1992-02-26

Mr. Fred J. Mifflin (Bonavista-TVinity-Conception):: Mr. Speaker, on Monday the Minister of Fisheries and Oceans announced a 35 per cent reduced northern cod quota.
There were general statements on foreign overfishing, seal problems and compensation, with no specifics, no firm action, only vague promises, repeating the past.
Time is running out. There are variable factors that can be controlled in this complex issue but I believe the minister has either missed the boat or he is failing to close the bam door before the horse bolts.
In the House of Commons, he denies supporting unilateral action by Canada to control the nose and tail of the banks. In St. John's for the Newfoundland media, he is hawkish on resorting to this serious but reasonable and essential measure.
We are still awaiting specifics on the seal cull. Yesterday there was a perfect window of opportunity in the budget to lay out concrete compensation plans, but it was sadly missed.
I ask the minister and this government to come clean once and for all and let Canadians know that this government has the political will to move on these all-important issues to salvage the Atlantic fisheries.


MACEDONIA
Mr. Fernand Jourdenais (La Prairie):: Mr. Speaker, a great number of my constituents are of Greek origin and are deeply concerned by the developments in the Balkans.
It is veiy disturbing for all Canadians of Greek origin to witness any attempt to rob them of their cultural heritage. I would like to assure them that, as any schoolboy knows, Macedonia is an integral part of Greek culture and civilization and the Canadian government is more than aware of their sensitivity and concern.
I am glad that next Saturday, February 29, thousands of Canadians of Greek origin will demonstrate in Ottawa in order to make the government and their fellow Canadians aware of their feelings regarding this issue.
I urge all Canadians to come to the Hill next Saturday to support that peaceful demonstration.
 * *


RURAL CANADA
Mr. Len Taylor (The Battlefords-Meadow Lake):: Mr. Speaker, to those of us from farm constituencies, yesterday's budget seems to ignore the continuing plight of farm families. Bankruptcies remain high. The accumulated farm debt remains at record levels. The price of grain remains inadequate. Economic confidence remains depressed and the GATT talks have not been concluded.
Yesterday's budget speech should have acknowledged that the farm community may require substantial assistance during the coming year and therefore given farmers confidence in their own future before they plant their crops this year.
Farmers do not want to have to come to Ottawa, hat in hand, after the harvest is complete. This budget should have acknowledged the continuing uncertainties in agriculture and expressed the government's intention to cover this year's shortfalls if they occur. Otherwise we

February 26, 1992
are left to conclude this will be another difficult year for farm families dealing with a difficult and apparently uncaring government. Rural Canada deserves better.


OLYMPIC GAMES
Mr. Bob Corbett (Fundy-Royal):: Mr. Speaker, on behalf of all New Brunswickers, I want to congratulate Mark Lackie for his silver medal performance in the
5,000	metre speed skating relay at the XVT Winter Olympics in Albertville, France.
Mark was the only member of the Canadian team from New Brunswick and the only New Brunswicker ever to win a silver medal at a Winter Olympics.
His remarkable achievement makes us all proud to be Canadians and proud to be New Brunswickers.
Congratulations Mark, and best of luck in your future skating competitions.


EDUCATION
Mr. Ronald J. Duhamel (St. Boniface):: Mr. Speaker, the government on a number of occasions, for example the Speech from the Throne and through its ministers, has made a number of important statements about education. What has been its action?
There will be another $250 million reduction in transfer payments this year alone. What effect will this have? It will have a negative effect on the amount and quality of education, the amount and quality of training and retraining and the amount and quality of research and development.
The government is beginning to privatize student aid. It is supposedly going to remove the 3 per cent administrative fee on student aid but it will fold it into the interest rate and the students will end up paying more. Combined with the elimination of the six-month interest free period for needy students upon graduation, the government is just adding to the growing debt of students in Canada. The merging of Social Sciences and Humanities Research Council with the Canada Council and the decision to close the Science Council of Canada and the Economic Council of Canada makes it abundantly clear that this government has lost its bearing.

There is nothing in it for students.


NATIONAIR
Mr. Vincent Della Noce (Laval-Est):: Mr. Speaker, employees of Nationair have been locked out since November 19, 1991. Many of my constituents work there. Nationair accounted for 51 per cent of Mirabel's traffic and the whole economy of Mirabel goes through Laval. Since this lockout began, the union has forced employees to boycott Nationair. The strikers use wrongheaded tactics like intimidating travellers and raising doubts about safety and equipment to reach their goal. Even elected NDP members are used to apply pressure.
In short, the unions are using defenceless employees to destroy a national company. I think that this union is being controlled by some people in Toronto who have no interest in reaching a settlement and particularly by the Quebec Federation of Labour, which seems to own 25 per cent of Air Transat, a competitor of Nationair. Unfortunately in this whole affair it is the employees who pay, and they are turning the other employees against them.
I wish to assure these employees of my support and I demand that the union stop filling its pockets at the workers' expense.


STATUS OF WOMEN
Ms. Mary Clancy (Halifax):: Mr. Speaker, yesterday's budget cuts put a roadblock on the highway to the advancement of women in Canada. The government has served notice that it will not make pay equity retroactive payments prior to November 1990, thus paying only lip service to women's equality in the work force.
The government has also threatened the spousal allowance, decreeing that should the cases currently before the courts result in substantial settlements of money, the program could be cancelled. The majority of low income seniors benefiting from this allowance are women. Thus, again, the government states that chal-
February 26, 1992

lenges to potentially discriminatory legislation will result in cancellation.
Finally, the government today announced that a national child care program is a dead issue. Canadian women who are in need of suitable affordable child care cannot find it and the increase in child care deductions will not create the needed spaces. Once again the government has backed down on its promise.
Does the minister responsible for health and welfare really consider it, and I quote: "a privilege to have killed child care in Canada"?


THE BUDGET
Mr. John A. MacDougall (Timiskaming):: Mr. Speaker, northern Ontarians were very pleased to hear of the initiatives undertaken in last evening's budget to help us through the recession: reductions in the manufacturing and processing tax rates; a 2 per cent cut in personal income tax; a home buyers' plan that allows the use of RRSPs up to $20,000; increased venture capital funds and the ceiling for loans to small businesses doubled by $200,000.
As the finance minister said yesterday, we hope that the provinces take notice of how we are able to cut the deficit by cutting government spending, not by raising taxes. We hope the money we have given to the taxpayers will not end up with the provincial tax man. We need money in the economy, not in provincial coffers.
If I could send one message to Queen's Park, it would be a plea from the taxpayer. Northern Ontarians are saying to you, Pink Floyd, no more taxes.



Mr. Nic Leblanc (Longueuil):: Mr. Speaker, the federal government knows that we are living through the worst recession in 30 years. The federal government also knows that the Canadian economy is handicapped by chronic structural weaknesses such as dependence on raw materials, uncompetitive industries, an overvalued dollar hindering exports and unacceptable backwardness
in science and technology and research and development.
I expected the government to take serious action in the budget. What did the government do? At one stroke it abolished the Economic Council and the Science Council of Canada.
I wonder whether the government is serious when it talks about economic recovery.


NATIONAL DEBT
Mr. Guy Saint-Julien (Abitibi):: Mr. Speaker, in 1984-85 the Liberal national debt was $206 billion. Compound interest on the Liberal debt from 1984-85 to date is $239 billion. The federal Liberal leader calls for openness, integrity and elections.
On behalf of Canadian taxpayers, I ask him to tell us how the Liberal government acted openly and with integrity in leaving us this $445 billion debt.
The Liberal member for LaSalle-Emard will be in Val-d'Or next week. I hope that he will talk about this Liberal national debt, which is the theft of the century.


THE ECONOMY
Ms. Catherine Callbeck (Malpeque):: Mr. Speaker, Canadians were looking to this government to boost consumer confidence and so revive consumer spending. The survival of many retailers is dependent on the government's actions. The jobs of many Canadians are on the line.
The December sale figures came out this week. They showed a 10 per cent decline over last December in retail sales. It is obvious that this government has no plan to put 1.5 million unemployed Canadians back to work. There is no capital works program, little investment in research and development, even less in the way of training initiatives to deal with the restructuring.
This government's lack of action to boost consumer confidence indicates that it has lost the will to lead this country. The government could have acted; it did not.

February 26, 1992
Canadian retailers and workers are going to continue to suffer due to this government's neglect.


PETROCHEMICAL INDUSTRY
Mr. Ken  Janies@Sarnia-Lambton: Mr. Speaker, for a number of months I have worked with local industry and the Samia-Lambton Chamber of Commerce to point out that aspects of our current federal-provincial tax regime had to be changed to make it more attractive for new investment in the petrochemical and refining sector.
The case was made to the Prime Minister, the Minister of Finance and the Minister of Industry, Science and Technology. They listened, and action was taken in yesterday's budget. The 1992 federal budget has taken the lead to address this after-tax problem. Provisions for our local petrochemical refining base include a reduction in the manufacturing and processing tax rate and an increase in the capital cost allowance rate for M&P machinery.
I am pleased that our government has taken the first step to make Samia-Lambton a more attractive place for new builds in the petrochemical and refining sector. We can now look to the Government of Ontario to follow our lead and introduce initiatives that complement these federal measures. The last thing that Sarnia-Lambton needs is the province to move into the tax room which the federal government has now vacated.


HOUSING
Mr. Mike Breaugh (Oshawa):: Mr. Speaker, last December the federal minister responsible for housing announced rather grandly: "The federal co-operative housing program, which helps to house low and moderate income households, will continue in 1992". That lasted until yesterday. That program was cancelled by the Minister of Finance.
That means that over 4,000 housing units for those who are in need will be cancelled. That means that we will lose 4,000 jobs building those units now and perhaps another 10,000 later. That means municipalities and provincial governments will lose in this calendar year $46 million for each 1,000 units that have been cancelled.
That is a sad message. That means that the half million people in this country who are on waiting lists for socially assisted housing will get nothing. That means that that group of over 40 activists from the province of Quebec who have camped out on the ice below Parliament Hill waiting for some good news from this government got a cold blast of winter wind this morning and nothing else.


CAPE BRETON
Mr. David Dingwall (Cape Breton-East Richmond):: Mr. Speaker, the Mulroney government has once again targeted Cape Breton Island in its budget with the announcement that it is going to privatize the Cape Breton Development Corporation and dismantle Enterprise Cape Breton. The government is abandoning the coal miners of Cape Breton, their families and the small business community.
At the present time we have areas in Cape Breton with an unemployment rate upward of 50 per cent. The Cape Breton economy is desperate and yet, instead of putting programs in place to stimulate job creation and get people off UIC and welfare and back to work, the federal government wants to pull out of Cape Breton, leaving 3,000 jobs in limbo.
The national Liberal caucus during the ACOA debates of 1987-88 predicted the privatization of Devco and now we see that the groundwork has all been laid out. This government has abandoned the region of eastern Nova Scotia, the same way it has abandoned the fanners, the fishermen and the auto workers. This government is ignoring its responsibility to this region of the country and is deliberately making things worse for the people of Cape Breton and, indeed, all of Atlantic Canada.


THE BUDGET
Mrs. Edna Anderson (Simcoe Centre):: Mr. Speaker, the finance minister's budget brought down in the House last night is evidence that this government does listen. The budget demonstrates that it has heard Canadians say: "No more taxes, leaner and more efficient government, less regulation and, most important, no new spending".
February 26, 1992

This government has also listened to backbenchers like myself. Since the fall of 1990,1 have been drawing to the attention of caucus the numerous beautiful but very costly government publications. I must say I was delighted to hear the finance minister say that this is a thing of the past. From now on government publications will be subject to a no frills publishing policy.
By reducing communications budgets we will save $75 million a year. This good news I know will be well received in my riding of Simcoe Centre.



ORAL QUESTION PERIOD


Hon. Jean Chretien (Leader of the Opposition):: Mr. Speaker, these are the worst economic times we have experienced in 50 years. We have been in a recession for 24 months, but there was nothing in yesterday's budget to kick-start the economy. The government, however, wants Canadians to believe it has cut taxes.
We can see the minister's tax reductions on page 135 of the budget. A family of four with an income of $15,000 will enjoy a staggering tax reduction of $2 per year, while a family of four with an annual income of $20,000 will enjoy an equally staggering tax reduction of $6 per year less than two cents a day. Why does the minister not recognize where his responsibilities lie and do something to get this country moving again?


Hon. Don Mazankowski (Deputy Prime Minister and Minister of Finance):: Mr. Speaker, the hon. member is inaccurate when he says that this is the worst economic times in 50 years. He was a senior member of the government that presided over one of the worst recessions in our history, namely 1981-82. This budget is about economic recovery. This budget is about creating jobs. It is about creating confidence and improving our competitiveness and creating a positive economic environment for investment.
If the hon. member has been listening, he will know that organizations like the Canadian Manufacturers'
Oral Questions
Association, the Canadian Federation of Independent Business, the Business Council on National Issues have all indicated that these are the right steps at the right time to improve the investment climate, to preserve jobs and to create new job opportunities for Canadians in the future.


Joseph Jacques Jean Chrétien: Mr. Speaker, the budget of yesterday marked the beginning of the end of universality. The government has broken its promise. Universality is no longer a sacred trust.
I want to ask the minister if he is also going to end the universality of medicare. Will he subscribe to the plank of Preston Manning? I want to tell him that beds in hospitals in Canada are for sick people, not only for people who have money. We will fight if this government wants to kill medicare in Canada as it did with the family allowance yesterday.


Hon. Benoit Bouchard (Minister of National Health and Welfare):: Mr. Speaker, first, I must say I am very proud of what the government did for Canada's children yesterday.

Second, I am going to be very up front with the Leader of the Opposition about what he said. I do not know what he means about universality because the Liberal Party does not always have the same position. If I understand, universality means that I cannot take money from a man or a woman who earns $250,000 to give to children who are in a position where they need to be helped. I do not want that universality.


Joseph Jacques Jean Chrétien: Some day we will have a good debate about what that means. In Canada we treat all citizens the same. For those who make money, we tax it back.
What the minister is trying to do today will leave the impression in Canada that not everybody is treated the same way. The second step will be that he will be moving on medicare. I was in the United States last week. Everyone there envies our universal, free medicare for all citizens, and we want to keep it that way in Canada.


Benoît Bouchard: Mr. Speaker, I do not know why the Leader of the Opposition is talking about medicare. Nothing in the budget will change medicare.

February 26, 1992
Oral Questions
What medicare does is respond to the needs of Canadians in terms of health. That is exactly what we do. As usual, the Leader of the Opposition is talking about universality and talking about keeping all the cheques.
I would like to quote his colleague, the premier of New Brunswick, Mr. McKenna: "The time has come when the premier of New Brunswick should be prepared to give up his family allowance cheque so that his next door neighbour who is poor will receive twice as much money". Is that your opinion, Mr. Leader of the Opposition?


An hon. member:: No, no.


An hon. member:: Any other questions?


Mr. Paul Martin (LaSalle-Emard):: I am delighted to hear that you are following the Liberal leader in New Brunswick. It is not going to be very long before you are going to be following the federal Liberal leader in this House.

Mr. Speaker, my question is directed to the Minister of Finance. The government's economic policies during the past seven years can be summarized as follows: no training programs, cuts in research and development, and no adjustment measures for workers who lose their jobs. The budget does absolutely nothing to correct this situation. Anti-inflationary policies alone are not enough.
How can the government reconcile this hands-off policy with the need for a thorough restructuring of the Canadian economy?


Donald Frank Mazankowski: Mr. Speaker, if the hon. member had listened to the budget and, more important, read the budget, he would recognize that there are a lot of measures in there that will improve the competitiveness and will improve the confidence of the manufacturing and processing sector, a sector that has been the hardest hit during this recession and during the industrial restructuring that is going on.
There are a number of measures incorporated in the budget, from the improvement of capital cost allowance to lower income tax, to improved research and development, to new venture capital, to measures for small business. All of these things are going to have a very positive effect and it now puts Canada in a competitive position to attract investment, not only to upgrade and to modernize, but to create new manufacturing and processing activities.


Paul Edgar Philippe Martin: A supplementary, Mr. Speaker.
This budget is tokenism and the time for tokenism is over. What the minister is saying is that we can meet the European, the Asian and the American challenge to our industrial base, to literally hundreds of devastated Canadian communities, with a budget that simply confirms the economic lunacy of the last seven years.
Retraining, lip service, R and D, a drop in the bucket, adjustment measures, nothing. My question is: Who in heaven's name do you think you are kidding?


Mr. Speaker:: I would ask hon. members, in spite of their enthusiasm, to not address their questions directly to the minister. They should come through the Chair.


Paul Edgar Philippe Martin: Mr. Speaker, you are right. The way these people answer questions, I should have put them to you not through you.


Hon. Audrey McLaughlin (Yukon):: Mr. Speaker, my question is for the Minister of Finance.
Yesterday's budget abandoned pay equity for women, abandoned universality and abandoned the unemployed in this country. A budget that starts out by accepting 1.5 million unemployed in this country and offering nothing to them is a failure right from the beginning.
Unemployment costs this country $30 billion a year and today we learned that UI payments alone went up by 34 per cent this year.
The Minister of Finance had choices. Why did he make the choice to retain the $1 billion business lunch deduction for those who have money and not take that $1 billion and put it into job creation to get Canadians working again?


Donald Frank Mazankowski: Mr. Speaker, I know the New Democratic Party is a party that is anti-business and I know that it would like to have scrapped the capital gains tax as well.
February 26, 1992

Oral Questions
I have to remind the hon. member that we believe that the capital gains exemption and benefits to the business community are appropriate measures to encourage investment in business. The capital gains tax, which the hon. member is adamantly opposed to, is a measure that encourages investment and encourages risk-taking. This party and this government are going to continue to support those measures.


Audrey Marlene McLaughlin: A supplementary, Mr. Speaker.
Clearly this government was not prepared to make choices in terms of creating jobs, but preferred to make a choice to keep the tax loopholes there for the rich.

The main tax relief contained in the Budget will give six times as much money to people who earn $100,000 as it does to people who earn only $30,000. Why introduce a tax measure that will only make the rich richer? Is that fair and equitable?


Donald Frank Mazankowski: Mr. Speaker, if the hon. member would read the budget, she would learn that some
500,000	new jobs will be created by the end of this year. In the period 1984-88, they laughed when we said we would create 1 million new jobs and we created 1.5 million, and we will do it again. We will do it the proper way, not by adding to the burden of taxation and the burden of the deficit.
In this budget we cut spending, we cut taxes, and we cut the deficit. We are going to create a positive environment for investment and for job creation not only for today but indeed in the future.


Audrey Marlene McLaughlin: Mr. Speaker, I would like to raise one of the promises the government has made on several occasions. The minister today is making another promise to the unemployed. What the unemployed would like is for the minister to do something and get some jobs going in this country.
Today the Minister of National Health and Welfare is quoted as saying: "I have the privilege on day care as I
had with many other issues like VIA Rail to be the killer".
My question is for the Prime Minister. His party made an election promise of a national child care program. There was nothing in the budget to say that the national child care program was gone. Will the Prime Minister stand today in this House and tell Canadian people that his promise of a national child care program is dead?
Hon. Benoit Bouchard (Minister of National Health
and Welfare): Mr. Speaker, I would like first to apologize for two words I used this morning.
Sometimes when I use English as a second language I can make a mistake and I did. Of course the word "privilege" in French can mean that it is an obligation. It is in that respect that I used it. On the word "killer", of course I never killed anybody and I would not kill anything either. That is what I meant when I used those words.
Second, in terms of day care or child care we had a choice as a government. I had the choice myself of dealing with the day care issue on one side or trying to deal with the major problem of child poverty which has been raised by the hon. member and many other members in the House.
This is in the action plan that we will unfold later in the month dealing with all the problems of children in society who face abuse, violence and so on.
Canadians have told me, when I talk about that, that instead of continuing the question of day care or child care, they would prefer in light of the resources we have if we deal with the question of children at risk and poverty, as the Minister of Finance mentioned yesterday, and this is what I will do.
I am not saying that child care is not important. It is one of the important issues for children, but first we have to look at all children who face abuse, violence, sexual abuse and so on, and help poor children as we said we would yesterday.


Ms. Sheila Copps (Hamilton East):: Mr. Speaker, I am afraid the minister's explanation rings a little hollow.
In the same interview he went on to say that the polls showed people were more concerned about children living in poverty and children whose mental and physical health is threatened by family violence and sexual abuse.

February 26, 1992
Oral Questions
I would like to ask the Minister of National Health and Welfare, whose mandate it is to defend all children, why he would create a situation where he is pitting abused and hungry children against children who legitimately need safe child care across this country? Why is he pitting child against child?


Benoît Bouchard: Mr. Speaker, I have to make a choice, because in our society, children are faced with situations like that.
Of course children need day care, but as the hon. member said herself, there are children who are exposed to sexual abuse and family violence. A two and a half year old child was killed the other night in Montreal, for no reason at all.
When a minister of health has choices to make, Canadians want him to have the courage to make them. I believe my cabinet colleagues fully support my contention, and I would hope the hon. member and all members of this House do so as well, that we must find ways, as soon as possible, to help children who are suffering in Canada for no good reason at all.


Sheila Maureen Copps: Mr. Speaker, listening to the polls does not take any courage.
I may refer the minister, who went on at lenght about what he wanted to do for children, to page 92 of his cabinet colleague's budget. If his government is doing so much for children, why will it to cut $1.5 billion in equalization payments next year, the very payments which affect the health and education of our children? Why is it making those cuts and why is it not defending its policy?


Donald Frank Mazankowski: Mr. Speaker, equalization payments to the provinces have grown by 60 per cent since this government came into office, from $5.4 billion in 1984-85 to $8.5 billion in 1992-93, and it will grow to $9.2 billion in 1993-94.


Mrs. Diane Marleau (Sudbury):: Mr. Speaker, my question is for the Minister of Finance.
This Conservative government introduced the surtax in 1986 and raised it twice following that. All told it has raised taxes 33 times. How can this Minister of Finance look Canadians in the eye and tell them that they are
better off in 1992 and that he is saving them with a $2 tax break? It is absolutely insulting.


Donald Frank Mazankowski: Mr. Speaker, one of the reasons we have had to increase taxes is to pay for the burden of debt inherited from our Liberal predecessors. Prior to 1984, prior to our taking office, the Liberal government of that day was spending $1.33 for every dollar's worth of revenue it was taking in. That could not be sustained. That had to be changed.
We had to start paying down the deficit. We had to start reducing the deficit and we had to start dealing with the burden of debt. That is exactly what we have been doing.


Diane Marleau: Mr. Speaker, this government is not intent on saving Canadians. At 11 per cent in the polls it is merely trying to save itself. Canadians are still taxed to death and no amount of sleight of hand or rhetoric can change that fact.
Why has the minister not made some meaningful and realistic changes that would help Canadians make ends meet?


Donald Frank Mazankowski: Yes, Mr. Speaker, I agree with the hon. member that Canadians are overtaxed. We are doing everything in our power to reduce taxes. We are reducing government spending. We are reducing taxes and we are reducing the deficit.
For the information of the hon. member, with the impact of the child benefit package and the impact of the reduction in the surtax in 1993, a single parent with two children making $50,000 a year will have a benefit of $394; a two-earner family with two children will have a benefit of $240; and a single earner family with two children will have a saving of $280. I think that is very important. That will help provide clothing and put food on the table.


CHILD CARE
Ms. Dawn Black (New Westminster-Burnaby):: Mr. Speaker, my question is for the Minister of National Health and Welfare.
Over and over again this government mouths platitudes about the equality of women and its commitment to the equality of women. The minister knows full well that child care is the vehicle that would allow poor
February 26, 1992

families to break out of the poverty cycle and enter the paid work force. He has lots of data on that. Yet the minister said he had made his choices; he had choices, he said, and he chose to be the killer of child care.
My question for the minister is this: After promising in 1984, after promising in 1988 a national child care program, and after promising as little as a year ago a national child care program, why is the government breaking its commitment to the families of Canada, to the women of Canada, to the children of Canada? Abused children, battered children need child care just as all Canadian children do.


Benoît Bouchard: First, Mr. Speaker, the member should say, because she knows it, that the government has put more than $1 billion a year into the child care system in Canada.
Second, she knows, because I am sure she read the budget, that we have increased the child care deduction by $4,000 to $5,000 for all children from zero and seven. We have increased it by $2,000 to $3,000 for all children from seven to fourteen.
I believe it is a good move. I am sure that she agrees, because she is talking about abuse and violence, with the efforts we are trying to make to give those children the chance to be better nurtured, to be better helped, to be better nourished. I believe and I hope that she agrees with that.
In other words, we deal with child care with the capacity we have to do that, but we also have to deal with the children who face day after day the reality of life. I challenge my friend to say that she disagrees with that kind of policy.


