England. This is the kind of thing where the employer was in the driver's seat, where he called all the shots. With this document, this statement, he knows that the employee is not going to quit because he or she will be afraid they will not qualify for UI. He knows that he can ride that employee right into the ground and when he gets them into the ground, he can then fire the employee.
He knows the employee can be fired for misconduct because the minister has said so. Apparently he has intentions to legislate that. The employer knows that employee is already on his knees economically. While he might pursue the question of whether there was cause to
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charge misconduct he has nobody to buy the groceries in the 12 or 15 months it takes to prove that particular charge. It is a dastardly thing. I see your signal, Mr. Speaker. My time is up.
I appeal to the minister, in the interest of basic sanity and humanity, to get that statement out of there and all it stands for.


Alex Kindy: Mr. Speaker, I appreciated the speech of the hon. member. I want to make just a couple of comments. I remember in this House when there were questions asked of the Minister of Finance a couple of months ago. He had extreme difficulty saying that Canada was moving toward a recession.
He could not pronounce the word recession. He said: "Everything is on target. Our budget is on target. We are going to have a deficit of $27.4 billion", and so forth.
Then suddenly he had to admit that we were in a recession and that it was worse than a recession. It was a depression; 500,000 manufacturing jobs were lost in Canada; welfare rolls were increasing. Today I read about 700,000 people in Quebec being on welfare. How many in Ontario? How many in Alberta?
The minister's advisers were telling him that he was on target. He tells us today that he is going to solve the problems. Why should we believe him? I would like to ask the hon. member whether he believes what the Minister of Finance said today, whether this is believable or not?


Roger Simmons: Mr. Speaker, I thank my friend for Calgary Northeast. He sat with the Tories on that side until he saw the light. That is another story but we welcome him to this side. I mention that fact because he better than I can really answer his own question.
Do I believe the finance minister? Well, it is not that the finance minister lacks integrity. That is not the issue. I have always regarded him as a man of great integrity. That is not the issue at all. But integrity and competence are two very different things. Is he asking me whether the Minister of Finance is a competent minister? My answer would be, competent to do what? Competent to follow the orders of the gentleman from Baie Comeau? Yes, he is competent to do that.

December 2, 1992
Private Members' Business


The Acting Speaker (Mr. Paproski):: It being 10 o'clock p.m., pursuant to order passed on December 10, 1992, the House will now proceed to Private Members' Business as indicated on today's Order Paper.



PRIVATE MEMBERS' BUSINESS


Rodney Edward Murphy: that in the opinion of this House, third party advertising during elections should be restricted to individual Canadians and limits on the amount each person can spend should be established.
He said: Mr. Speaker, I raised this motion which is very important to democracy in this country. In the 1988 election many Canadians were concerned about the amount of money that was spent, especially by those who supported the free trade agreement. There was a feeling in many ridings by many Canadians that the money that was spent by those advocates of the free trade agreement helped to have an undue influence during the election period.
Of course, the problem is that we take away the fairness in our system. In 1975 we had four basic fundamentals about our elections in this country. We required parties and candidates to provide full disclosure of election expenses and full disclosure of income sources. We put limits on total expenses and we required black-out provisions to restrict and limit the influence of paid advertising. Those were requirements that were put in place for all parties and all candidates. It came out of a sense of election fairness to make sure we did not go the route of other countries, notably the United States.
In the United States, it is interesting to note that in the last election many American congressmen and senators and their staff talked about the amount of time they spent raising money for elections. Those of us who pick up a lot of the American channels in our ridings also noticed the types of advertising, the vehemence, the hatred and the anger that was put out by various groups in their paid advertising.
Canadians have been well served by our different approach of disclosure and our approach of limitations. Part and parcel of the limits we put on candidates and political parties is a restriction in the act that has limits on third party advertising.
In 1984 in a lower court in Alberta this provision was struck down on the basis of the charter. Here we are many years later and this Parliament has not introduced new measures in this very important area. As I mentioned earlier, without any real restrictions, we run the risk of another election very similar to what we had in 1988. We do not want to see that happen. We do not want to see completely unlimited spending by special interest groups while at the same time we have severe limits on what political parties and political candidates can spend.
With the types of groups that are forming in various parts of this country that have a lot of money, it is quite possible that the candidate for Thunder Bay-Atikokan or Prince Albert-Churchill River could find out that they are entitled to spend less money in their whole campaign in providing literature, in dealing with all the issues, in making contact with the voters, paid advertisements or whatever other means they have to use to campaign in their ridings. For all of those purposes they could end up being able to spend less money than one single issue group that wants to campaign against it. That is the problem with what is happening in this country at the present time.
We need a strong law that does not completely prevent third party advertising, does not take away the right of freedom of expression, but which puts reasonable limits on money spent in the exercise of those rights. Politicians, political parties and candidates have respected those same limitations on themselves since 1975. What we are saying is that the same thing should apply to other Canadians.
The Lortie royal commission came down with a figure of $1,000 that could be spent by individuals or groups. To make sure that there was no collusion, it also recommended that groups could not combine to make sure that if one person spends $1,000, and somebody else spends $1,000, all of a sudden you find you have $50,000, $60,000, or $80,000 being spent in one riding by what in essence is one special interest group.
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We have a law based on fairness but we have a glaring loophole in that law at the present time, a loophole which was, as I said, exercised by those who defended the free trade agreement, those in this country with lots of money. We cannot afford to allow that to happen in the future.
I call upon this government and all parties in this House to ensure that before we have the next election, which must occur within a one-year period, we have reasonable restrictions. We are not asking for a complete outlawing of third party advertising but reasonable limits to make sure that our system is fair, to make sure that those Canadians who are out there working in an election, trying to explain their political philosophy, their dream of where this country should be going and how it should be governed, do not find themselves swamped by those people who have large contributions from all sorts of sources which under the present law are basically secret sources.
We do not know who contributes to the National Citizens' Coalition. We do not know who has contributed to some of the large corporations and some of the front groups that will exist during a federal election campaign. Parties have to list their donors. They have to give the addresses of their donors. They have to make that information public. We should insist that all those who wish to participate in a campaign period should have restrictions in terms of public disclosure as well.
If somebody contributes to the New Democratic Party and it is over a certain amount of money, whether it is $100 or perhaps $250 in the future, we have to make that information public. If someone is campaigning in a riding, or in a province, or in this whole nation on a certain issue, they also should have to make public the sources of their income. We must make our system fair.
We must avoid the excesses of the United States. The only way we can do so is to make sure that we keep restrictions on candidates and parties. If we take that away then we have lost any sense of fairness. We will all end up with the dollar buys the election system of the United States. We also must make sure that for those others who have a legitimate point of view and who choose to work outside of the political parties, there are
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reasonable limits and that they account publicly for where they raise their money.


Mr. Geoff Wilson (Swift Current-Maple Creek-Assiniboia):: Mr. Speaker, I am pleased to have the opportunity to discuss the motion that has been sponsored by my colleague, the member for Churchill.
His motion is to the effect that third party advertising during elections should be restricted to individual Canadians, and limits on the amount each person can spend should be established. This question of spending limits is an important one and is subject to the entire range of public opinion.
As a matter of background the Lortie royal commission on electoral reform was created back in November 1989. It held extensive public hearings across the country and heard hundreds of suggestions for improvements in the electoral process. Indeed, its final report was more than 1,500 pages and contained 267 recommendations.
The research studies produced during the course of the royal commission, which will be assiduously studied by my friend from Kingston and the Islands, and will comprise some 23 volumes at the end of the day.
The job of the parliamentary committee on electoral reform, of which the hon. member for Churchill is a member, as I am, is to review the findings of that royal commission and report to Parliament.
In regard to the question of spending limits, let me mention that there were amendments to the Canada Elections Act in 1974 which prohibited spending during an election campaign by third parties that favoured or opposed a political party or candidate. However, exempt from this prohibition was spending relating to an issue.
In 1983 Bill C-169 removed that exemption and created the current prohibition which prevents any election expense that is not channelled through a candidate or through a registered political party.
However, as things stand today under the Canada Elections Act, as a practical matter there is no limit on third party spending. That is because back in 1984 the Court of Queen's Bench in Alberta rendered a decision called the National Citizens' Coalition case, in which the court struck down the then spending limits on third

