1992-02-27

Mr. Albert Cooper (Parliamentary Secretary to Minister of State and Leader of the Government in the House of Commons):: Mr. Speaker, in a few minutes we will be having a fairly lengthy statement by a minister and statements following that by opposition members. Just to provide an opportunity for a minister to table a bill and not then have to delay the House, I think you will find unanimous consent for the following motion:
That we proceed immediately with introduction of government
bills and revert to tabling of documents thereafter.


Mr. Speaker:: The hon. parliamentary secretary has put a proposition to the House and is asking for unanimous consent. Is there unanimous consent?


Some hon. members:: Agreed.


Some hon. members:: No.


Mr. Speaker:: There is not unanimous consent.



ROUTINE PROCEEDINGS


[Stage Direction]
A message from His Excellency the Governor General transmitting estimates of the sums required for the
service of Canada for the financial year ending March 31, 1993 and, in accordance with section 54 of the Constitution Act, 1867, recommending these estimates to the House of Commons.
Hon. Gilles Loiselle (President of the TVeasury Board and Minister of State (Finance)):: Mr. Speaker, I would like to table in support of the Estimates part I, the government expenditure plan.
In addition I will table with the Clerk of the House, on behalf of my colleagues, Part III of the estimates consisting of 87 department expenditure plans. These documents will be distributed to members of the standing committees to assist in their consideration of the spending authorities sought in part II of the Estimates.


REFERENCE TO STANDING COMMITTEES
Gilles Loiselle: That the Main Estimates for the fiscal year ending March 31,1993, laid upon the table on February 27, 1992, be referred to the several Standing Committees of the House as follows:

Since there is a detailed allocation of the estimates to various committees and the list is lengthy, if it is agreeable to the House I would ask that the list be printed in Hansard as if it had been read.


Mr. Speaker:: The House has heard the suggestion made by the hon. minister. Is it the pleasure of the House to adopt the motion?


Some hon. members:: Agreed.

February 27, 1992
Routine Proceedings
lb the Standing Committee on Aboriginal Affairs
Indian Affairs and Northern Development, Votes 1, 5,10,15, L20 and L25
Tb the Standing Committee on Agriculture Agriculture, Votes 1, 5, 10, 15, 20, 25 and 30 lb the Standing Committee on Communications and Culture
Communications, Votes 1, 5,10, 15, L20, L25, 30, 35, 40, 45, 50, 55, 60, 65, 70, 75, 80, 85, 90, 95 and 100
Secretary of State, Votes 1 and 5
lb the Standing Committee on Multiculturalism and Citizenship
Multiculturalism and Citizenship, Votes 1 and 5
lb the Standing Committee on Consumer and Corporate Affairs and Government Operations
Consumer and Corporate Affairs, Votes 1,5,10,15, 20,25, 30 and 35
Governor General, Vote 1
Industry, Science and Technology, Votes 80, 85 and 90 Parliament, Vote 1 Privy Council, Votes 1, 5, 10 and 40 Public Works, Votes 1, 5,10, 15, 20, 25, 30 and 35 Secretary of State, Votes 10 and 15 Supply and Services, Votes 1 and 5 Heasury Board, Votes 1, 3, 5, 10, 15 and 20 lb the Standing Committee on Energy, Mines and Resources
Energy, Mines and Resources, Votes 1,5,10,L15, L20.L25, 30,35 and 40
lb the Standing Committee on Environment
Environment, Votes 1, 5, 10, 15, 20, 25 and 30
lb the Standing Committee on External Affairs and International Trade
External Affairs, Votes 1, 5, 10,15, 20, 25, 30, 35, L40, L45, 50, 55, 60 and 65
lb the Standing Committee on Finance Finance, Votes 1, 5, L10, L15, L 20, 25, 35 and 40 National Revenue, Votes 1, 5, 10, 15 and 20 Privy Council, Vote 30
To the Standing Committee on Forestry and Fisheries Fisheries and Oceans, Votes 1, 5 and 10 Forestry, Votes 1, 5 and 10
lb the Standing Committee on Human Rights and the Status of Disabled Persons
Justice, Vote 10
To the Standing Committee on Justice and Solicitor General Justice, Votes 1, 5, 15, 20, 25, 30, 35, 40 and 45 Privy Council, Vote 45
Solicitor General, Votes 1, 5, 10, 15, 20, 25, 30, 35, 40 and 45
To the Standing Committee on Labour, Employment and Immigration
Employment and Immigration, Votes 1, 5, 10, 15, 20 and 30 Labour, Votes 1, 5, 10 and 15 Tb the Standing Committee on House Management Parliament, Votes 5 and 10 Privy Council, Vote 20
To the Standing Committee on National Defence and Veterans Affairs
National Defence, Votes 1, 5, 10, 15 and 20 Veterans Affairs, Votes 1, 5, 10, 15 and 20
Tb the Standing Committee on Health and Welfare, Social Affairs, Seniors and the Status of Women
Employment and Immigration, Votes 25 and 35 National Health and Welfare, Votes 1, 5,10, 15, 20, 25, 40 and 45 To the Standing Committee on Public Accounts Finance, Vote 30
To the Standing Committee on Industry, Science and Technology, Regional and Northern Development
Atlantic Canada Opportunities Agency, Votes 1, 5 and 10
Indian Affairs and Northern Development, Votes 30, 35,40,45,50 and 55
Industry, Science and Technology, Votes 1,5, L10, L15,20, 25,30, 35, 40, 45, 50, 55, 60, 65, 70 and 75
National Health and Welfare, Votes 30 and 35 Secretary of State, Votes 20 and 25 Western Economic Diversification, Votes 1 and 5 Tb the Standing Committee on Transport Privy Council, Votes 15 and 35
Transport, Votes 1,5,10,15,20,25, 30, 35,40,45,50, L55,60,65 and 70
To the Standing Committee on Official Languages Privy Council, Vote 25.


[Stage Direction]
Motion agreed to.

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 25 petitions.
[Editor's Note: See today's Votes and Proceedings.]
February 27, 1992


Gilles Loiselle: Mr. Speaker, I am pleased today to table in the House the government's Main Estimates for the 1992-93 fiscal year. I believe that these estimates attest to the government's ongoing efforts to make its operations more efficient, to reduce costs and to maintain a fair balance between the demand for federal services and the taxpayers' ability to pay.
The Main Estimates explain in detail how the government plans to spend $159.6 billion, the planned budgetary expenditures for 1992-93, pursuant to the announcement made this week by my colleague, the Minister of Finance.
In presenting this budget the government wishes to obtain authorization to spend $48.8 billion from Parliament. The rest is covered in legislative authority already granted by Parliament.
Cast year I made explicit commitments in the House. Today I wish to report on our achievements over the past year and on the measures that we have taken and are now taking to cut spending and obtain the most value from each taxpayer dollar.
I will also tell you, Mr. Speaker, about our commitment to provide Canadians with the best services possible, what we are doing, and the plans we are making to meet this commitment.
The spending control plan that we introduced with the 1990 budget and that we later broadened and expanded in the 1991 budget affected many programs. The growth of most programs, except for equity programs and those that meet Canadians' basic social needs, has been slowed, while other programs have been frozen, reduced or simply eliminated.
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Spending control has forced departments and agencies to face increasing demands with fewer resources. The freeze or reduction of operating and maintenance budgets has been an important element of the cost cutting measures in all budgets since 1985. Since that year the real value of operating and maintenance budgets for programs in place has gone down by about 30 per cent as a result of these and other measures.

In keeping with the 1991 budget, the government limited salary increases to zero and three per cent over two years when Parliament passed the Public Sector Compensation Act in October 1991. We have also reduced to three the number of management layers below the deputy minister level. This makes the management structure in the federal Public Service comparable to that of many large organizations in the private sector which have had to restructure their operations to reduce costs.
We are ahead of schedule on the commitment made in last year's budget to reduce the number of senior managers by 10 per cent within two years. There are now 4,430 members of the executive group, down 320 from January 1991.
Our record is there for all to see. It is a record of performance, not words. We have reduced appreciably the rate of growth of program spending. In 1984 program spending represented nearly 20 per cent of the country's Gross Domestic Product. Today, mostly because of the restraint measures we have introduced, the figure is down to 16.7 per cent.
The savings we have made in recent years have not come only from reducing the payments we make to individual Canadians and the transfers we make to the provinces. The deepest cuts were made in government operations and capital. Canadians have indicated that they want governments to spend less, to spend smarter and to be more efficient. We continue to scrutinize expenditures to ensure that we spend only where Canadians need and want to receive services.
Programs including grants and contributions are being reduced in a number of areas. Defence spending is being scaled back further. Funding for new social housing will continue to grow but at a more limited pace. We remain