Dawn Black: Mr. Speaker, the minister can challenge me all he likes. He is wrong.
This government talks about spending a billion dollars on child care. It also loses a billion dollars every year on the business entertainment expense allowance, which
Oral Questions
even allows for the deduction of escort services at the expense of the children of this country.
This is the end of a universal social program, the child benefit that the minister is talking about. Today the minister has killed child care. What is next? The old age pension or medicare?


Benoît Bouchard: Mr. Speaker, today we have made a choice and I expressed the choice to my friend. What she has to understand first is that the social policies are there to respond to the needs of Canadians. It is for this reason we have the social policies that are in place today and announced yesterday in the budget.
The health care policies answered a question of Canadians about health care. We do that and it will not change. We do exactly the same thing with senior citizens.
Today we have decided that to answer the problems of children we should use the money that we give to the rich but, my God, the NDP has asked me not to reallocate money for those who earn $250,000. What a miracle.
I want to give to poor families to care for their children. I hope that the saviours of the world will help me to do that.


THE BUDGET
Mr. John Nunziata (York South-Weston):: Mr. Speaker, I would like to get back to the Minister of Finance. In his budget the minister totally and completely abdicated responsibility to the unemployed.
Can the minister explain why he and his government have turned their back on the 1.5 million unemployed Canadians and the 2.5 Canadians on welfare? Can he explain to those people why he has relegated them to the trash heap?


Donald Frank Mazankowski: Mr. Speaker, nobody has been relegated to the trash heap. We have created a climate of confidence, an improved climate of investment.
When we assumed office the hon. member's party left us with an unemployment rate of close to 12 per cent. It was not a crisis then.
I know that unemployment is too high. We are putting in place the fundamentals. Interest rates are down.

Oral Questions
Inflation and the cost of doing business are down. We are improving the investment climate to help the restructuring process and to ensure that the companies engaged in manufacturing and processing will invest in Canada, will improve their facilities, and will make new investments that will create new jobs. That is why we are so confident that 500,000 new jobs will be created this year and a million jobs over the next four years.


John V. Nunziata: Mr. Speaker, a lot of consolation that is to the unemployed Canadian today. This government has the moral responsibility to put those Canadians back to work. The minister says he is going to create half a million new jobs, yet he admits that the unemployment rate will remain as high as it is.
The government's only answer to the unemployed in this country is tough luck. The minister promised a realistic budget and unemployed Canadians are asking today what exactly is this minister's definition of reality. Is he so far out of touch with reality that he has totally ignored the pain and the suffering out there? Does he not realize that people are hurting? Why? I would like to ask the minister why he has not given some hope to the unemployed in Canada.


Donald Frank Mazankowski: Mr. Speaker, with all due respect to the hon. member, this budget does give hope.
One only has to listen to the spokesmen for the Canadian Manufacturers' Association, the Business Council on National Issues, and the Canadian Federation of Independent Business.
They have indicated that with the fundamentals in place, with low inflation and with low interest rates, what we have to do is create a positive climate for investment so that new investment will take place to modernize, to upgrade, to encourage new investment, and to create new job opportunities, particularly in the processing and manufacturing sectors.
We have outlined five specific initiatives: the increase of the capital cost allowance; lower tax rates; improvements in venture capital; improvements in R and D; and reductions to withholding tax.
All of these are seen as positive moves which will create a climate of confidence and a ray of hope for those who are working today and those who are unemployed.


Mrs. Marlene Catterall (Ottawa West):: Mr. Speaker, my question is for the Minister of Finance. Yesterday the minister told Canadian women that Canada cannot afford to pay them as much as men. The minister said yesterday that regardless of the Human Rights Commission's decision, the government has no intention of paying a fair salary to 70,000 women who have struggled for eight years for a basic right. Why this discrimination? Why are women the victims of this government's unfair and ill-conceived policies?


Hon. Gilles Loiselle (President of the Treasury Board and Minister of State (Finance)):: Mr. Speaker, at the risk of sounding immodest, I would like to tell the hon. member that this government is very proud of what it has done for pay equity in Canada. In any event, I believe that this government is the first national government in Canada to do so, long before the Liberals and the provincial governments, and even all other governments in the world, if I am not mistaken. Not one of them acted as we did, giving pay equity as we did.
I will remind the hon. member that in recent years we gave nearly $500 million in catch-up payments and that we pay out $80 million a year for that.
The decision we made in the budget was to do what the provinces do and not be liable to pay for the past, for the Liberal regime. We are assuming our responsibilities for the future and that is what we are prepared to do. We believe in pay equity and that is what we will do for the future.
[English)


Marlene Catterall: Mr. Speaker, my supplementary question is for the same minister. The minister knows perfectly well that he is cheating Canadian women out of $1 billion.
Equality does not begin and end when this government says it does. During the last election the Prime Minister said the money was in the bank for pay equity.
February 26, 1992

I ask today: Why is the government budgeting now to pay its debt to Wall Street but wiping out its debt to women?


Gilles Loiselle: Mr. Speaker, after the most extensive study ever conducted in Canada on pay equity, we came to a proposal which was put to us to pay $370 million. We paid it and we consider that we have settled this account for the past.


PUBLIC SERVICE
Mr.   Brian@: Mr. Speaker, my question is for the minister responsible for the Public Service. Canadians are concerned about reports that government workers are being mistreated by union leaders.
It has been reported that some abusive and self-serving union leaders continue to condone harassment of Public Service employees because of their political beliefs.
Will the minister assure this House and all Canadians that this government will not tolerate harassment of Public Service workers by union bullies?


Gilles Loiselle: Mr. Speaker, I am aware that many Canadians have found profoundly disturbing activities alluded to by the hon. member that have been reported in the media.
However, our capacity to act is very limited because section 8(1) of the Public Service Staff Relations Act prohibits us from interfering.
However, I am glad to tell the hon. member that there is at least one union local that has claimed that the alliance has committed an unfair labour practice and is challenging the right of the Public Service Alliance of Canada to impose these kinds of actions. We will be following that very carefully.


THE BUDGET
Mr. Steven W. Langdon (Essex-Windsor):: Mr. Speaker, my question is for the Minister of Finance.
Oral Questions
My community of Windsor has 21.5 per cent unemployed as we stand here in this House of Commons today. The same tragic, senseless human waste is there right across this country.
I want to ask the Minister of Finance why it is that his budget has paid so little attention to the plight of these
1.5	million jobless across this country and at the same time has left unfair and unacceptable tax loopholes still in place?


Donald Frank Mazankowski: Mr. Speaker, it is tragic that the unemployment levels in the hon. member's area are as high as they are. I regret that very much.
Obviously, his area is a manufacturing and processing sector and we have undertaken a number of initiatives which will indeed strengthen the manufacturing and processing sector, not only strengthen the viability, but indeed encourage the investment opportunities in that particular area.
The hon. member knows very well that capital these days is very mobile in a globalized economy. What Canada has to do is ensure that it has an appropriate environment and a competitive environment to allow that expansion and that new investment to take place.
I ask the hon. member again to reread that section dealing with the manufacturing and processing sector. I am sure he will find that there are a lot of positive elements in there. It has generated a great deal of positive response from that particular community and for that I am very grateful.


Steven W. Langdon: In fact, Mr. Speaker, I read those sections very carefully because they represent yet another new tax loophole to the manufacturing sector in this country, an increase in the capital cost allowance, which nobody has ever indicated increases investment any place in the world.
I want to ask this minister point blank: Why has this minister left in place in our tax system a situation that permits corporations to pay for the cost of escort services for their clients and write it off against the taxpayers all across this country?


Donald Frank Mazankowski: Mr. Speaker, I have heard it all. I do not know where the hon. member has been. In the pre-budget consultations I travelled right across this country. At every meeting that I attended there was a

Oral Questions
request for an improvement in the capital cost allowance.
If the hon. member does not believe that I will bring him lots of evidence to prove it.


Mr. Benoit Tremblay (Rosemont):: Mr. Speaker, yesterday the Minister of Finance announced that tax incentives for research and development would be improved.
Does this mean that federal tax credits will be harmonized with Quebec's so that Quebec businesses will no longer be penalized for their research and development efforts, as requested by the Quebec minister of finance at the last first ministers' conference?


Donald Frank Mazankowski: Mr. Speaker, what we propose to do is to improve the administration of the research and development incentives with industry and to provide further funding for that purpose.
There have been some difficulties in the administration of that. We will be sitting down with industry officials to try to work out the difficulties and the obstacles that have been in place so that the industry can truly take advantage of the R and D incentives that were provided for in previous budgets and indeed in this budget.
[Translation\


Benoît Tremblay: Mr. Speaker, the Minister of Finance knows perfectly well that by obliging Quebec businesses to subtract the R and D tax credits they receive from the Quebec government from their deductions when calculating federal tax credits, the federal government is actually taxing 39 per cent of the tax credits granted by Quebec to its research and development sector. That is what the finance minister wanted to know. Is the federal government prepared to stop requiring businesses to deduct what they receive from Quebec when they ask for federal deductions, as is the case in Ontario?


Donald Frank Mazankowski: Mr. Speaker, as the hon. member
knows, there are several key initiatives in this budget that will improve the manufacturing and processing sector and particularly the opportunities to use research and development incentives.
I am pleased to note the provincial minister of finance for the province of Quebec, Mr. Levesque, has expressed a very great deal of satisfaction with the budget. It would seem to me he likes the direction and the thrust of the budget.
I should remind the hon. member that several other provinces are very much supportive of the initiative we have taken in this budget. I hope the hon. member will support it as well.


Mr. Maurizio Bevilacqua (York North):: Mr. Speaker, my question is for the Minister of Finance. The government's plan to privatize the Canada Student Loans Program is a slap in the face of Canadian students. Many will be seriously hurt and their chances of obtaining an education will be seriously damaged.
Why does the minister feel it is necessary to hide behind the bankers? Why is he getting the bankers to do his dirty work? Why does the minister not put an end to this masquerade and give students the support they need?


Donald Frank Mazankowski: Mr. Speaker, there are several initiatives in this budget that will help the students in terms of the student loans program.
My colleague, the Secretary of State, will be undertaking negotiations with the bank to improve the administration of that, with a view to removing the 3 per cent administration fee. I am sure the hon. member will be pleased with that.


Maurizio Bevilacqua: Mr. Speaker, essentially the minister is saying: "Don't call us as a government; call your banker if you want an education".
We have a serious problem in this country. We have
400,000	young Canadians on the unemployment rolls of this country. That is a problem we cannot sweep under the carpet. That is what the government is trying to do with this budget. There is nothing here for young people. They have been condemned to chronic unemployment and the government refuses to act.

When will the minister and his colleagues wake up to the fact that no plans for youth means no plans for the future?


Donald Frank Mazankowski: There are several initiatives in this budget that will indeed help the youth in their education. I refer him to the budget. There are a number of initiatives with respect to the education credit.
If the hon. member has any other specific suggestions, I would be very pleased to receive them.


Mr. Joe Fontana (London East):: Mr. Speaker, my question is for the Minister of Finance.
Yesterday's budget on the one hand provided access to home ownership for Canadians with savings, with which we agree. On the other hand, the government has abandoned its commitment to affordable social housing. This budget cuts funds for affordable housing by 50 per cent in three years and is eliminating some 12,000 affordable units in the next two years.
Why has this government relegated over one million Canadians, including 500,000 children living in inadequate shelter, into permanent poverty with no hope of ever being able to own a home and with no hope of ever finding adequate shelter?


Hon. Elmer M. MacKay (Minister of Public Works):: Mr. Speaker, I thought my colleague opposite would be congratulating the Minister of Finance and this government for some of the excellent things they did for housing.
Instead, it gives me an opportunity to point out to him and to reassure people who are dependent on social housing that we are really increasing the amount of money spent on social housing this year by $70 million. There is $2 billion spent approximately each year on social housing, which comes to $10 billion over the next five years.
This government has no apologies to make in that regard. The hon. member knows there are many other programs that are more targeted and more appropriate to those in core need than the co-op program, although this was in many ways an excellent program.
Oral Questions


Joseph Frank (Joe) Fontana: Mr. Speaker, with a single stroke of a pen this government has terminated the co-op housing program, to which the minister just referred, a fully targeted program which has provided lower and middle income groups secure and affordable housing for 20 years. Currently 164,000 Canadians are on the waiting list for co-ops. Their hopes of ever getting adequate and affordable shelter have been crushed by this government.
Last December this minister promised the co-op housing people $6 million for their co-op housing. Yesterday, he completely cancelled the program.
I ask this minister, and this finance minister, will they reinstitute this program that has served Canadians so well in the past 20 years?


Elmer MacIntosh MacKay: Mr. Speaker, no, we will not at this time. There are other programs that are more directly appropriate for people who are in core need, as the hon. member knows.
He should remember, as well, that when it comes to social housing, this government has consistently spent more money each year on social housing and we are continuing to do so. I remind him that the last time his party was in office in 1983-84, $1.2 billion was spent on social housing. We have spent $100 million plus each year since that time and our commitment continues.


SCIENCE COUNCIL OF CANADA
Mr. Howard McCurdy (Windsor-St. Clair):: Mr. Speaker, my question is for the Prime Minister.
The Science Council has been killed under orders from the Prime Minister's Office. It cannot be because of costs, because it costs so little. Can it be, I ask through you, Mr. Speaker, that the Science Council would look at the so-called prosperity agenda which promised more training, more education, more technology, more research and development, and identify it for what it is, a crock and a scam?


Right Hon. Brian Mulroney (Prime Minister):: No, Mr. Speaker. In point of fact, as my hon. friend might perhaps know, the Science Council has, of course, done very good work. In the last number of years pursuant to

February 26, 1992
Oral Questions
consultations with universities, think-tanks, the private sector and various provincial governments, a new organization, the National Advisory Board on Science and Technology, has been created. Yes, indeed, independent. It is that board which has assumed more and more of the responsibilities which previously in some areas had been assumed by the Science Council. It was felt by the government that while all of these agencies clearly had a certain value that this was the appropriate-


Howard Douglas McCurdy: They were just too critical.


Martin Brian Mulroney: My friend says they were just too critical of us. They were not critical at all. They were supporting the policies of the government. They thought that the government had taken the proper move in creating the National Advisory Board on Science and Technology which created, for example, the Centres of Excellence, some hundreds of millions of dollars that have been distributed into universities across Canada.


An hon. member:: Scholarships.


Martin Brian Mulroney: The Canada Scholarships Program which provides for 10,000 new scholarships in science and technology to be given to Canadian students across Canada. One of the conditions is that 50 per cent of all of those scholarships must be held by women.


THE BUDGET
Mr. Mac Harb (Ottawa Centre):: Mr. Speaker, the Minister of Finance is quoted in the media today as calling Ottawa a fat city. This is a gross insult to the people of Ottawa. It is a gross insult to any city.
Yesterday the budget eliminated over 20 agencies that presently employ hundreds of people. I want to ask the minister if he conducted any studies that justify the closure of these agencies and if not, will he put an immediate stop to this harsh and unfair insult to the taxpayers of this region?


Donald Frank Mazankowski: Mr. Speaker, I never referred to Ottawa as fat city. If the hon. member has the quote, I would like to see it, because I cannot recall ever making it. I would certainly like to see it.


PRESENCE IN GALLERY
Mr. Speaker:: I wish to draw to the members' attention the presence in the gallery of the Hon. Karl Erik Olsson, Minister of Agriculture from Sweden.


Some hon. members:: Hear, hear.


PRIVILEGE
Mr. Scott Thorkelson (Edmonton -Strathcona):: Mr. Speaker, I rise today on a question of privilege.
On February 18 the members of Legislative Committee H apparently voted to adjourn consideration of Bill C-203, an act to amend the Criminal Code concerning terminally ill persons sine die.
This extremely unusual procedure has effectively meant that the bill is dead and will not be brought back to the House of Commons. This action on the part of the legislative committee has breached the privileges of the House of Commons and of individual members. It constitutes contempt of the House.
In addition to setting a dangerous precedent, it also flies in the face of repeated commitments to the empowerment of members. Under the Standing Orders of the House, bills that receive second reading are referred to a legislative committee for study and consideration.
It is important to appreciate the purpose and significance of this stage in the legislative proceedings. The sixth edition of Beauchesne's describes legislative committees as follows, in citation 759(3):
Legislative committees are appointed by the House to consider specific bills and amendments thereto.
It also sets out the function of a legislative committee in citation 798:
The function of a legislative committee is to consider the bill for which it was created, and to report the bill with or without amendment to the House.
This point is also made in the fifth edition at citation 763:
The function of a committee on a bill is to go through the text of the bill clause by clause and, if necessary, word by word, with a view to making such amendments in it as may seem likely to render it more generally acceptable.
February 26, 1992

The fifth edition also states in citation 764(1):
A committee is bound by the decision of the House, given on second reading, in favour of the bill, and should not, therefore, amend the bill in a manner destructive of this principle.
It goes on in citation 764(2):
The committee may so change the provisions of the bill that when it is reported to the House it is in substance a bill other than that which was referred. A committee may negative every clause and substitute new clauses, if relevant to the bill as read a second time.
It is also provided in citation 754:
(1)	Every public bill, when it is read a second time, is referred to a committee before any amendments are made to it.
(2)	To 'commit' a bill means to refer it to a committee, where it is to be considered and reported.
It should be noted that citation 885 of the fifth edition states:
(1)	It is the duty of every committee to report to the House a bill that has been committed to them and not, through long adjournments, to withhold from the House the result of their proceedings.
(2)	If a committee does not report back a bill, the House should take cognizance of the matter.
Although these statements are made in the context of private bills, it is submitted that they are equally applicable to any bills, public or private.
The authority for this statement is page 614 of Bouri-not's Parliamentary Procedure and Practice, fourth edition, where the principles are set forth generally:
"It is the duty of every committee to report to the House the bill that has been committed to them," says the best English authority, "and not by long adjournments, or by an informal discontinuance of their sittings to withhold from the House the result of their proceedings. If any attempt of this nature be made to defeat a bill, the House will interfere to prevent it."
The fundamental point is that a bill having received second reading has been approved in principle by the House. The purpose of referring it to a committee is to iron out the details. That is why in the words of Standing Order 113(5), legislative committees are given a power "to send for officials-whom the committee deems to be competent to appear as witnesses on technical matters" and so forth.
The committee has to consider the bill, but it also has a duty. It has a duty to report back the bill. It cannot ignore the bill or do nothing. The committee is required to
Privilege
report back to the House. It can make amendments. It can even change the bill significantly, but it must return the bill to the House. This is clear from the wording of Standing Order 113(5).
Any legislative committee shall be empowered to examine and enquire into the bills referred to it by the House, to report the same with or without amendments-
This is consistent with parliamentary practice as far back as Bourinot, whose fourth edition 1916 sets out the principle clearly at pages 520-521:
Every committee on a public bill is bound to report thereon. The house alone has power to prevent its passage or to order its withdrawal.
The 21st edition of Erskine May at page 654 is to a similar effect:
A select committee to which a bill has been committed has no power to put an end to the bill -
Applying those general principles to the present case, the members of Legislative Committee H decided to adjourn consideration of Bill C-203 sine die. I understand that this means it cannot be brought back for consideration, either by the chairman or by the members of the committee. To all intents and purposes, this means that the committee has chosen not to report the bill back to the House. The members of the House who supported this motion have thus prevented the House of Commons from further considering a bill that was approved in principle by the same House.
This is far worse than if they had reported the bill back with amendments, even if these had significantly changed the bill. At least in that case, the members of the House could have proposed amendments at report stage and the bill could have been considered and disposed of by the House itself.
Legislative committees are supposed to assist the House, not to substitute their own judgment for that of the House. The actions of the legislative committee have prevented the House from voting on the bill; either approving it or voting it down. The subject matter of Bill C-203 is very difficult, both morally and legally, but it is unconscionable that a committee has taken away the right of the House to decide that matter.

Privilege
This is a violation of all tradition and it flies in the face of the role and function of legislative committees. But it is also particularly important to remember that Bill C-203 is a private member's bill. Much has been said lately about empowering individual members of Parliament. One of the ways this can be done is through Private Members' Business.
Since the McGrath committee's report, various procedural changes have been made to enhance the opportunities and chances of success for private members' bills. It has been said that private members' bills belong to all members and to the House: all members have an interest in their progress through the various legislative stages. Unlike a government measure, which the government can control and bring forward as and when it wishes, private members' bills that are votable are guaranteed an opportunity to be debated. This right is hollow, however, if the bill gets stuck in a committee so that the House never has a chance to consider it again.
I would like to quote another citation from Erskine May's 21st edition, page 600.
For a committee to endeavour to dispose of a bill which has been committed to it by adjourning sine die, or to some distant day, would be inconsistent with the duty imposed on the committee by the order of the House committing the bill to the committee. Nor can a committee relieve itself from the obligation of considering the bills allotted to it and reporting them to the House by adjourning further proceedings on a particular bill sine die -
For all these reasons, I would submit that Legislative Committee H is in contempt of the House of Commons, and accordingly my privileges as a member and the privileges of this House have been breached.


Mr. Robert Wenman (Fraser Valley West):: Mr. Speaker, since this is my particular private members' bill, not only have the privileges of all members been breached by the committee not returning the bill to the House to have it considered by the entire House, but it certainly breaches mine as the author of the private members' bill.
In the spirit of the reforms of 1978-79 and 1984, the members are breaching the intent of the House of Commons, that in fact the public should have access to the House of Commons through private members and through the private members' process. This will in fact bring members' bills through to a final vote in the House of Commons.
I too would like to quote on page 600 of the 21st edition of Erskine May which states:
For a committee to endeavour to dispose of a bill which has been committed to it by adjourning sine die, or to some distant day, would be inconsistent with the duty imposed on the committee by the order of the House committing the bill to the committee. Nor can a committee relieve itself from the obligation of considering the bills allotted to it and reporting them to the House by adjourning further proceedings on a particular bill sine die, or to some distant day-
Further, page 607 of Erskine May states that:
It is the duty of a standing committee, as of all committees, to give the matters referred to it due and sufficient consideration. The chairman of a standing committee will not therefore normally accept motions in pursuance of which the committee would conclude its deliberations before it has gone through the bill committed to it.
This bill passed unanimously through the House of Commons. There was not one dissenting vote against it and that seldom happens in itself. Surely the House has the right to have the bill considered and returned.
I know you have no knowledge of committees as such, but this particular committee in fact heard 25 submissions from groups across Canada, and they did not even have an opportunity to discuss it. They did not even start the discussion let alone go through the bill clause by clause, or go through amendments-excellent amendments-suggested by many of those who appeared before the committee.
This is a cost of thousands of dollars to us in the House of Commons and to the taxpayers of Canada. We make a farce of our whole process and of the whole presence of private members in this House of Commons when the whole of our country is calling for a concern that private members' votes should be put in a non-partisan way. Issues of controversy like this should in fact be put for private members to vote according to their conscience.
That kind of reform is called for and it seems a shame that some members do not understand this. I know the chairman did not do this through any direct intention. Perhaps he did not recognize his responsibilities to you and the House of Commons according to the traditions of the House of Commons as outlined by myself today.
So I would urge you to consider this matter. Then perhaps a motion could be presented to have the matter considered forthwith that the committee should report back to you according to the intention of this House of Commons.
February 26, 1992


Mr. Don Boudria (Glengarry-Prescott-Russell):: Mr. Speaker, I was present at the committee at the time in question. I just want to very briefly bring two things to the attention of the Speaker.
One, of course, is that the Erskine May precedent or rule that has been brought to your attention is superseded by our own traditions here in Canada as demonstrated in citation 492, page 354 of Beauchesne's fourth edition. It explains quite clearly that the sine die rule has been utilized here in Canada in the past.
Nevertheless, and probably more fundamentally, the ruling in question by the chairman at that particular time was not contested in any way, shape or form, to my knowledge, when it was handed down by the chair of the committee.
That is all I have to say at this time, except to indicate that I and several other members of the committee did not receive any prior notification that this item was going to be raised today.