December 2, 1992
Private Members' Business
parties. The court ruled that the provisions of the act prohibiting third party spending were on their face a restriction on freedom of expression. Indeed, the judge stated, and I quote: "Care must be taken to ensure that the freedom of expression as guaranteed by section 2 of the charter is not arbitrarily or unjustifiably limited. Fears or concerns of mischief that may occur are not adequate reasons for imposing a limitation. There should be actual demonstration of harm or a real likelihood of harm to a society value before a limitation can be said to be justified."
The court then went on to conclude that the limitations on freedom of expression were not reasonably justified in a free and democratic society.
In the last federal election in 1988 no spending limit existed to restrict the expenses of individuals or groups other than candidates or registered political parties.
The situation today is this: During an election campaign, while spending limits exist in so far as candidates and political parties are concerned, there is no limit imposed on third parties. Outside of the writ period, there are no limits on anyone, any individual, political party or single or special interest group, to promote any or all issues.
The Royal Commission on Electoral Reform and Party Financing did hear representations from different interveners on this specific issue, as it did on many others. A number of the interventions reflected dissatisfaction about the involvement of third parties in the 1988 campaign, or concern about the impact of third parties in the democratic process. On the other side, there were substantial arguments about maintaining individual rights and the rights of free speech.
There was substantial support both from those who supported and those who opposed restrictions on third party activities for requiring or reporting of third party spending and disclosure of the source of their contributions. The Canadian Bar Association made a presentation in favour of a principal balance between the rights of free expression and the need for some measure of equality.
The royal commission in the report provided in February of this year recommended that election expenses incurred by any group or individual independent from registered parties and candidates not exceed $1,000. It further recommended that the sponsor be identified on
all advertising or distributed promotional material and that there be no pooling of funds.
In coming to this recommendation, the commission stated and I would like to again quote from the royal commission report: "A regulatory approach that seeks to promote the fundamental value of fairness in securing the right of individuals and groups to participate in an election campaign by incurring election expenses must acknowledge that individuals and groups cannot be equated with candidates and political parties in the design of spending limits.
"The regulatory treatment of independent expenditures must respect the essential and primary role of candidates and political parties in elections by recognizing the nature and potential impact of independent expenditures".
The royal commission attempted to strike a balance between the individual freedom of expression and the need for a fair process in so far as the parties and candidates for which spending limits exist. As colleagues know, the four volume report of the royal commission is now in the hands of the parliamentary committee for study. Hearings are going on at the present time and third party spending limits, one of the important and difficult issues that the committee will have to consider as part of the bigger picture, are being considered.
I do not believe it would be advisable for us to deal with this issue in isolation from the other issues raised and dealt with in the report of the royal commission. The Canada Elections Act is a comprehensive piece of legislation, its provisions are interdependent, and there is a danger in dealing with financial provisions of the act in isolation.
Frankly, my personal point of view on this matter at the present time is that the individual's right to free expression, his or her freedom of speech must remain paramount. I have rather an aversion to regulation and am not convinced that there is a legitimate argument for spending limits; notwithstanding the report of the royal commission and the viewpoint of my colleague who posed this motion here this evening.
I remain unconvinced. There were substantial expenditures in the recent election and it is quite evident that money did not rule there. Until I could be satisfied that money and money only is the governing principle in these matters I guess I would want to be on the side of
December 2, 1992

the individual's right to spend as he or she sees fit for whatever cause he or she may choose.
I respect the point of view that my colleague from Churchill has put forward in moving this motion. We have I think an honest and legitimate variation. There are lots of differences of opinion on this particular issue, but above all else it is part and parcel of a number of measures that are presently being dealt with by the special committee on electoral reform, which is holding many hours of discussion and examining in detail the many proposals put forward by the Royal Commission on Electoral Reform and Party Financing.
The special committee was tasked to study the royal commission's report and to make recommendations to the government. In my view it would be appropriate to let this committee carefully study this issue of third party spending in the context of the entire recommendations of the royal commission report and ultimately allow the parliamentary committee to make the appropriate recommendations.


Peter Andrew Stewart Milliken: Mr. Speaker, I am pleased to be able to participate in this debate this evening on this very interesting motion put forward by my colleague the hon. member for Churchill.
Like the hon. member for Swift Current-Maple Creek-Assiniboia, I have been involved in the work in the committee on electoral reform which has been considering this very question. I am concerned that the progress we are making on this particular issue is not entirely in accordance with the report of the royal commission. Nor is it in accordance with the wishes of many of us in this party who believe that third party advertising has been a problem in this country. It is one that should have been dealt with some time ago. It certainly constituted a particular problem during the course of the last election campaign.
The recent American experience indicates that the electorate cannot be bought by fancy, glitzy advertising campaigns. Indeed I am sure many of my friends opposite remember the leadership convention they had in, I believe it was 1976, when the Minister Responsible for
Private Members' Business
Constitutional Affairs was chosen to be the leader of their party. I think I have got the year correct on that.
They will recall that the present Prime Minister engaged in a very glitzy and very expensive advertising campaign. Many commentators suggest the reason he lost the leadership race in 1976 to the Minister responsible for Constitutional Affairs was because of this very glitzy campaign that he mounted for that particular leadership campaign.
I was not at that convention, so far be it for me to say what it was he did wrong. I have only read about it. I would not have been caught dead at such a convention.
Nevertheless, the convention went ahead. The current Prime Minister was defeated in his bid for the leadership of the Tory party. They ended up with the Minister Responsible for Constitutional Affairs who was Prime Minister briefly and then of course got appropriately knifed in the back by the current Prime Minister in a subsequent leadership campaign.
In that campaign he deliberately spent on a less glitzy scale. We suspect that perhaps less money was spent, but of course we do not know that.
Money does not buy everything in politics. Perhaps you, Sir, were at one of those conventions and can tell us a little more about it later. In any event, it does not buy everything in elections. But the fact is that it is perceived by the public to be an indication of tremendous electoral power. It is certainly considered that if the party with the substantial amount of money is able to get its message out more effectively and communicate with more people it is more likely to win the election.
I can say that in my own experience, clearly I won in spite of the expenditures that were made by the other candidates, as well as third parties. My own electoral experience was that the other candidates for the other two major parties in Kingston and the Islands both spent more than I did in the election in 1988.
The fact is there was a substantial amount of advertising by other persons who were not registered parties, who particularly in the last few weeks of the campaign advertised extensively in favour of free trade which was favoured by only one of the candidates in that election. She was the candidate for the governing party and was

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Private Members' Business
not successful in spite of this massive expenditure of funds by these third parties.
I cannot help but feel that it is unfair that those parties should participate in the electoral process without any restraint when those of us who are candidates in the election are restricted in what we are allowed to spend.
I know that the Reform Party in its public statements says that it is against any restriction on campaign spending. The wealthiest takes all in the view of the Reform Party. That is not surprising because one has to be well to do to be successful in the Reform Party.
I am sure my friend from Saint-Denis would say it is the same for the Conservative Party. If one is not well to do, one will not be successful in the Conservative Party. I would not want to be so unkind.
There are a few perhaps who have been successful in that party who do not have buckets of cash, but I do not know who they are and I would not want to speculate. I see some hon. members pointing to themselves. That may be accurate, I do not know. It is not for me to judge. Perhaps they can stand up and file a statement of net worth later on.
It is a problem that some people are able to mount extensive campaigns based on the money their friends have available and thereby influence the outcome of the election. It is that third party advertising that this motion is intended to end.
I fully support the motion. I believe that the limits proposed in the motion are fair and reasonable, that there should be limits. It does not say what the figure should be.
The royal commission recommended a limit of $1,000 per person, but it defined persons to include more than individuals. I am surprised that the hon. member for Churchill, a member of the New Democratic Party, is not agreeing with the proposal put forward by the royal commission. It allowed unions and corporations to communicate with their members or shareholders, as the case may be, and that would be exempt from the $1,000 restriction.
A union could send out a mailing to all its members and it would not have to worry about the $1,000 ceiling and similarly a corporation could do the same to its
shareholders. Perhaps the fact that shareholders were included scared the hon. member off and he decided that he could do without the limitation for unions. I am sure Bob White would not agree with his position, but who knows because he is not here. I guess he is busy running the province of Ontario, running it into the ground.
What the royal commission recommended is reasonable. In my own view the $1,000 limit is overly generous and should be restricted to something more like $500 which would be plenty. However, I may not reflect the view of all members of the House when I say that a restriction like that is fair and reasonable.
My concern is that we try to get a restriction in place before the next election so that we are not left with a free-for-all on election spending by non-political parties. If there is going to be a fair restriction in place, and I think there is, on the spending by political parties in this country, there has to be a restriction on spending at least during some period during the campaign on the expenditures of other non-political party groups who are involved or wish to participate in the advertising and dissemination of literature in the campaign.
The proposal put forward by the royal commission is generally fair, as is the proposal put forward by the hon. member for Churchill. I hope the chief government Whip who I see is here tonight and of course is in the anomalous position of being chairman of the Special Committee on Electoral Reform will agree to allow for this motion to pass tonight by unanimous consent.