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committed to the green plan spending of $3 billion over six years, but we will delay some of the spending for two years. We are improving the management of the Canada Student Loans Program. These actions will yield savings of $530 million in 1992-93 and $3.4 billion over five years.
We are continuing to restrain the cost of government operations. Departmental non-salary operating budgets are being reduced by a further 3 per cent. The 20 per cent restriction or reduction on travel outside Canada introduced in December 1989 will be continued.
The number of international meetings and the size of foreign delegations will be scaled back. Ministers, members of Parliament and deputy ministers will no longer be entitled to travel first class. Business class travel will be reduced as will be the amount spent on hotel accommodations.
The government Leader in the Senate, the Hon. Lowell Murray will be reviewing spending in the communications function to identify $75 million in expenditure reduction.
Forty-six separate organizations will be wound up, privatized or consolidated with other organizations. Thirteen ministerial advisory councils will be brought to an end. Three new agencies will be put on hold, and a number of activities will be privatized.
Cost recovery will be extended to a number of additional program areas, continuing to shift the cost of providing specific services to the beneficiaries and away from general taxpayers.
Assets no longer required will be sold. The government will increase its effort to collect unpaid debts.
These measures, taken together, will provide savings in excess of $1 billion in 1992-93 and $7.3 billion over the next five years.
The changes we are making in the way we do things address squarely the twin challenges of restraint and serving Canadians in the best way possible. We must balance clients' demands for services with taxpayers' ability to pay.
We are not simply cutting. We are restructuring to make our services more accessible to Canadians. We recognize that due to the expenditure cuts announced this week, reductions in the level of some services may occur. We want to minimize these effects by shifting
resources from internal administration to the points of service delivery.
In 1992-93 the government plans to spend $159.6 billion and that is $119.4 billion in programs with the remaining $40.2 billion going to servicing the public debt.
Out of every dollar spent, over 27 cents is transferred directly to individuals through such things as pensions and unemployment insurance benefits.
Transfers to the provinces and the territories made up principally of equalization programs payments to the less well-off provinces and payments to help fund provincial and territorial programs such as health care, post-secondary education and social assistance take up another 16 cents.
About 8 cents go to defence, another 10 cents to industrial and regional support transfers to aboriginal people and international assistance.
Subsidies to Crown corporations take up 3 cents. The cost of servicing the debt accounts for another 25 cents. The remaining 11 cents represent the cost of providing services directly to Canadians. This is made up mainly of employees' wages and salaries, accommodation, equipment, travel and related expenses.
In 1984 Canadians were paying $1 in taxes and getting $1.33 in program benefits. The difference was financed by borrowed money, so payment was put off to the future. The future is now.
Today, Canadians are still paying their tax dollar, but a growing share is being used to pay interest on the debt accumulated through past spending.
This is why we must continue to hold the fiscal course that this government has charted since 1984.

Restraint measures have forced managers and agencies to meet an increased demand for services with fewer resources. Nevertheless, they did not falter. Aware that restrictions are here to stay, they are determined to meet the challege head-on.
They remain steadfast in their determination to serve. Like their counterparts in the private sector, they take pride in ensuring that taxpayers get their money's worth.
Dedicated federal public servants are responsible for providing Canadians with the kind of efficient service they expect from their government. Canadians are demanding, and they have every right to be. The government's employees are doing a good job.
February 27, 1992

We are decentralizing decision-making. We are giving public servants the authority to make decisions and making them accountable for those decisions. They are also responsible for getting results.
Many of our recent initiatives were inspired by the wide-ranging renewal announced by the Prime Minister in December 1989-Public Service 2000. Creating special service agencies will make public servants better able to run their agency like a business. Operating budgets will give them a chance to determine the most effective distribution of funding and resources.
We will privatize services and functions if this option turns out to be less costly and more effective and improves service to the public. We will continue to charge user fees for activities that mostly benefit specific clients or users.
Our government is committed to providing the best possible service with the resources available, and to do so courteously and efficiently. It is committed to creating a Public Service whose employees have an abiding concern for the public, are sensitive to the public's needs, and are capable of solving problems and responding quickly to the needs of Canadians. We continue to restructure the public administration in order to streamline its services and facilitate their access.
The departments will co-operate in order to better answer the needs of their clients, and they will take all reasonable measures to logically group together government services in a single service area. They will consult with their clients, so that the latter can help them resolve important issues. They will have more flexible hours, so as to better meet the needs of their clients. They will reduce the number of forms and revise them to make them easier to fill. They will have a single registration number for businesses. They will use electronic devices for their procurements, and they will invest in training as well as in new technologies.
In order to make other savings and increase efficiency, the government will continue to give up activities that can be performed elsewhere at a reduced cost. It will continue to privatize services or to enter into partnerships with the private sector, when such measures are financially profitable. The government will also continue to divest itself of excess goods, to recover its costs and to
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insist on results whenever possible. It will continue to examine regulations in order to determine if they are still useful and, when they are, to ensure that they do not go against efficiency and competitiveness. It will also simplify those regulations where possible. We will examine the needs of small organizations and determine if they can share their office space in order to improve service and reduce costs. The government will continue to ensure a greater efficiency in markets and procurements, and to deregulate operations within the Public Service as operating budgets will come into effect.

In conclusion, the measures announced this week build on the actions we have taken over the last seven years. They demonstrate our commitment to sound fiscal management, to reducing the demand on the taxpayers dollars and to placing more resources where employees serve the public directly. That is where Canadians want us to place the focus, and that is where it should be. In this way we can keep costs down while making sure that we provide the best possible services.


Mr. Douglas Young (Acadie-Bathurst):: Mr. Speaker, in listening to the budget on Tuesday and listening to the President of Treasury Board today, one might have thought that at this point in time we would have heard something about what the government was going to do for the unemployed.
We may have thought we would have heard something about what was happening with the primary resource sector as a result of the over-valued Canadian dollar. We might even have had a better insight into how the Government of Canada intended to spend $160 billion for the benefit of Canadians who are most in need.
Canadians might have been looking forward to some answers on whether or not the government was prepared to become involved in renewing municipal infrastructure in this country. I think that the bottom line after the last couple of days is that Canadians are asking themselves what happened to the government and members of government who, not very long ago, talked about jobs, jobs, jobs and talked about the fact that they were the people who could best manage the affairs of the country.

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All that has gone for naught, and now we are faced with having to deal with documents and estimates. Just to set the discussion in perspective, this is one budget document. This is the document that represents the
1992-93 estimates for employment and immigration in Canada.
In this document one would take a look and find that employment and immigration is going to spend substantially less this year than last year. It will be quite a reduction. If you look at it closely, there will be an increase in the number of people who will be working for employment and immigration. There will be some 1,200 more people than were involved last year. There will be less money and more people.
One wonders what the people are for. Are they to check up on people who are collecting unemployment insurance? Are they to deal with matters that are going to help the Canadians who need help, or are they there simply to create more problems? It is very difficult to tell. One of the things that we will never be able to determine as Canadians, as taxpayers or as parliamentarians is really what is in the estimates of the government.
This represents one of over 90 books that were tabled this morning figuratively by the minister. He did not bring them all into the Chamber, but they are around for anyone who wants to look at them. There are 90 publications-some of them thicker than this one; some of them are thinner- covering all kinds of government activity, on how it is going to spend $160 billion. No one truly has any hope of finding out exactly how that money is going to be spent.
What I thought I would do this morning in the few minutes that are allowed to me is to put myself in the shoes of Canadians who, after Monday afternoon, might want to have some notion of what is happening to them. I wonder what the unemployed in this country are thinking.
Where do they believe $160 billion is going to go and how is it going to affect them? What about the farmers of this country, many of whom were here in the last couple of weeks telling us how concerned they are about their future? What about the woods workers where the forestry industry which is totally depressed across the country because of the over-valued Canadian dollar?
What about the thousands of men and women in the fisheries, most of whom are in the fishery directly on the seas and in the fish plants? I wonder what they thought was in the budget document and now in the estimates that is going to help them out. Where are the adjustment programs that we heard so much about? Reams of documents were produced on the free trade agreement and people were going across the country. There were blue ribbon commissions put in place to determine programs that would assist workers who were being displaced.
One and a half million people in this country have to be very concerned about the fact that for them, $160 billion will bring them nothing. It is nearly inconceivable because for most people in this country it is an amazing exercise that the government comes forward and politicians from all political parties talk about $1 billion casually.
There has been a great deal of talk recently about testing in our school system. I wonder if anyone at the high school, cegep, community college or university level would like to ask some of the people in the economics classes what a billion dollars is put another way. How many $10 bills is it? How many $100 bills would there be in a billion dollars? How many thousand dollar bills would there be in a billion dollars? If there were such a thing, how many million dollar bills would there be in a billion dollars?
We sit around and we talk about these huge amounts of money as if we really understood. We produce 80 documents and we have a situation where I as a member of public accounts-and I am sure it is an experience shared by many of my colleagues- have been told that senior bureaucrats say that parliamentarians do not use the very voluminous documents that the President of Treasury Board made available to us today. That is the truth. We do not use those documents because we really cannot get to the bottom of them. It is a morass, it is a maze.
We have even been told that people who come to work in departments with a financial vocation are told not to worry too much for a couple of years when they first get there. No matter how well trained they are, with masters in economics and masters in business administration, or even doctorates, do not get frustrated; it will take a couple of years to catch on. They are in a niche, where
February 27, 1992