Mr. Albert Cooper (Parliamentary Secretary to Minister of State and Leader of the Government in the House of Commons):: Mr. Speaker, I do not want to take much time on this either, and I apologize to members opposite. I want to clearly indicate to them I had no warning of this coming up myself on a day that is dedicated to the budget debate. So I want to be very quick.
My first point is that I think the argument has already been made regarding Erskine May and whether or not that applies in this situation. I do not believe it does. I believe it has been superseded by our own Standing Orders and by our own practices.
Second, you cannot put a question to a committee that you cannot answer. For example to make my point, here in committee of the whole the chairman always says "Shall I rise and report the bill?" Now, if the House were to say no, obviously they could not rise and report the bill.
We are in precisely the same circumstances here. I think the committee did act within its mandate. Citation 760 of Beauchesne's sixth edition, subsection (3) states:
Privilege
The Speaker has ruled on many occasions that it is not competent
for the Speaker to exercise procedural control over the committees.
Committees are and must remain masters of their own procedure.
I do not want to take any more time of the House. I think the argument is very clear.
Mr. Gilbert Parent (Welland-St. Catharines-Tho-rold: Mr. Speaker, to identify myself in this debate, I am the chairman of this legislative committee. I say I am the chairman because to my knowledge the committee has not formally been disbanded.
I take notice of the remarks of the hon. member who spoke earlier from the other side of the House. I would point out to the Chair, in making his judgment, it is not my intent here to take sides one way or the other. I simply give this information to the Chair and to all members for their consideration.
I believe the duty of the Chair is to prepare himself or herself for all possible contingencies. To that end, I asked the Clerk of the House to research what my responsibilities would be as the chairman in the event that certain scenarios unfolded.
As it turned out, I was informed that one of the motions made was perfectly acceptable in terms of the rules of the committees and of the House and I therefore proceeded on that basis.
The chairman of a legislative committee is always in the hands of the members of the committee. If there was an action on my part which was improper then I beg the Chair to make a ruling to that effect so that we can proceed as it would be directed by the House of Commons.


Mr. Speaker:: I do not need to hear further argument. I am sorry, the hon. member for Kamloops.


Mr. Nelson A. Riis (Kamloops):: Mr. Speaker, I do not want to prolong the discussion, but I do want to acknowledge the fact that the hon. member for Edmonton- Strathcona, who has raised this issue, is a dedicated member of the Private Members' Business and raises a very critical issue.
In light of the fact that we want to get on with the budget debate, would it be possible to request to you, Mr. Speaker, that we set aside the consideration of this issue for another moment in order to hear further interventions. Most of us did not know this was coming

February 26, 1992
Speaker's Ruling
today. It is a very serious issue and I would hate to think we would seek a ruling on this without further input.


SPEAKER'S RULING
Mr. Speaker:: I am going to rule on it now. I am fully aware of the implications of this particular situation. Some hon. members have said they had no knowledge this was coming before the House. I hope all hon. members realize that when I receive a question of privilege, that is the privilege of the member applying until the member has risen. I know there was no suggestion the Chair should have communicated with members, but I hope all hon. members will know it would have been quite improper for the Chair to do so.
I compliment the hon. member for Edmonton- Strathcona on his argument and I compliment him on how concise it was. It was brief and to the point. I have listened with great care to the hon. member for Fraser Valley West who of course has a very strong personal interest in this particular matter.
The first thing I have to look at, and the hon. parliamentary secretary mentioned it, is that it is not for the Chair to get involved in matters within a committee unless there is something so egregious and so outrageous that it transcends the normal bounds and amounts to a contempt of the House or, in some extraordinary way, a breach of the privilege of an hon. member and this does not.
First of all, does it affect any hon. members' capacity to carry on their duties as members of the House of Commons? The answer to that is no. All members can carry on their duties as members of the House of Commons. The second thing is whether there is some other procedural approach that might be taken to deal with this matter in front of the whole House, as my hon. friend from Kamloops has suggested. Yes, there is. A motion can be put down.
I go back very briefly to a citation which the hon. member for Edmonton-Strathcona cited. I think I have the exact words: "The House should take cognizance of the matter".
That is really where we are. If the House wishes to take cognizance of this, if the House wishes to exercise its authority, then of course it may do so. But in my view,
it would not be correct or proper at the present time for the Speaker to intervene.


POINT OF ORDER
Hon. Jean Lapierre (Shefford):: Mr. Speaker, I wish to raise a point of order because I have just been informed that Friday at noon, the Beaudoin-Dobbie committee will table its report and hold a press conference or something like that. I have also been informed that starting at 9.30 a.m., journalists will have access to copies of the report before it is actually tabled in the House.
I know that most of my colleagues have had the privilege and the opportunity to be briefed on most of what the report contains within their own caucuses. Members of the bloc, the members of the Reform Party of Canada and the independents did not enjoy the same privilege. Perhaps it would be appropriate to follow our usual practice, as the Minister of Finance did for his budget yesterday, which is to allow the critics to be briefed or at least let them have as much information as the members of the press.
Mr. Speaker, I know you are here to maintain the good order of this House. Perhaps you could ask the parliamentary secretary to check into this, but I would appreciate it if we could follow our usual practice, since unlike other caucuses, we did not have a chance to be briefed. I think the real battle will be about substance, not procedure.


Mrs. Venne:: The whole thing is insulting.


Mr. Speaker:: I appreciate the problems of the hon. member and a number of other members, but the decision to have a lockup is made by the committee, not by the government. Since it is not a decision of this House, it is not up to me to intervene. I am sorry about the situation this has created for the hon. member, but I have no solution.
The hon. member, very briefly.


Jean-C. Lapierre: Mr. Speaker, in that case I would like to reserve the right to raise a question of privilege. Meanwhile you said it was a decision by the committee, but we all know that decisions are often made by the majority on
February 26, 1992

the committee. I wonder whether members of the press now have more privileges than members of this House. That is my question.


Albert Glen Cooper: Mr. Speaker, the hon. member raises a concern that has some interest and some legitimacy.
May I suggest that he raise it with the co-chairs of the committee and see if they cannot do something to accommodate him.


Mr. Marcel Prud'homme (Saint-Denis):: Mr. Speaker, I believe that in the weeks to come our country will be entering a veiy important phase, and the point raised by the hon. member is certainly a valid one.
I think the parliamentary secretary just made a very intelligent suggestion. First, to submit to the joint chairmen what the hon. member just said, bearing in mind that the Chair said it has no responsibility in that respect. Certainly the fact that two or three of us are rising in the House shows how important it is to proceed in an orderly fashion.
To me it seems incredible that some people should get this information in advance, if we agree that Parliament is supreme and all parliamentarians, irrespective of the opinions of the various political parties, are equal. As far as I am concerned, I would appreciate it very much if what we are saying now were carefully considered by the government, by the chairmen, the joint chairmen. I hope the hon. member's suggestion will meet with the approval of those who are listening or who should be listening to us at this time.
I agree it is not up to the Chair to dictate certain guidelines in this respect, but I wish to thank you for allowing us to add our own comments and letting us go on at some length so that the message will be heard.
Routine Proceedings



ROUTINE PROCEEDINGS


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



INTERPARLIAMENTARY DELEGATIONS


Robert Lloyd Wenman: Mr. Speaker, pursuant to Standing Order 34,1 have the honour to present to the House the report on the Asia Pacific Parliamentarians Forum for Educational, Cultural and Economic Co-Operation held in Canberra, Australia, on December 10 and December 11, 1991.
This is a very important conference that is attempting to keep the wider Pacific basin an open option in keeping with APEC and PECC work over the past years. This is an attempt to unite the parliaments of the Pacific with common understandings, particularly as they relate to the tremendous opportunities for growth of trade.
The United States, our major trading partner, is losing precedence to our Asian partners: Japan, Korea, China, Taiwan. The entire region is a region that is of extremely increasing importance to the Parliament of Canada. Therefore, this interparliamentary organization needs to find new precedence among our parliamentary organizations.
Along with the member for Saint-Denis, having observed this first hand, we feel very strongly that his report, which will follow, and this report must be taken very seriously.
Canada must join this organization and be an active part or we will be excluded as we have been excluded from the European Economic Community.

Routine Proceedings
The timing is very important. This is a very significant report. We urge you to study it carefully.



HEADS OF DELEGATIONS MEETING OF THE PARLIAMENTARY ASSEMBLY OF THE CONFERENCE ON SECURITY AND CO-OPERATION IN EUROPE

['Agreed.']
Hon. John Bosley (Don Valley West):: Mr. Speaker, pursuant to Standing Order 34, I have the honour to present to the House the report of the Heads of Delegations Meeting of the Parliamentary Assembly of the Conference on Security and Co-Operation in Europe on January 13, 1992 in Madrid, Spain.
I will not read a precis of the report, under the circumstances, knowing that the hon. Leader of the Opposition is waiting to make his speech.



Mr. Jesse Flis (Parkdale-High Park):: Mr. Speaker, pursuant to Standing Order 36, I have the honour and duty to present petitions on behalf of many residents of Canada who are petitioning regarding the tragic crash of the Arrow Air DC-8 at Gander, Newfoundland on December 12, 1985.
The petitioners state that the Canadian government's accident investigation into the tragic crash did not establish the cause and whereas no proper public inquiry-


Mr. Speaker:: The hon. member knows that it is not appropriate to get into a debate. What the House wants to hear is what is the petition, what is the prayer. I am sure the hon. member can finish that off shortly.


Jesse Philip Flis: Mr. Speaker, because of the seriousness of this petition I am reading it verbatim.


Mr. Speaker:: The petition may be read verbatim, but I think the hon. member, whether he is reading the preamble or not, is getting into argument.
The difficulty in this case is that because we cannot hear any other member on the presentation of a petition, I am asked by all hon. members to be fairly strict about limiting the amount of debate that goes with it. What the hon. member ought to do-and I would think that the petition would show this-is let the House know what it is that the petitioners are asking for. We do have to limit
debate. After all, all petitions of course could be considered serious matters.


Jesse Philip Flis: Mr. Speaker, the families of the victims desperately want to learn the complete circumstances of the deaths of 256 loved ones, and Canada has yet to fulfil its international obligations to investigate fully the worst aircraft crash in Canadian history.
The petitioners humbly pray and call upon Parliament to urge the government to appoint a royal commission to ascertain, evaluate and report on the investigation of the Gander crash with particular attention to deliberate or inadvertent attempts that may have been made to obscure the circumstances.
I would like to draw to the attention of this House that I received a similar petition signed by citizens of the United States and by many of the parents of the soldiers who were killed in this crash. I cannot present their petition in this House because they are not Canadian citizens.
Therefore, I did send their petitions directly to the Prime Minister. Hopefully, with the Prime Minister's intervention and that of the Minister of Transport, the government will see fit to appoint a royal commission to find out once and for all the cause of this crash. Was there any cover-up or not?


QUESTIONS ON THE ORDER PAPER
[Stage Direction]
(Questions answered orally are indicated by an asterisk)
Mr. Albert Cooper (Parliamentary Secretary to Minister of State and Leader of the Government in the House
of Commons): Mr. Speaker, Question No. 158 will be answered today.
Mr. Rideout: With respect to the recapture and trial of Allan Legere, (a) what
were the total costs of the (i) manhunt (ii) trial (6) what proportions
of these costs were paid by the federal and provincial governments
(c) what was the cost of the RCMP DNA testing?


Albert Glen Cooper: I am informed by the Department of Justice and the Ministry of the Solicitor General of Canada as follows:
February 26, 1992

The Department of Justice was not involved in the Allan Legere trial since it involved the provincial responsibilities on administration of justice. All questions concerning the costs of the trial would have to be directed to the provincial authorities in New Brunswick.
Royal Canadian Mounted Police
(a)	(i) It is difficult to calculate the total cost of the manhunt. The RCMP was investigating a number of murders and other serious crimes in the Miramichi, and other areas, in which Allan Legere was one suspect. Certain costs, such as costs for overtime and travel, were collected which were directly attributable to the escape and the recapture of Allan Legere. These costs totalled $110,000. Not included in this figure are costs associated with unsolved crimes, sightings of Allan Legere and subsequent investigations and the salary costs of investigators.
(ii) The trial costs have been identified as being approximately $314,000. This represents the cost of six
(6)	Provincial Police Positions for courtroom security and escort duties, and the costs associated with the DNA analysis. No other trial costs were captured.
(b)	Both the costs of the manhunt and the trial, as identified above, will be divided between the federal and provincial governments, with 30 per cent of the costs charged to the former and 70 per cent to the latter. The costs of the DNA analysis will be charged 100 per cent to the federal government.
(c)	The cost of the RCMP DNA testing was $63,000. This includes the human resource expense as well as travel.


Mr. Speaker:: The question as enumerated by the parliamentaiy secretary has been answered.


Albert Glen Cooper: I ask, Mr. Speaker, that the remaining questions be allowed to stand.


Mr. Speaker:: Shall the remaining questions stand?


Some hon. members:: Agreed.


[Stage Direction]
Mr. Albert Cooper (Parliamentary Secretary to Minister of State and Leader of the Government in the House
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of Commons): Mr. Speaker, I would ask you to be so kind as to call Notice of Motion for the Production of Papers P-1, in the name of the hon. member for Winnipeg North Centre.
That an Order of the House do issue for copies of all correspondence, briefs and reports relating to the visit of government officials in January 1991 to Europe to discuss Canada's treatment of native peoples.
Albert Glen Cooper: This notice of motion is acceptable to the government and the documents are tabled immediately.


[Stage Direction]
Motion agreed to.
Albert Glen Cooper: I ask that the other Notices of Motions for the Production of Papers be allowed to stand.


Mr. Speaker:: Is it agreed?


Some hon. members:: Agreed.



GOVERNMENT ORDERS


[Stage Direction]
The House resumed from Tuesday, February 25, consideration of the motion of Mr. Mazankowski that this House approves in general the budgetary policy of the government.
Hon. Herb Gray (Windsor West):: Mr. Speaker, the budget presented last night is a budget of illusion. It substitutes smoke and mirrors and the appearance of activity for the action that is needed to help the Canadian economy and millions of Canadians battered and bruised by the policies of this government to get up off the ground and back on their feet.
For example, in this budget the minister holds out the promise of a tax cut to Canadians reeling under the effects of the 33 separate tax increases imposed on them by this government since it took office in 1984, including the impact of the GST.
When the smoke clears away, when the government stops moving the shells around and Canadians look underneath, what do they see? For Canadians earning below the poverty line a salary of $15,000 a year for themselves and their families including two children,

February 26, 1992
The Budget
what does this minister offer? A tax cut of $2 this year. If we look at an average family earning $40,000 a year, what does this minister offer it by way of a tax cut? $27 a year.
If we look at the table in the government's own Budget Papers, guess who gets the biggest tax cut of all this year of $111? It is a family earning $100,000 a year. It is not surprising because this is typical of Tory tax reform.
Also, if we look at the minister's table, strangely enough the single taxpayer gets a bigger cut than an entire family. That is real "Mazanomics", to use a word I saw in some of the press coverage.
Looking at this $2 cut for a family below the poverty line, no wonder I have called the Minister of Finance "Mr. Generosity" and "I\vo Buck" or better still "T\vo Loonie Maz".
The government talks of its proposed new child benefits program, but let us look at this proposed program after the smoke of the budget speech clears away. What do we see? The average family gains very little from this proposal. In fact a family with an annual income of $40,000 will receive an added annual benefit of only $44. In three years the value of the benefit will decrease by 10 per cent and within a decade the help will be gone for most families because this benefit is not indexed for inflation.
The government's proposal will put $2.1 billion back into the system over a five-year period, starting January 1, 1993. The Minister of Finance must hope that Canadians have forgotten that between 1986 and 1991 the Conservative government took more than $3.5 billion out of the child benefit system. This proposed child benefit program still fails to put back in the hands of Canadian families everything this government took away from them only between 1986 and 1991.
By the way, nothing in the proposed child benefit program addresses the profound need for child care facilities. In fact the government's drum beating for this new program hides the fact that the government has apparently abandoned its pledge of a national child care program to provide facilities to look after the children of parents who are at work.


Sheila Maureen Copps: Child care killer.


Herbert Eser (Herb) Gray: Mr. Speaker, the government has proposed the increase of its child care expense
deduction by $1,000, but it is important to note that this deduction provides absolutely no benefit to families who do not earn enough money to pay income tax. Also, this program will not go into effect for almost a full year. If there are any additional benefits in it, they will not be available to Canadian families right now when they are suffering from the effects of this very serious government induced recession.
In the budget it is true the government did adopt the Liberal proposal, although not in the exact same detail, to allow the use of RRSP funds to buy homes. The government has already accepted our proposal to lower the down payment required to buy a home.
When the Tory drum beat stops and the smoke clears away and they stop moving the shells around, what do we see? The Conservatives are cancelling the co-operative housing program. They are cutting back on the growth in the funds for Canada Mortgage and Housing to provide for other programs of low income housing. The RRSP and low down payment programs, we expect to be useful, but they do nothing for people who cannot afford to put money in RRSPs and who cannot afford even a 5 per cent down payment. The budget makes it harder and not easier for those Canadians, low income Canadians, tens of thousands of them, to be able to get decent, affordable housing.
The budget does have some interesting words, fine words about education and training. Again, when the smoke clears away, there is a lot less there than meets the eye. The budget talks about increasing the student tax credit. Yes, it makes a slight improvement.

The government agreed to raise the education tax credit from $60 to $80 per month for students in post-secondary institutions.

This budget does nothing to restore the cuts in federal transfer payments to the provinces for post-secondary education, cuts that will mean that in Ontario alone likely 5,000 fewer young people will be able to go to university next year. What good is a tax break to pay for university studies to a young Canadian who cannot get into university in the first place because of the government's cuts in transfer payments to the provinces for post-secondary education? The universities now have to
February 26, 1992

cut back the number of students they will accept in their entrance year.
The government also pays lip service to the need for more research and development in this country. When the smoke clears and the Minister of Finance stops moving the shells around in his shell game of a budget, Canadians will see that the budget offers about only another $230 million for this vital activity spread over five years. At the same time the government cancelled the Science Council, a vital source of advice and research and support for having a more effective, competitive and technologically advanced country.
The budget also appears to do things including tax changes to help business. Everything in this budget that the government says is targeted to help business will not even begin to make up for the damage this government has done to business, especially manufacturers, through its high interest rate and high dollar policies.
When the smoke clears away from this budget and the mirrors stop flashing, Canadians will see there is nothing in the budget to take away the reality that our interest rates are still very high. They are still too high in real terms after deducting the rate of inflation from them.
There is no pledge in this budget about further declines in real interest rates. This budget says nothing about the need for further declines in the Canadian dollar. Instead the Bank of Canada, apparently with the support of this government and this Minister of Finance, appears to be working to keep the dollar up in spite of pleas from our resource companies and our manufacturers that the dollar be allowed to decline further to help restore their competitiveness in world markets.
The government talks about fundamentals, but it still refuses in its budget speech to admit that the fundamentals of the interest rate and the dollar are still not right and are still working against the best interests of Canadian business and the Canadian economy, still reeling from the impact of the GST and the free trade deal and yes, world economic changes.

The Conservatives' economic policies have caused record levels of personal and business bankruptcies in
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Canada. The economy cannot grow until businesses can operate in a relatively stable and healthy environment.

The budget sets out forecasts of the government deficit, forecasts of the unemployment rate and economic growth for Canada. I note this government has not been right yet in those forecasts, if we look back at its previous budgets. Even if these forecasts turn out to be right, they paint a sad picture of too high unemployment and a lagging and weak economic growth.
The minister's own budget papers confirm how poor its management of the economy has been. Thke a look at page 41 of The Budget Papers and I quote:
Taken together, annual growth this year and next still remains well below the 4.7 per cent average of growth in the 1983-1984 recovery period.
Thke a look at the next page. It says:
Annual growth of 4.5 per cent in 1993 is below the norm of past recoveries-The present recovery has been weak by historical standards. Excess capacity will thus remain in the economy throughout this period -despite the anticipated pick-up in growth in 1993.
That is quotation from the minister's own budget papers. These are buried in these papers but not found in the budget speech.
When The Budget Papers speak of excess capacity, this means more lay-offs, more lost jobs, more closed factories and lost production.
Once again, when the smoke clears away and the illusion of good economic management this budget attempts to create is gone, we see the budget is really a sham when it comes to helping create a strong recovery. This budget is lacking in many things, but it is especially lacking in a commitment to strong economic growth.
The budget continues to address the deficit and debt reduction. These are certainly important issues, but there is no recognition of the role of economic growth in helping to deal with those problems. With economic growth there is less government expenditure for things like welfare. With economic growth there is more revenue without tax increases because businesses are making profits and people are working and earning incomes.

February 26, 1992
The Budget
Looking at this budget and comparing it to past budgets, it is basically more of the same. When one has a worn out used car with a new coat of paint, in spite of that new coat of paint it is still the same worn out used car. This budget, in spite of its smoke and mirrors, is still the same worn out, tired budget presented over and over again by the previous minister in spite of the efforts of the present one to dress it up with a new coat of paint, in the form of the appearance of help for Canadians.
When we look at this budget in terms of the government's own priorities of debt and deficit reduction, this government is a failure because the budget speech confirms that the government has again failed to meet its own deficit target. No matter how much it twists and turns, it cannot escape the reality that since it took office, the public debt has actually doubled to $420 billion.

The Conservatives increased our debt; they did not reduce it. I know how much the Prime Minister and the Minister of Finance love to distort the truth about it and blame the previous government for the exponential growth of the debt.

The government has responded to some of the suggestions in my leader's emergency economic recovery plan, but what about the other elements in this plan? Where is the national community works program it proposes that would help municipalities all across this country get on with projects they already have on the shelf to upgrade roads, bridges and pollution control system? This program's costs would be shared with the provinces and municipal governments and would help put tens of thousands of people back to work.
Where are the programs the Leader of the Opposition mentioned in his emergency economic recovery program to help our workers obtain basic skills right now? Where are the programs of adjustment to retain and upgrade our workers and restore our industrial base to help it recover from the negative impact of the free trade deal, the GST, and world economic trends?
These programs certainly are not anywhere in this budget. This points to the basic failure of this budget. It does little or nothing to help the 1.5 million Canadians who are unemployed get back to work. It does little or
nothing to help the 2 million Canadians on welfare get back into the labour force.
After the smoke cleared away, the minister, in his speech last night, admitted that with all the activity the budget speech described, there will still be an unemployment rate this year of over 10 per cent and about the same high level next year.
I do not see how the government, if it is responsible and caring, can live with these numbers. Instead of action, the Prime Minister, when he has the chance to say something constructive, calls the unemployed crackpots when they protest their plight.
This budget should have provided a frontal attack on unemployment. It gave us only the illusion of action and nothing more than smoke and mirrors.
As I said last night, the only test that counts is what this budget does for the 1.5 million unemployed. By the standards of that test this budget is an abject failure. This budget does nothing for the fish plant workers in Newfoundland. It does nothing for the auto workers in Ontario or the oil workers and the farmers of western Canada.
What does this government in its budget have to offer the workers who have been laid off at Hibernia and the
2,000	workers who will be losing their jobs at the General Motors plant in St. Catharines? To the Prime Minister and the Minister of Finance these people are nothing more than crackpots to be ignored and swept aside.
When I responded to the budget last year I described it as a "blueprint for de-Confederation". The budget given last night does nothing more to strengthen the fabric of this country when that strengthening is badly needed. It gives the illusion of action but it is only a mammoth shell game. Last year the then Minister of Finance called his budget a plan for economic recovery. But instead of recovery, it brought further recession and fear about the future. There is little in this budget to take away that fear and concern from the minds of millions of Canadians.

These people deserve better than that. They worked very hard all their life, but every additional year under this government sets them back a little further. Did they do all that for nothing? Today, they cannot even afford what the middle class took for granted not so long ago. Those who always took care of their future are worried
February 26, 1992

today. They are starting to wonder how much longer they will have a job.

Before he gave his budget speech the Minister of Finance said he would present a realistic budget, a realistic budget. But now that we have heard it, it is clear this budget is the height of unreality. It has instead strong elements of fantasy. It ignores the reality of too high unemployment; it ignores the reality of slow economic growth and lingering painful recession. A realistic budget would give Canadians heart and hope instead of continuing the despair caused by this government's policies.
The priority of a truly realistic budget would be to get Canadians working again. This budget does not do so. In this budget once again this government has betrayed the trust of Canadians. This government has confirmed why it does not deserve the confidence of Canadians and why there should and must be an early election to get rid of this callous and incompetent Conservative government.
In conclusion that is why I move, seconded by the member for Beausejour:
That the motion be amended by deleting all the words after the
word "that" and substituting the following:
That this House condemns the government for its budget's failure to provide realistic support for the millions of Canadians who are victims of its short-sighted fiscal and monetary policies and for its failure to offer a realistic blueprint for the creation of jobs and economic growth in order to bring about a strong and early recovery from the economic disaster induced by this government.