Mr. Jim Hawkes (Calgary West):: Mr. Speaker, I was just having a private conversation with the member for Churchill who is the sponsor of this motion.


Mr. Prud'homme:: You made him an offer he cannot refuse.


Frederick James (Jim) Hawkes: I made him an offer because his motion opened a door that I have been trying to open and get people to deal with sensibly for over 13 years. I am really pleased to see that door opened. The member's motion reads:
That, in the opinion of this House, third party advertising during elections should be restricted to individual Canadians and limits on the amount each person can spend should be established.
That open door may surprise listeners, but it is the use
of the word "advertising". Current Canadian election
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law limits candidates in its written form, individuals and third parties to spending money during a period of time.
That money could be spent on the rental of a building or rental of a pair of ice skates or buying Chinese meals or some other kind of meals for people. We say that in our wisdom we must restrict the spending of money during an election period, not money specifically for the purpose of advertising.
What the member is trying to do with his motion is put some kind of limitation on the system as he talks about equity and fairness, but that limitation is on spending money directly for the purpose of influence.
We can have a more intelligent discussion and resolution of some of the issues on the table if he means it. If he thinks the evil is advertising then let us talk about advertising and get rid of all the other things that in committee he is constantly telling us should be limited.
That we should limit the capacity to paint the wall, to put something on the floor, to clean the sidewalk, to clean the snow off in the winter lime and to spend money on all of these purposes is the view he advances consistently in committee. Yet in public in the House he talks about advertising.
It is like a conversion on the road to Damascus, and most of us who serve on the committee find it to be a welcome relief from past practices. If he means it boy, we are going to have some good discussions in the next 10 days as we work on our draft report. We may be able to break some of the log-jams that have been around for quite awhile.
Let us also examine the issue of the principle of limitations. Let me state clearly and for the record that my personal instincts based on my own experience are that more problems than solutions are created through limitations.
I recognize that is a minority view for most people who are connected to electoral processes. We are all stuck with the notion that to amend the election act, we certainly must have the support of half of the people in this Chamber. It would move forward more smoothly with a better sense for Canadian people if it moves forward unanimously.
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We are all stuck in the business of making reasonable compromises that will still respect the integrity of the system. I fully expect that regardless of my attempts to be persuasive to my colleagues I am not going to be able to get the majority of members of this House to say that the best policy position is an unlimited expenditure position, that the truest way and the best way to run a democracy is to let people try to influence each other.
When we look at the system which is in current law there is a limit on expenses that do not really relate in a very direct way to influencing people, but they are in there. The taxpayers are charged with the responsibility of a rebate. People are charged with breaking the law and threatened with losing their seat or having to go to jail or something for breaking them. You begin to see what I mean when I talk about the problems with limits.
If we could talk about a simpler, smaller basket of limits, then the problems are less complex. There are fewer dividing lines or border lines. The resolution at least can be better. That is the compromise I would suggest from my position of no limits and his position of a lot of limits. Can we agree on reasonable limits?
There should be agreement on a smaller basket of things so that there are fewer problems and they are more directly related to the notion of influence. That is really what people who talk about fairness are trying to do something about.
I was interested in listening to my colleague across the way from the Liberal Party pointing out that when there is unlimited spending authority, we can spend ourselves right out of voter approval.
History is full of voting situations where the electorate comes to the conclusion that this particular persuasion, this particular person, this particular group spent too much. They make the judgment that the particular person or group is not the right one to run things because they do not exercise a sense of responsibility adequately. Therefore, they would not be good managers of the country or the economy or anything else.
The minute limits are put on things, that is the minute where we begin to say to the electors that there is something artificial going on here. We are not getting the real picture of where people are and the judgments

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Private Members ' Business
they would make. We do not give the spendthrifts the opportunity to show people that they are spendthrifts.
That is part of the logic that runs through my mind as to the reason that elections without limits would provide a fairer picture to Canadians of where people were coming from.
Another thing we should look at is the limit today on the period for advertising. We can spend all the money we want until the day a writ is issued. We can spend millions of dollars, if we had it, every day for four years. Then one magic day a writ is issued. All of a sudden, one dime cannot be spent on advertising for example, from the 60th day prior to voting day until the 28th day prior to voting day. Then all of a sudden we can spend, but within limits.
The only time we are blocked from spending money to communicate with electors is the first 30 or 32 days of a writ, the notification of when the election is to occur. There is a kind of absurdity in that too. But I may be forced to swallow that as a principle because it is established. It has been around awhile and members are experienced with it and comfortable with it.
In closing, I would say to the House that we are already seized to the issue. It comes through the electoral reform committee. It comes to us because of court decisions that have struck down sections of the act already. The electoral reform committee will be dealing with it and we will be reporting to the House at the earliest possible opportunity so that we get our conclusions and recommendations to the House and in the public domain as quickly as we can.


Marcel Prud'homme: Mr. Speaker, I would like to start by thanking the chairman of the special committee which is now examining the Canada Elections Act, the hon. member for Calgary West, the hon. member for Champlain who is on the committee, the hon. member for Gaspe, whom I see more often, the hon. member for Swift Current-Maple Creek-Assini-boia, my colleague from Kingston and the Islands and the hon. member for Churchill.
It is a good idea to let Canadians know what we are doing. For hours on end, Mr. Speaker, for what seems like ages, we have been sitting to consider how to update the Canada Elections Act. There is of course a very important issue, and it happens to be the subject of the
hon. member's motion, which is about individual Canadians having the right to do third party advertising during elections.
I always like to discuss the historical aspect. There are many ways to learn about the history of Canada. I remember, Mr. Speaker, and I am sure you do, since you were a member of this House, when we produced a bill to restrict election expenses. The legislation is very strict, and I am very glad about that. It gives members like me a certain amount of independence, since I do not have to speak at all kinds of gala evenings to raise funds to pay for my election campaign. We know all about that in Quebec, and it is something the people in my province understand. I hate having my hands tied by lobbies of all kinds, because election campaigns are expensive.
In keeping with the spirit of the time, we created a very modern piece of legislation that is the envy of the United States. Personally, I know senators and members of the House of Representatives who envy us, because they say: We, as members of Congress, instead of looking after the needs of the nation, are almost continuously at the mercy of our fundraisers.

This is one of the great dangers of the American system. Elected people most of the time belong-I will not say willingly-to lobbies of all kinds. I am going to be nice tonight. I will not mention the most important lobbies. The danger is that they have to raise money all the time in order to get elected. During that time, of course, they are not looking after world affairs. They are not looking after a good social system or medical system because they are raising money. We do not have to do that in Canada. We have a good law.
I am talking directly to Canadians. If they would only understand that by giving $10 or $100 to the party of their choice they could get money back on their income tax, they would participate. Instead of attacking Parliament all the time, they should say: "I am putting my money where my mouth is. I can choose any political party. I will make sure these people are independent and that they limit their expenses".
What happened during the last election? Third parties came in, as my colleague the member for Hamilton East would say, like a Mack truck while my esteemed friend from Kingston and you, Mr. Speaker, and all my colleagues were desperately watching their expenses right
December 2, 1992

to the penny. In my district I spend, on and off, around $40,000. That is according to the law.
Suddenly third party advertising arrives. Powerful lobbies of all kinds spend an unlimited amount of money and in a way have-I hope it is a good word in English-bastardized a beautiful intention of a pure invention of Canada. It is unique in the world. Third party advertising is leading us directly to the Americanization of our political system and I deplore it. It has nothing to do with my friendship with the American citizens, but I do not like their system. I prefer ours.