they are dealing with some very restricted kinds of information.
We are asking small business entrepreneurs in this country to take a look at the estimates and take a look at the budget and try to figure out what is in it for them. We are asking the people, the men and women and the small business operators who have gone bankrupt by the thousands in the last few years, to look at $160 billion and see if there is anything in it for them.
I think all there is in it really is more frustration for the people who cannot get a clue as to what is in these kinds of numbers for ordinary Canadians. We do not know whether there is improper or unauthorized spending. We do not know where the waste is unless we stumble on it. The duplication is sometimes obvious but it is protected in turf wars. There is poor productivity. The Auditor General is very concerned about productivity. He keeps referring to it.
There is a lack of accountability. There may even be some corruption. There are certainly questionable accounting and reporting systems. There is bad management. There are so many things that we could question. When we are talking about an organization that spends $160 billion a year and has well over 200,000 employees, we recognize that it cannot be simple to account for the expenditures of government.
What I am asking and what I hope the President of Treasury Board understands is that as we move toward Public Service 2000, we understand that very few people can cope with the kind of information that is made available to us. We are told by the senior managers that Parliament and the Canadian public are provided with all the information they can use. But that is not true. We are provided with more information than we can use. Is that a purpose that is set out as an objective to make sure that we are overwhelmed, both as parliamentarians and as Canadians, to a point where we really cannot in any way, shape or form deal with the kinds of questions that should be fairly easy for people to get answers to? I want to make sure that we understand how complex the system is. I go back to this example. We have situations, if I can digress for just a moment. I could not help myself.
This morning I picked up The Globe and Mail. Liberals still read The Globe and Mail. You sometimes have to
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wonder why. The hon. Minister of Communications asks if we read. Yes, we do, unlike some of his colleagues who are not very fussy about Canadian literature.
This week, as a matter of fact in the March edition of The Globe and Mail report on business, there is a very glowing account of what appeared to be a success story. We are talking about a very sophisticated organization that is Canadian-wide in terms of its input and its ability to assess the economy, and so forth, but also one that has people who are first-rate-researchers, economists- who work for The Globe and Mail and who prepare their business reports, their inserts that we see month to month. Here is March 1992. This is a little bit of a futuristic look as far as The Globe and Mail is concerned. Here is the headline: "The Dean of Discount: With a push from master merchant Dean Muncaster, Bargain Harold's is cashing in as discount retailing goes mainstream."
This is what Canadians are reading this week that came out of The Globe and Mail on the weekend in its report on business.
This morning, in the very same week, this is the headline in the report on business in The Globe and Mail: "Bargain Harold's seeking protection from creditors".
The point I am trying to make here is certainly not that Mr. Muncaster did not have a great success and worked very hard for Canadian Tire. I know many Canadian Tire retailers in this country. I know what a great organization that is. The point I make is that economic analysts and people who are responsible for much of the business information that is disseminated in this country are unable to look at a company like Bargain Harold's and get a grasp of what this economy is doing to a company like that that is Canada-wide.
How can it be expected that ordinary Canadians understand what is happening with their government when we are spending $160 billion a year? It is so complicated that in the documents released by the Treasury Board president today, we cannot find out how many people work for the government. It is incredible. I have asked in public accounts to take a snapshot on any given day, a day ago or two years ago, and tell us how many human beings worked for the Government of Canada on that day. We know that most people who

February 27, 1992
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work expect to get a cheque. The system works well enough in that respect. People who work for the government get a cheque. Because of jargon and all kinds of systems, we are unable to determine exactly how many people are on the payroll of the Government of Canada, in other words being paid by the taxpayers of Canada.
It is interesting. If you look at the new approach that will be used by the government, this year 28,000 were removed from Treasury Board control. They went into a special program, a pilot project system that is being used to implement PS 2000 in the next couple of years.
What happens is that the PS 2000 approach and this de-control means that you look at some departments and there is nobody there in terms of person-years. Person-years is an approach that has been used for many, many years.
The ordinary Canadian who would look at the estimates that came out today and who would focus, for example, on the Prime Minister's Office, would find that no one works in the Prime Minister's Office. Nobody works there at all. Zero. This is the kind of thing that goes on. The point I am trying to make is how do you expect Canadians to have confidence that their tax dollars are being well spent and, as important, that their tax dollars are being accounted for when we are going through these exercises where some people are controlled, some people are de-controlled and you do not know how many people are working for you on any given day. Now, in a place like the Prime Minister's Office, nobody works at all.
I want to make one last point on this because somebody might think that we are playing politics with this. The Auditor General of Canada and the Comptroller General of Canada are the two most senior accounting segments in our system of government and this is the situation we are faced with. I quote the Auditor General: "I have unfortunately concluded that the 1991 financial statements do not report certain important elements of information reliably". He could not accept the accounting procedures of the Government of Canada.
We sat in public accounts and tried to get to the bottom of this. Last year, the government fudged the books to a point that it was able to deal with a $2 billion deficit on the basis of the zero and three freeze. It was able to get $1.3 billion out of that. It should have charged
it out over a 13-year period forward because there will be savings in the pay-out of pension plans over the next 13 years.
Petro-Canada, because of an evaluation mistake made in the early 1980s, there is a loss there. Instead of writing it off in the year in which the loss was discovered, it took that back to 1984. It is very creative accounting.
The Auditor General does not agree with that. What do we have? We have the Comptroller General saying that it is perfectly all right. The very sad part of all of this is that both of these individuals rely on accepted accounting practices that have been set out by people who have an interest in public sector accounting.
We had J. J. Kelly come in, a recognized expert on pension plans. We had Joseph Weinstock come in and talk to us. Imagine what chance Canadians have of getting any kind of information from the estimates when the two senior accountants in government, the Auditor General and the Comptroller General, cannot agree on $2 billion as to whether or not it should have been used last year to reduce the deficit. That is the kind of problem faced by Canadians.
We need clarity in our accounting system. We need sense being applied to how we are going to deal with these issues because Canadians want to know what is happening to their $160 billion.


Mr. Steven W. Langdon (Essex-Windsor):: Mr. Speaker, what we have received today, as the previous speaker suggested, is a great deal of detail which fills out the budget package which was presented on Tbesday by the Minister of Finance.
I think some of the comments which the previous speaker has made are important comments, but I think it is crucial in this brief preview of a debate which will take place on estimates throughout the year, to put very clearly the differences in substance which we have with the approach which the government has taken in the way it has decided to spend its money.
In the days when life was easy for the Liberals in government and they could simply feel they could borrow money and spend it as they wished, perhaps one did not have to look so carefully at where money was spent, but in these days, in these days where, I think, across the country all responsible governments are
February 27, 1992

recognizing that you have to look veiy carefully at how you spend your money, where you make your allocations to see to it that you get fairness for people to see to it that you get results for the economy, it is crucial there be a careful examination of where money is being spent, how it is being reallocated.
We received this great mass of material one hour and a half before the minister stood up to speak this morning. This is not going to be a definitive detailed judgment on these points, but there are certainly some major problems with the reallocations and the expenditures which this government has put before the House this morning.
As we look at this set of estimates, they seem to us to show a government which is still, in the way it allocates its money, very heartless to many people in the country, a government which is still not being as honest as it should in telling Canadians what is happening to their money and a government which is being unfair in the way in which money is being reallocated within the structure of expenditures.
Let me just go through a number of points which I think illustrate why we come to this conclusion that the estimates tabled today demonstrate heartlessness, lack of honesty and unfairness. We take, first, I think the most important reallocation which is in these estimates, the area of expenditure to get people back to work. I do not think there is anyone in this House who does not believe that the fundamental function of us as the Parliament of Canada should be to see to it that we get as close as we possibly can to getting everybody who wants a job back to work. It requires training expenditure. It requires help to companies to train people. It requires help to provinces to be able to develop their training programs.
Yet what has been cut most dramatically in this particular set of estimates? There is no question that it is the estimates of the employment department of this country.
Take, for instance, grants for employment purposes. These are not grants for make-work jobs. I quote from the estimates: "to assist individuals to improve their employability and to promote employment opportunities by assisting local entrepreneurial development". Everybody believes in that. Yet what has this government
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done? It has reduced those grants from $127 million last year to under $90 million this year.
If we take contributions they are not meant for make-work jobs either. These are contributions for the provision of training. I am quoting again from the estimates: "for the provision of training, work experience, for mobilizing community resources, for establishing adjustment measures necessary for the efficient functioning of the Canadian labour market". These are all crucial to a good economy in this country. Yet what has happened? These contributions were $1,319,000,000 last year. These have been reduced this year by almost one-quarter of a billion dollars to $1,064,000,000. In total, if we take both grants and contributions, we see a decrease from $1.33 billion to $1.07 billion.
This is unforgivable when there are so many people out of work across this country. We find the money to give tax breaks that benefit manufacturing companies and to give new tax loopholes which the large corporations in this country will be able to take advantage of. Yet we do not find it possible to keep even the same level of funding for employment and training programs as there was in last year's budget. It is unforgivable.
Then there is the question of defence. The Minister of Finance suggested, when he made his speech the other day, that Canada was going to enjoy a peace dividend. When one gets into the estimates one finds there is no reduction in defence expenditure. Looking at the estimates for last year and comparing them with the estimates for this year, one finds that there has been an increase of $230 million in expenditure on defence. So much for the honesty of this government. We have not seen defence cuts. We have seen defence increases.
The government will come back and say: "Yes, but we have spent more money than that in last year's estimates because of the gulf war". But how much more was spent? We were told by officials this morning that the extra expenditure for the gulf war was $147 million. That means that the increase in defence expenditure, even taking the gulf war into account, is almost $100 million from last year to this year. We could not possibly have a clearer case of smoke and mirrors from a government trying to persuade Canadians that they were cutting defence when they were increasing expenditures on defence in this country. This is despite the fact that the cold war is over and we do not need to be putting the tremendous sums of money into defence which were