Steven W. Langdon: Mr. Speaker, it is always an interesting exercise to get up and look first at the rhetoric of Conservative budgets and then to look at the details of those budgets.
The rhetoric of this budget talks about strengthening the fundamentals. It talks about an emerging new Canadian economy. It talks about action for jobs. It talks as well about a social dividend and yet, when you actually look at the details of this budget, it provides little help to the many, many people across this country who are in such desperate situations. They are in such devastating
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positions that their families face grim futures. They themselves have started to lose hope.
I say to the Minister of Finance and this government that there is across this country a sense of despair, a loss of hope which is taking place, and this government is not responding with the kind of compassion, caring and serious programs which are essential if we are going to see that despair reversed and if we are going to see some hope provided to this country for the future.
I wish that I could talk about the budget in a more positive way because, frankly, there are cosmetics on this budget. This is a budget which has taken the face of previous Conservative budgets and put some make-up on it. There is a little bit of lipstick. There is a little bit of rouge here and there, but what there is not, when you penetrate below those cosmetics, is anything that seriously gets at either the roots of our economic problems in this country or gives the people who are out of work across Canada a sense that over the next six months or over the next year we are actually going to see recovery, that we are actually going to see significant growth. Is there any chance that they are going to get a chance to get back into the work force and put food on the tables of their families?
I come from a constituency which has just had a study produced this week which indicated-it is not a community which is different from many in southern Ontario, it is not a community which is different from any in Atlantic Canada or in parts of Quebec-that 21.5 per cent of the labour force of Windsor is out of work. These people are unemployed.
That is a human tragedy. It is a human tragedy for the people affected. It is a colossal waste of resources for this country to have people out of work, having to receive unemployment insurance, having to receive welfare when they could be productively contributing to our economy. They could be giving our economy a sense of growth, a sense of expansion, and they could be giving all of us as taxpayers some partners to help in the burden of paying taxes.
That is one of the things we forget. We think sometimes it is just the 1.5 million people out of work who are affected when there is a serious economic downturn. The reality is that every Canadian is affected because

February 26, 1992
The Budget
every Canadian has to pay more in taxes. Every Canadian has to shoulder a greater burden because people have been thrown out of work and have to receive unemployment insurance or welfare instead of paying taxes to the community.
As we look across this country, the realities of 1992 are not much different from the realities a year ago, except that they are worse. A year ago this government said we had a budget in front of us that would give us recovery. This budget promises us recovery.
The Minister of Finance said back in October that the economy was starting to boom. The Minister of Finance has said that he regrets those words, he overstated himself. He should, because we are not in a boom; we are not in a recovery. We in fact are facing the worst, the most prolonged economic downturn as far as our manufacturing sector and our farming sectors are concerned that we have experienced in this country since the great depression of the 1930s.
When you get that long a period of unemployment you do not just have people out of work. We have found in the statistics that have come out in the past few months, increasing inequalities in our country, increasing poverty. We have found that we are exporting less, that our trade position is worse than it has ever been before. We found bankruptcies at record heights. We had more bankruptcies last year than this country has ever seen in a single year before.
I could go on and list the great set of disastrous economic circumstances which are in front of us as a country. I do not want to suggest doom and gloom as the only reality. There are many Canadians who have ideas, who have hopes, who have suggestions. We heard from them across the country. We heard too their sense of anger that this government had not taken action to put this economy back into recovery, had not put people back to work.

The budget contains an impressive list of cuts, changes and modifications of all kinds to government programs and agencies. Some taxes on corporations and on individuals were changed. The Minister of Finance wanted to give the impression that he is a man of action and that he knows how to take charge of the situation. But this budget contains nothing to get the economy out of its slump and to put people to work.
Like the Liberal Party at the end of its mandate, this government is drained, unable to present a creative budget. This government keeps repeating the same refrain about cutting the deficit. If it had abolished the capital gains lifetime exemption as suggested in the New Democratic Party's budget proposals, the Conservative government would have recovered $2 billion. Sixty per cent of those who benefit from this exemption earn over $100,000.

We are talking about a loophole in the case of the capital gains exemption which benefits only .4 per cent of the taxpayers of this country. Less than half of 1 per cent receive 60 per cent of the tax breaks from that tax loophole. If we had eliminated that tax loophole we would have gained $2 billion that we could have used to put people back to work; that we could have used to reduce the GST and get rid of it for certain sectors of the economy; that we could have used to do something about improving the infrastructure in our municipalities; that we could have used to establish a child care program such as this government today has just abandoned.
We do not have a set of strong actions against the loopholes for the rich that remain in our tax system. Instead we have a series of tax changes which in the first place are veiy small. The tax changes which took place in this budget were about half of the total amount of tax increases this government put in on January 1, in terms of increased UI premiums that individuals and companies had to pay.
With one hand it gave people about $1 billion extra and then a month and a half ago it took away from people almost $2 billion in UI premiums. So much for tax decreases from this government.
In the second place, those tax decreases that were provided were far more beneficial for people who were rich than for people who were poor. For every dollar that went in tax breaks to an individual making $30,000 per year, the average wage that an industrial worker in Windsor would get, people who are wealthy in this country making $100,000 a year received six dollars. Six dollars for every dollar that went to the average person.
That is not fairness or social justice. That is the same old Conservative philosophy which has led in this country in the past seven and one-half years to increased taxes for the average family and decreased taxes for the
February 26, 1992

rich. It has led to decreased taxes for corporations and consequently to an economy that is suffering very badly.
I mentioned today in Question Period that some of the tax loopholes are especially gross and unbelievable. I find it inconceivable that a government, after it had been pointed out to them, would still keep a provision in the tax system permitting a company to hire escort services for their clients. I asked the Minister of Finance about this today and he refused to answer the question. I think he was embarrassed. He certainly should be embarrassed. This government should be embarrassed by what it has given the rich, the powerful and the well off in this country at a time when people are suffering so badly across this country.
As we look through this budget, there is no action to expand jobs. In fact I can point to things in this budget that reduce jobs such as the elimination of co-operative housing. This excellent program has benefited thousands of people across this country, not only those who live in co-operative housing but also those who build that co-operative housing and produce the materials that go into it. Mr. Speaker, I think your timing must be slightly off. It was about four o'clock when I started. If I can continue-


The Acting Speaker (Mr. DeBIois):: I want to be clear. I think you have two minutes left in your speech.


Steven W. Langdon: Mr. Speaker, all I can say is that having looked at the clock when I got up and it now being just past a quarter after, it seems to me that two minutes is rather a remarkable interpretation.


The Acting Speaker (Mr. DeBIois):: Order, please. I want to remind the hon. speaker that I gave him two minutes more than the usual time because of the interruption. You have two minutes left.


Steven W. Langdon: It seems to me that what we have in front of us is a budget which does not provide a response to the answers of Canadians. Instead it provides answers to the needs that the large scale business community in this country wanted. It is not surprising the Minister of Finance, when he quoted those who supported his budget, said today that they had support from the Business Council on National Issues. They had support from the Chamber of Commerce and from the manufac-
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turers. That is not surprising. It is a budget that was written for them, not for the average person in this country. That is the reality.
I say to this government and I say to this minister that they have to get a vision of reality.
He talked about realism before he presented this budget. He has to recognize that the reality across this country is a grim and tough reality. It is a grim and tough reality with many, many people out of work.
That required a budget that had compassion, that had force, that gave leadership and that put people back to work. That is not the budget that we have before us and that is why I would like to move a subamendment to the amendment which has been moved. I move:
That the amendment be amended by adding the following words
after the words "monetary policies":
specifically, its failure to eliminate unfair tax loopholes for the rich
and by adding the following words after the words "economic
growth":
, to reach full employment in Canada and significantly reduce defence spending so as to provide funds to assist in the expansion of jobs
That amendment can give us a direction which will put people back to work and give us a sense of hope for the country.


Mr. Dennis Mills (Broadview-Greenwood):: Mr. Speaker, I listened carefully to the member for Essex- Windsor and there were many things he said in his speech that I agree with.
I was hoping that the Minister of Finance naturally would take a much more aggressive approach in tax reform. It is no secret to this House where I stand on comprehensive tax reform.
I would have thought that there would have been a little bit more in this budget, a lot more actually for training. I supported the member for Essex-Windsor on that.
As I listened to him I could not help but think of my own province, the province of Ontario. Some of those same criticisms that he was putting toward the government could also be applied toward the premier of Ontario.

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The province of Ontario has traditionally been consid- Ste. Marie there is Algoma Steel with over 3,000. We can ered one of the engines that is vital to the economic talk about de Havilland which has been saved. We can health of this country.	talk about Kapuskasing which has been saved.
Does the member for Essex-Windsor not think that maybe some of that advice that he is giving this Minister of Finance-and by the way I agree with a lot of it- could also be given it the treasurer in the province of Ontario?
In the province of Ontario right now the unemployment situation is a disaster. The video business in Toronto is a good business to be in because we seem to be paying people to stay at home. We are not getting them back to work.
I caution the member for Essex-Windsor that as he is criticizing-and I am certainly going to be critical of this government-we should also be putting some ideas forward.
Those same ideas should be presented to the premier of Ontario who is doing a disastrous job right now in the province and not helping this engine of recovery at all. I was wondering if he could maybe comment on that.


The Acting Speaker (Mr. DeBlois):: Before giving the floor to the hon. member, I received the amendment to the amendment from the hon. member for Essex- Windsor. That amendment is under consideration by the Speaker.


Steven W. Langdon: Mr. Speaker, I would say two things.
First, it is interesting the provincial Liberals in Ontario attack the New Democrat government in Ontario because it is doing too much, because it is being too expansive, because it is trying to do too much for people. And this federal Liberal wing attacks that government for not doing enough. It would be interesting if they would at least get their act together. As far as we are concerned there is no difference, which will be reflected in my comments.
What I have said this government should be doing is precisely the kinds of things which the Ontario government has been emphasizing and has been putting into effect so as to get people back to work.
I can list for members the various plants which have been saved by the aggressive action of a government that is providing leadership in Ontario, for example, in Sault
In area after area in my province the New Democrat government is being aggressive and providing leadership because it does care about people.
It is also putting tax changes into effect. For instance, in its last budget it saw to it that for every dollar in tax breaks that went to the average working family, there was not $6 that went to the rich as this government is putting into effect. Instead, there was an increased tax burden on the rich so that they contributed a fair share of taxation in the province of Ontario. That is the direction which has to be taken.
It is a direction which I think we all recognize cannot represent a vast expansion in the deficit. That is something on which there is broad agreement, but a reallocation of money is essential, and this government has not given us that reallocation of money.
It has played a shell game which has tried to suggest that such reallocation is taking place, but no such change has really occurred to put money in the hands of those who need it to get people back to work.


Mr. John Harvard (Winnipeg-St. James):: Mr. Speaker, I want to raise the matter of universality because it certainly comes up in this budget.
There is no doubt in my mind that with respect to family allowances universality is dead and gone. You can thank the Tories for that. It was Liberal governments in the past that brought universality to this country.
If Tory government members can end universality with respect to family allowances, where do they go next? Do they stop at family allowances or can they then attack universality at the level of medicare? If they can attack universality at the level of medicare, can they go further? For example, can they go on to pension plans? Why not?
It seems to me that if you can argue that upper middle income people or so-called rich people in this country do not need the benefits of universality, then you can equally argue that upper middle-income people, rich people, do not need the benefits of medicare. If you can argue that, you can go down the road farther and you can argue that upper middle income people and rich people
February 26, 1992

in this country do not need the benefits of pensions. Where does this nonsense stop?
It seems to me that if we are going to fight for it we have to fight for it now because once you unleash this, once you attack universality or end it in one area of our social programs, that attack will continue. I want to ask the speaker for the New Democratic Party whether he shares that view of mine.


Steven W. Langdon: Mr. Speaker, I have to say I agree very strongly with the member from the Liberal Party who has just spoken. I think we have in front of us an attack on universality which is very dangerous for the future of our social programs. As soon as you make the social programs in this country simply for a disadvantaged minority, and everyone does not have a stake in our social programs, then inevitably by the politics of majorities and minorities, those majorities will squeeze the money that goes to that minority and those social programs will cease to be useful.
I agree with my friend from Winnipeg. I suggest to him as strongly as I possibly can that yes, we must fight this. I urge him to fight it as strongly as he possibly can with the Liberal premier of New Brunswick who has suggested that we should get rid of universality in medicare; with the Liberal premier of Quebec who has suggested that we should get rid of universality in medicare.
I think this battle has to take place, and as someone in the Liberal Party, I think he is well placed to lead that fight against those in his party who are heading down that road. There are certainly a lot of them and I worry about them a great deal.


Benoît Bouchard: Mr. Speaker, I welcome this opportunity to lead off the debate on the government's budget for the
1992-93 fiscal year.
I would like to start by congratulating my colleague, the Minister of Finance, on a budget that reflects the concerns of Canadians. He not only heard what they had to say. He listened. This is truly a budget for all Canadians, not just for the government.
During pre-budget consultations, there was a clear consensus on the need for adopting a well balanced approach that would help strengthen our economy today and in the years to come.
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Mr. Speaker, I think it is clear, and you and I heard the minister say, that Canadians want to cut the deficit. They know that higher debt means higher taxes, and they want an end to rising taxes. They want the burden of government reduced. They want less government and better service.
Canadians want to ensure better development of Canada's most valuable resource-our people. They want better opportunities for people to improve their skills, and they want steps taken to ensure that our social programs meet the basic needs of Canadians.
Most of all, Canadians want a renewed basis for confidence in their economy-confidence that jobs will be created and jobs maintained.
The budget is a response to these demands. The equation is quite simple: The budget will cut public spending and use the savings to provide tax reductions that will help Canadian citizens and support economic growth.

This budget will not please anyone who thinks we can spend our way to instant prosperity. My colleague, the Minister of Finance, said yesterday that you don't get out of a hole by digging it deeper. The budget of course makes tough decisions to reduce government spending. These cuts make it possible for us not only to reduce the deficit but also to cut taxes and deliver a social dividend to Canadians and their families.

The personal income surtax will drop from 5 per cent of basic tax to 4 per cent on July 1,1992, and to 3 per cent on January 1, 1993. This will increase Canadians' aftertax income by $500 million in 1992-93, and by more than $1.2 billion in 1993-94. Every one of the nearly 15 million taxpayers will benefit from it.
The new home buyers' plan will allow Canadians to draw on their registered retirement savings plans to buy a house. Individuals will be able to withdraw up to $20,000 tax-free and repay it over 15 years.
Interest rates have declined considerably, about seven points since the spring of 1990, and Canadians are very pleased with that. Similarly one-year mortgage rates have fallen sue percentage points. Thus a family that takes out a $75,000 mortgage loan amortized over 25 years saves over $300 a month. Lower inflation is the key to lower interest rates. Inflation has dropped spectacu-

February 26, 1992
The Budget
larly, from a 6.8 per cent annual rate in January 1991 to barely 1.6 per cent today.

The manufacturing and processing sector exports some 40 per cent of its production and is highly exposed to international competition. To help it meet the challenges of globalization, the manufacturing and processing tax will be reduced from 23 per cent to 22 per cent by January 1, 1994.
Furthermore the capital cost allowance rate will be increased for manufacturing and processing machinery from 25 per cent to 30 per cent.

The budget also recognizes the crucial role that research and development play in today's global economy. We are streamlining the administration of the scientific research tax credit. This should enable businesses to make greater use of the credit and stimulate about $230 million of research and development in the next few years.
The government is setting up the Small Businesses Financing Program to help small businesses, which are so important to the Canadian economy, obtain loans at lower interest rates. Furthermore the ceiling for loans to small businesses under the Small Businesses Loans Act will double to $200,000.

As one can see this budget makes a concrete investment in overcoming our current economic weakness, in reducing the burden of deficits and taxes, and in building a more competitive future. But it also invests new resources in assisting Canada's children, the disabled and students. The government has proposed major reform of the child benefit system. The new system will increase child benefits by $400 million per year and target them to low and middle income families. I will come back to this proposal in a moment.
The budget also includes measures to help disabled persons play a fuller role in Canadian life. For example, the range of tax deductible expenses for medical treatments Mil be broadened.
The budget will also provide additional tax relief to students. The maximum amount of income on which the education credit is calculated will increase by one-third. The limit of the total amount of tuition fees and education credits which may be transferred to another taxpayer will rise to $680.
Even as the government is being streamlined, measures will be taken to improve service to the public. For example, departments and agencies will work to provide more convenient one-step access to the services they offer. Standards of service will be developed for such matters as longer hours of opening and faster responses. Procedures and forms will be simplified and existing regulations will be reviewed to ensure they serve valid public purposes.
Yesterday in the budget we saw a major $2 billion step toward improving federal support for children and families.
The new child benefit will consolidate the existing family allowances, child tax credits and dependent child credit into a single monthly benefit beginning January 1993. The child benefit will also include an additional amount for low income working families.
It is the largest and most important social initiative since the child tax credit was introduced in 1978. The proposed child benefits built on existing federal programs for children and families total $15 billion annually.

Mr. Speaker, I would like to tell you today why we are taking this action. To begin, I would like to quote something that I read recently: "Children are an asset to the state, human resources are of much more importance than material resources". Those words were spoken by then Prime Minister Mackenzie King in the House of Commons in July 1944, nearly half a century ago, when the family allowances bill was presented. He also said: "There is an obligation upon the state to assist in the upbringing of children" and "the family and the home are the foundation of national life". To be sure, politicians are rarely unanimous. However, when the importance of children and families is concerned, I am sure that we can agree.
February 26, 1992



We plan to discuss this proposal with the provinces however. We plan to discuss implementation and not introduction. In fact we will be introducing legislation before the summer and I hope we will receive support from all members of the House.
We want the kind of support that Mackenzie King received in 1944. Adjusting the way we support children and families is a hallmark of Canada's social policy tradition.
Since 1945 successive federal governments have made additions and adjustments to our child benefit programs. These programs have been modified on more than 20 separate occasions. Each of these changes were made with good reason. Each was appropriate to its time, but the result of all these additions and adjustments is a patchwork of benefits.
It is complicated. It makes little sense. It tries to be fair, but it falls short in that regard, too.

The new child benefit follows up the recommendations of two parliamentary reports, one from a Senate committee entitled Child Poverty: Towards a Better Future, and another from a House subcommittee entitled Canada's Children: Our Future. The recommendations were very good. We have accepted and implemented them.

The new child benefit has three characteristics. First, it is simpler. There is no additional paperwork to fill out. It is tax free for parents to keep and benefit their children. An all in one payment is made every month. It is fairer.
The new child benefit will be based on the over-all income of the family and not on individual incomes. It will go to families who need it. To help working families better provide for their children, there is an earned income supplement of $500 per family.
Finally it is more generous. Virtually all single parents and one earner families will receive more. Annual benefits for low to moderate income families with
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incomes below $50,000 will increase by an average of almost $250 a year.
I believe it is a fiscally responsive decision and that fiscal responsibility is itself a social benefit. Our children must not inherit a Canada that is crippled by debt.
Of course some will say this is the end of universal social programs. I believe it is a reaffirmation of Canadians' belief in fairness. I cannot justify sending a family allowance cheque or giving a child tax credit to families that earn hundreds of thousands of dollars. It is just not fair.

On the contrary, I think that as a society, whether we are politicians or ordinary citizens, we cannot remain indifferent when children go to school hungry or do not have boots to wear in winter.
If we want to help children, we must help families. Of course the government does not have unlimited resources so it must make the best use of them.

Every generation leaves the next a legacy. We all struggle to do our best for our children. As we make these efforts, we also recognize that our children will one day have to make their own way in the world. We must give them every opportunity.
Prosperity is not a commodity that can be bought or sold. It is not something that can be handed down from one generation to the next. Prosperity is the result of a healthy, happy, educated and motivated collection of people. Certainly prosperity has something to do with money, but it has a lot more to do with people. Tomorrow's prosperity is in the hands of today's children. The legacy we must leave them is one of unrestricted opportunity. They must inherit from us a future that is wide open, free for them to make the paths they will.

All the measures described, together with the initiatives that the government has taken in the past, strengthen the foundation for growth and job creation. As the Minister of Finance reminded us yesterday, and it is worth repeating, the Canadian economy is fundamentally well placed for a sustained recovery.

February 26, 1992
The Budget
In summary, I think that this budget provides leadership and does what Canadians say they expect the federal government to do. But it is also true that no level of government can make the economy healthy.
The economy will only be healthy if all levels of government and all sectors of the economy work together constructively to put long-term gains ahead of shortterm interests. That is why our government, in close co-operation with the provinces, will try to strengthen the policy framework that our economic union provides for growth and future job creation.
The provinces will soon bring down their budgets. It is important that they follow a course compatible with this budget: better financial balance, lower deficits, tighter control on spending and on the tax burden. To repeat again what the Minister of Finance said, it is always the same taxpayers who pay and they deserve a break.
That is the message which Canadians gave us and we listened to it. I think the budget we tabled yesterday provides a clear answer to that message.


Dennis Joseph Mills: Mr. Speaker, I have a lot of respect for the minister of health. I have watched him serve in many profiles for this national government over the last few years. I think that his child tax benefit plan is an interesting one and it is the beginning of an interesting debate.
The minister says they are listening to the people of Canada.
I am hearing right across this country that people want to get back to work. In the province of Quebec alone we have 600,000 entrepreneurs. This minister is the Quebec minister. I have listened to some of these people and they are not feeling confident. The unemployment numbers in the province of Quebec are high. The minister talks about children and the ability to buy snowsuits and rubber boots, and having enough food to eat. The best way to provide this is to get these people back to work. The best way for children to be looked after in terms of their health and their welfare is their mother or father having a job.
I do not see anything in this budget that is going to kick-start the entrepreneurship of this country. There are 1,700,000 entrepreneurs in this country. The government says it is way ahead of its inflation targets. It has a very low interest rate. In spite of all those things, there is a low, low confidence in this country. I believe that the Minister of Finance, without being dramatic, without going to the deficit or to the debt, should have done something to kick-start that entrepreneurial spirit that exists in this country if he wants to get people back to work again. It seems to me that that would be just as powerful a way of looking after the children of this country as the program that he is on. I am not against exploring that program, but it seems to me the dignity of a person working is equally important as that tax credit.


Benoît Bouchard: Mr. Speaker, I want to say I appreciate the comment. It is positive. It is constructive. Maybe it is not based on the same perceptions, but I appreciate the way the member is approaching the issue.
I agree that the more we have the capacity to produce in the country, the wealth of the country will grow automatically and we will be able to do more for poor children. I totally agree with that and I agree that wealth comes first of all by working. People in the labour force who are able to get a job and to work produce wealth in the country.
However in Canada, as in any other country in the world, I would say we face today a kind of cyclical period. It happened in the 1970s and it happened at the beginning of the 1990s. I believe that my friend will agree with me that jobs are not coming. I will use the expression which is coming from French-I made a mistake this morning. I hope I will not make one this afternoon-which is spontaneous generation, which is coming so suddenly that we do have to take into account all different factors of the problem we face today. My colleague was and still is involved in the business sector. He knows very well that all those conditions are such that a few macroeconomic conditions like interest rates, dollar plays, and many other factors refer particularly to the question of restructuring of the economy and so on. When doubled with a recession as the one we face, it makes that very difficult. In Quebec, as in Ontario, it may be they are proportionally touched with problems with the recession.
February 26, 1992

Other provinces have problems too. Last week I was in British Columbia and obviously the reality is different. It is not because there are no problems. The question is the different realities in the two central provinces touched by the recession. There is no doubt in my mind that what I would call the point d'arrivee with the question of children has to be fixed with the point de depart.
The Speaker has told me that I have taken too long. I believe that what the Minister of Finance has proposed, and it may be in terms of triggering some kind of new economy, is modest in the capacity that we have to do it for small business, investors and so on.


The Acting Speaker (Mr. DeBlois):: I am sorry to interrupt the minister, but there are several members with questions, and I will now recognize the hon. member for Rosemont.