There must be limits and I know the judges of the Supreme Court are looking into this. It is their job to analyse the intent of the legislator. We do not give instructions to judges. That is also a Canadian virtue. I like the way we appoint judges. In the United States, they are elected. Elect a judge? Imagine. I would hate to campaign against a judge, lose and live in the same district. But in Canada we have a good system and the judges always try to find out what the legislator meant.
I helped draft this legislation under the previous government. I want it to preserve its original intent which was to give members who wanted it, the maximum amount of intellectual freedom. If they don't want it, that is their problem, but for members like me, who want to be a little more independent within our parties, it means we don't get pushed around as much. We can say: "Listen to me." I remember when I was a young parliamentarian and they told me: "If you don't do this or that, you won't get any money from the campaign fund". Now you understand why I get so passionate and emotional about these issues. Once they told me: "You know, if you talk too much, the money from the campaign fund-" Nobody knew exactly what it was. There was a kind of mystery about it but we put a stop to that.
In Quebec they stopped all that, although there is still room for improvement. But at least the tools are available for those who want to use them. I know I am not being partisan tonight and I know my views are shared by many colleagues in all political parties. Even
Private Members' Business
the Bloc Quebecois, which has just joined us, seems to agree with me. Just imagine. Prud'homme and the Bloc. We live practically next door to each other and more or less share the same parishes, but I know its members support that. I know the hon. member for Champlain do and the hon. members for Churchill and Kingston so it will have to be done.
Every time we are ready to pass some good legislation-this is for the judges who interpret the legislation-everybody gets into a panic and says: "Oh, but the charter, the charter". Well, in section 1, as far as I know, the charter provides that when reasonable-and I stand corrected if I am mistaken, because it is late, it is already 10:45-section 1 or 2 and section 3 deal with freedom of expression but only within reasonable limits. I think it is an extraordinary piece of legislation that we should watch like the apple of your eye, as they say, because it is good law. We must not let people from outside come and contaminate a good political system, a good elections act. We are going to update it. We are going to give the franchise to people who are a little farther away than Canada. We listened. We are very much aware of the judgments of the various courts.
I do regret that in one instance in 1984 we did not appeal. It was a judgment handed down by a judge of Queen's Bench of Alberta. We did not appeal and my government was in power. I have never been a member of cabinet, but just to show I am not partisan it was an election campaign and the Liberals were in power. This wasn't being partisan, it was a fact.
We did not appeal. I am convinced that if we had appealed, we would have won. We must preserve this political system and ensure, as the motion says, that third parties are also restricted. I am not in favour of eliminating them totally because they are Canadian citizens- they have to be Canadian citizens-but there has to be a very reasonable limit which can be controlled. If we control the expenses of candidates and members, then we should also control what third parties do.


Mr. Michel Champagne (Parliamentary Secretary to Minister of Forestry):: Mr. Speaker, I would also like to take a few moments to discuss the motion tabled by my colleague from Churchill and support the comments made by several of my colleagues who spoke on the

December 2, 1992
Private Members' Business
motion from the member of the New Democratic Party. I believe the hon. member for Saint-Denis made quite a remarkable speech on the issue of third-party advertising during elections. I know, after two election campaigns, that the expenses of candidates and political parties are very much controlled. They are controlled to the point that if someone breaks the rules, action can be taken and it can even lead to criminal charges.
I believe that within the electoral reform committee, on which the three main parties in this House are represented, we agreed to discuss this issue. I also think given the situation and the seriousness of the action that could be taken if the limits imposed on the election expenses of candidates and political parties were not respected, this reform should also apply to third parties. At least we should look at it very carefully, because the legitimate right to vote is granted to everybody, at least those allowed to vote under the Canada Elections Act.
Legitimacy or freedom of speech must also take into account the fact that we must not exert undue influence on the debate or the electorate. We saw that during the last electoral campaigns and also during certain activities, where such an influence may have produced what I would call a negative impact because of that attitude toward people and the ability to spend over and above what is prescribed by our legislation. Even if some courts have ruled that this issue could be unconstitutional because of freedom of speech, I believe the Lortie Commission was very wise in presenting its position and in restricting, up to a point, the amounts that third parties may spend on advertising.
In any case, 1 would like to remind my hon. friends from the other parties that we are examining this issue very closely. I hope the report we table in the House will deal at least with one aspect of the question raised by my colleague, the member for Churchill, in order to bring about some form of control. If we impose some form of control on candidates and political parties I cannot imagine what principle could keep us from imposing one on third parties who pay for advertising. If freedom of speech applies in their case, it must also apply in ours. If political, economical or even criminal restrictions exist for candidates and political parties-because criminal action could be brought against us, the present legislation says so-I cannot fathom logically, and I am not speaking from a partisan standpoint, why a third party
could accomplish indirectly what legislation forbids me from doing directly.
That is the fundamental debate in our committee. We are not working from a partisan point of view, our discussions rise well above such things. As members of the Special Committee on electoral reform we hope we can reach a solution which will respect freedom of speech and each Canadian's freedom to express his or her opinion through the candidates, political parties or even advertisements, and which will ensure that each and every one of us is equal, and has an equal right to chose the government. That is fundamental to our legislation. We hope that solution will also ensure we all have equal opportunity to use advertising because advertising will certainly have a more profitable impact if it is better controlled.


Alex Kindy: Mr. Speaker, I am delighted with this opportunity to speak to this particular subject.

Third party financing, a motion proposed by the member for Churchill touches a fundamental problem of third party intervention in the election process of members.
There are members of the Special Committee on Electoral Reform here, the chairman was here, the vice-chairman was here and other members of the committee are here. This committee has met on 19 occasions since November 20. On 19 occasions the Special Committee on Electoral Reform has met and only on four occasions has that committee had public hearings. The other meetings were in camera.


An hon. member:: No, we were drafting.


Alex Kindy: I am surprised that there is no input from the public. The public is not able to attend those meetings. I had hoped that this Parliament had learned something from the referendum process that took place here in Canada. The public stated clearly to the members that it did not believe in government from above but in government from the bottom.
This committee has not listened to what the referendum told it. The people who voted in the referendum believed we have to listen to the people. As we are
December 2, 1992

talking about third party financing, this is what really happened. In that referendum the elites, the three parties sitting in this House, all the opposition parties across the provinces, the provincial governments, the newspaper elite and the business elite were all on one side. They were on the yes side on the Charlottetown agreement.
On the other side were the ordinary people. Those ordinary people did not have any financing.


An hon. member:: There are more of them.


Alex Kindy: There were only 14 no committees across Canada. There were over 60 yes committees, and all the money was on the yes sid.
This example shows that money cannot always buy votes. This is the best example we have had in Canada. If the Charlottetown agreement had been a good agreement I am sure it would have passed. It did not pass on its merit. People read the agreement, disagreed, and voted against it in different provinces for different reasons, but they voted against it.
When we talk about third party financing we can see that money is not always the most important factor. What is important is that we have laws that are to the benefit of Canada and candidates who want to work for the benefit of Canada, and I am sure they would get elected. However, what we have been seeing lately, even in this House, is that candidates are being appointed by the leaders. I do not call that democracy.
This is another intervention of our party system. If the leader wants to appoint candidates then we should have a presidential system. The leader should run on a separate ticket and be elected as a president, and then he can appoint his cabinet. There are members here who have been sitting in this House for over 27 years and have never made it to the cabinet. For what reason? For different reasons, not because they were not competent-they are probably much more competent than anybody else-but because they were independent in their thinking.
Private Members' Business
Our system, and this should be addressed by the Special Committee on Electoral Reform, wants members to be the trained seals who just vote as the party dictates.
I sat on the other side of this House and I remember when the Minister of Finance predicted we would have a balanced budget in a couple of years. What is the result now? We have over $500 billion of national debt, just at the federal level.
We should be doing third party financing, as the member for Saint-Denis said. I think I agree with him on that. In Canada we have a system that allows for members to get elected without a lot of financing. For instance, I spent less than the two candidates for the other parties, the Liberal Party and the NDP and I had the most votes. This limit on third party financing is probably very good in certain circumstances.
A United States congressman, once elected, has to go back to another election in two years. He spends all year trying to get financing for his next campaign and sometimes it goes into millions and millions of dollars. Therefore he belongs to those who finance him. I think our system of financing for candidates is probably a valid one.
On the other hand there is the question of free expression. Somebody mentioned that a court decision in Alberta said third party financing should be allowed. At that time nobody appealed that decision. We had three parties, so it means they all agreed.