February 27, 1992
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required when it looked like a potential for world war might still exist.
In addition to those two key areas I want to talk a little bit about regional development because it is another area that is important to economic growth in this country. Yet what has happened to the regional development budget in Atlantic Canada for instance? It has been cut. If we look at the budget for the Atlantic Canada Opportunities Agency grants and contributions, they have decreased from $288 million last year to $274 million this year.
If we look for loans to Cape Breton which is one of the hardest hit parts of this country we see a reduction in loans as well. The over-all contribution to regional development in Atlantic Canada has been cut from $357 million to $334 million. This is despite the fact that an economic catastrophe has just hit Atlantic Canada in the fisheries. Again, it is unforgivable, heartless and unfair.
There are some other small points that I want to note that seem to indicate to me that the government has been unfair and heartless in making its cuts in this budget. It has taken one of the very best agencies that we have to help poor people in the less-developed countries, the International Development Research Centre, and it has cut its budget by $8 million. What possible sense can there be in that? It has taken the Office of the Superintendent of Financial Institutions, which under the new Bank Act has been given more responsibilities, and has reduced its operating budget.
Everybody in this House had heard horror stories about the Immigration and Refugee Board because it cannot do its job fast enough. Has the government given any extra resources to that board? Not a bit.
At the same time this government continues to waste money. It has increased the budget of the Canada 125 exercise by 50 per cent. This is an exercise which is caught up in extreme difficulties and which has no accountability to this House. It is a wasteful way to spend money.
At the same time it is spending extra money, $18 million, to establish a GST centre in the country. This is another expenditure for this bad tax which should be done away with.
I will finish with this point. Perhaps the biggest problem with these estimates is that there is nothing to explain to Canadians the money which is being given to corporations and to wealthy Canadians in tax expenditures and tax reductions which go to help those large corporations. We have mentioned some of them in the House: the fact that a large company can deduct escort services for its business executives, the fact that the capital gains tax of $100,000 which goes strongly to rich individuals is not even costed out in these estimates.
If we want a true picture of where the government is giving its benefits, we need these tax expenditures put clearly before this House.
I want to say however that there is one good thing in this set of estimates that has come before us, one excellent allocation of funding. This excellent allocation of funding is a very significant increase in the budget for the office of the Chief Electoral Officer. The Chief Electoral Officer has been given an increase of $15 million for this year to run an election. I hope that it turns out that election is held and we get rid of this heartless, dishonest and unfair government.



INTERPARLIAMENTARY DELEGATION


The Acting Speaker (Mr. Paproski):: Pursuant to Standing Order 34, I have the honour to present to the House a report on the meeting of the Conference of Speakers and Presiding Officers of Commonwealth Parliaments held in Jamaica on January 6-10, 1992 in both official languages.



REPORT OF CANADIAN NATO PARLIAMENTARY ASSOCIATION

Mr. Bob Hicks (Scarborough East):: Mr. Speaker, pursuant to Standing Order 34, I have the honour to present to the House, in both official languages, the ninth report of the great Canadian NATO Parliamentary Association.



CUSTOMS


Mr. Clement Couture (Saint-Jean):: Mr. Speaker, I have the honour to present, in both official languages, the report of the Special Committee on the Act respecting Customs. I would like to express my appreciation of the excellent work done by the members of this committee, thanks to whom it was possible to table this report which contains a series of recommendations on application of the legislation.
Furthermore, pursuant to the provisions of Standing Order 109, your committee asks the government to table a comprehensive response to this report.



SCRUTINY OF REGULATIONS


Mr. Derek Lee (Scarborough-Rouge River):: Mr. Speaker, I have the honour to present, in both official languages, the fourth report of the Standing Joint Committee for Scrutiny of Regulations.
Your committee wishes to draw to the attention of the House the inappropriateness of the fee structure contained in the central registry of divorce proceedings regulation. The revenues from these fees are materially in excess of the costs incurred amounting to some $1.5 million over the last five years.
It is the position of the committee that circumstances here raise an issue relative to the distinction between a fee and a tax. In the unanimous view of the committee, this statutory order number 86-547 represents in terms of scrutiny criteria an unusual and unexpected use of the authority conferred on the minister by this Parliament.
[Editor's Note: See today's Votes and Proceedings]
Routine Proceedings TELECOMMUNICATIONS ACT



MEASURE TO ENACT

["I wish to inform the House that pursuant to Standing Order 33(2)(a) because of the ministerial statement, Government Orders will be extended 48 minutes beginning at one o'clock p.m.\nFebruary 27, 1992"]
Hon. Perrin Beatty (Minister of Communications) moved: for leave to introduce Bill C-62, an act respecting telecommunications.


The Acting Speaker (Mr. Paproski):: Pursuant to Standing Order 68(2), the motion is deemed adopted.


Henry Perrin Beatty: Mr. Speaker, after about 15 years and one hour of waiting, I am delighted today to be able to introduce comprehensive new telecommunications legislation for this country. The bill has been designed to enhance the capacity of the Canadian telecommunications industry to meet the demands of all Canadians.

I am firmly convinced this legislation will be highly beneficial for the industry and for consumers across the country.

I wish to thank the members of this House for their co-operation in passing this crucial piece of legislation.


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



Mr. George S. Rideout (Moncton):: Mr. Speaker, pursuant to Standing Order 36, I have the pleasure of presenting petitions from people in British Columbia concerning two Canadians, Christine Lamont and David Spencer, who are languishing in a Brazilian jail and sentenced to 28 years in prison.
The petitioners are calling upon Parliament to urge the Secretary of State for External Affairs to request the Government of Brazil to expel Christine Lamont and David Spencer and return them to Canada.

Routine Proceedings
There are numerous other petitions on their way. CRIMES OF VIOLENCE


Hon. Pauline Browes (Scarborough Centre):: Mr. Speaker, pursuant to Standing Order 36, I wish to present a petition on behalf of residents of Scarborough and the surrounding area who are concerned about the criminal justice system.
The petitioners request that Parliament recognize that crimes of violence against a person are serious and abhorrent to society and want to amend the Criminal Code of Canada, the Bail Reform Act, 1972, and the Parole Act accordingly.


Mr. Jack Whittaker (Okanagan-Similkameen-Merritt):: Mr. Speaker, it is my pleasure to rise today pursuant to Standing Order 36 and present petitions with names of 225 signatories.
These people are all from the Penticton and surrounding areas. I add these to the petitions of over 7,000 names that I have already presented to this House.
The people are upset about the closure of the Penticton post office and they petition Parliament. Canada Post is closing and privatizing post offices and will be closing the Penticton post office February 10, 1992 and converting it to a commercial service centre only for commercial use.
The petitioners humbly pray and call upon Parliament to stop this closure and privatization of postal services to ensure that citizens and taxpayers of Penticton, British Columbia, have a full service post office which is directly run by Canada Post Corporation.


Mrs. Diane Marleau (Sudbury):: Mr. Speaker, pursuant to Standing Order 36,1 have the honour to present in the House today a petition signed by residents of Sudbury, concerning the rights and dignity of victims of
sexual assault. Your petitioners call upon Parliament to table legislation to protect those victims.


Diane Marleau: Mr. Speaker, I have a second petition pursuant to Standing Order 36 and concerns the problem of the murder of Nina de Villiers on August 9.
This petition has been signed by a number of residents of Sudbury. They ask that Parliament recognize that crimes of violence against the person are serious and abhorrent to society and amend the Criminal Code of Canada, the Bail Reform Act, 1972, and the Parole Act accordingly.


Mr. Bob Kilger (Stormont-Dundas):: Mr. Speaker, pursuant to Standing Order 36, I have the honour to present to the House a petition which has been signed by 200 residents of Stormont-Dundas.
As Canada is currently involved in negotiating at the GATT, these petitioners are calling upon the government to preserve and strengthen article XI of GATT and defend the continuance of the supply management system for Canadian agriculture.


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


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


Some hon. members:: Agreed.


The Acting Speaker (Mr. Paproski):: I wish to inform the House that pursuant to Standing Order 33(2)(a) because of the ministerial statement, Government Orders will be extended 48 minutes beginning at one o'clock p.m.
February 27, 1992



GOVERNMENT ORDERS


[Stage Direction]
The House resumed from Wednesday, February 26, consideration of the motion of Mr. Mazankowski that this House approves in general the budgetary policy of the government; and the amendment of Mr. Gray (Windsor West) (p.7631); and the amendment to the amendment of Mr. Langdon (p.7633).
The Acting Speaker (Mr. Paproski):: The hon. member for Broadview-Greenwood has 13 minutes remaining for debate.