Benoît Tremblay: Mr. Speaker, I heard the Minister of National Health and Welfare and Minister responsible for Quebec speak with great pride about the budget. I must say I have had enough of the opposition's worrying about the future of universality as it applies to health care, now that the government has dropped this principle for family allowances. I think the two cases are quite different. Although the government's decision is not spectacular as far as supporting our families or the birth rate is concerned, the latter being vital to us in Quebec, the fact remains that this reform does send the money to the families that are most in need. As far as health care is concerned, however, programs are already being affected today. During the eighties, and even more so recently, the federal government has been withdrawing from health care support to a very substantial degree. In 1985-86, according to agreements existing at the time, the federal government paid 46 per cent of health care and higher education costs. We know that by 1994-95 it will be paying only 32 per cent. This is clearly a withdrawal from those agreements. For Quebec next year this means a shortfall of $1.9 billion. How can the minister say he hopes the provinces will do the same? Does he mean the provinces should send the bill to the municipalities, which will send it on to the citizens of this country who
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ultimately pay anyway? If the federal government withdraws from health care financing, the provinces will either have to change the program or tax their residents. Although the minister continues to defend the principle, at least officially, the programs are already being affected.
There is another issue that is extremely important to Quebec -


The Acting Speaker (Mr. DeBlois):: I am sorry to interrupt the hon. member but he has only one minute left to finish his comments, after which the minister has a chance to respond.


Benoît Tremblay: Regarding research and development programs, I simply want to know whether the minister responsible for Quebec is aware that the federal government is actually skimming off 39 per cent of the tax credit allowed by Quebec to businesses for research and development, as the finance minister explained at the last first ministers' meeting.


Benoît Bouchard: Mr. Speaker, I think that the Minister of Finance already commented this afternoon on the subject of the second question from the member for Rosemont. So that I can have more time for the first question, I would just point that out.
As for the first question, I do not challenge the figures given by the hon. member for Rosemont, except that I am sure he knows that the federal government transfers not only cash but also tax points for health care, at the request of Quebec, among other provinces. In 1977-78 I believe that Quebec asked the federal government to transfer tax points instead of cash, and that is exactly what has happened. If he considers the tax points transferred, he does not obtain the same result for the proportion going from 46 per cent to what it is today.
Second, the recent debate in Quebec is significant for the national health issue. All provinces share the same concern; the hon. member talked about a $1.9 billion shortfall for Quebec, but everyone agrees that 9 per cent of the gross national product for health care is enough. In other words, the health care system in Canada does not lack money, but the way it is managed must change. Mr. Cote and the other ministers agree on that. Giving Quebec $2 billion more will not necessarily relieve the overcrowded emergency wards. Funding has doubled and

February 26, 1992
The Budget
tripled in the past 10 years, but the problem has not changed. The problem is one of management and the federal government will continue to do what it has done. Of course we do not transfer money that we do not have and for the information of the member for Rosemont, Quebec does the same since it transferred responsibilities to the municipalities under the Ryan plan, as we know very well.


The Acting Speaker (Mr. DeBlois):: The Chair, having considered the motion in amendment put forward by the hon. member for Essex-Windsor, can now rule in favour of the motion.


Diane Marleau: Mr. Speaker, it is an honour for me to have this opportunity to speak about the 1992 budget.
As you know, Mr. Speaker, we have a new Minister of Finance and we have been told to expect a brand new budget. I must say that, when I first looked at it, I thought that there might be something in there. Then I took a second look and realized that a coat of varnish was making everything look great. As soon as you take a good look, you can start noticing the cracks, real big cracks!

When I first saw this budget I thought just maybe there was going to be some hope for Canadians. I heard about tax breaks and I thought hallelujah. We are already so overburdened with taxes it is high time. But when I looked more closely at what was underneath this budget I realized that the tax breaks were just a bit of colouring.
When we are being hammered on the head constantly and somebody takes a chip off the hammer, we may feel a little of relief at first glance but we are still being hit on the head. It does not take away the fact that we are overtaxed. This has not helped us in any way, shape or form. What is $2 in 1992?
What we see is a budget which goes ahead and says: "In 1992 we will reduce the surtax by 1 per cent". Then when we look beneath that we find the surtax is 1 per cent but it starts July 1. Right away that makes it .5 per cent. The surtax is a tax levied on the tax that has been calculated. When we look down the line it does not mean
a whole lot, especially not for those who need it the most.
But it was a gesture and we have to allow them then-gestures. After all, this is a budget for an election year. It is a budget crafted in 1992 but nothing really happens until 1993. It is a one-year budget but with five-year benefits, so we are told.
This government is not going to be here in five years time so it is easy to project into the future. I can project all kinds of beautiful things too if I think I will not be around to answer for it.
I wanted to know, when I opened this budget document, what the government was going to do this year. Over the last few weeks we have heard about a barrage of plant closures and job losses. Over the years we have heard this government go on about competitiveness: we have to be competitive and we have to be the best.
One thing happened last week in the announced closure at the plant in St. Catharines. There was a plant that was competitive. There was a plant that made money. It is closed. Now tell me: how are we going to help those people who are faced with job loss? Is there anything at all in this budget to help these people? Absolutely nothing.
Let's talk about the farmers. What is in it for the farmers? Mum is the word, mum is the word. What is in it for the fishermen on the east coast? Absolutely nothing.
We talk about the deficit. We have heard much talk about the deficit and how this government was going to be God's gift to deficit reduction. We just have to go back to the very first years of its mandate. We had a brand new minister then. He said: "We are going to reduce the deficit. We have to reduce the deficit". The size of the annual deficit since 1986-87 has not been reduced at all.
As a matter of fact the national debt has doubled in size, and this through some of the best growth years of our economy, this despite the fact that our income taxes and all taxes have gone up at least 33 times. The average Canadian is suffering an horrendous burden in terms of taxation.
Now we are looking at bankruptcies which are reaching record levels. We are looking at unemployment which is at a record high. What is the government
February 26, 1992

predicting about unemployment? It is going to be quite normal now for our employment rate to remain above 10 per cent at least for the next two years.
What kind of nonsense is this? How can we expect to have competitive, happy and prosperous people when we are saying: "You are not going to have a job. I am sorry, we can't help you"?
Keeping in mind that the Tory text since 1984 has been expenditure control, cutting the deficit and reducing government debt, in 1990 the then Minister of Finance stated: "Our policies are working". He was making reference to the monetary policy, which by the way really helped create this made-in-Canada recession. However, as we know, the forecasts of budget deficit, interest rates, growth rates and inflation rates have consistently been wrong. Why should they be right this time?
Beginning with the February 1988 pre-election budget which was subtitled Securing Economic Renewal, the public was left to believe that renewal had been secured. "In three and a half years our economic progress has been dramatic. Our policies and initiatives have worked in building the framework for the economic success we now enjoy", stated the then finance minister.
In the following months he went on to explain: "The structural changes that we are making in the Canadian economy have strengthened the foundations for economic growth and investor confidence". Absolutely beautiful words. Where is this economy growth and investor confidence right now?
The recovery is being held back by many factors, and probably the most important one is that the Canadian consumer is afraid to spend. In any event he has very little money to spare. His confidence is badly battered, not only by the lay-offs and bankruptcies seen in any recession but also by the permanent job cuts and industrial restructuring sparked by flagging government fiscal and monetary policies.
When we hear this new finance minister speaking of restraint, we hear echoes of the other finance minister who preceded him. When he talks about failing to meet budget targets this year but achieving them in two and three years, the reverberations of prior years are very loud. Have we not all heard it before? Is it not the typical speech? "We are sorry we did not meet the targets this year, but for sure next year we are going to meet them".
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They are going to be really on target next year or five years from now or somewhere, somehow, some day they might. We might as well say that.
The Conservative record of deficit reduction is dismal. In 1985 the deficit came in at $34.6 billion what was predicted to have been $33.8 billion. They were off. The federal debt that then needed controlling was at $224 billion. Now it sits in excess of $420 billion. In 1986 the finance minister said that he would have the deficit down to $25.9 billion but it was $28.2 billion. In 1987 the deficit was $30.7 billion. In 1988 the deficit stood at $29.3 billion, and in 1989 at $28.6 billion. The deficit has gone up every year since 1987-88.
In order to hasten the recovery process, the finance minister at that time in 1989 launched what was described as an ambitious five-year fiscal plan. The finance minister was never short of plans. He mentioned this five-year deficit reduction plan in last year's budget as well. Forget the old clear and realistic medium term plan. We are now back in the business of medium term predictions with new ambitious five-year deficit reduction plans.
I go on about this only because I want to show the people that this is a lot of mumbo-jumbo and a lot of really nice words which will not produce very much. We just have to go through the list of what is in this budget today. Let me refer to one of the things that is happening. Remember how the environment was sacred to this government and it had this fabulous green plan. Let me tell the people across the way that the environment is sacred and our children will suffer because we are not being honest and we are not tackling the environment the way we should be doing.
This fabulous green plan was supposed to be a plan for five years, but the following year the Conservatives extended it to a sixth year. Now they are saying: "We really cannot afford it so we are going to cut back $75 million a year for the next two years, but we will make it up on the last three years". Come on, come on.
They talk about helping people with housing. There will be no more co-op housing. Social housing will be cut back but there will be some. Fine. We brought in the brand new idea that RRSPs could be used to purchase homes. It was a great idea. Our leader suggested it. I am

February 26, 1992
The Budget
very happy to see that they have taken it up, but why only limit it for one year? Many Canadians right now have RRSPs locked in for long terms of four or five years before they can access them. How will they be able to access these funds so they can use them this year if there is a one-year term?


An hon. member:: Some will buy any way.


Diane Marleau: Yes, some will buy anyway and in some instances it will help.


An hon. member:: We hope they will buy.


Diane Marleau: We certainly hope so. We think it was a great idea. We just wish they had extended it a little longer so that those who cannot access RRSP funds this year would be eligible to access them in the next few years.
TUming to Canada student loans, there is always a sleeper in everything they do. They give with one hand; they take away with another. They say: "We are going to allow you a bigger deduction for the fact that you are a student, but we are going to start charging interest on your Canada student loan from the day you graduate".
I do not know how many of them know students and know how difficult it is for them to get jobs. It is extremely difficult to get a job and start working the day after one graduates. For most right now it is almost impossible.
Another thing they are doing is privatizing the loans. I will give an example of a woman in my riding who came to see me not long ago. She had been left alone with two children. She decided that she did not want to live on welfare or mother's allowance. She wanted to make a life for her family. She went back to school and she got a Canada student's loan. This lady, when she finished her schooling, got a job. We have to understand that other than the Canada student's loan she has never lived off any kind of government assistance. Now it is 10 or 15 years later and she owes more in interest than she does on the original loan even though she never defaulted on her payment, not once.
The other day she came to see me and asked: "Do you think that there is some way I can get out from under this horrendous burden that seems to get worse and worse and worse?" Now her children are at an age where they have to go out and get Canada student loans.
I wonder if there is any compassion, where people who help themselves get a little help also. However, with privatization the collection people will be at her door and it will not matter that she is supporting two children and not on mother's allowance; she has to pay her loan. If she were on mother's allowance maybe she could have gone bankrupt and not even tried to pay the loan, but she did not. These kinds of insensitive actions really are deterrents to people who want to do the right thing. I would ask that you reconsider some of these methods of collecting Canada student loans. There is no doubt there are people with money who are not paying back their loans and I have no objection to you going after them. But there are many out there who are struggling and having a very, very difficult time. In that case, we should have a little compassion.
One item in the budget is reductions in grants and contributions. It all sounds so good. We do not know yet what is in that because it is going to come out with estimates tomorrow.
There are agencies eliminated and consolidated. Some of them may have been absolutely useless. Some of them could be very good. It may even lead me to believe that some of them have been eliminated because they were a little bit too good. There are two that come to mind and they happen to be led by some very capable women. I am wondering if that is something that just happened. You sometimes wonder how the minds of these financial people work.
We are going to have tighter government travel guidelines. I have no problems with that. I cannot travel first class, by the way. The only plane that flies direct to Sudbury is a 19-seater with no washroom or service. But I do pay first class prices for that flight. I wish you could do something about helping alleviate the cost of transportation for people in the outlying areas.
The communication budget cuts. Hallelujah. They are going to stop spending some of their massive advertising budgets.


Dennis Joseph Mills: Go to personal service contracts.


Diane Marleau: I am just wondering. You are going to cut it out, but are you going to have consultants do it? How is it going to work? I have this feeling that somehow there is an election year coming and there will be some way you can go out with a massive advertising campaign.
February 26, 1992

You know, the prosperity agenda: You can do it. You can compete. You say that to the people in St. Catharines. You say that to most people and they will look at you and tell you they remember.
Tax compliance and cost recovery are great ideas, but why are you cutting back on staff in those departments? Why are you not really making those departments effective? Each one of these tax collecting people brings in more than his or her salary, yet the numbers have been reduced.
There are many people out there who have not complied with the GST. No one has been near them. No one has asked them why they have not complied. There are billions out there. Maybe if we had additional staff we could collect some of these thousands of dollars out there. I am very anxious to see something done there.


Mr. Sobeski:: How can people avoid paying tax?


Diane Marleau: You ask them. They will tell you.
Changes to withholding tax always sounds great. The government is going to allow more foreign investment in Canada. I like foreign investment. It does things for Canada, but it is only for foreigners. They are the only ones who get this benefit. Why are we not encouraging Canadians to invest in Canadian enterprises? We are giving them tax cuts but they are not half as good as this. Part of the problem with foreign investment is that all of the profits leave the country and that has been a major problem with our economy. I am of two minds about this one.
Small business financing. Hallelujah. If a small business is in trouble the government is going to allow it to borrow up to $200,000, up from $100,000.1 do not know where you people live, but I know a lot of small businesses and they have no means of borrowing up to the $100,000 even when they are in good financial positions. Do you live in Never Never Land? If a business is in trouble do you think it will be able to increase the amount of its loans to $200,000?
The child tax benefit is a beautiful package. It sounds so great. But do you realize that the family allowance cheque goes out to mothers? Every mother in this country receives the cheque directly. When the mother
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works outside the home perhaps she does not rely on that cheque coming to her directly as much as the stay-at-home mother.
Do you know that for thousands of stay-at-home mothers in this country, it is the only cheque that comes to them in their name? Is there any way at all it can be arranged in this new scheme of things that the stay-at-home mothers receive that credit directly in their hands? I think it is extremely important.
The Speaker is trying to get my attention here. I can keep going on and on. What I can say is that the government members are big on r words. I will say to the people of Canada, just remember that when we had the free trade debate they promised us jobs, jobs, jobs.
We did not get jobs, jobs, jobs so most of us are pretty sceptical now. When the GST came in they said you would love this GST. It is was going to create jobs and it was going to make us all prosperous. Nobody believed them. Nobody believes them now and nobody will believe the government is going to do anything with this budget except try to-


Mr. Jean-Marc Robitaille (Terrebonne):: Mr. Speaker, we have listened with great interest to the hon. member as she described the hardship businesses are experiencing. She mentioned in particular the case of a Canadian woman who is going through hard times. Believe me, I do sympathize with the Canadian men and women who suffer hardship from time to time.
However, did the hon. member who talked a lot about the deficit, telling us it had not been reduced, tell her constituent the real reason she is suffering such hardship today and why it is increasingly difficult for government to act, that it was because we basically have our hands tied due to the mismanagement of the former Liberal government?
The hon. member talks about the deficit and tells us that this government did not reduce the deficit. The truth of the matter is that in 1984 there was a $38 billion deficit, of which $22 billion was interest to service the debt and $16 billion were cumulative operating deficits. This means that in those days the government was

February 26, 1992
The Budget
spending more than it was collecting in taxes, which created a total deficit of $38 billion.
Eight years later, in 1992, we are told that the deficit stands at $31.4 billion, with a $12 billion operating surplus, which means that the difference between $12 billion and $31.4 billion is due only to interest on the debt.
The hon. member should know that if we had a balanced budget, if revenues and expenses were the same, the deficit would now be $43.4 billion. What is worse, and the hon. member is silent on this, is that if we had kept increasing expenses at the same rate as the Liberal government did until 1984, our deficit today would be $80 billion and our debt would be $600 to $700 billion.
I ask the hon. member whether she and her party recognize, once and for all, that the deficit is indeed lower and that it is by lowering the deficit that we will again have the necessary leeway to ease the tax burden on our citizens, or does the hon. member intend to support her leader's policies-I conclude on that note -which would increase expenses, reduce revenues and add to the national debt?


Diane Marleau: Mr. Speaker, in response to the gentleman opposite, I can inform the Conservative member who just asked me a question that the Tories have not a clue how to run things. They have not the slightest inkling. They are very good at making speeches. However, when you consider we have had 33 tax increases since they came to power, during a period of prosperity the like of which we have not seen for a long time, I hardly think they have any right to say they know how to run a country.
In any case, when we come to power, we will have some terrific problems because of your poor management. In any case, we will put people first. That is how a government should be run. First, Canadians will be a lot happier and, second, we will run things very decisively.


Patrick (Pat) Anthony Sobeski: Mr. Speaker, I have listened to the hon. member from Sudbury. She read a budget but I would like to ask her something. We had some comments from some other people. The President of the Canadian Manufacturers Association said that
investment in the goods producing sector will be stimulated by cuts to the tax rate on manufacturing income. He praised the government's move to let companies write off the cost of new equipment and machinery more quickly.
The hon. member talked about consumer confidence. Mel Fruitman, vice-president and research director of the Retail Council of Canada, said that the economic growth assumptions underlying the deficit forecast are creditable. His group is happy with the budget because it manages to cut both the deficit and taxes. He said they think this will help rebuild consumer confidence. Finally the Canadian Home Builders Association said they think this whole thing is a springboard to recovery.
So here are three people in the retail business who are saying this is the springboard and this indeed may bring back consumer confidence. They read the same budget. Is the hon. member telling me that the home builders, the retail council and the manufacturers association are wrong?


Diane Marleau: I would imagine the manufacturers are very happy at having a tax cut, and of course they would support it. But let me remind this government that there are very few manufacturers making any money these days so it really matters very little. There are also very few manufacturers.
All I can say to the member for Cambridge is that perhaps many of you, and a lot of us also, would like to continue to live in hope because otherwise we die of despair.


Dennis Joseph Mills: Mr. Speaker, I want to compliment our co-critic of finance on her speech. During the course of her speech she talked about the Small Businesses Loans Act. This Small Businesses Loans Act, which was first passed in 1961, assists small business to access financing for investment purposes, et cetera. The amount after this budget increased from $100,000 to $200,000.
I think that is a good initiative, but there are two problems with this. Of the 1,700,000 entrepreneurs in this country, I would venture a guess that probably 95 per cent of them are not aware it exists. Second, and I would like to ask my colleague from Sudbury if she has had similar experiences, I hear from a lot of my small businesses on Queen Street, Gerard, Danforth, Pape, et cetera, that they are having a tough time maintaining
February 26, 1992

their lines of credit. Many of them are below $100,000, let alone getting an additional $100,000.
I would like to hear from my colleague and see if she has had the same experience.


Diane Marleau: I have definitely had the same experience. I know of many people who own small businesses who have been horribly burdened by a lot of the taxes brought forward by this government. They are having a very difficult time keeping their heads above water. Many of them, by the way, are going bankrupt. That is where the bulk of the bankruptcies lie, in small business.
I tell you: You have done very little to help them because, again, as I said during my speech, if you are in trouble, no one will advance you any money. If they will not advance you up to $100,000, why would they advance you up to $200,000 when you are in trouble? I have yet to have found one small business person that is in trouble who has been able to get any kind of loan. I will tell you it is a very serious, misleading sort of statement there because that is not hope for small business. Small business needs more than just nice words. It needs concrete policies to help them get through this.


The Acting Speaker (Mr. DeBlois):: The hon. member for North Vancouver. I would appreciate it if the hon. member would indicate to the Chair if he is splitting his time with another colleague.


Mr. Chuck Cook (North Vancouver):: That was the first thing I was going to mention, Mr. Speaker. With your consent, I will split my time in order that more speakers may have an opportunity to be heard in this debate.
My comments will be in a slightly different vein from what we have been listening to today, I think perhaps much more philosophical than some of the comments.
I have been a participant and have listened to and watched this kind of debate for something like 13 years. I think some of the opposition speeches I have heard are quite good, as a matter of fact well done. We did the same speeches between 1980 and 1984 with about the same results in terms of affecting government policy.
There is one question that does not seem to be asked here. I have yet to hear a speaker even mention the
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subject and perhaps it is the most important subject facing this country and this House of Commons today. I do not hear it being mentioned on the government benches particularly nor on the opposition benches. That question simply is: Can we afford it?
What can we afford and what can we not afford? With a really creative budget, if we were to gather together all of the ideas expressed by the opposition, put them together, the amount of spending would be absolutely massive and massive spending at this time is the last thing this country needs.
What people seem to forget is that the whole world is in a restructuring mode. The economic world order is in a process of changing radically. I suspect it is the largest change that has taken place in economics in the world since the industrial revolution. If that is going on, then I will forgive my own government for not being able to go against the trend of the new economic world order, but I would suggest to all Canadians that they consider very carefully what is taking place throughout the world, which means that an individual government of any country, and you could look at them all, really has little to say or can influence the total world significantly today. In John Donne's words: "We are not an island unto ourselves" and that bell is tolling for all countries and all economic orders in the world. We have seen some of it in eastern Europe. We are certainly seeing a restructuring taking place in the United States, North America, Central America, throughout the world. Things are changing and changing radically.
I cannot agree to massive spending in an attempt to go against world trends. To use another analogy, I am not really sure that massive spending would have helped the Luddites in the economic revolution that took place with industrialization at all. Massive spending is not the answer. Time, perhaps, will help, doing what you can to help individuals and people, but note the qualifier: doing what you can. I personally, and I think a great many Canadians, do not believe that you can solve problems by throwing massive amounts of money at them. If you would like an example, let us talk about Atlantic Canada and the maritimes. Certainly over the last few generations, massive amounts of money have been thrown at Atlantic Canada and look at the results; not very much.

February 26, 1992
The Budget
We have a new world economic order, the greatest structuring since the time of the industrial revolution. That brings me then to the solutions being offered. Let us deal with all parties. I am attempting to be pragmatic and fair. If I look at the Liberals, all I have to do is look at their record and listen to their speeches during this debate. Obviously they would go back to what they did so successfully and for so long, spending massive amounts of money, building up the national debt, paying no attention to the fact that their grandchildren and mine will still have debts to pay off as a result.
If you look at the New Democratic Party, it would do even more. We have evidence of that already in the present NDP government of Ontario. Do not forget a $10 billion deficit for the province of Ontario will grow and will be there for some time. If that is the economic policy of the New Democratic Party, as much as it wants to help people, as much as it feels that everyone should be helped, somebody has to pay for it.
That is one of the things I note in this House that people tend to forget. Who is supposed to pay these bills and how are they going to be paid? There is little thought given to that. I suppose the Canadian public does not give that much too it as well.
Let me talk briefly in terms of our own party. I do not particularly like our present budget if you would like to know. I think 1 per cent cuts, things like 5 per cent off cabinet ministers' salaries, travel restrictions where you cannot fly first class-I have not found a first-class flight in a year anyway-are cosmetic. I do not think they were needed there and I think they are somewhat dishonest as well. I wish we did not have them there.
However, over all, the Minister of Finance has done a good job with what he had to work with and with the times in which he is preparing a budget. We are into a situation where the best thing we can do is try to hold our own, not increase spending, and sincerely hope that the world turns around and starts recovering. I doubt if there is going to be any major recovery in Canada until we see the world straightening itself out. There is little evidence of that at the moment.
I do not mean to be depressing about the whole subject, but I also do not believe that any Canadian government is alone. We are part of the world and we survive by being world traders. The more world trade we can do, the better off we are.
I should also mention that other party that perhaps is the one that is talked about most these days, and that is the Reform Party. We have the huge spenders, the NDP. We have the spenders, the Liberals. We have the Conservatives and, for a change, that name means something, attempting to conserve, attempting to be conservative. And then you have the Reformers. If we can believe what they say, they would cut and slash throughout government. It is almost a situation of throwing the baby out with the bath water because they would disrupt this country and the governing of this country to such an extent that it would take years to recover from it.
I just lost another group of friends.
Remember, in government operations we have done a couple of good things over the last few years. It has not been as good as I would have liked, but we have turned an additional government operations deficit of $16 billion around to a surplus of $13 billion. That is pretty good action in terms of government operations. A lot more of them could and should perhaps be cut down.
Just remember, every dollar this or any government spends when it is added to the deficit means another dollar for your grandchildren to have to pay. Why were we sent here? We were sent to this place to attempt to do the best we can for the people we represent. Obviously, there is a difference in viewpoint between the three parties as to what we feel is the best thing to do.
We seem to have forgotten that the initial purpose was to do the best we can for this country, but to do it in a prudent way. We are in a situation where our spending must be cut back. Spending is being cut back. We are preparing for a situation-


The Acting Speaker (Mr. DeBlois):: Order, please. I invite the hon. member to end his speech, please.