An hon. member:: That was during the election. We did not have time.


Alex Kindy: I presume they all agreed to have third party financing. As I said in the beginning, the committee sits in camera and I have the list of those meetings in camera-


The Acting Speaker (Mr. Paproski):: Order, please. The time provided for the consideration of Private Members' Business has now expired.
Pursuant to Standing Order 96(1), the order is dropped from the Order Paper.

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Government Orders



GOVERNMENT ORDERS

[Stage Direction]


[Stage Direction]
The House resumed consideration of the motion of Mr. Mazankowski that Bill C-98, an act to provide additional borrowing authority for the fiscal year beginning April 1, 1992, be read the second time and referred to a legislative committee in the Economics envelope.
Mr. Jim Peterson (Willowdale):: Mr. Speaker, we in Canada today are in the worst recession we have had since the Great Depression. How did we get here? This is the government that riding a great boom and growth in our economy after 1984 gave us the free trade agreement. At the same time it gave us a high tax, high dollar, high interest rate policy which made it impossible for Canadians to compete. We can see the results.
Today unemployment is at 11.3 per cent. Canada is being deindustrialized. Over the past four years we have lost 375,000, or 18 per cent of our manufacturing jobs.
The government opposite tells us that times are tough all over. If times are tough all over why have the Americans not lost 18 per cent of their manufacturing jobs as we have? They have lost 8 per cent. Things are not as bad down there because they have managed their economy better than has this Tory government.
We see the deindustrialization and unemployment, food banks, people on welfare and over a million Canadian children living in poverty. What is even worse for our future is that we have slipped in the past year from fifth to eleventh in terms of our ability to compete among the industrialized nations. Our high tech deficit in goods traded is a staggering $15 billion, a further symptom of our inability to compete. Our balance of payments deficit, the deficit we have with other countries, what they are taking out of Canada as opposed to what we are giving them, is a staggering $30 billion. All of this is a sign of a very sick, weak economy.
I give the government credit. I think it is finally starting to realize that it could not stay the course, that its economic policies have been a disaster for our country. What did it do? To give it credit it made some modest moves to try to recognize some of the problems that exist.
In terms of unemployment it said: "We have a plan to get unemployment down to 11 per cent over two years from 11.3 per cent today". It is going to create 5,000 new jobs through its infrastructure programs. These are small expenditures, politically motivated, that will create only half the jobs that Canadian National this week announced it was going to lay off.
The government announced some expenditures in R and D. We were told by the World Economic Forum that our research and development, which is falling is less than half of world standards. No wonder it said we cannot compete. What has this government done? It has finally, having paid lip service to R and D over all these years, said it will spend $400 million more on R and D over the next five years. A pittance. It will hardly boost our rate of R and D by 0.1 per cent.
I give it credit because it has finally recognized that it is not just big business, the big foreign multinationals, that is important. It has finally started to recognize small business and has made some modest moves here-too late. They are not very significant moves but it has at least finally paid lip service to small business.
What it did not deal with in this economic statement were some of the real fundamentals. It made no great commitment to higher levels of education, more people taking science or more people training in the technologies. It did not make a brand new commitment to give us a scientific culture here in Canada. It did not deal with the complex problem of how to get companies into the areas of high tech in which our deficit is growing every year under them. Did they deal with the 30 per cent of our students who drop out of high schools? Did they deal with the 20 per cent of Canadians who are functionally illiterate or the 40 per cent who do not know enough mathematics to get by?
At best, the Conservatives are starting to recognize some of the problems. Their approaches have been nothing but minimalist in dealing with them. They did not tell us where the people who are unemployed today are going to get their jobs tomorrow. They did not tell us where our children are going to find gainful employment here in Canada five and ten years from now. They did not give us a vision of how Canada, as a high wage, resource rich country is going to be able to compete for
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the value added jobs with low wage countries such as the southern United States and Mexico.
The Conservatives have their heads in the sand. They did not deal with the industries of the future that globally we know are so critical to giving Canadians the high incomes we need in order to sustain our way of life. They did not deal here with a vision for environmental technologies, new materials, bio-technologies, the new medical sciences, communications, transport or aerospace. They did not tell us they are trying to have this country more and more dominated by foreign multinationals which have their best jobs in their foreign headquarters.
This government refuses to support and wants to kill our generic drug industry. The generic drug industry is one of the fastest rising, Canadian based multinationals, value added, profits, jobs here in Canada with the profits being reinvested here. Canadian based multinationals are the types of industries we should be supporting.
With Bill C-91 this government not only wants to impose a tremendous new increase in costs for drugs on Canadians, but it wants to drive this burgeoning new set of industries out of Canada.
This government has tried to stay the course, the Reagan course, but it has not been able to. The evidence is finally overwhelming that its policies have not been working. Therefore, the recognition of its failure is in this mini budget. It has said it has to change the course. It has to do some other things. However, why did it not have the courage to admit how bad things really are? Why did it not have the courage to bite the bullet and make sure that it was going to be investing in the things today that will produce those jobs tomorrow and 10 years from now?
The Conservatives did not have the intellectual integrity or vision to know what was needed. It is very disappointing that this government has had to wait until the eve of an election in order to finally recognize what it is doing to the hopes and aspirations of so many unemployed Canadians, so many young Canadians who are in school but see no jobs waiting for them out there,
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so many people who say: "I now believe that it will be impossible for my children to enjoy the things that we have enjoyed during our lives".
This is frightening because we as a country have more potential than any other in the world. We have resources. They alone cannot create wealth but were we good stewards of what we have received from the land, and the water around us? We would be able to transform those goods into value added products that we could be selling on world markets. It requires vision. It requires investment. It requires the best trained people in the world. We cannot be content to give our raw materials, as we have in the past, to other countries and buy back the finished goods, exporting our jobs with them.
We are going to have to transform our economy. This government has not had the courage to do it. It has not had the wisdom to do it. It is a tired government that can only respond. It cannot lead.


The Acting Speaker (Mr. Paproski):: Pursuant to an order made Tuesday, December 1, 1992, and under Standing Order 74, the 10-minute maximum after five hours of debate referred to is now in order. These will be 10-minute speeches, no questions or comments.
The hon. member for Willowdale has five minutes questions or comments if there is somebody who wants to ask him a question.


Alex Kindy: Mr. Speaker, I wanted to ask the hon. member a question. He listened, I think, with attention today to the economic and fiscal statement delivered by the Minister of Finance and he probably made a judgment call which I am sure is not very favourable.
I look at the departments of the federal government and see that National Revenue employs over 34,000 individuals. I remember when we were debating the GST the government said it was going to create more exports, it would be easier on the consumer and so on and so forth. Since that time we have lost about half a million manufacturing jobs and the federal government had to hire about 4,000 employees.

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My question is, if his party was elected as the government, how would he deal with the GST? Would his party continue that process, or as it has created havoc in the country, would his party take another approach?