Mr. Dennis Mills (Broadview-Greenwood):: Mr. Speaker, I appreciate the opportunity speak in this budget debate.
I want to start my remarks by going back to last night. It was funny because I became a little bit uptight with the direction of this debate and I momentarily lost control with respect to my colleague from Carleton-Charlotte. I want to take that back. I hope he will accept my apology.
I have watched this Minister of Finance, not just in the last three years, I watched him when I worked on the Hill from 1980 to 1984. Quite frankly I think he is one of the hardest working members of Parliament we have in this House.
Sometimes when I am in my riding people will ask: "What is the Minister of Finance like?" I tell them that I think this is a man who is quasi-monastic in his commitment to public life. I have watched this man day in and day out work long hours. I know he is totally committed to his job and is doing the best he can with the resources he has.
I asked myself last night why I felt so uncomfortable with this budget. Why do I feel that it really is not addressing some of the fundamental issues, not for the advantaged people in our community but for the disadvantaged. The government will say that the fundamentals are in place and it continues to go back to the inflation number which is the lowest in 20 years. I acknowledge that.
As I said last night and I want to repeat today, there is a tremendous cost to the ratchet it has put on inflation in
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this country. The cost to the nation is the large number of people who are unemployed and the large number of people who are on welfare. They face a budget which really does not have a lot of hope in it.
When the member for Essex-Windsor talked earlier today about estimates relating to training and retraining, he mentioned the fact that when we discuss productivity, competitiveness and education, we have cut the retraining and grants to re-employment by almost $300 million. Those are not hopeful signals we are sending out to this country when we are going through such difficult times.
I ask myself again why I have such a different feeling toward this budget and this Minister of Finance. The bottom line is that I have a different vision of what the national government is all about. I have watched this government for the last few years. It has used the words "streamline" and "restructure". I prefer to use the words "the retreat from national government" or "the diminished federal presence". This government continues to pursue a diminished federal presence in nearly everything it touches.
I want to suggest to the government that it is really putting itself into a position where there is going to be very little to govern here in the direction it is heading.
I want to be very specific and relate this diminished federal presence, not just to the province of Quebec, because we all talk about the diminished federal presence in the province of Quebec and how harmful that will be in galvanizing us as a nation, but I would like to make the point in relation to my own province, the province of Ontario.
As this government reduces its federal presence in those programs which it has had traditional responsibility for, not only is this national government's ability to cope weakened by the serious problems we are facing today, but a situation is created where a premier, such as we have in the province of Ontario, an NDP premier who, by his actions, is filling that void and is developing policies which are exacerbating the unemployment in this country. He is exacerbating our ability to be competitive.
Here we have the premier of Ontario who, within two or three years, will actually have more economic power than the national government. The province of Ontario will have more spending power than the national government. Is that really what we want?

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By diminishing that federal presence then the person who is operating that program, such as the premier of Ontario, will fill the void that the national government runs away from and, in the process of doing that, we will lose our ability to give direction or have say because he who pays the piper calls the tune.
Right now, when this government talks about reducing the deficit, trying to tell Canadians it is trying to control the debt, most of that reduction is coming to them because of the reduced federal presence.
Do you know what is going to happen, Mr. Speaker? We are going to have a situation, as we diminish this federal presence, where those regions of our country who do not have the ability to provide the economic thrust to maintain national standards, whether it be in education or in any other phase of our economy, are going to be at a disadvantage.
When I was elected in my community I was asked to come here to speak for a strong national government, a national government that would look out for the disadvantaged regions of this country, a government that would make sure that those standards were national. This budget is really working against that principle. It is a retreat from the national government and it is pushing more and more responsibilities to the provinces.
Mr. Speaker, you signalled me that my time has lapsed. I hope that more members of Parliament, who are from the disadvantaged regions of this country, see through this budget and understand that is where it is taking us.


Mr. Greg Thompson (Carleton-Charlotte):: Mr. Speaker, as the member alluded, last evening we were engaged in debate in the House. We were the last two speakers to be on last night, and I am glad that I have the opportunity to respond to the member this morning.
I go back to a comment that the member made this morning. I think there is some commonality of thought here, although I am sure it is not complete. He talks about the tremendous cost of getting the fundamentals correct in this country. By that of course we are taking a look at interest rates at the lowest they have been in 20 years, inflation the lowest it has been in 20 years and so on. We do not have the time to go through all of those
obviously. We know that we have paid a cost for that. I think we all acknowledge that. At the same time we acknowledge that it is important to get those fundamentals correct for investment to take place in this country to get us on the course of recovery which I believe that we are on this point.
What is the cost in the long term of not getting the fundamentals correct? We acknowledge the fact that we paid a price for that on one side, but in the long term, what is the real cost of not getting those correct? When we have runaway inflation, interest rates that are over 20 per cent as they were 10 years ago, could the member please comment on that aspect of it?


Dennis Joseph Mills: Mr. Speaker, I appreciate the question. It is a good question. I think it is a question of balance. If you are almost six months ahead of your inflation targets, your interest rates are the lowest that they have been in almost 20 years, and you are still getting signals that this is not sparking confidence in the economy, that this is not getting a reaction from the 1.7 million entrepreneurs in this country who are our greatest hope for job creation, and I am not talking about make work projects here, when you are getting the feeling from these people that their confidence is so fragile that they are not striking out, that they are not investing, that they are not hiring, I suggest that the government has to loosen that ratchet a little bit. It has room. It has room in the interest rates. It has room with respect to inflation.
I am not saying we should have a spending binge here, but to have a $300 million cutback on retraining when we are all talking about retraining and global competitiveness, there is enough slack in the inflation numbers here that we could have handled that.
I want to suggest one other thing regarding the Small Business Loans Act which in the minister's budget doubled from $100,000 to $200,000.1 think that is good. My problem with it is that if you want to get confidence and you want to get that 1.7 million entrepreneurs sparked and going, if each one of them will hire one person, unemployment is gone and we are back in business and then we can really attack that deficit. That, to me, is one area of the minister's budget that he should be buying full-page ads with. He should be taking taxpayers' money and he should be communicating to the 1.7 million entrepreneurs that this facet of the budget exists.
February 27, 1992

I say to all hon. members here that 99 out of 100 small businessmen do not know what that Small Businesses Loans Act is all about. I challenge the government to communicate it to all Canadian businessmen.


Mr. Jean-Robert Gauthier (Ottawa-Vanier):: Mr. Speaker, in his remarks the member covered an awful lot of ground. He also alluded in his closing remarks to the fact that the government was transferring to the provinces and to the individuals an awful lot of hot potatoes in terms of training and development, for example.
I want to refer to the estimates that were tabled this morning and ask the member this: In the Main Estimates for Employment and Immigration we find that there is a net decrease of $177 million in employment. I was wondering if job training, job creation, is not something that we should address more thoroughly.
I notice also that in the transfer payments to the provinces and to the agencies, the Atlantic Canada Opportunities Agency, for example, is cut by $13.4 million. There is a whole series of cuts to programs which, indeed, could be used or could have been used to create employment. I want to ask the member if he could elaborate on his views as to how we could use these moneys to put people to work.


Dennis Joseph Mills: Mr. Speaker, I thank the member for his question. The training cuts are a mystery to me and, quite frankly, I wonder if the reason why the government seems to be retreating from this training section is linked to the constitutional talks where we are talking about putting more training into the hands of the provinces. If that is the case, I am very nervous because I think that is something the national government should maintain a direct linkage with and the ability to give direction to.
The businessmen of downtown Toronto came out with the statement yesterday that a lot of them supported this minister's budget. Quite frankly, I am mystified, I am at a loss as to why they are supporting it. If they are just supporting it on the fact that the number crunching side of it is good, fine, I have acknowledged that. But combined in a budget there should be some innovation, there should be some creative ideas, especially in the area of training and retraining, a topic which all the businessmen are talking about. In that particular area I
The Budget
am absolutely convinced that if you asked those businessmen if they want support for training and retraining- which is in a sense a capital investment-I am sure once they are aware that this government has cut back on training, they are going to reverse their position.


Mr. Pat Nowlan (Annapolis Valley-Hants):: Mr. Speaker, I know the time for questions is just about over. I certainly listened with interest to the thoughtful remarks, as they usually are, by the hon. member for Broadview-Greenwood.
There are many things to say. I certainly share how he started his remarks this morning in terms of trying to distinguish and separate the feeling and respect that one has for a fellow colleague, especially the Minister of Finance, in his monastic drive to be a real public servant, helping the public good and the land, and being a little critical or adding questions, or introducing questions, on the budget that that minister presented. I certainly share those views because of a long relationship with the Minister of Finance.
I, too, have serious questions about aspects of the budget and I would like to ask the member specifically this: I think really the thought of a businessman downtown may be partly what I call sort of a Stockholm syndrome to the budget. First you have the personality of the minister, who is very warm, engaging and human. Then you have a lot of bad news that has permeated the economic scene and/or the land for so long that a budget that has some glimmer of creativity makes us all feel a little good. I think we are all in that sort of mood.
In terms of something that I really find difficult that happened-and there is an argument about how much show it was and how much reality it was-is the elimination of some of these agencies that do have a national focus, that have helped the land, especially in these difficult times. I am thinking specifically of the Science Council of Canada and the Economic Council of Canada.
I would like to ask this member a question. The time for questions is short. I have many questions I could put to him but I am going to try to get questions to some of the government ministers if they stand some time during this debate in view of some of the history around here at the creation of the Economic Council of Canada.

February 27, 1992
The Budget
In terms of the $22 million that I guess has been saved with the elimination of these 14 agencies and the merger of these other agencies and commissions, how does the member, with his experience in politics and in the outside world, balance that specific reduction of $22 million with all those agencies and all the difficulties that is going to create in eliminating the Science Council of Canada and the Economic Council of Canada when in effect the government, up until now, on just five different areas, has spent over $125 million. Be it the Spicer commission, the commission on reproductive technology, the royal commission on transportation, the Minister of Industry, Trade and Commerce competitive strategy, all of these are $20 million plus. I just wonder if he feels-and it may be a leading question-this is going to instil confidence in Canada and Canadians in the way we are going.