Charles Henry (Chuck) Cook: To conclude his remarks in five seconds. In any event these are some of the things. I wish every member would think about them and realize we cannot go on spending if we hope to have a country for the future.


John Harvard: Mr. Speaker, first I want to say that I agree with my hon. friend from Vancouver when he describes the reduction in cabinet salaries and the abolition of first-class air travel for MPs as cosmetic. I agree with him. I think it is
February 26, 1992

tokenism. I do not think the government will score any Brownie points with that budget initiative.
I want to get on to something else. My hon. friend from Vancouver was talking about the global changes, the restructuring of the world economy. It is true. There is a major change going on. It is hard to say where it is all going to end. It is hard to say where Canada is going to wind up in this major world-wide restructuring that is going on.
What I find rather passing strange, when it comes to the budget and when you take into account the restructuring of the world economy, is this government's decision to abolish the Science Council of Canada and the Economic Council of Canada. To me, it makes no sense. It seems to me that at the very time when there is this major alteration in the world economy, and where a lot of us really do not know where we are going, it is sort of like travelling in the dark, at the very time when we need independent research and independent advice from independent bodies like the Science Council of Canada, the Economic Council of Canada, what does this government do? It abolishes them. It does not seem to make any sense.
There is no way it is going to do without some kind of consultation, without some kind of independent research. It seems to me that there will be no saving to the taxpayer. The government will have to go to independent or rather private think-tanks like, for example, the Fraser Institute which is located in his home city.
I ask the hon. member, does it make any sense to abolish these advisory bodies? It does not to me.


Charles Henry (Chuck) Cook: I have two points in regard to the hon. member's comments. The first point is this. There are parallel organizations to both the Economic Council and to the Science Council. As a matter of fact, most of the work now that the Science Council used to do is being done by an advisory group.
I come back to my initial and original point and would re-emphasize it again. They would be nice, yes. Can we afford it? I wish that question would be asked more often by more people around this place. Can we afford it?
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Lots of things are nice.


An hon. member:: Can you afford not to be without it?


Charles Henry (Chuck) Cook: Yes, we can afford to be without both of them because you will see the workload will not change.
[Translation)


The Acting Speaker (Mr. DeBlois):: Resuming debate. The hon. member for Beauce, who has 10 minutes.


Mr. Gilles Bernier (Beauce):: Mr. Speaker, I welcome this opportunity to say a few words about the budget. There has been a lot of comment, and editorial writers across Canada, both anglophones and francophones, expressed a lively interests this morning in the budget. I think on the whole their reaction was positive.
Yesterday, the finance minister brought down a budget that apparently sent a signal not only to the federal apparatus but to all other levels of government, including the provincial government, the municipal government and school boards across Quebec.
I visit my riding regularly, and for many months I have been meeting hundreds of people, both in my riding offices and at special events. Every time people said that governments-and when they spoke to me they meant the federal government-should cut spending and stop using the credit system they have used for 25 years.
Incidentally in early January I wrote to the Minister of Finance and told him what my constituents had said, that people were starting to have enough and were irritated to see how governments were acting. I also told him that our Quebec caucus committee on spending cuts had come up with 32 points where government spending could be cut.
Of course the government apparatus had grown fat over the years, thanks to our predecessors, and the annual deficit was out of control. When we took power in 1984 we had an accumulated debt of over $220 billion and interest rates started to climb. As a result, today we have a national debt of more than $400 billion and an annual deficit that we reduced from $38 billion to about $30.5 billion. Interest rates were steadily going up and inflation was not under control.

February 26, 1992
The Budget
Today we have good news. I think that it is because of previous budgets that clearly told the public that it had to make sacrifices. As part of our economic plan, we are still trying to lower the rate of inflation.
I remember that in 1982 when I was a businessman in Beauce inflation was 13.5 per cent. Today we have reached a record 1.6 per cent, the lowest since March 1971, 21 years ago. Since our government's restrictive policies brought inflation under control and interest rates are down, I think that with a budget like the one we presented we can do good things for the people not only in Beauce but in Quebec and in Canada.
On behalf of my constituents in Beauce, I told the Minister of Finance that we had to cut in several areas. I listed them and it was publicized in Beauce. People know my position on the budget presented yesterday. I must say that our finance minister listened to his MPs, who listened to the people.
Today The Budget Papers show that drastic measures have been taken. We want to make cuts in many places: grants, contributions and other programs. On page 84, we read: "Reflecting the need to make the deficit reduction and expenditure restraint thrusts as broad as feasible, a wide spectrum of grants and contributions will be reduced. The savings will be $170 million in 1992-93, $71 million in 1993-94". People will have an opportunity to read it. Copies are available in our constituencies. All these cuts will be made so that we can have funds for new programs to stimulate employment.
We are eliminating the waste due to overlapping and duplication in the federal administration. The government machine was simply too big. We are eliminating the waste due to duplication with the private sector. There is the possibility of strengthening particular sectors by combining related organizations and their functions and the need to postpone desirable initiatives that the government cannot afford to finance right now. We are continuing to privatize commercial activities that no longer serve the needs of public policy.
Canadians clearly indicated that they want the government to live within its means. They want a smaller burden imposed on them by the public sector. It has been
mentioned that the salary of the Prime Minister and his ministers was cut by 5 per cent. This is not where the emphasis should be put. We have streamlined federal administration by cutting 46 institutes, commissions, international centres, boards, monitoring agencies and advisory committees. There are many. The axe fell on 46 of them yesterday at midnight. The equivalent of these corporations is easily found within the Department of Science and Technology where basically the same work is done.
Projects such as the Canadian Race Relations Foundation and the Canadian Heritage Languages Institute are postponed. We will merge or combine some other corporations or other groups to save money. We will privatize corporations. We will cut $2.2 billion in National Defence.
I said earlier that we have been living on credit for 25 years. We have created an excessively heavy governmental apparatus. It took a few years to streamline this apparatus, because we had to get to know the organization inside out.
The 1992 budget will cut spending by $1 billion next year and by $7 billion over the next five years. We have had to take measures that were not always popular. In the past seven years, we have made a tremendous effort to cut public spending, but I think the finance minister has now come up with the kind of proposals Canadians were waiting for.
The expenditure control plan introduced in the 1990 budget and extended by last year's budget will be broadened and deepened. Defence spending, as I said before, will be cut by a total of $2.2 billion. Non-wage operating budgets of federal departments will be cut by 3 per cent. That is a lot of money. This will save $150 million next year and $800 million over a five-year period.
First-class travel for members of Parliament, senators and senior public servants, already subject to restrictions, will be eliminated altogether. It does not make sense to have senior officials flying around the world at great expense. One senior official does not matter that much, but when you have 1,000 across the country running up this kind of expenses it is time to pull the plug.
February 26, 1992

The growth in spending by Canada Mortgage and Housing Corporation on social housing will be held to an average of 3 per cent per year. The government will also set aside funds to review the tax treatment of family budgets. This is important, but unfortunately I do not have enough time to expand. I do know a number of useful initiatives have been taken and that my constituents will be very pleased. Of course there are a number of so-called tax experts and economists who make sweeping statements and say that ministers' salaries should be cut by 5 per cent. lire budget does more than that.
I prefer to listen to what was said by the economists who came out yesterday in support of the government. There is a reference to "Wilson's iron hand in Mazan-kowski's velvet glove" in Alain Dubuc's editorial in La Presse this morning. "Without necessarily being a reason to rejoice, the budget brought down yesterday afternoon will probably be the least unpopular Tory budget we have seen so far, not only because it does not hurt as much, but because for the first time the Tories have managed to square the circle; in other words, reduce the deficit and taxes simultaneously".
No tax increases, no increases in income tax, and at the same time we reduce the deficit. That is why I think we should support what the Minister of Finance is trying to do. I think that each department will go ahead and implement these decisions, decisions based on the recommendations members have made to the Minister of Finance who has listened to them. We have pleaded the good cause on behalf of our constituents. The people from Beauce will no doubt be happy to know that this budget contains no tax increases but does contain spending cuts.


Patrick (Pat) Anthony Sobeski: Mr. Speaker, I would like to ask my colleague to comment on two aspects of the budget.
First, he commented about listening to his constituents and in the budget the finance minister talked about consulting with Canadians, business, labour, voluntary and social sectors, students, managers and farmers.
The finance minister also met with the provincial premiers. I know that the premier of Ontario and the premier of Alberta had asked for RRSPs to be used as
The Budget
down payments on homes. The finance minister for Quebec had asked for controls on government deficit. The Nova Scotia premier asked for a reduction in tax levels and the premier of Newfoundland asked for restrained government spending. These things were in the budget.
I would like him to comment on whether he believes that the finance minister listened.
The second comment was about how the finance minister was able to reallocate spending. The example is the new child tax benefit in The Budget Papers. The cost to do that particular program when it is mature is about $300 million.
However, the finance minister by the equal tax treatment of common law couples and married couples is able to save $280 million, which basically pays for the program. Is the member impressed with the finance minister's ability to reallocate spending?


Gilles Bernier: Mr. Speaker, I would say that the steps taken by the Minister of Finance and this government are incentives. This reallocation of spending and the ensuing cuts will do a world of good to our balance sheet a year from now. Over time I am sure this will, as my hon. colleague mentioned, give us the tools we need to keep working at creating jobs. It is clear that this cannot be done overnight, but by cutting spending we bring the deficit under control and foster low interest rates which make borrowing quite affordable for the Canadian people as well as a controlled rate of inflation. With control there is more money available for social programs.
I think the social programs listed in the 1992 budget speech are far-reaching, national programs that will benefit the Canadian people. The effects will be felt in a year or two. We could have let the deficit keep on increasing as the previous government did. The Liberals never cut expenditures during the 22 years they were in power, pleasing everybody, creating programs, spending money and helping friends. That is the role they played, but now we figure that people have had it with that kind of useless spending.
Streamlining will improve budget analysis and their application to direct job creation. I know that the incentives concerning our manufacturers contained in

The Budget
this budget will promote job creation in the long run. We must first maintain the jobs that are there. That is very important. Were the recession affecting only Canada there might be an easier way out, but it is world-wide. If every government in the world took steps, and particularly those in our country-I urge my provincial colleagues, the councillors and mayors at the municipal level and the school board administrators to follow our lead and to cut spending, cut surpluses and streamline- we would all be better off.


Mr. David Walker (Winnipeg North Centre):: Mr. Speaker, I welcome this opportunity to join in the debate on a very important budget at a very important time in our country's development. Every budget gives us a chance not only to comment on what the Minister of Finance has to say, but also to reflect upon the situation in the country.
I would like to address the question of the structure of the economy and the failure of this budget to address it. In the last three years, partially as a result of the free trade agreement and partially the result of a number of structural changes in the Canadian economy, the Canadian economy has been unable to create the wealth to sustain government activity. At the same time the strategy of this government has been to reinforce the failure of the private sector to create wealth, and the fact it is has only created debt itself.
We come into this budget with the reality that we have been unable to find ourselves with a presentation since the formation of this government of under $30 billion a year. The annual debt and an accumulated debt are now estimated to be in the neighbourhood of $450 billion. It does not take a genius to figure out that although it limits the government's actions every year there have to be voices in the House to say that some people are responsible for this. The responsibility of the government is to make sure that Canadians are better looked after in some changes in the way it has structured this economy and in the way it has structured this budget.
It is without apology that I say that this budget is another failure of this government to respond to the great economic malaise we find ourselves in, in the hope that people will begin to listen, to understand that other
countries have found other strategies out of recessions such as this. In our history since the industrialization of Canada, whenever our government has chosen to sit back and to do nothing in times of economic crisis, the recession or the depression has only worsened. The Keynesian strategy of using capital works and public consumption to gear up the economy is one which has been successful one decade after another.
Many times people respond to me by saying that is just another cliche, that is just another Liberal position. I would like to point out that one of the major differences between the Canadian economy and the American economy is that the Americans can rely on private consumption to pull themselves out of a recession or out of a depression. In markets in excess of 250 million people, there are those who can spend their way out. The production facilities are there and so on. The logic of the American economy is to use private consumption to generate enough demand which, in turn, begins the cycle again.
In Canada, with our weak markets, our small markets, the fact that most production takes place offshore, either elsewhere in North America, in Asia or in Europe, means that the way we generate wealth in this country is entirely different. The failure of this budget to deal, first of all, with the creation of wealth is astounding. Second, the failure of this budget to deal with the consequences of not having wealth is also outstanding.
The fact that we have 10 per cent unemployment accepted as a structural reality in the Canadian economy, in this budget, is amazing. The fact that we have a UI system which translates into people being taken off UI and put on to provincial and municipal welfare systems also undermines the stability of the economy and reinforces the reality of the 10 per cent figure for unemployment which is in fact much higher.
Depending on whose figures we want to use, we have somewhere between two million to 2.5 million Canadians out of work and living either on welfare or on UI and unable to find even a temporary position, let alone full-time successful employment.
I was happy to see in this budget the government wanting to deal with a couple of questions of pressing concern in social policy. It has been a while since we have had an initiative on this government's part on the social policy front. I think it is a beginning with the question of
February 26, 1992

child poverty which should be commended and should be supported. As I will note throughout my speech today, that is not sufficient in its approach, but nevertheless the minister should be congratulated on combining a white paper on the reform of the child welfare system or the child support system, along with the economic statements. I hope that the white paper provides an opportunity for the House to continue this discussion and also to have extensive discussions and consultations with groups outside Parliament.
In dealing with the question of poverty in this country, which this budget seeks to address, we have heard through one report after another of the crisis among children in poverty. This government seeks to address it by answering one of the most important components of the problem-cash in low income families. By targeting children in low income families, it helps to begin the process by providing the resources needed to look after the basics.
In the history of North American social policy, that is considered to be but one component of a multi-pronged strategy needed to answer the question of child poverty. Up to the arrival of this particular government, in the history of Canada, dating back to the 1930s, we saw a series of initiatives to deal with child poverty which have been severely undermined in the past eight years. Here I am referring, for example, to questions of food.
For the first time since the depression, we have to deal with the reality of finding food for children, either in the schools or in the food banks. It has been largely a voluntary effort and we support the voluntary organizations such as Winnipeg Harvest which have been delivering food to children for the past couple of years, but we also have to deal with the reality that these organizations need support. It has been recognized in our major urban centres of Winnipeg, Vancouver, Toronto and now Montreal that as of September publicly funded food programs will be needed in the schools. This particular budget is silent on the needs to expand the Canada assistance program to make sure children have food.
Second, one of the foundations in social policy for addressing questions of child poverty is that of the adequate provision of housing. We have, for many years, tried to put on the market in large and small centres, but
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particularly in large centres in Canada, as many housing units as possible so that children have a place to go to in the evening, their families have a place to sleep, all these basics which have been taken for granted.
We find in this budget, once again, a cutback in social housing. More astoundingly we find the elimination of the co-operative housing program which was an excellent process for combining the resources of individuals with the resources of government to build a significant number of units to which low income families have had access. I am very sorry to see the demise of this program. When you juxtapose it to the initiative on child benefits, you see that on the one hand the government has taken away support systems while the other hand it is putting forward the promise of other benefits.
A third area in which looking after children is very important is the area of health care. We have long used Canada's national health care system to ensure both preventive medicine as well as responsive medicine for children is available in every community. The tremendous cutbacks in transfer payments to the provinces are having a devastating effect on the health care system. This is recognized by members on all sides of this House and it has been recognized by every provincial government. We need further support for the medicare system so the basic health needs of children can be addressed.
In addition, we have used education as the major source of mobility for children. We now find that because of the offloading of costs related to changes in the UI programming and transfer payments, more and more of the problems related to inner city schooling, for example, have been put on school boards which can no longer afford the programs to support children from poor families. They can no longer support, for example, English language or French language training for new Canadians.
This means that poverty becomes a more permanent condition in our inner cities because school boards and municipalities cannot respond to the needs. They cannot respond to the needs because the taxpayer at the local level has been overburdened. That is because the province has to offload costs to protect their tax base. The province has to offload because the federal government has cut back so much.

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We find, if we look at the basics of education, health care, housing and food, the government has walked away from four of the most essential ingredients in the support of children in our society.
I would like to take a minute to point out that one of the great gaps in this budget is dealing with aboriginal children. As we all know, we deal with aboriginal youth, particularly on reserves but also in Canada's larger cities. Very few aboriginal families are captured by the tax system and their support systems are very important.
This budget is silent on the question of aboriginal development, except to note the cutback in excess of $130 million to organizations delivering services such as child welfare, education and health care.
We find that before we discuss the actual child benefits package, we had better be sure that we understand the exact implications of the total strategy of this government. It has so undermined the life of children in this country that it now has to bring together a package which only begins to address the problems it has created for itself.
The program as outlined by the white paper attached to the budget has been welcomed by many of the groups involved with poverty and developing public policy on poverty for the past decade. In this context, the government has developed some good-will among groups which have been long seeking some income support for low income families.
The question becomes: Where does one find the money? The immediate response of this government is to argue that through the end of universality, one will make moneys available to low income families. The spectre is raised many times-it was raised by the minister today in Question Period-of why Canadian taxpayers should support a family where the income earned is $250,000.
That is not the question to be addressed. The question to be addressed is how does the ordinary Canadian working family maintain support for their children? The question does not become the traditional argument of targeting versus universality, but how does one reach out and make sure that families which need support are kept within the framework of social policy and not shunted aside?
When one begins to set aside that rhetoric of the initial position in the white paper and in the tax papers and begins to look at it more concretely, one finds that Canadians are being asked to pay a very, very high price for having the child tax benefit program.
It is only for families whose income rises above $40,000 that the benefit is marginal in this new system. Members should not forget that this is the big shift that no one wants .to talk about. We are no longer talking about individual incomes, we are talking about family incomes.
The price that we are paying for the end of universality is marginal to the healthiness of the individual families that we are trying to reach.
For example, if two people are working in a family and they are both earning a very modest $25,000 a year for a total of $50,000 and if they have two children, the benefits now are going to be about $4 a month. Four dollars a month is marginal in improving the situation of your children.
As we review this budget we should be careful to make sure that Canadians understand that this package is being put together with a little bit of sleight of hand.
For many families earning $40,000, $50,000 or $55,000 a year-do not forget that according to StatsCanada, the average family income is $51,600-when you have thresholds in which you begin to decline the benefits, a lot of the benefits decline at $40,000 and also do not forget that this is indexed the same way that the pensions now are at 3 per cent each year. Every three years, you lose 10 per cent from the thresholds, you find very quickly that the average Canadian family will have access to minimal or no benefits under this.


Ms. Campbell (Vancouver Centre):: Inflation is less than 3 per cent.


David Walker: Are you going to predict that for the rest of the life of this program? I want the minister to put her reputation on the line for that. She knows very well that this is just a small window.


A. Kim Campbell: I will change the statute if it gets bigger.


David Walker: The minister is taking an interest in the debate. We await her questions and her participation later on.
February 26, 1992

In the meantime the government has presented a package in which each of the documents is presenting a slightly different figure as to what it is. Following the presentation of the budget, the benefits for a working couple with two children at the threshold level of $30,000 are to be about $44 in favour of these families; at $40,000, $44 in favour of these families; and then an anomaly: it is slightly more at $50,000 and drops off dramatically right after that.
I want to point out that many Canadian families in large metropolitan areas will assume when a government talks about targeting and helping out working families that it recognizes that the tax burden put upon those families in the last seven years has been very difficult for them to manage.
There have been estimates from independent agencies lately that the additional tax burden put on Canadian families is somewhere between $1,000 and $1,200. We have seen higher figures, but let us use the lower figure. Well, that is a tremendous burden when the return appears to be about $44 per year.
As we examine this proposal more closely, we will see that we must ask Canadians whether or not these benefits are worth it. I am sure the minister would be interested in examining these figures more closely in the weeks to come.
We welcome the beginning of the discussion on one of the most central issues in social policy'. That is how we look after our children. We are not particularly happy to see that. We are beginning to pit one child against another.
Family income levels now become an issue as to whether a child is helped. Families with marginal incomes in metropolitan areas are deemed to be too wealthy to be helped and others to be poor enough to be helped. This segmentation in social policy within communities and neighbourhoods in the past has led to devastation and a decline in support for social programs.
This party calls upon the government not to move ahead with this budget but in fact to remove it, and particularly to set up the white paper for extensive consultation so that we may all take a better look at this child benefits package as presented in the budget.


Mr. A1 Johnson (Calgary North):: Mr. Speaker, I was listening carefully to my hon. friend opposite. I was
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surprised that he would attack a program which is so fundamentally sound in its basic structure. It opens the delivery of social programs in Canada so that they are available universally to everyone, but they are delivered through the tax system based on income.
Surely he does not expect in any way that people who earn $100,000 or $200,000 a year or even more, should be getting a family allowance. We have this extraordinarily complicated system of giving out money, taking it back, giving it to one person and taking it from another person in the same family.
Can he tell me what he would propose doing to make the system simpler, more fair, and universally accessible to all families?


David Walker: Mr. Speaker, I welcome the question from the member for Calgary North and the question of who
has access to the money.
One of the support systems we have quietly provided for Canadian families is to provide a cheque each month for several million women, although the amount has been very modest. In fact, using the figures out of the budget it is estimated that 600,000 women probably will not receive a cheque any more.
The question of who receives the cheque is very interesting. So far the white paper is silent on that. I would be interested to see how the Department of Finance, as it develops this concept of family income, which will be the first time that it has really been developed, decides who actually gets the cheque.
I speak advisedly here, not as an expert, but the sum appears to be a minimum of $100 a month, perhaps more. Then that does begin to affect the family expenditure patterns. It will be interesting to see exactly how we should all work together to make sure that the moneys are allocated properly. It is not a question of having the so-called little bit of money on the side, but in fact it is now a major amount of money to be suggested here.
The question of how to proceed at this point is, of course, the most interesting one facing us in the House. We welcome the opportunity to listen to people and to develop the policies as the Parliament of Canada and to see which direction to go in.


John Harvard: Mr. Speaker, I would like to make a comment with respect to the

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jobless because there are about 1.5 million unemployed in Canada at this time. That is a conservative estimate. Some people believe there are even more than that.
It seems that the budget is cold comfort for the people who are unemployed. While the budget is a grab bag of many things, it really does not have a major thrust in attacking the problem of unemployment in this country.
The finance minister even admitted in his speech yesterday that the unemployment rate is going to stay around the 10 per cent mark for about the next two years. That is a lot of pain, a lot of hurt, and is a terrible drag on the economy as well.
I would like to ask my friend from Winnipeg North Centre whether he feels that is a major failure of the budget.


David Walker: Mr. Speaker, I would like to thank the member for Winnipeg-St. James for the question.
In the Manitoba area it is estimated that there are at least 45,000 unemployed and that represents only those who are captured by the UI system. As my colleague well knows, that excludes aboriginal people whose figures are not even included.
The number of people not participating in the labour force in Winnipeg alone is probably 50,000. In Manitoba I would estimate it to be 75,000 to 80,000 people.
As those people get left behind and get left out of the UI training process and have no access to other training, the issue becomes absolutely critical that we find a way to put people back to work.
I was reminded by another colleague that in looking at the total amount of moneys we spend in this country on welfare and UI pay-outs, we would have a work force of considerable proportion if we could just understand that historically we put these peole to work.
Taking the strategy this year that for some reason the less work that we have for these people to do the better off we are going to be is an absolutely absurd strategy. We must take those funds available to us, recognizing that the money is already going out each week-


David Walker: If it is as my colleague says, $30 billion that means we have roughly $600 million going out each week which just disappears into the system.
There are no jobs, no hopes, no training. How do the young people at the age of 18 put themselves in a situation where they can go to school, can find jobs in the summer and can get a start? Those who are 18 and are not inclined for whatever reason to go to school, what do they do for the next decade?
We are going to wake up here at the turn of the century and, instead of having these glorious speeches about the future of the country, we are going to be trying to explain to a number of people under the age of 40 why we could not figure out what to do with them.