James Scott (Jim) Peterson: Mr. Speaker, the GST has been a real disappointment to this government. It thought the GST was going to be the salvation of our competitiveness.
Yes, it has helped the manufacturers to a certain extent in their exporting but the manufacturers have been losing jobs hand over fist at more than twice the rate of the Americans.
Has it really helped our manufacturers that much? What has it done to small business? The costs of implementing this tax to the private sector alone were estimated by the Canadian Federation of Independent Business to be $9.5 billion. That was more than half of what the government expected to take in from the GST in the first year.
Then we have conflicting statements from this government about the GST. It said the GST was going to be as real revenue-raiser and we needed it in order to increase our revenues and get the deficit down. What did the government find out? Sadly the Minister of Finance had to admit today in his statement that the GST has not produced more revenues than the previous manufacturers' sales tax. This is a tax which in theory may be okay in certain ways, but it is highly regressive so it really penalizes the poor people. Is that okay? I am not sure it is. It told us we needed a VAT, a value added tax, because many other countries had it. Except our major competitor, the United States, does not have it. How stupid can it be? Why is there so much more cross-border shopping?


The Acting Speaker (Mr. Paproski):: There are no more questions or comments. We are now into 10-minute speeches and the hon. member for Rosemont has the floor.


Mr. Benoit Tremblay (Rosemont):: Mr. Speaker, all Quebecers are trying tonight to assess the finance minister's economic statement and are wondering whether the decisions announced today can help get the economy out of the deep recession we are in and create jobs for our hundreds of thousands of unemployed people.
Because the recession is so long, we know the unemployed have lost confidence, consumers have lost confidence and investors have lost confidence. The finance minister's statement should therefore have tried to restore confidence among all these participants in the economy.
Now what do we find in the finance minister's economic and fiscal statement? Instead of decisions to restore confidence, we find a savage attack on the unemployed, an insignificant increase in job creating investments and a deficit for next year that is $10 billion more than forecast. To add insult to injury, the Minister of Finance takes pride in an inflation fighting monetary policy that has led us to the economic disaster we know.
Mr. Speaker, in the space of a few minutes, the Minister of Finance has managed to dismay workers, consumers and the unemployed, increase the mistrust of investors and financial markets and convince everyone that he is completely abdicating his fundamental role of helping the economic recovery.
Let us look at the measures for the unemployed. The minister announced $2.45 billion over two years in cuts to unemployment benefits and gave back $600 million in training, for a net cut of $1.85 billion. Clearly, the government is attacking the unemployed rather than unemployment.
What about the promised investment in infrastructure which the Prime Minister announced at fund raising dinners of the Progressive Conservative Party in recent weeks? Well, these promises only lasted as long as it took to help sell tickets at $500 a plate. After hinting at investments of $24 billion, then $12 billion, today they tell us that $485 million will be invested in infrastructure over two years. This is a completely marginal effort that will have no impact on employment and lets the deterioration of our infrastructure continue.
Let us look at the deficit forecasts. There the Minister of Finance loses all his remaining credibility. Nine months ago, on February 25, 1992, the Minister of Finance announced that the deficit for 1991-92-and there was only one month to go, since that year ended in March 1992-would be $31.4 billion. Now, after all the bills are in, we are told that the actual deficit is $34.5 billion; it was off $3.1 billion with a month to go. That's not all. For the current year, the Minister of Finance announced a $27.5 billion deficit and now nine months later we are told that the forecast has changed; it is $34.4 billion, a difference of almost $7 billion in nine months.
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But hold on. For next year, he had announced a $22.5-billion deficit. Today, he just told us his current forecast, which is not the last, is $32.6 billion; a $10 billion error in nine months. If the vice-president of finance of any private company-and the government always talks to us about private enterprise-had such a forecasting record, he would be thrown out before he finished his speech. That is obvious. In less than a year, this Minister of Finance has lost all credibility, although this credibility is essential to stabilize the Canadian dollar and bring about lower interest rates, which are the best thing for economic recovery.
This government has missed a great chance to restore the confidence of the unemployed, the consumers and the investors because of its lack of courage and imagination. For instance, it has decided to freeze all salaries and cut operating expenses by 5 percent in all departments. As such, it is not a tragedy but it goes to show how inept it is at making choices. It has made $385 million-worth of cuts in national defence when nothing threatens our security any more. That is ridiculous. It would be possible to cut $3, $4 or even $5 billions in DND.
How do you expect the people of Quebec to see that we are going through difficult times economically when the government of Canada just had an embassy built in Japan on a piece of land worth over $1 billion? We spend to show off while cutting back on unemployment benefits.
Let us look at the restructuring of the Public Service and the departments. This a hot topic these days. We know that the Belanger-Campeau commission estimated at about $3 billion the cost of duplication between departments and ministries in Ottawa and Quebec. We were met with a blunt refusal here in Ottawa. It was out of the question to do away with duplication. Just in labour costs, savings would be in the order of $300 millions.
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This government's inability to make choices is obvious. It would much rather cut an even 2 or 3 per cent across the line in the estimates. As I said, it is not a tragedy as such. There are so many people out of work that we take the cuts. However, with a minimum of political guts many more billions of dollars that are no longer spent usefully in some areas could have been saved.
Our only source of comfort is to think that this government has only a few month to go. In fact, before long, the electorate will decide. As far as the people of Quebec are concerned, I am sure they will go for a thorough restructuring of their relationship with the Canadian government. There is no doubt about it, the price of Canadian federalism is too high indeed.


Raymond John Funk: Mr. Speaker, it is a pleasure to speak on the financial statement which the Minister of Finance presented today. I am pleased that the minister is one of the few of us in the House at this hour of the night. Hopefully he is listening carefully to what the representatives from the different parts of Canada have to say.
In spite of the fact that he is in attendance and in spite of my respect for the minister, his statement today can only be described as a bit of a joke and a financial hoax. If I did not see him fully clothed, I would say it reminds me of the old tale of the emperor having no clothes, with the exception of a little fig leaf which I will come to later.
The reason I say that is the two fundamental questions we are dealing with, unemployment and the deficit, are not addressed in this paper in any kind of fundamental way. When we look at what is projected, in 1994 we will still have 11 per cent unemployment, the same level we have today, and we will have a $32 billion deficit, $10 billion more than what was projected in the minister's estimates just last February.
Somehow he has been able to ignore the fact that there are 1.6 million unemployed people. Those statistics are not just numbers. They represent real misery and real people. There are 2.5 million people on welfare experiencing the indignity of having to live on handouts