Dennis Joseph Mills: Mr. Speaker, I thank the member for Annapolis Valley-Hants for the question.
First of all, a lot of those agencies were set up by Liberal governments. The purpose of those agencies was to provide policy ideas, policy suggestions. It is impossible when you are a politician to come up with the ideas yourself. You go to an independent organization. Quite often those organizations, even when we were in power, did not always agree with us. They criticized us. They were there to probe and spark debate and to inspire. From that point of view, I think the government is being shortsighted, but I do want to give the government a little bit of credit for something here.
The Economic Council of Canada, and I was reading one of their documents last night, "A Joint Venture: The Economics of Constitutional Options", produced a lot of good stuff. I think that when the Economic Council of Canada produced that paper saying that it was not such a bad thing for Quebec to be a sovereign nation, quite frankly, had I been the Prime Minister, that day I would have called the directorship of that operation in and I would have said: "Listen, we have got enough problems with unity in this country as it is. You are not politicians and it is not your job to promote the fact that it is an easier way to live in this country as a divided nation than a united nation". On that specific point, I think the Economic Council of Canada was way off base.
I think we are absolutely crazy to abolish the Science Council of Canada and a lot of those other agencies. I do not know all of them, but I know a lot of them have good, honest, hard-working people and I think that the government was penny wise and pound foolish.


Mr. Pierre H. Vincent (Parliamentary Secretary to Deputy Prime Minister and Minister of Finance):: Mr. Speaker, I spent all day yesterday in the House, listening to the comments of my colleagues on this side, but mostly to the comments of the opposition.
This is my eighth budget and my seventh budget as Parliamentary secretary to the Minister of Finance. In all those eight years I never heard a single constructive comment or suggestion from the opposition when it was discussing the budget. I think this shows something very important is lacking in this House. Criticism should be constructive and we should also consider the budget for what it is.
I am getting rather tired of hearing the opposition complain there is no education policy in the budget, no social policy or cultural policy or health policy. A budget is a budget. In the private sector, a budget shows columns of figures, with the bottom line indicating whether the year's results were positive or negative. That is a budget. As far as policies are concerned, we have ministers who announce policies as appropriate to their individual budgets. The same applies to the private sector. When I look at a private company's budget, there is an operations sector. There is someone in charge of operations and someone in charge of sales. The person in charge of sales has a budget to spend and defines policy in terms of what is best for the company. We have to stop expecting the budget to contain all the government's policies in every sector. That is not what a budget is for.
I think it is time this was understood. The Minister of Finance gives us his budget forecast, explains what the monetary situation is and where we are headed. He defines a few broad principles. The purpose of the budget is to give Canadians a financial statement they can trust, not 48 policies.


An hon. member:: What about hope?
February 27, 1992


Pierre H. Vincent: The hon. member mentioned hope. In fact this budget is a budget of hope. I would like to get back to the tax changes announced in the budget, because when we talk about revenue and expenditures, we have to talk about the Income Ihx Act. That is where the money comes from, and that is where less money will be coming from when we amend this act.
What the budget tells us, is how the money comes in and how much it will cost to run the country. That is what the budget is about.
The budget deals strictly with the fiscal aspect and how it will affect taxpayers. People should stop saying that there is nothing in the budget for this or that program. We had a good example only 10 minutes ago, when the Minister of Communications tabled a new bill. This bill was not part of the budget because it is the responsibility of the Department of Communications. It is about communications policy, and it was tabled by the Minister of Communications.
I hope the opposition will take these comments to heart and will start offering some constructive criticism, without trying to make the budget into something it is not.
I would like to give a short history of Canada's financial situation since 1984 when we were elected. You will recall that in 1984, the government spent $39 billion more than it was getting in revenue. This year the deficit will be $31 billion and next year it will be $27 billion. We have managed to reduce the current deficit every year, but this does not deal with the problem of the national debt. In 1984 the national debt was $206 billion. The opposition will say that today it is nearly $400 billion and that it is all our fault.
When we talk about the national debt, we must remember to include the interest charges this government has to pay on the debt it inherited from the Liberal government. The interest charges since 1984 total $239 billion-


An hon. member:: Highway robbery.


Pierre H. Vincent: -which corresponds exactly to the debt we inherited in 1984.


An hon. member:: Outrageous.


Pierre H. Vincent: However we managed to have an operating surplus which means that this year, if we exclude the interest charges payable, the government is spending less
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money than it raises. We are now operating like the average family. We are not borrowing with MasterCard to pay chargex, as was the case under the former Liberal government.
That is where we were in 1984 and we must continue in that direction. To do so, again, we must take difficult measures and make cuts. I heard my opposition colleagues talk about the 46 agencies that were cut. When a family, a business or an individual cannot afford to do something, what do they do? They do not do it. Here we had the habit of borrowing when we could not afford something. That is over. If we cannot afford something we do not borrow, we cut.
That is exactly what Canadians want. They understand, because they pay enough tax to understand that the government cannot borrow any more. Every day, we hear members opposite get up-and we should count how many times they do, it would be hilarious-and ask questions in order to obtain more money. They do not understand what Canadians want. For example, take an open-line show in my riding of Trois-Rivieres yesterday at noon, from 11.30 to 1.30, when the question was: Are you for or against the Hon. Don Mazankowski's budget? Seventy per cent of the callers said they were in favour of this budget. Seventy per cent supported it on an openline show in Trois-Rivieres.
People want us to run the country as they handle their family budget. The fiscal measures announced in the budget also reflect what Canadians want. This budget was prepared by the Minister of Finance after consulting the national caucus, the Quebec caucus and MPs. Members come back from their ridings on Monday morning and know, after spending the weekend with their constituents, just what Canadians want. People in Ottawa don't understand the problems of Abitibi-the member for Abitibi does. The same goes for Trois-Rivieres and every riding.
You will hear people say that the announcement about RRSPs is a smoke screen, I was not greatly in favour of the original request to let people use their RRSPs to buy their first home, because I thought that it would not have the intended effect. People who do not have a house surely do not have much money in their RRSPs and are just starting out in their life and career. This is for the purchase of a principal residence, so someone can take

February 27, 1992
The Budget
$20,000 out of his or her RRSP and use the money to pay for an existing home or one that they want to build and so on. For a married couple, each partner can take $20,000, which makes a $40,000 down payment. That is excellent, and it will make a valuable contribution to real estate and the buying and selling of homes. It must be seen in that light and the program must be used in that way.
Some will tell you that it does not pay, because the $20,000 in your RRSP was not subject to income tax and you will lose that advantage. That is a good point. On the other hand, if I borrow $20,000 from a financial institution, I will have to pay interest every year on this loan, say $2,000 at 10 per cent, but I will have to earn $2,500 or $3,000 before tax to pay my income tax and also the interest on the loan and even more to gradually pay off the principal.
I submit that this plan can be very profitable for those who use it wisely. It will enable them to buy either a first home or one that better suits their needs in 1992, and that, again, at a very interesting price.
This echoes the wishes expressed by Canadians. In my riding, many real estate agents and others have written to me. They said: "Let us use them." Provincial premiers had also mentioned something along that line.
Another issue I have received a lot of correspondence about is that of the treatment of common law couples. That too can be found as a new tax measure in the budget. From now on, common law couples will be treated the same as married couples under the Income Tax Act and for the purposes of the GST and other credits, transfers and so on. That is what happens when a caucus sets its shoulder to the wheel and incorporates suggestions in preparing a budget.
This particular measure had been long-awaited in my riding of Trois-Rivieres, as in the rest of the province of Quebec and Canada. Not only is this part of an improved tax legislation but it also reflects the social and economic reality of 1992. It should be pointed out that this is not a family oriented policy or anything like that, but an amendment to tax laws and, as such, it was included in the budget.
Another new feature in this budget is the $100,000 capital gains exemption. We know that every Canadian man and woman was already entitled to a $100,000 capital gains exemption. The budget does not take it away. We figured that, in order to assist and stimulate the Canadian economy, that exemption should apply specifically to gains on active revenue-producing assets. This does not mean-just this morning, I was reading a piece about investment property in La Presse-Xhai the real estate market will shrink. It means that you can, as individuals, decide to invest say in a rental property, realize gains on it every year and, when you sell it, you will be taxed less because it will be considered as a capital gain.
Now if you decide not to invest in real estate but rather in an company operating in the Trois-Rivieres riding, which I hope is what you would chose, when you sell your shares your active participation in that business creates jobs and generates employment. The $100,000 exemption on capital gains will still be valid. Compare this to real estate which does not create jobs. If you buy a four-unit apartment building you will not employ somebody full time for its maintenance.
Therefore nobody is penalized. Each Canadian can chose where he or she will invest. Evidently we all know that there is a higher risk involved in a small business than in a four or eight-unit apartment building.
I feel that this is one way our government is looking at the economic reality of Canada. It is an incentive for all small business owners who often must seek are out investors, who often need small sums like $50,000 or $100,000 to carry on more securely, to buy new equipment, to get the technology they want and so reach the national level.
Incidentally, talking about small businesses, another measure which will be helpful for our businesses is the raising of the maximum from $100,000 to $200,000 for small business loans. I think that doubling the amount a small business is entitled to borrow. Mr. Speaker, you are signalling me that I have only two minutes left, but I feel I have just begun. I will speed up a bit. I was saying that allowing small businesses to borrow $200,000, guaranteed by the government, is another positive step taken by this government to assist our businesses and help the
February 27, 1992