Al Johnson: Mr. Speaker, I am very pleased to have the opportunity of speaking in this very important debate. I will be brief as I wish to share my time with the hon. member for Hochelaga-Maison-neuve.
First of all, let me say that the budget presented by my colleague, the hon. Minister of Finance, is both a caucus budget and one which clearly responds to the needs of people, particularly the needs of families with children.
As chairman of our caucus committee on family issues, I am very pleased with this. In fact I am delighted that the minister has responded in a very significant way to the recommendations that I and some 30 of my colleagues have worked on over the last two years. In this regard, I would like to thank most sincerely all of my colleagues who have worked to prepare these proposals.
In fact, I would go so far as to say that this effort to bring about one of the most revolutionary changes in the way we deliver social programs is a near perfect example of what can be accomplished when a truly national party is given the responsibility for governing our country.
These proposals received support within our caucus from British Columbia, Alberta of course, all through the west and into Ontario. The enthusiasm and support that my colleagues in Quebec offered was truly heartwarming and I want to offer a very sincere thank you to them.


An hon. member:: $30 billion.
February 26, 1992

I wish that everyone in Alberta could understand at the most basic level of love of family and concern for children just how much Quebecers are like Albertans, and vice versa. We would have no trouble in keeping this country together if we could communicate on this basic level. To my colleagues in Quebec, I extend my warmest thanks.
The efforts of our caucus committee were also strongly supported by our colleagues in Atlantic Canada. They, too, understand that all Canadians want a tax system to be fair, simple and supportive of families and traditional values.
I extend to all of my colleagues my sincere thanks, but most of all I would like to thank our leader, the right hon. Prime Minister, for the direction and encouragement he has given us and the Minister of Finance and the Minister of National Health and Welfare for their support and their willingness to take on a reluctant bureaucracy.
Our Prime Minister and the cabinet have clearly shown through this budget that they care about the aspirations of all Canadians.
The new integrated child tax benefit may be the most dramatic change in so far as it changes the way social programs are delivered.
But the other items, such as the new rule allowing RRSPs to be used for home purchases, the general tax reduction, the supplement for low income working families with children, and the introduction of fairness between married and common law couples are all clear indications that this government and this minister care about families, particularly families with children.
The average person in Canada has veiy simple aspirations. He or she wants to grow up to be a healthy, productive and happy adult, get a job, get married, buy a house, raise children, and eventually retire in reasonable comfort and watch the children go through the same cycle. I know because I am at the beginning of that watching cycle. I care very much about the future of my children and my grandchildren.
This budget speaks forcefully to these good citizens who form the backbone of our society. First of all, it says very simply and clearly that the government is no longer
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going to tax marriage and quite rightly so. People should not be taxed on their lifestyles.
Under the existing system married couples sometimes get a better deal than common-law couples. But common-law couples, particularly those with children, more often get tax breaks that are not available to married couples. These inconsistencies will come to an end with the implementation of this budget.
There are many initiatives in this budget that will encourage investment and create jobs. Perhaps the most important is that the manufacturing and processing income tax rate will be reduced in two steps from 23 per cent to 21 per cent. Along with this, the capital cost allowance for manufacturing and processing machinery will be improved by 5 per cent and the withholding tax rate on direct dividends will be reduced to 5 per cent.
Tax incentives for research and development will be increased by $230 million. Lower interest rates will be made available to small businesses and farmers who are in difficulty and small business loan limits will be doubled from $100,000 to $200,000.
All of these and other actions will improve the health and the investment climate in the business sector. Five hundred thousand new jobs should result.
As I said earlier, virtually everyone wants to own their own home. The recently announced reduction of the down payment required for a home, plus the budget initiative allowing anyone buying a home to take $20,000 from RRSPs, will put home ownership within the reach of many thousands of Canadians who could not previously afford it.
I would like to note here for our viewers and those listening at home that anyone who does not have a 1991 or earlier RRSP to use in this way and who is contemplating buying a house before the end of the year, has only two days in which to make an RRSP contribution. If he or she makes such a contribution, it should be in the form of short term, say 30 to 90 day notes, so that it can be cashed in before this opportunity expires.
Despite the fact that this option is only available for a short time, I am very pleased that our Minister of Finance has developed such a simple and safe plan to help use RRSPs to get people into their own homes

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while at the same time boost the home construction industry and preserve the value and purpose of RRSPs.
The real centrepiece for families in this budget is Canada's new integrated child tax benefit. This represents a totally new approach to the delivery of our basic social programs. The present system is a jumble of contradictions and complicated taxback systems that are based on an outmoded, flat rate concept of universality. This new proposal says that the child tax benefit should be paid through the tax system, that it should be based on income, and that it should be universally available to everyone. This is the proper form of universality. People earning $100,000 this year do not get it, but if their income drops to $20,000 next year they get it.
I am pleased that the Minister of Finance has decided to base the child tax benefit on family income. This combined with his decision to eliminate the difference between married and common law couples will mean that the tax system will be much fairer, and when it comes to taxes fairness is the key to their acceptability.
The future health of our nation is based on our ability to raise children to be physically and psychologically healthy and productive adults. This is the only real insurance that we have for the sustainability of our society.
I am very pleased therefore that the Minister of Finance and the Minister of National Health and Welfare have developed this child tax benefit and that they have included in it a supplement for low income working families, with children. The supplement, which may be up to $500 will assist those families who may not have access to subsidized child care to get out from under the welfare trap. As it reduces with increasing income it is consistent with the over-all model of delivering social support that is reduced as income levels improve.
There are many other ways in which the Minister of Finance and the Prime Minister have shown that they care about the circumstances and aspirations of Canadians and that they listen to their caucus colleagues who bring these concerns and advice to them.
I could list a few in these last minutes I have to speak: assisting Canadians with disabilities; improving their medical expense deductions; giving them education credits; recognizing disability pensions as earned income; and
such other things for the environment we live in as removing taxes from ethanol and gasoline mixtures; helping students, very much another family issue, by increasing their education credits; and making retirement plans more flexible. All these things show a sense of caring and concern for Canadians. Cutting the government's own expenditures has been its most important action because in this way we can afford to do all of this without increasing the deficit.


Dennis Joseph Mills: Mr. Speaker, I want to say that the member for Calgary North should be congratulated. I for one think that he has done terrific work in looking at ways to reform and simplify the basic tax system. We have had some exchange of paper and I know his heart is in this issue and that he is heading in the right direction.
The one thing that puzzles me about this idea-and it is not dissimilar to some of the ideas we have been exploring in the single tax-is why they would wait until January 1993. Here we are in February 1992. The member has been working on this issue, as he said, for a couple of years. He has refined it fairly well.
I think there is a bit of an illusion going on here. It is tantalizing but it really does not come into effect until a year from now. Right now families are in desperate need of this kind of assistance.
Since he is chairman of that special committee and he has obviously had some direct influence on the Minister of Finance to get this issue implemented, does he not think it would ring more true if he could get it implemented by, say, the end of the tax period at the end of April?


Al Johnson: Mr. Speaker, I appreciate very much my hon. colleague's comments and his interest in what he calls the single tax and what I have been calling the integrated flat tax. This is a very important concept. I have read at great length his own work in that area. I also respect and compliment what he has done there.
As far as the timing of the implementation of this proposal is concerned, he may have noticed that when I was speaking I talked about a reluctant bureaucracy. We have been working for some time on this issue and certainly have had considerable support, but it has been a very difficult sell to make such a fundamental change, as
February 26, 1992

he might understand. Because of that, I would say the change has only been agreed upon in the last couple of months and it takes a good year to take something this complex and implement it. I am sure that is why the department has allowed itself the time to do that and the minister needs the time to consider all the ramifications.
The key issue here and what we can celebrate is the minister and the Prime Minister's commitment to this very fundamental change which will improve, I am sure, the way we deliver social programs in Canada.


Mr. David Kilgour (Edmonton Southeast):: Mr. Speaker, this is mostly a comment, but if there is time I hope the member will answer.
I salute him on his efforts for fair taxation for families. I would like to tell him something that a friend of mine who has six children told me yesterday. He told me something I did not know. He is a stockbroker, I should admit. Other than the banks and utilities last year, there was not a single company listed on the Toronto Stock Exchange that made any money.
The government which he supports is dumping gold as fast as it can get it out the doors of the Bank of Canada. The last country that did that, Moscow, stopped doing it a year ago when it ran out of gold. Canada is doing it now at an horrendous rate, to put it mildly. His point is that six gold mines have closed in the past year. We are selling off gold bought at 40 cents an ounce for $400 an ounce for two reasons. One is to keep the dollar at the 84-cent level, which as he said is bankrupting most of Canadian industry, particularly our mining and natural resources sector. The second is to try to come up with a phoney figure for the deficit by selling off the topsoil, so to speak.
I wonder if he has any comments on the fundamental economic policy his government has reflected once again in this budget.


Al Johnson: Mr. Speaker, if the hon. member's facts are right, I would share his concern. I for one believe that we should have a somewhat lower dollar, not too low. From the western resource producers' perspective, I believe that would be appropriate.
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As far as his comment that companies on the stock exchange are not making money is concerned, I think he will rejoice with me or celebrate with me the fact that we have reduced the manufacturing and processing income tax rate and that this should provide some relief in that area.


Mr. Allan Koury (Hochelaga-Maisonneuve):: Mr. Speaker, I am honoured to participate in this debate on the 1992 budget. I would like to highlight a few points for the benefit of my constituents in Hochelaga-Maison-neuve.
I am thrilled with the improved taxation for families and I must congratulate my colleague from Calgary North for his efforts and hard work. We will simplify, streamline and improve the assistance we give to 2.9 million families and 2.3 million children in Quebec. Nationally benefits will increase by 400 million dollars a year.
National Health and Welfare Canada has proposed, in a white paper, the new integrated child tax benefit. Canadians know that our future prosperity and well-being depend on our children. Undoubtedly, according to international standards, Canadian children are in very good health and receive good care and education.
Of course parents are chiefly responsible for seeing to the needs of their children, as we have long recognized through our public programs such as family allowances and the assistance provided in our tax system. Those programs will be totally restructured and substantially enriched. The actual patchwork of federal measures made up of three different child benefit programs-family allowances, child tax credit and refundable child tax credit-will be replaced by one single monthly benefit for children under 18.
The new benefit will be as much as $144 per month per child for a total of $1,733 a year. It will also include a new eamed-income supplement of up to $500. This benefit will represent a supplementary assistance for working low to middle-income families.
Furthermore benefits will be based on family income rather than personal income and that improves the fairness of this new program. A single monthly benefit is

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more simple, more efficient and better adapted to the needs of a family than the actual system which sometimes has the families wait for many months before they get a payment.
The budget also provides assistance to families by changing the deduction for child care expenses. The maximum child care expense deduction will be increased by $1,000 to $5,000 for each child under age seven and to $3,000 for other eligible children.
We will make it easier to own property, by letting Quebec families use funds already invested in their RRSPs. Individuals will be able to use up to $20,000. This means that if there are two people in a family, a husband and a wife, and they each have $20,000, they can invest $40,000 in this home and in the next 10 years they will be able to save $4,000 annually to put back into their fund. This means that they can repay in 10 years, instead of 15, the $40,000 previously invested in a registered retirement savings plan and used to buy or build a house. This measure, which takes effect immediately and will apply until March 1, 1993, will make it easier to buy a house and be a big boost to the economy. Those who take advantage of it will have 15 years to repay the amount withdrawn from their RRSR As I just told you, they can also do so in 10 years.
The Home Buyers' Plan will help Canadians take advantage of mortgage rates that are now lower than ever, as well as of moderate prices for homes. It will also help buyers benefit from the recently announced reduction in the down payment required for a CMHC-insured mortgage.
This new plan will contribute to renewed growth in the housing sector this year. According to the Canada Mortgage and Housing Corporation, housing starts should increase 15 per cent this year. The real estate industry will benefit from the improved economic climate and lower interest rates. Homes have never been so affordable in the past 10 years, except for a brief period in 1985.
As for providing greater assistance to the disabled, new measures improve the help given to some 42,000 handicapped people in Quebec in order to reduce the disincentives to work that hold them back. The list of expenses eligible for the medical expenses tax credit will be expanded, as will the list of expenses eligible for the
tax deduction for modifications by businesses to buildings and devices to assist Canadians with disabilities.
Furthermore, the education tax credit will now be made available to disabled individuals who attend postsecondary educational institutions on a part-time basis, while the definition of earned income for the purposes of pensions will be expanded.
With the increase in education credit, the budget provides additional tax relief to students, who are our most important resource. The amount on which the education credit is calculated will be increased from $60 to $80 per month of full-time study, starting with the 1992 fiscal year. The limit on the total amount of tuition fees and education credits which can be transferred to another taxpayer will be raised from $600 to $680.
The personal income surtax will be reduced. All 4.7 million Quebec taxpayers will benefit as a result of the reduction in the general surtax. It will drop from 5 per cent of basic tax to 4 per cent on July 1,1992, and to 3 per cent on January 1, 1993. This will increase Canadians' after-tax income by $500 million in 1992-93, and by more than $1.2 billion per year thereafter. All taxpayers will benefit.
Principal residences will continue to be fully exempt from tax on capital gains. The $500,000 exemption for small business will not be affected. The federal budget will encourage economic recovery and promote economic growth and job creation. A number of actions will be taken to encourage initiative and productive investment. These measures will promote the healthy growth of the private sector, which is, after all, the only true source of economic growth and job creation.
The manufacturing and processing sector accounts for almost one-fifth of Canada's economy and its jobs. With over 40 per cent of its output exported, this sector has been particularly hard hit by the restructuring of the global economy.
To help the manufacturing and processing sector meet the challenges of globalization, the manufacturing and processing tax rate will be reduced from 23 per cent to 22 per cent, effective January 1, 1993, with a further reduction to 21 per cent on January 1, 1994. The capital cost allowance rate will be increased for manufacturing and processing machinery from 25 to 30 per cent,
February 26, 1992

effective for acquisitions made after today. Hence, the Canadian rate will match the rate in the U.S.
Thanks to these two measures, revenues in this sector will reach $40 million in 1991-1992 and as much as $750 million in 1996-1997.
New activity in all sectors will be encouraged by reducing the withholding tax rate on direct dividends to 5 per cent. This will help Canada compete for international direct investment.


John Harvard: Mr. Speaker, I have a short observation and a question for my hon. friend from the province of Quebec.
I do not know whether my good friend from Quebec has a co-op housing development in his riding, but I do. I naturally have visited that housing project in my riding. I have talked to the residents there and they are mighty proud of their facility. In this particular development there are elderly people, pensioners, and they are veiy, very happy with the facility. I have not talked to them today, but I am sure that they are very distressed over the announcement coming from the budget that the co-operative housing program has been eliminated by the government.
I should point out that the housing program was certainly a cost-efficient program. It delivered affordable housing to seniors, single parents, disabled and low income earners. Despite the fact that the government sees a saving of something like $25 million over the elimination of the program, I would like to ask my friend from Quebec how he feels about the abolition of the program, whether he thinks it makes sense.


Allan Koury: Mr. Speaker, being an expert in housing in Montreal, it will be easy for me to explain to my colleague the co-operative housing phenomenon.
When you talk about senior citizens, you talk about people who live mostly in low cost housing units. That will continue to exist.
I have built 741 co-operative housing units, and it caused a problem in the Montreal area. People left their residences to move into co-operative or low cost housing units, leaving a whole lot of apartments vacant. Entire buildings are empty. I met people in my riding. Some
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apartments stayed vacant for 19 months. I know from experience that these people pay taxes but they do not have enough income. Their income is insufficient but they are taxed just the same.
They have to pay the co-ops, but they did not lease their residence. There are lots of apartments like this in Montreal. The present vacancy rate is 7.2 per cent. There has to be a freeze somewhere because people contributing to co-ops will not be able to go on doing so and a disaster is bound to happen. There should be a freeze so that vacant units will be filled and will stay that way. If subsidies are handed out, they should be given to needy people through their revenue. I think it is the best system. Everybody will have some revenue even if they get subsidies. At least, these units will not be vacant while more units are being built and the vacancy rate is
7.2	per cent. It could even reach 7.5 per cent by next summer.


Mr. Jack Whittaker (Okanagan-Similkameen-Merritt):: Mr. Speaker, it was interesting to be in the lockup yesterday and be able to look over the budget and look at the pretty gloss on the budget documents, the budget speech and the budget papers. The initial reading of our finance minister's budget speech was one that left sort of a warm fuzzy feeling. And then, as it started sinking in, you realized that what was inside the shiny cover was in fact not as shiny or as bright as it first appeared. I would suggest that in fact it was a cosmetic approach to soften the image of the harsh realities of the last seven and a half years of Tory rule in Canada.
It was interesting to look at some of the press comments, some of the editorials that have been printed today. Particularly interesting was The Globe and Mail which emphasized to me exactly what I had seen when I started, after reading the speech, going into the papers and finding out the harsh realities of what was behind the cosmetic approach. What I found was the same old wrinkled face with a lot of cosmetics caked on it.
In The Globe and Mail they say: "Budget illusion: Some Smoke, Some Mirrors", and in the first paragraph they state: "The latest federal budget accomplishes a neat trick, it stands still but gives the illusion of movement". That is exactly the way I feel about that particular budget. It does give you that warm fuzzy feeling. It does make you feel that, maybe they are doing something, but

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under scrutiny and under analysis it is obvious that it has gone nowhere.
I would like to touch on a number of things in this budget that concern me, a number of things that I believe are the harsh realities of where this government has gone instead of where it should have gone.
There are a number of things. Perhaps first of all I should say that all in the budget certainly is not bad. There are some positive things. Being a person who likes to talk about the positive, let me talk about some of the positive things. Unfortunately, some of the positive things are tempered by negatives.
I personally feel, as does my party, that the Registered Retirement Savings Plan situation is a good one. The use of Registered Retirement Savings Plans at a time when an injection needs to be made into the economy, particularly in central Canada, makes sense. It makes sense to be able to use some money that is already saved at a reasonable rate and to be paid back over a period of time, thereby answering the critics who say it is for retirement.
Through the use of this particular instrument, it makes it possible for those who have some Registered Retirement Savings Plans but may have difficulty in purchasing a home. That is a positive, but if you analyse what is in the Registered Retirement Savings Plan program, you see that in fact they have opened it up so it can be stacked between spouses. In other words, a husband and a wife can use $40,000 of the Registered Retirement Savings Plan to make a down payment, but it is not for first home buyers. A recommendation of the subcommittee on finance was made within the last few weeks to the Minister of Finance, that it be for first time home buyers only, not necessarily for a new home but for existing housing, thereby helping those who may have been having problems.
By doing what they have done, in effect they have made a situation possible where a couple could live in a home and decide to upgrade. A couple, for instance, my age, who have had the opportunity of paying into registered retirement savings plans and perhaps have $20,000 each in that plan, can pull out the $40,000, move to a new home. There is nothing stopping them from renting out the existing home they have, using their
$40,000 out of their Registered Retirement Savings Plan, interest free for 15 years, and taking any benefit that they have from that particular situation.
That, it seems to me, is once again assistance to those who are in a position already to purchase a home, but opening up a loophole to take bigger advantage of their taxable income.
The upside of this, of course, particularly in the riding of Okanagan-Similkameen-Merritt where we have a good number of saw mills and lumber mills, is hopefully it will create housing starts so that we can begin to sell more lumber and get our economy in those areas going, increasing employment, increasing all of the things we need in the area to get things under way. On the other hand, a little further along we see that the government has cut out over a five-year period $622 million from social housing and terminated co-op housing immediately, costing $25 million.
Those who use the social housing provisions, those who use the co-op housing are normally those in the lower end of the economic scale, those who cannot afford to purchase a house, those who do not have Registered Retirement Savings Plans and certainly do not have $20,000 in Registered Retirement Savings Plans, if they have any in order to put into new housing. They are the ones who usually buy into co-ops so that they have a price they can afford and still say they own their own place. They take pride in that fact that they have been able to bring up their family in housing that they own and that they maintain. They know they can either pass it on or have an investment at some time in their future.
In this budget the government built in something for those who can already afford it while taking away, on the other hand, from those who cannot afford it.
It does not seem to be fair. It seems to be the policies that I have seen over the last seven and a half years, and the policies that I have particularly seen over the last three years while I have been sitting as a member of this House, where we have two classes of people.
We have those who have and those who have not, the rich and the poor. More and more we see the whittling away of the middle class, those in between who can afford a little bit of something. Through taxation, the policies of this government, free trade, increases in
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unemployment insurance, GST, clawback and you name it, more and more it has hit the middle income earners.
It is interesting to look further and see that in the course of the budget we talk about streamlining. I have no objection to streamlining. I have no objection to making government services more available to the average Canadian. In fact if it were simply that, I would applaud it.
It is interesting to look at the way they talk about it and the type of language they use in the budget papers for this streamlining. They talk about measures to promote improved government service to Canadians.
In the next sub-title, they talk about co-location of services in urban centres and single window services in smaller centres. This does not mean moving all federal public servants in a given city into a single building. That sort of massive relocation would not be cost efficient. Rather, it means co-locating points of service delivery in a rational way and over time to provide better, more convenient service at the lowest possible cost.
If that means giving better service, fine. If it means a continued assault on the rural towns and villages of Canada, then I and my party certainly say: "No. No more. We have had enough". We in the small communities have watched as they have gutted our rural post offices and set up privatized post offices.
We are fighting that right now in Penticton. We are trying to keep the jobs in Penticton, a community of 2,600 where they have closed the main post office. They have privatized and now have threatened 12 more sorting jobs and moving in this type of so-called increase in service to a larger community to the north, Kelowna.
Twelve jobs to a population of 26,000 are a lot of jobs, but I look at this. Does co-location mean taking services and moving them into the larger centres? For instance, in Penticton, we have about 30 people employed by the federal government in veterans' services. They service the whole southeast part of British Columbia, from Merritt in my riding across to the border in Kootenay East.
Does this co-location of service mean that they are going to move this service to Kelowna or Kamloops? It would cost another 30 jobs in the city of Penticton, on top
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of the potential 12 jobs lost in the post office. If that means also the movement of the Ministry of Health and Welfare, Old Age Security and Canada Pension Branch that employ about three people in that same building with the veterans' services to somewhere else, perhaps to Kelowna, making all of the people in the south end of the Okanagan Valley use a telephone when they are seniors who like to deal face to face, then I say no. My party says no. Enough of this gutting of rural Canada. Let's make services better for people, but let's serve the people. Let's serve the people who we are supposed to be serving. Let's be reasonable about this.
In my critic area of small business, I note in the budget that there are supposed to be some benefits. It seems that they spend a lot of time in the budget papers talking about how good they have been and how well off small business is. Certainly, if we look at the bankruptcy figures over the last two or three years in particular, I think you will agree with me, Mr. Speaker, that they have not been very kind to small business in Canada. In fact the fiscal and monetary policies of this government are driving small business into bankruptcy, into receivership. In some cases those who have not gone broke are moving across the border.
What have they done? They have set up in this budget a small business financing program. Under this program the small business corporation or the unincorporated business will be able to issue small business financing instruments. In talking to the finance department officials, it appears that this is lifted straight out of a bond issue situation act that was prior to 1987 and will probably only apply to banks. Does this mean it is an effort to simply ensure that banks have the opportunity of added insurance against loss? It does not appear to be.
If there was an investor, that investor would be able to come and buy in. In fact, by the next page we see that it is restricted to corporations, individuals who are viewed as being unable to obtain ordinary financing and who are already in financial difficulties. If they have to go out and get the financing because they are in financial difficulty, it is very unlikely that any of the financial institutions are going to take the chance anyway. If they are in financial difficulty, you can be certain that they have already got chattel mortgages and mortgages. They have already got

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their book accounts tied up. They do not have anything with which to bargain. Who is going to come in after all as a lending institution and take exactly the same amount that they could get by lending somewhere else? It is just not going to happen. It is more window dressing. It is more smoke and mirrors. It is an attempt, it appears to me, to look like they are trying to help the small business community, but it is doubtful that it will work.
The Small Businesses Loans Act increase to $200,000 is applaudable but once again, as has been pointed out in some speeches and questions in the House already, it is apparent that most small businesses are not aware of the Small Businesses Loans Act and, if they were, would not use it at any rate. It is very cosmetic. They have not really looked at the source of what the problem is for the small business community. You do not have to look very far when you look in here and you see that the goods and service tax is bringing in money, and you see what is has cost the small business community over the last year and some months since it was instituted.
Throughout my riding and throughout a number of other ridings across Canada that I have been in since January 1, 1991, it is apparent that not only the small business community has been hurt by the GST. It is apparent that even larger industries, including the forest industry in my area, have all complained about the problems with the GST, the problem with compliance costs. It is interesting to look at the estimates of the Canadian Federation of Independent Business. Their estimate of the cost to business in 1991 is a staggering $6.6 billion to collect the GST for the federal government. They estimate that the cost in 1991 of complying with the collection costs for the GST to small business is $4.5 billion.
This is added on top of the problem they already have in people being so annoyed at the goods and service tax that they are not purchasing any more. They are annoyed that those in the band across lower Canada against the United States border are going across into the United States to buy their goods and in many cases buy their services.
We have to look very carefully at the goods and services tax. There is nothing in this except some wonderful words telling us that the goods and services tax is on target.
It may be on target but it is certainly hurting everyone. If the arrow has hit the target, it is killing small business. I think this government has to face up to that fact and has to do something about it.
Even the Canadian Federation of Independent Business and other businesses have suggested to the government that if it cannot harmonize, cannot knock off the tax on certain things that people normally use or need, such as fuel services and whatnot that are so expensive in Canada, then it should get rid of the goods and services tax. To that I heartily agree.
In order to get this economy going, the government was warned it must drop the goods and services tax.
What hope has this budget given to the average man on the street? Nothing. The government talks about tax breaks, a 1 per cent cutback in the surcharge. That amounts to some $19 in the first year to a person with a $30,000 income. What is that going to do for the economy? That is really something, $19 in the first year. While the government gives $19, it takes back in the other hand.
In this budget the Minister of Finance has admitted to the end of universal family allowance. The first major step was the clawback. The second major step was the admission that universality had ended. Tbday, family allowance; tomorrow, old age pension. Will it be medicare in the future?
I will fight against this. I will fight against cutbacks in the old age security. I will fight against universality attacks by this government in the future on medicare.