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from the state when they would like to make a living. There are 4 million in poverty in this rich country, 1 million of whom are children.
Certainly it does not reflect the need that I see in my constituency of Prince Albert-Churchill River. In many of the northern communities we have 70 per cent to 80 per cent unemployment. We have a farm community that is sinking to the abyss. We have more farmers who are over 70 than under 30, an appalling statistic when we look at the future of that industry. Even in the city of Prince Albert, a relatively wealthy city, there are a great number of professional, well educated people, who have done everything right in their lives but cannot find work.
What does the minister persist in talking about? He keeps talking about the fundamentals. What are the fundamentals? Surely one is being able to pay the bills, and cover the debts. Ever since the Liberals introduced a budget in this House in 1974 that started giving tax breaks to the wealthy to the extent that the government was no longer able to pay its debts, its bills, we have seen a constant erosion of the financial situation of this country to the point where today the debt is indeed crippling and something we have to deal with. It is something that in eight years this government has not been able to come to terms with.
Surely another one of the fundamentals is stability so that people can know from one day to the next, from one year to the next, from one generation to the next what their lives are going to be like, what kind of circumstances they will live in.
Looking at my occupation of agriculture, do we see stability or any move toward stability? No, we do not. We have seen the trade wars, the bankruptcies and the loss of hope. What do we see at a time when we need stability? We see this government introducing measures to do away with the Crow rate, the fundamental transportation structure of this country, particularly in western Canada.
We see the government further undermining the Canadian Wheat Board by threatening to take barley out from under its jurisdiction. When it comes to the country at large, we see the free trade kind of philosophy, the NAFTA agreement and the patent drug act, all of which cause more instability in the lives of people.
Surely there is nothing more fundamentally important than a job, nothing more fundamental than the ability of an economy to be able to accommodate the needs and
wishes of people to be able to earn their living, to pay for the food on their table, the roof over their heads, their clothes and their kids' education. Surely that is the fundamental that we should all be striving for, but it is one which this government has lost sight of.
What did we see in this statement? Did we see tax fairness? No, we did not. We see a continuation of those big loopholes that the Auditor General pointed out such as family trusts that allow wealthy families in this country to concentrate ever more wealth in their own hands to the point where this country has the greatest concentration of wealth in the world.
We see the offshore tax havens continue. We see loopholes like the entertainment tax credit which costs us $2 billion a year continue. We see in this statement that revenues are short. It is not surprising when so many people are unemployed, not paying taxes and absorbing services from the government. Certainly it is no surprise that revenues are going to be short. The government should have known that.
In my own constituency the welfare and unemployment bill amounts to $126 million a year, an appalling statistic. Surely that is where the waste of money is as well as the shortfall in revenues. We see a continuation of expenditures like the $4.4 billion on helicopters that cannot land on the boats they are designed for and cannot carry out the auxiliary functions that people had hoped they would.
What have we seen to deal with unemployment? We had great promise of an infrastructure program. I must say that the Minister of Finance and his officials have laboured mightily and produced a mouse. There is very little there for any part of the country, but the further west you go the less there is. When you get to western Canada you get a few roads and the national parks.
The minister talks about UI reform. Rather than putting people back to work in new and creative ways, what do we see? We see a situation where people who quit their jobs are not going to be eligible for unemployment insurance, no matter under what circumstances they quit.
In an era where sexual harassment on the job site, unsafe working conditions and so on are at the top of the agenda, people who respond to that will be told: "Sorry, you are out of luck. You did the wrong thing, there is nothing for you". We see cuts in programs that could lead to value added production, that could lead to
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investment in new industries like Western Diversification and the green plan.
In the two minutes I have left I would like to spend one minute dealing with the fig leaf, the incentive that we see for investment in small business which is, after all, the major job creator in this country. The changes to the Small Businesses Loans Act, the unemployment insurance holiday, the 10 per cent tax credit are all matters which I think members would generally applaud.
Personally, as the critic for co-operative and community development, I would congratulate the minister for finally taking some action with regard to the unfair treatment that co-ops often experience by making it possible for people forming worker co-ops or other kinds of co-operatives to be able to use RRSP money or RRIF money in order to stimulate co-operative investment. This is a long overdue measure and I congratulate the minister on it.
What could the government have done? It could have brought in some real tax reform. It could have instituted a national investment fund to create value added opportunities, to invest in the knowledge industries, the industries of the future. It could have invested in the economic infrastructure by empowering communities through community economic development corporations, economic development authorities and other institutions like that to take their economic destiny into their own hands in a very low cost effective kind of way. We have not seen that.
What we have seen instead apart from the fig leaf is more GST, more free trade and more of the corporate agenda. With all due respect, Mr. Speaker, I think this is an indication, and I say that somewhat sadly, that at a time when we need creative government action, we have a government that seems to be politically bankrupt in many ways and morally bankrupt. I think when we look at the direction that this paper takes us, it is also intellectually bankrupt.
Canadians are looking for change. This was an opportunity to create some real change, but it was not taken. Therefore, I must submit that we will not see the kind of change Canadians are looking for until we see an
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election, until we see a change in government, until we see a change in the fundamental direction in which this country is going so that once again Canadians can be proud to earn a living in their own country.


Marlene Catterall: Mr. Speaker, Christmas season is fast approaching. It is the time when we think of sharing some happy times with family and friends, sharing the bounties of the work that we have done throughout the year and enjoying the fruits of our labour.
This statement today reminds me of a Christmas story that I have heard since I was a little girl. I think it bears repeating here. It symbolizes the trickle-down economics that this government continues to believe in, that continues to enrich those who have the most and impoverish those who have the least.
It is the story of The Little Match Girl, who on a freezing Christmas Eve stood outside the rich people's house and looked inside at the fire in the fireplace, the decorations on the Christmas tree, the toys under the Christmas tree, the big fat turkey on the table, the people in all their finery and hoped just that they might come outside and pay a penny for her matches. As she stood there and waited for the rich people to come out and pay a penny for her matches, she started lighting her matches to keep her hands from freezing. Before they were finished their dinner she had burned up all her matches. Before Christmas Eve was over she had frozen to death in the snow.
This is trickle-down economics. Those who have the least get the least and get poorer and those who have the most get the most and get richer. The principle was repeated here in the minister's statement this afternoon. Those who can compete will prosper; those who cannot will stagnate.
We have a continuation of the policies that have impoverished 3.6 million Canadians, including one million children. We had a proud statement by the minister this afternoon that we will continue to invest in policies to make our economy work better.
This government has brought us the made-in-Canada recession and is telling us that its policies have made this economy work better. Tell that to 1.6 million Canadians

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who are out of work. Tell that to the children who line up at food banks every day in this country.
We will continue to invest in sound monetary and fiscal policies. I do not think there is anybody but the handful of people on the other side of this House who pretend to govern this country, who believe that their monetary and fiscal policies have been sound. Certainly, it is not the people in this country who wonder if they have a job today or whether they will have a job tomorrow.
This is about scraps from the table of the rich, hopefully falling down and allowing the poor to eat. What we need is economic recovery from the ground up. Even in this, the national capital, one of the wealthiest communities in this country, we have 100,000 people on some form of public assistance or unemployment insurance. That is what is costing us $22,000 for every unemployed person in this country. Right here in the nation's capital, on the Ontario side of the capital, we have welfare up by nearly 25 per cent in the last 12 months.
We have a plan here that is not going to solve the problems of people who wonder whether they are going to have a roof over their head and a meal on the table a month from now. We have a plan here that continues the mistakes of the past, that repeats the unfulfilled promises of eight consecutive budgets that we will reduce the debt and reduce the deficit. What do we have? A steadily rising debt and a steadily rising deficit.
We have an infrastucture program here that is going to invest again in short-term make-work projects. There is no vision of investing in an infrastructure that is going to strengthen the economy of this country in the long term.
The Minister of Supply and Services sits over there. Small towns in his community cannot expand economically because they are under an environmental order not to add any further development. They have wooden sewers that go back into the last century and are not safe or sanitary. Do I see anything in here about improving the water supply for Canadians, treating the water supply of Canadians to stop polluting our rivers, lakes and oceans? Not at all. The rhetoric of Rio that came so freely from the Prime Minister's mouth less than six months ago is totally lost in our commitment of creating
jobs. We see an even further cut from what has already been done in this year's budget to the green plan.
Then we turn around and we see that we paid $22 billion last year in interest to foreign lenders. That is only the tip of the iceberg. That $22 billion at a 50 per cent tax rate means $11 billion in lost tax revenue. One-third of this year's deficit is being lost because this government has not figured out how to get Canadians to invest in their own country and their own future, how to keep that money in Canada that we are paying out in interest to the tune of $22 billion a year, and how to collect income taxes on that income in Canada rather than allow foreign countries to collect income tax on money that we are paying out of the pockets of Canadian taxpayers.
I note with irony a statement on page 11 of the minister's Economic and Fiscal Statement this afternoon indicating that the more we can leave in people's pockets the better it will be for our economy. If the government truly believes that leaving money in people's pockets and letting people purchase goods and services that produce jobs for other Canadians is good economic policy then why is it as the largest single employer in the country, with the largest single work force, insisting on cutting the purchasing power of its own employees and insisting on further reducing jobs when it is time to encourage the private sector to create jobs?
We have a double-whammy of three years of no job increases for tens of thousands of people who are earning incomes below the poverty level working for the Government of Canada. How are they going to pay for food, clothes and education for their children?
We had cutbacks in government spending in the budget this year. We had another 2 per cent cutback in June. Now we have a 2 per cent cutback in the last quarter which is equivalent to an 8 per cent cutback in services to the public. We heard two things from Canadians during the referendum campaign. The first was to stop fiddling with the Constitution and get back to fixing the economy and the major problems that confront this country. The second thing was that they wanted a strong federal government capable of taking leadership, building partnerships and solving the problems of this country. What do we have now? We have a government that is destroying the ability of the Government of Canada to govern on behalf of Canadians.
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Hon.   Chas. L. Caccia@Davenport: Mr. Speaker, we know that we are in a transition period from one type of economy relying on heavy industry and the exploitation of natural resources to another based on knowledge, information, high technologies and services. We know this and what we are saying to Canadians in this debate is that we would do much better in using the levers of government. We would not be obsessed with deficit cutting as the government is because first we would want to look after the social fabric of Canada. We would want to kick-start economic growth in partnership, if you like, with the provinces, municipalities, labour and business. We would probably pay attention to water quality. We would pay attention to sewage treatment plants.
We would engage resources in pollution prevention, in the rehabilitation of our rivers and the removal of health-endangering chemicals. That is where we would hopefully put our taxpayers' resources and not in megaprojects, such as tar sands or the construction of a link to Prince Edward Island. That is a very costly and divisive project. Water is a very precious resource and is badly neglected. Water would receive attention at this time by an enlightened government.
Let me tell you what we would not do. We would not fight unemployment on the backs of the unemployed by reducing benefits as the government announced it would. Believe me, it is no fun to be without income for the first two weeks and then have to make ends meet on 60 per cent of one's previous income. To reduce unemployment insurance benefits below 60 per cent is really a disgrace. If that was not bad enough, this government now wants to penalize those who quit their employment by depriving them entirely of their benefits, whether they qualified with contributions or not.
This afternoon I was shocked to see the Prime Minister applaud when the finance minister announced this measure. 1 was almost embarrassed. I asked myself whether the Prime Minister realized what he was doing when this measure was announced. This measure gives the employer greater power than ever. It makes it virtually impossible for the employee to quit if the employee is harassed, sexually or otherwise, in the workplace or decides that the workplace has become unsafe.
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Through these measures we see the ugly face of the Conservative government. We see its heartless face that is taking away from the weak in the name of cutting the deficit. What a shame.
I will move on to the freeze on the income of parliamentarians. It seems rather curious that this is being done without looking at the size of cabinet. Why stop at parliamentarians? Would anyone in Canada have suffered if cabinet had been cut by 25 per cent, or even 50 per cent? Would anyone have noticed?
Would any Canadian have noticed the disappearance of eminent ministers such as the minister of multicultur-alism, the minister of forests, the minister for constitutional affairs-who disappeared anyway from the political map after October 26-the minister of state for the environment, the minister of state for financial affairs. These are just a few.
It seems rather peculiar that this government would find the courage to inflict penalties on the unemployed but not on cabinet itself.
It seems to me that this government is retreating from governing. It is not rebuilding the economy of this country. It has axed the Economic Council of Canada, the Science Council of Canada, the Law Reform Commission, and the Institute for International Peace and Security. It has eliminated the Court Challenges Program. You name it.
In addition to that wilful action, in the private sector every day there are plant closures and people laid off by the hundreds. The social and economic costs of these lay-offs are immense, yet there are no adjustment programs.
There is no improvement in the direction for those who are laid off. There are no initiatives for those searching for their first job, for instance. There are no extensions of benefits for those who are running out of unemployment insurance benefits, thus increasing the tax burden on municipalities.
What a hard-nosed, heartless way of governing, certainly not in the name of social fairness but in the name of cutting deficits.
If this government were guided by social fairness principles, then it would have wanted, with this measure today, to close the many tax loopholes identified by the Auditor General in his report. Or it would have imposed a tax increase on those making, say, more than $50,000 a year. Or it would have eliminated some of the major tax privileges such as tax-free expense accounts. You name