The Budget
economy. Another measure designed to help our businesses is the program allowing a small or medium-sized company to borrow money, while the loan and revenues made on that loan by the lender will be considered a dividend rather than an interest. As we all know, if these companies expand, they will create employment. If they create employment, it will benefit the Canadian economy.
In conclusion, I would like to congratulate the Minister of Finance who suggested the merging of three programs for children into just the one. People will receive only one cheque per month, not taxable and bigger than what they used to get. There will less paper burden and everybody will therefore be happier. Instead of having three programs, there will only be one: one cheque per month, and bigger than what people now get. This must not go unnoticed because unfortunately I do not often hear the opposition mention the positive measures that are in the budget. The deficit is reduced and people have tax policies that meet their needs. These things must be said. We must be positive. That is how the regional economy of Trois-Rivieres, of Quebec and of Canada will improve.
In concluding, I would also like to emphasize the fact that, for the first time in a very long time, the Minister of Finance has reduced taxes for all Canadians. Yet the opposition will automatically say: "Not by much, not by much". That is not the point. The point is that thanks to the cuts made in the last eight years, thanks to the work of the member for Etobicoke Centre and now the member for Vegreville and thanks to the fact that for the last eight years Canadians throughout the country have tightened their belt in terms of federal expenses, this government has been able to reduce taxes.
Everyone in this House would love it if there were no taxes, if there was no GST. We all agree on that. It is perhaps the only thing on which we all agree, but we agree on that. However, because of our structures and programs, we must have and we must pay taxes. From that point on, this government has demonstrated that you can increase taxes, but it has also shown that you can reduce them. Again I want to congratulate the Minister of Finance in that regard.
My time is up but I would just like to ask all members to be positive and to make sure that this budget is passed as quickly as possible.


Ms. Catherine Callbeck (Malpeque):: Mr. Speaker, I have listened with interest to the hon. member.
One of the comments he made was that the budget was to put trust and confidence in the people. I agree that that is what a budget should do but certainly we have not seen any initiatives in this budget that would put any trust or confidence back in the people.
He went on to say that it is a budget of hope. The same thing applies. I cannot see anything in this budget that offers any hope whatsoever for the 1.5 million people who are unemployed. I know in my province the unemployment rate is approximately 17 per cent.
This budget, as I said, does not offer any hope. There is no capital works program. There is very little investment in research and development. There is nothing new in training initiatives.
He went on and talked about small business and what a great thing that the ceiling of borrowing has been doubled. Does he not realize that small business today is trying to survive? It does not matter if the borrowing level is quadrupled. If they cannot take advantage of it, what good is it?
Look at the bankruptcy rates of small businesses across this country. This government should be doing something for small business. It was small business that helped lead us out of the last recession but the government fails to realize that.
This is the question that I want to ask. I want to come back to the statement the member made about it being a budget of hope. I would like to know what hope this budget offers to the 1.5 million people who are unemployed across this country.


Pierre H. Vincent: Mr. Speaker, I must admit I am disappointed with the question because either the member did not listen to my presentation or they did not understand the message.
At the beginning of my speech, I explained the nature of a budget. A budget is made up of figures, it is not a series of announcements by 40 departments of what is to come during the following year. It presents revenues expenditures and credits for each department. That is what a budget is all about. It is not supposed to describe

The Budget
all government policies for the year to come. Again, the member said the budget did not contain an education policy, a business policy, this or that. That is right, the budget does not present any of those things. The sole purpose of a budget is to allocate funds so that departments may announce their policies and the Canadian economy may adjust to it. The taxation measures are in there.
Maybe my colleague did not read the budget because she says it contains nothing for small businesses while in fact there are five or six taxation measures aimed at small business in that budget. It might be a good idea for her to read it.
I was a tax lawyer in Trois-Rivieres when Marc Lalonde established tax credits for scientific research in his budget.


Mr. Saint-Julien:: The theft of the century.


Pierre H. Vincent: His budget said that the cost would be $200 million.


Some hon. members:: Oh, oh.


Pierre H. Vincent: Did you notice, Mr. Speaker, how shocked they are when we talk about real life?
Marc Lalonde had written in his beautiful budget that it was going to cost about $200 million. He was Minister of Finance so he just said "about $200 million". Do you know how much it actually costs Canadians? Four billion, including $1.9 billion in fraudulent claims, as the Auditor General pointed out. We spent $4 billion on a tax credit scheme which were to cost about $200 million. I did not say $4 million. I said $4 billion.
He knew it, but he did not do anything to put an end to it. We had to wait until the election of the Progressive Conservative Party and the appointment of the member for Etobicoke Centre as Minister of Finance to do away with that program. The meter was then at $4 billion, including $1.9 billion in fraudulent claims. Could my colleague across the floor imagine what we could do with $4 billion of taxpayer's money, $4 billion which simply disappeared?
Such was the Liberal policy. Unfortunately, they do not understand the budget. They do not understand its philosophy. They just do not understand what a budget is supposed to be.
I notice, that I am out of time.


The Acting Speaker (Mr. Paproski):: There are about two minutes left for another question or comment.


Jean-Robert Gauthier: Mr. Speaker, my question is about facts. The hon. member for Trois-Rivieres, who is also the Parliamentary secretary to the Minister of Finance, ought to know that statements should be based on fact. At the beginning of his speech, the hon. member said the government had reduced the deficit. I may remind him that, as reported in the Public Accounts of Canada, the Auditor General had three serious reservations about the government's accounting methods. In fact, the Auditor General said that the deficit should be $2 billion more than you estimated it would be. His reservations are right there in the public accounts. I think the hon. member knows what I am talking about. It was one of your accounting tricks.
My question is simply this: Does the hon. member know whether the accounting methods used last year are the same as the ones used this year or the ones that will be used next year? The problem is, Canadians cannot read your accounts because you keep changing the rules of the game every year. Did I make myself clear? Your accounting methods are no good. The Auditor General of Canada said so himself. Your accounting methods are lousy. What I have to say to the parliamentary secretary is this: Give us and give Canadians in general the assurance that the accounting methods you used this year are the same ones you used last year or will use next year, so we can compare.


Pierre H. Vincent: Mr. Speaker, I like the hon. member for Ottawa-Vanier, but he always has a knack of making a mountain out of a molehill. As you know, Mr. Speaker, accounting and generally recognized accounting principles are changing constantly. My hon. friend has been here long enough to realize that his own finance ministers changed their accounting methods, I would not say religiously but quite regularly, so I do not think he
February 27, 1992

should take that line of attack. I think he should look at the situation as it is right now and at the figures as they are. As far as that goes, I have no problem with the accounting methods used by the Government of Canada to make our figures crystal dear. The hon. member knows perfectly well that our accounting methods are pretty good, because our figures are not only for domestic consumption. They are also scrutinized by international organisation, so they have to comply with generally recognized accounting principles, and the hon. member admits as much. I can tell from the expression on his face.


Jean-Robert Gauthier: Mr. Speaker, since debate has resumed, I would remind my friend from Trois-Rivieres who is the parliamentary secretary-I do not want to take all my time talking about it-that he need only refer to the public accounts for 1991. On Page 2.23, the Auditor General, Denis Desautels, not I, wrote: "These reservations deal with what I believe is improper accounting for: (1) the effect of short-term wage restraint on employee pensions; (2) a reduction in the value of the investment in Petro-Cana-da; and (3) income tax revenue collected on behalf of provinces". He may be new but he is an excellent accountant.
He had three serious reservations that together amount to $2 billion which the government said it had saved, when all the accountants who testified before the public accounts committee and the Canadian Association of Accountants told us that is not proper bookkeeping. The parliamentary secretary who is close to the minister and on top of the issues should know that a serious reservation has been expressed about the public accounts and it should be heeded. All I asked him is this: Will he comply, will he listen to what the experts told us Canadians and will they change their methods so that we can read those accounts with some understanding and satisfaction that we are being told the whole truth and that the dice are not loaded?
That being said, I go on to the budget. By the way, I must say that this morning the estimates for the coming year were tabled and they contain everything the government intends to do in terms of programs. If people are interested, they can read 80 booklets on what is happening in each department and agency. These clearly ex-
The Budget
plain, I think, what the government intends to spend for the year that begins April 1, 1992 and ends March 31, 1993.