John Harvard: Mr. Speaker, I think there was a sigh of relief right across the country when it was discovered yesterday that there were no tax increases in the budget.
Most Canadians feel that they are taxed far too heavily. They are fed up with the rate of taxation in the country, so there was that sigh of relief.
However, when we look at the figures, one has to put these tiny decreases in perspective. The previous speaker from British Columbia alluded to this. When it comes to a family earning $40,000, the surtax decrease will be only $27. By the way, that is after raising the taxes $1,000 in recent years. For a one-earner couple with two children, earning $20,000, the finance minister is going to give them a $6 relief. For families earning $15,000, there will be a whopping $2 cut in taxes.
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It seems to me that we cannot get the cuts much smaller than that. I would like to know what my friend from British Columbia felt about that.


John R. (Jack) Whittaker: Mr. Speaker, it is interesting that the smoke and mirrors continue. This is part of the smoke and mirrors where the government can actually say: "We did give you a tax cut".
It is also interesting to look on the other side of it, when we look at the cost of unemployment insurance over the last little while, where the money is going for unemployment insurance.
The government says that it is supposed to go into training. It does some shifting around and yet it does not do any training. The increase in the unemployment insurance that will kick into effect this year in effect raises the taxes on the average employer and on the average employee. They are all going to have to kick in more for that particular aspect of it.
Let me just say one other thing. One of the other cuts that hits hard at a time of high unemployment-and high unemployment means higher taxes because we all have to kick in or we will have higher deficits-the government has cut $1 million from Canadian Jobs Strategy.
That is an area that has been well used by a number of our ridings, a number of areas within Canada and certainly, within the area of Okanagan-Similkameen- Merritt.
Those types of cuts in my area where the unemployment rate is over 4 per cent higher than the national average cuts hard. The cost of that is incalculable.


Mr. Steve Butland (Sault Ste. Marie):: Mr. Speaker, I am glad the member mentioned unemployment insurance and the cutbacks in retraining funds, despite the fact that there was supposed to be $1.8 billion in the charge-back fund.
Most everybody will understand and recognize the fact that the Department of Employment and Immigration will allow an individual to take a 12, 16 or 20-week course, then go back to the department and may get approved for a separate and isolated program from the
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first program and if successful, may go for a third separate program.
He or she may get approved for three separate years of training on three different programs, but have refused to approve training for two or three consecutive years which makes eminent sense so that at the end of a retraining program you come out with a certificate.
I have been told by the people in Ottawa that the program is inconsistent across the country. Some employment offices are proceeding with approvals for two and three-year training programs and others have not. It is just a mess.
The people who work in the employment centres have no idea where to go with this. They are saying: "They are grey areas. We are not getting any instruction". They are working on it, but one has to wonder about the sensibility of such an action.
If we want to retrain people, let us do it properly. Let us retrain them so that at the end of their program they have something to show for it, that they really are retrained. I suspect it is somewhat rhetorical, but I would like the member to comment on that.


John R. (Jack) Whittaker: Mr. Speaker, what I have seen in my area is a similar problem, where there is a lack of consistency between one area and the other.
One of the problems we are running into in those areas through all unemployment retraining programs and for most unemployment insurance programs, is that because of cutbacks people are not getting proper instruction.
People are overburdened with work and cannot keep up with the massive number of applications for either retraining or unemployment insurance. It is a problem.
When they talk about streamlining service I really question that. In my area I have seen that dismantling of the service is closer to the truth of what is happening and that people have to wait and go on welfare.
Over the last few weeks I have had people come to my office from the social services areas around my riding telling me that they cannot get UI and they have had to apply for social assistance. They cannot get job retraining, they have to wait. Some of them have missed the deadline because of the long delays.

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It is a never-ending problem with these people and this government simply turns its back and says: "We are going to streamline the service".
I agree with the member for Broadview-Greenwood. In fact, they are dismantling all of the systems. The service is going straight downhill. People are not getting what they pay for. They are not getting what they expect and they certainly are not getting what they need.


Mr. Greg Thompson (Carleton-Charlotte):: Mr. Speaker, thank you for allowing me to take part in this debate. As I begin tonight, I want to quote from the speech of the Minister of Finance yesterday:
I wanted a budget that would deliver a strong bottom line: one that supports the well-being of Canadians and their families; one that promotes the success of our business people in expanding and creating jobs; one that contributes to a strong and more united Canada. And that's the bottom line of the budget I am delivering today.
I think most of us in this House who have analysed that budget would concur with the minister. He has done that.
I go back to a phrase that the minister often uses. I think it is the theme of his budget: "getting the fundamentals correct" or "strengthening the fundamentals". I think he has done that in this budget. What are those fundamentals? Let us look at some of them and maybe help explain them to Canadian people this evening.
The first thing I want to mention with regard to those fundamentals is inflation. It has just been reported that inflation at this point in time in Canada is the lowest it has been in 20 years. It is coming in now at an annual rate of about 1.6 per cent. That is one of those important fundamentals that has to be there for a number of reasons.
We have had many people in our society who have been hurt by the ravages of inflation, not only businesses but our elderly. If we go back to the old rule of 72, which is what they call it in the investment world, any combination of numbers that would equal 72 would give us how much incomes can be eroded when we are taking a look at inflation. If we are taking a look at inflation at 12 per cent for six years, that amounts to 72 per cent. Imagine what that does compounded on top of other expenses
with regard to the real income of average Canadians. We can also apply that with regard to incomes.
The minister has pointed out quite well in this House in recent days that if we can get down to a 2 per cent or 3 per cent annual rate of inflation, the demands by the work force in Canada with regard to wages will come down as well. They will understand that a 5 per cent or 6 per cent increase in wages in relation to a 2 per cent or 3 per cent inflation rate is much better than a 15 per cent wage increase when they are looking at inflation of 11 per cent or 12 per cent.
That fundamental of getting inflation under control is a very important one. As I say, it not only affects our senior citizens but also the working class. I believe that the minister has done that.
If we take a look at interest rates, we see that right now in Canada they are the lowest they have been in 20 years. That has to be good for investment. It is not only good for investment but it is also good for homeowners, those people who are considering purchasing new homes.
As pointed out earlier, the difference between interest rates today and what they were 10 years ago reduces a mortgage on a $75,000 home by over $300 per month. That is very important to recognize because it is a saving for those individual families.
Going back to my opening remarks with regard to inflation, if we are paying less that means we have to earn less. Our demands on our employer are not as great and we have freed up some money to do other things with. Again, it is a very important concept which I think the Canadian people now understand more than they did last year because they can see clear evidence in their daily lives that it is working.
Again I go back to interest rates today versus where they were last year and certainly where they were two years ago. If I go back 10 years, I know we were in the 22 per cent range with regard to interest rates.
Along with that we have to take a look at the value of the Canadian dollar. In Canada we have not decided yet whether we like a low dollar or a high dollar, but we do want a stable dollar. Those fundamentals have to be there in order to achieve a stable dollar, a stable
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currency. That means the other part of the equation, the debt burden we carry as Canadians, has to be stabilized as well.
That leads me into some of what the minister pointed out yesterday with regard to our debt situation or our deficit situation on an annual basis. He is going to maintain the deficit at somewhere in the order of $31.4 billion this year. Next year it will tumble to $27 billion and go down by approximately $5 billion the year after that. Our target was to reach a point of zero borrowing, where we were actually bringing in revenue not only to pay down the debt and pay the interest on it but simply pay off the principal amount of the debt. That is the secret to the big equation. That is something we have not been able to do as a government, because for many years leading up to 1984 that debt was allowed to multiply at such a rate that when we assumed office we could not generate the necessary dollars to pay it off.
I think that target of being able to pay off the debt or pay down the principal in the year 1995, 1996 or 1997 is achievable. Last year, despite the downturn in the economy, and it was a very tough year, we did not do all that badly. On the revenue side the minister is pretty well on target. Despite a recessionary year he brought the thing in pretty close to target. This year, with an expected growth of something in the order of 3 per cent, I think the goal the minister has set for himself and the government is very achievable.
We have heard in the last number of days-and we have heard it in the House today as well-about the failure of the government to kick-start the economy or jump-start the economy. That brings me back, when I talk about kick-starting or jump-starting the economy, to an editorial I read the other day in The Globe and Mail. It read: "If I hear that term kick-start or jump-start one more time, I am going to call a taxi. When will these people realize that the economy is not like a car engine? It is not like a generator of money that you simply put a charge into it and off you go". We have proven as a country over the years that that just does not work. I do not think we want to follow that course knowing that at the end of the day someone has to pay the bills. Our inability to pay the bills has put us into the difficulty we are in today.
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We are not going to follow that course. I am very glad to see that the minister has not taken that course. The only way out of debt is to earn our way out of it, work our way out of it, pay it down and pay it off. We are not going to fall into that trap of kick-starting or attempting to jump-start that money machine. It just does not work.
One interesting statistic that I am very proud of in relation to the government is our percentage of debt in relation to our Gross Domestic Product. If we take a look at our projected deficit and in fact what the deficit is today, we have made remarkable progress. In 1984 the ratio of debt to Gross Domestic Product was in the order of 9 per cent, slightly less than 9 per cent. I think it was 8.7, to be exact. Now we are just a little over 4 per cent. We have cut it in half.
It is very interesting to note that some countries in the western world have gone the other way. As we are going down they are going up. I think we are on the correct course because the Canadian economy, as it grows and as we take the types of measures that we have to take and were taken in the budget yesterday, that number will get even smaller. It is a very encouraging number. It does point to some of the things we have done as a government in relation to the fundamentals. It clearly indicates that we do have them right.
One of the topics the minister mentioned yesterday was in relation to interprovincial trade barriers. It is very important that the minister addressed it. As we know, it is one of the proposals that we are trying to address in our constitutional package. I am pleased to see that the minister did address those yesterday.
There are about 500 interprovincial trade barriers between the 10 provinces in this country. At the end of the day they cost us a lot of money. The economists tell us that it costs the average family of four anywhere from $1,000 to $2,500 a year, depending on whose figure you want to accept. It does cost us something. That cost is felt in communities all across this country.
I believe that it is imperative we address these interprovincial trade barriers, especially when we are negotiating and working through our trade agreements with other countries, whether it is with the United States through the FTA or internationally through the GATT.
As we continue to eliminate some of the trade distorting practices and barriers between countries, we have to take a strong look at what we can do here at home.

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We have been attacked or broadsided on universality and that is putting it mildly. One of the things the minister said yesterday in relation to incomes for poor families, and especially for children in poor families, is veiy refreshing, and that is the system of payment that will go to families which need it. I quote, as the minister did earlier today in the House, what the premier of New Brunswick said about child allowance. He said that there is something ridiculous about a system that allows someone with $100,000 to get child allowance. There are people in my neighbourhood and your neighbourhood who have trouble feeding their families. We should develop a system that addresses the problem a little more realistically. This is what the minister did yesterday.
It was also refreshing to hear yesterday that RRSPs can be used for a down payment on a new or existing home for one year. For example, a married family with both partners having RRSPs would be able to double the $20,000 to $40,000. This is good news for the housing market. It will only be for one year. We are going to try it and we will see how it works. It should be a big boost for the housing people.
In relation to the family, the minister announced that common law couples will not be taxed less than traditional families. It goes back to one of the policies brought forward by our member from Calgary North in support of the family unit. Part of that is the payment that will go to those families in need but the other part of the equation is a fairer tax system for the traditional family. The minister will make that change as well.
The ceiling for small business financing is being raised. In fact it is being doubled, I believe, from $100,000 to $200,000.
Some government agencies are to be eliminated. I have this one highlighted in the budget speech because it is quite interesting. I will step through this if I have the time.
There are a total of 46 separate government agencies that will be affected by the streamlining measures that were outlined yesterday by the minister. Some of these agencies will be wound up or eliminated completely, some will be deferred, others will merge with other agencies. I want to mention some of these. It is important because it is a saving of about $22 million.
I read through this list today for the first time. There are agencies in it I did not know existed. At the end of the day it costs the Canadian taxpayers $22 million. I will mention some of them: the Law Reform Commission, the International Centre for Ocean Development, the Veterans Land Administration, the Petroleum Monitoring Agency, the Agricultural Products Board, the Demographic Review Secretariat, CN (West Indies) Steamships Limited-there is one I did not know about-the Science Council of Canada, the Economic Council of Canada, the Pay Research Branch. That is a new one. The Canadian Environmental Advisory Council, the International Aviation Advisory Thsk Force and Committee, the National Advisory Committee on Development Education, the Canada Employment and Immigration Advisory Council and on and on and on the list goes.
Some agencies will be merged and some corporations will be privatized: for example, the Co-operative Energy Corporation, the Cape Breton Development Corporation, the Royal Canadian Mint and the Blainville Motor Vehicle Test Centre, one which I have never heard of.
I think those are all good moves on the part of the minister. As the minister pointed out yesterday, these were signals or messages that he was getting from all Canadians, not just parliamentarians, not just provincial ministers, but ordinary citizens. I have had some of those letters, as all of us have in this House, on ways that the government could cut costs and at the same time maintain services.
I believe that the minister has struck a good balance in this budget. As the member for Fundy-Royal mentioned yesterday, he has been in this House since 1978 and he says it is the first time that he can recall a budget coming in where there was absolutely no tax increases, not even hidden tax increases. I think that is encouraging. A signal was clearly given by the Canadian people, one that the minister acknowledges, that we are heavily taxed as Canadians and at some point we have to draw the line. I think he has drawn it very clearly.
To conclude, before we go into questions and answers and responses, in 1984 this government promised, through the life of its mandate, one million jobs. At the time the government was criticized by all opposition parties, but the fact is that in the life of that first
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Conservative government, led by our present Prime Minister, we did not create a million jobs. We created 1.5 million. We overshot our objective. We are going to do it again because in this budget the minister is suggesting and anticipating job creation in the order of 500,000 new jobs by the end of 1993.
Because I believe the fundamentals are correct in this budget and the minister is doing the types of things that we have to do, I believe that 500,000 jobs by the end of 1993 will materialize and we will exceed that figure as well.


David Kilgour: Mr. Speaker, I would like to ask the member a question. Is it not true that his government has added 34 new taxes, including the GST, which struck disproportionately at low and middle income Canadians?
Is it not true that the government has more than doubled the national debt since taking office, from about $168 billion to $420 billion? Is it not true that it has wreaked havoc for both our manufacturing and natural resource sectors by maintaining the Canadian dollar and interest rates far too high for far too long?
As I said to a member a while ago, they are selling approximately 300,000 ounces of gold monthly on average at the Bank of Canada in an attempt to reduce the deficit and to keep the dollar at levels which are wreaking havoc among Canadians in terms of unemployment.
Is it not true that virtually no Canadian company except the chartered banks and utilities made any profits last year? I am talking about companies listed on the Toronto Stock Exchange, for example. They have allowed the situation to develop in which foreigners now hold about $330 billion in the debt of our national government, our provincial governments and the private sector.
Is it any wonder that The Economist magazine this week, taking 13 advanced industrialized democracies, put us ahead only of Sweden in terms of our economic prospects for the next year. They talk about investment. Why would any intelligent person invest in an economy which has a government that is so bad? In my view, there is not a worse government anywhere in the democratic
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world, a government that knows so little about basic economics, about creating jobs and keeping jobs that it has done the kind of things I just mentioned.


Gregory Francis Thompson: Mr. Speaker, to respond to the member, it is bizarre when you think of it. Here is a guy sitting on the other side of the House now who ran for this government in 1984. He sat on this side of the House for four solid years. He ran for this party in 1988 and deserted us when the going got tough. That is the type of guy he is.
The truth of the matter is simply this. There is only one country in the world that has beaten Canada in terms of economic growth in the last six years, that is Japan, but just barely. In fact this year we are going to lead every single country in the world in terms of economic growth, including Japan.
I just want to point something out. We are always talking. They are always trying to derail the FTA because apparently the Americans are getting the best of it.
The truth is that we are doing a heck of a good job when it comes to competing with those guys south of us. What we tend to do is take a look at things with blinders on. We are having our difficulties here in Canada, and we all acknowledge that. We acknowledge that, but the difficulties south of the border do not even come close to what we are seeing. What we see on television every night is not even close to what is really happening there.
It is interesting to note that yesterday the U.S. Commerce Department released some amazing figures with regard to U.S.-Canada trade. Do you know what they told us? These are U.S. figures. In 1991 Canada's exports to the United States stayed right up there at $91.1 billion traded between the two countries.
After everything is said and done, we came out with a $6 billion trade surplus. That means, for the hon. gentleman who just asked the question, it is in our favour. We did better than they did.
We are competing on a daily basis. There are a lot of jobs in this country that depend on trade with other nations. In fact, 40 per cent of our individual wealth as Canadians depends on trade. We are doing a heck of a job.

February 26, 1992
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I want to give a clarification of those figures. That figure of $91.1 billion is what we shipped to the United States.
After the interchange of goods back and forth, we came out $6 billion better. That tells me we are doing a good job and it tells me that if this member had known what he was doing in 1988 he would have stayed right over here on this side of the House.


Dennis Joseph Mills: Mr. Speaker, I have some short comments. First of all, I would like to remind the member for Carleton-Charlotte that my colleague did not desert the government side of the House. He just said to me that he was expelled. We should not leave that misunderstanding in the eyes of the constituents of this country.
When I was listening to the member talk about the inflation rate being 1.6, and it is the lowest inflation rate that we have had in over 20 years, we recognize that. We see that has had some positive effect on the economy.
But one of the negative effects that it has had on this economy is that it has produced this tremendous number of unemployed Canadians, a tremendous number of people who are on welfare.
In this Chamber, this House of Commons, this nation's boardroom, we are not here just to speak for the advantaged and to talk about all the good things that are happening in terms of targets and objectives that we are out to meet. We are here to speak for those in our society who are disadvantaged.
As you are talking about this heavy ratchet you have put on inflation-and I recognize that-you must also recognize the other side of the coin and that is the 3 million people who are out there in deep pain.
We sometimes think that there is a tendency to forget that, you are so excited about the inflation numbers maybe being a year ahead of schedule that you forget about the 3 million people who have been left behind.
I am sure the member for Carleton-Charlotte would agree that it is our responsibility on this side of the House to prick your conscience and remind you about those 3 million people because certainly the Governor of the Bank of Canada is not going to remind you.


Gregory Francis Thompson: Mr. Speaker, the number that the
member uses is 3 million. I want to remind Canadians there are 1.5 million Canadians unemployed, not 3 million. I do not care whether he inflates the number at all. That is his business. Whether it is 1 million, 1.5 million, or 800,000, it is too many Canadians unemployed. We do not argue that point.
As I go back in my remarks earlier, we have to get the fundamentals right in order to get the economy moving. He understands that because he understands the Canadian economy probably more so than anyone else on that side of the House. He does. I have heard some of his speeches.
I do disagree with the number that he uses. The fundamentals have to be there in order to get the economy moving. That is what we are doing because we have to have an inflation rate that businesses can live with, where there is stability in the marketplace and interest rates are down.
I just want to remind the member of his leader. When his leader was part of the government in 1981-82 and the Liberal Party had the government in this country, his leader sat over there.
The unemployment rate at that time was 12.8 per cent and rising. Inflation was 12.9 per cent under the government of which the Leader of the Opposition was a member.
Interest rates at the time were 22 per cent. He corrects me. The Prime Minister of the day was Mr. Trudeau, but the finance minister at the time was the present hon. Leader of the Opposition.


Dennis Joseph Mills: I rise on a point of order to correct the record, Mr. Speaker. The Minister of Finance at that time was the hon. Allan J. MacEachen.


The Acting Speaker (Mr. DeBlois):: Order, please. That is a matter of opinion.
Resuming debate with the hon. member for Broadview-Greenwood.


Dennis Joseph Mills: Mr. Speaker, I only have seven minutes before the day is adjourned. I am going to save the body of my speech for tomorrow morning. I want to finish off responding to my friend from Carleton-Charlotte.
February 26, 1992

One of the reasons we on this side of the House are so concerned about the direction this government is taking us is the massive dismantling job this government has done in the last eight years, from VIA Rail cuts to the cutbacks in the CBC. There is not a thing in this country that has not been touched by this government. It has been one of the biggest dismantling jobs that we have ever seen anywhere in the world.
While the members on the other side tend to gloat on what they call the streamlining of government, they do not seem to realize that a lot of government institutions like the Science Council of Canada and the Economic Council of Canada are think-tanks that do not always agree with the government. They did not always agree with us when we were in government. They are instruments of provoking and advancing debate.
It is this dismantling that tends to make us very disturbed on this side of the House. Right now we are in the midst of a very serious constitutional debate. Quite frankly I am nervous that this government is in the process of giving away so many powers to the provinces that this place will become redundant; there will be nothing left to do here but send cheques to the provinces.
This country needs a strong national government. This country was built on national programs from coast to coast. That is where we get our national will. That is where we get the thread that binds us as a nation. When times are tough, like the times we have right now, it is this strong national government that pulls us together.
The Budget
Let us take a look at this budget. This budget barely touches retraining. I dare say one of the reasons we do not have a lot of retraining in this budget is that we are in the process of giving it away to the provinces. We are going to constitutionalize training and give it away to the provinces.


Mr. Thacker:: Mr. Speaker, I rise on a point of order. I wonder if my friend opposite would advise the House as to why his party opposed the $1.8 billion of UI funds going for retraining.


Dennis Joseph Mills: Mr. Speaker, I am not opposed to the $1.8 billion that we currently use in terms of retraining. When we have 1.5 million people unemployed and another 2.5 million on welfare, that is not enough. When we talk about training and retraining, in the city of Toronto we cannot find spots. We talk in this House about training and retraining, yet when people go to get it, it does not exist. That is the whole problem with this government. This government is one of the most dangerous governments we have ever had in our country's history because it is an expert at communications. It is all tactics and no substance. We are right in the middle of a very serious constitutional debate and I am deathly afraid that this constitutional arrangement that we are playing around with is going to be no different than this budget, just a total sham.


The Acting Speaker (Mr. DeBlois):: It being eight o'clock p.m., this House stands adjourned until tomorrow at ten o'clock a.m. pursuant to Standing Order 24(1).


[Stage Direction]
The House adjourned at 8 p.m.
[Stage Direction]
Thursday, February 27, 1992