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it. We know and I am sure the Minister of Finance knows where to find his lost sources of revenue.
To attack the unemployed and introduce these measures really is offensive. It is very sad because it is not in the political tradition and culture of Canada in difficult times to go after the weaker elements in society. This has not been our tradition so far. I regret that.
I would have thought that in this particular time the Government of Canada would have removed this illusive pursuit of reducing the deficit, which has plagued this government and preceding governments.
At this time with high unemployment and large numbers of people on welfare, I thought it would have decided that this was the time to move by giving priority to the social fabric of the nation, to the cohesion of our communities where high unemployment has such a devastating effect. We are not giving the individual that sense of dignity, not giving Canadians in large and small communities that sense of dignity that is so badly sought in difficult times. Our youth is crying for attention in terms of their first employment. Our middle aged workforce is going through a crisis at the very moment that it is without employment. Our elderly workers are very dissatisfied with early retirement adjustment programs and tonight they have very little to be happy about, very little. We are very distressed.


Alex Kindy: Mr. Speaker, it is with pleasure that I talk about this economic and fiscal statement of the Minister of Finance.
He certainly does not have an easy task. He has been appointed Minister of Finance when things are really bad so we cannot blame him personally for what is happening to this country.
As Minister of Transport, when I was still on the other side, the minister was hard working and certainly competent within this sphere.
What has happened? He has been appointed Minister of Finance and given the task to defend the previous eight years of this government. He has not addressed the fundamental problems of why in Canada we have a creeping problem of bad forecasting by the Minister of
Finance. I would like to quote Jeffrey Simpson of The Globe and Mail on December 2 in an editorial: "It is a new singer but it is the same old song, the Red Ink Blues".
It is true. Every finance minister since the early 1970s has been making forecasts but always the wrong forecasts. The Minister of Fisheries and Oceans when he was finance minister in 1979 said that by 1985 the national annual deficit would drop to $2.1 billion, but in reality in 1985 we had a deficit of $34 billion.
Alan MacEachen said, when he became Minister of Finance in the year 1983-1984, that because of his administration the deficit would be only $7.5 billion. In reality, in the year 1983-1984 the deficit was $32 billion.
The same thing happened with Marc Lalonde, another Minister of Finance.
We know the story of the former Minister of Finance, presently the industry minister. I remember when I was in caucus and he presented his first budget, he said that after four years of his administration there would not be a deficit.
I asked him a question. I said: "Mr. Wilson, Mr. Crosbie had made predictions. Mr. MacEachen had made predictions, and you are making predictions. How can you be that sure you are going to be different?"
As I said in the beginning, we do not address the fundamental problems of the taxation system in Canada. We reward that formation but we do not reward capital formation.
This is why we read in today's edition of The Ottawa Citizen that the Royal Bank said that 67 per cent of its loans were not performing. This means that they are not paying what is due to the bank, and this is $3.5 billion. Of that Olympia & York and Bramalea alone owe to the Royal Bank $780 million. Those companies are bankrupt.
Who is going to pay for that? It is you, Mr. Speaker. It is other members. It is the small person, the middle class, the worker who puts a little bit of money in the bank. The bank raises interest rates and makes money to pay for Olympia & York, Bramalea and others that have borrowed and spent money outside this country buying properties in the United States and building in London, England. Our taxpayers have to pay for those mistakes.
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The fundamental problems have not been addressed to reward capital formation. If companies are badly run we reward them. We reward them: they can borrow money. They can borrow money from the banks and money from the state. We give grants, but there is no reward for people who really work hard.
We are always talking about Japan, Hong Kong and Taiwan. In Taiwan the maximum tax is 16 per cent. That is a flat tax, whether one makes $1 million or $100 million, with no exemptions. Its corporations have to pay taxes like everybody. In our system the individual pays most of the taxes. Our government collects personal taxes and very little corporate taxes. Corporations are always exempted. They do not have to pay and they should be paying.
As time goes by I would like to say that the Minister of Finance in his statement does not resolve Canada's
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problems. He has been wrong in his forecasting. He was telling us six or seven months ago that we were not going into a recession. He could not even pronounce the word recession. After a while he said: "Yes, we are moving into a recession".
Today we are in a depression. Canada has lost 500,000 manufacturing jobs; jobs that have moved and will never come back to Canada. The government brings in the free trade agreement and now NAFTA, the North-American free trade agreement, that is going to siphon away jobs from Canada. This is not acceptable to Canadians.


The Acting Speaker (Mr. Paproski):: It being twelve o'clock midnight, pursuant to the order made Uiesday, December 1, 1992, the House stands adjourned until tomorrow at ten o'clock, pursuant to Standing Order 24(1).


[Stage Direction]
The House adjourned at 12 a.m.
[Stage Direction]
Thursday, December 3, 1992