The Tories have presented a budget that is cosmetic. It attempts to paint a rosy picture without addressing the fundamentals. It gives a little bit to a lot of people. It is like giving a mouthful of food to someone who is very hungry or starving. It provides fleeting relief but it does nothing to address the agony that person is having. We are having a terrible time in this country with regard to the economy and with regard to the confidence of the Canadian people in the future.
I suppose we should be happy. At the very least the Tories have admitted current weaknesses in the economy. I think they are getting the message from Canadians now that indeed we are having some problems. For all their admissions, they have offered little hope for those who have no jobs. These are the 1.4 million Canadians who are currently unemployed. There is nothing to help those on welfare. These are Canadians who would love to escape the cycle of poverty. There is nothing to stimulate the economy which needs a kick-start and should have been included in this budget statement.
The day before yesterday the finance minister based his budget on shaky assumptions. For example, he said that 500,000 jobs will magically be created by the large and small companies of Canada. These are the same companies that had their confidence shaken to the core by the destructive policies of this same government. It is a government which has not even provided the tools to help them compete in an atmosphere of free trade and intense global competition.
Those in government clear their throats with globalization and competitiveness, yet they have done nothing in the budget tabled a couple of days ago or in the estimates tabled today to give Canadians confidence that there is light at the end of the tunnel.
Another assumption made by the Minister of Finance is that Canadians will take the money from the marginal tax break they will receive in seven months from the reduction of the surtax. We calculate that that is about an average of $20 per Canadian. This is supposed to inspire them to go on a spending spree and get the

The Budget
economy going again. That assumption is wrong and the Tories know it.
They ignore the every day reality of Canadians on welfare, on unemployment insurance, those whose job security is uncertain and those in my community who have been put on the unemployment list by the budget of this government. There are 500 people living in the Ottawa-Carleton area who will be losing their jobs because of the closing down of some agencies. These people will not be on a spending spree to ensure this government is pulled out of the economic mess it has created. I remind Canadians that the recession we are in was a made-in-Canada recession. It was announced the Prime Minister some time ago. I tell Canadians to remember that, if the Tories have the guts to call an election. They are the ones who put us into this position.
Confidence in the economy is low. The Ottawa Citizen, a newspaper in my community, reported on January 15 that a poll conducted by Angus Reid and Southam News in late December and early January found that one in three Canadians feared losing his job or feared even losing a job in the family. Further, Ontario residents were the most depressed about their personal finances and almost 40 per cent expressed concerns that a family could lose a job this year.
The finance minister says: "Oh, I have a short-term fix. Don't worry". We say to him that his short-term fixes will not work. We must focus on the medium and long term. We must set our sights on those medium and long term solutions. Since no significant measure was announced in this budget to stimulate the economy in the short term, at least let them have the guts to call an election and we will take over and make sure there are programs to look after the needs of Canadians in terms of job creation and in terms of getting the economy back on its feet.
Much of the disappointment of this budget lies in lost opportunities. They have lost the chance to do it. Some people even had the naivety to say this was a pre-election budget. I dare say that if it is a pre-election budget it does not speak very highly of this government's capacity. Of course when one speaks for 11 per cent of Canadians, I guess one's credibility is only so much. That is what
government members do and they are at about 11, 12 or 13 per cent in the polls at best.
We suggested some things to get the economy going. The Tories listened to the request to get the down payment on a house purchase from 10 per cent to 5 per cent. They put that in, thank you very much. That is going to be helpful. They listened to the requirement of the real estate industry. For the last four years they have been coming around lobbying members of Parliament for at least four years on their approach to allowing RRSPs or a portion of them to be used to purchase a main residence. They have listened to that, except that I say it may produce from what I am told by the experts at best
10,000	to 12,000 new starts this year, possibly about 6,000. They did not listen to us on the infrastructure program that would have had in our opinion substantial spinoffs.
They followed the time honoured Tory tradition. They hit the national capital region very hard.
The Ottawa Citizen reported Wednesday: "This budget will cost this region an estimated $150 million in lost jobs and government spending". Up to 500 jobs will be lost as a result of the elimination or merging of 39 agencies and advisory boards. As I said, this budget will add to the unemployment rolls in this region. For the government to add to the 1.5 million Canadians on unemployment appears acceptable to them. I say that it is not acceptable. No Canadian in this country should go wanting. No Canadian who wants to work should be put in a situation where he or she cannot find appropriate remunerative employment.
It is indeed astounding, as my colleague from Toronto said a few minutes ago, that they would choose in a time of such great difficulties in the economy to cut agencies such as the Economic Council of Canada, the Science Council of Canada, the Law Reform Commission, the Canadian Environmental Advisory Council, and so on. We wonder. These were agencies giving government and the Parliament of Canada advice at arm's length. I admit that it was not always pleasing to the government, but at least it was objective, it was arm's length and it was constructive. Yet the government chopped it. Has the government lost sight of the value of independent evaluations of its policies and of its recommendations for future action?
February 27, 1992

I happen to chair the public accounts committee. When it comes to evaluating our programs to make sure that we are getting bang for the buck, that we are giving Canadians efficient services and that we are reaching the goals we have set, I am not so sure that disbanding the evaluation program in the Minister of Finance's department this year was such a good idea.
We criticized it; I think we were right. I understand the Parliamentary secretary to the Minister of Finance was saying that the scientific tax credit was a sham. Indeed it was. There were 10 evaluations made of certain programs going from the Cape Breton investment credit down to the disability tax credit. On every one of those evaluations by the Minister of Finance, his department said: "We are a bit embarrassed by the results of the evaluation". It was not just one program; there were ten. Yet they did away with it. They just said: "This is making us look like a bunch of fools here so we have to get rid of it".
Why is it that we are going to continue saying to Canadians: "We have a huge deficit, we have a heck of a big debt to repay"? The debt servicing charges per year are $40 billion, yet this government has done no evaluation of the debt management program. When we asked for that we heard: "Well, we will see". We would think on one of the most costly programs in this country, the debt repayment program, there would be a willingness on the part of the government to say: "Yes, we are going to manage this economy properly. We are going to be good managers and we are going to evaluate whether we should be borrowing short term, long term, medium term, whether we should go into Canada Savings Bonds, or whether we should go into other types of borrowing papers".
We are not getting there. It is sometimes very depressing to hear them tell Canadians that indeed we have a heavy debt. We do not know as Canadians whether that debt is being managed properly by this government .We should know. There should be a program of evaluating whether or not we are managing this debt. I put it to the government: "Do it and tell Canadians you will look at it at least and come up within the next few months with a program that will tell us whether or not we are getting bang for the buck".
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I want to talk about the people in my riding. We are having a tough time in some parts of my riding. The social welfare programs are overloaded. If we listen to the regional government, it is going to cost an additional $60 million in the Ottawa-Carleton area to look after those people for whom you, Mr. Speaker, and all of us in this room care. We would like to see them be able to find a job and get some kind of relief from poverty.
I have soup kitchens in my riding. There has been a terrible increase in those relying on soup kitchens for one meal a day. It is depressing. Yet we hear this government, through the mouth of its own parliamentary secretary a few minutes ago, saying: "Canadians do not understand the difficulty we are in". They do, they do.
I want to read some statistics into the record about this so-called Ottawa fat city, the fat cat city as it is often referred to by some people in the press. In my riding of Ottawa-Vanier the signs of recession are everywhere: stores out of business and others struggling to survive. About 75,000 people in this region are receiving some form of social assistance, an increase of 34 per cent over last year. To put it another way, 11 per cent of the population in this region is receiving either welfare payments or family benefits. The number of welfare cases in Ottawa-Carleton jumped 41 per cent in 1991 and is expected to jump another 25 per cent this year.
In The Ottawa Citizen of January 3, 1992 the region's social services commissioner said that we had a crisis on our hands. This is not a political person speaking; this is an administrator. The cost this year alone will be in excess of $60 million. He expects the monthly average of welfare cases to jump to 32,000 individuals and families in 1992, up from 1991 with an average of 25,000.
Bankruptcies have been increasing. As reported in The Ottawa Citizen of November 28, 1991, in the Ottawa-Carleton area 167 individuals and businesses declared bankruptcy in October, an increase of 14 per cent from the year before. For the first 10 months of last year bankruptcies were up 35 per cent.
The chair of the social services committee at the time said in January of this year that she had never seen such an explosion of demand for social services, and I quote her: "The situation this time is different, particularly because of the type of people applying for assistance. You have white collar workers and even people in management whose savings have run out. People want to

February 27, 1992
The Budget
work but just cannot find any work". Yet the government cut 500 white collar jobs this week.
The food banks are now serving 18,000 people a month in the Ottawa area. At the Shepherds of Good Hope Centre, which is in my riding, some 200 people a day receive food.
I want to quote from a recent report called "Overdrawn at the Food Banks: The Hunger Crisis in Ottawa- Carleton". It drives the point home: "Many emergency food banks first opened their doors in the 1980s to act as temporary measures. Instead they have become permanent. This is unacceptable in a country like Canada. There are three main reasons why demand remains high at emergency food programs: high unemployment, lack of affordable housing and inadequate social assistance allowances".
The recession has had an impact on my community, a terrible impact on people, and I ask this House to do something to help, to assist and to care for Canadians who at this time have no jobs, who are asking us to look after this situation and correct it as soon as possible.


Gregory Francis Thompson: Mr. Speaker, in response to the member for Ottawa-Vanier I want a bit of clarification. I believe he mentioned in reference to the finance minister a short-term fix. I do not think the finance minister ever ascribed to the short-term fix. The party the member represents is the master of the short-term fix which has created the problems that have made it so difficult for this government to operate.
The accumulation of the mountain of debt which besieges us today is really the problem. I quote from the minister's speech of two days ago when he delivered his budget. In reference to Canadians he said: "They do not believe that governments can borrow us out of the trouble that governments have borrowed us into. They know that higher debt means higher taxes and they want an end to rising taxes".
I question the member on that because it obviously does not work. Over the years we have proven that the accumulation of more debt just aggravates the problems we already have as a nation.
It goes back to the question of who pays the bills. We know who pays the bills. The Canadian taxpayers pay and
they are sick and tired of paying. They want out from underneath it. The only way we can get out from underneath it is to work our way out, to pay off the debt.
The member made reference to articles which he quoted from various papers. I want to quote an article and maybe he can respond to it. The Financial Post interviewed Maureen Farrow, an executive with Coopers & Lybrand, yesterday. The newspaper reported: "During a post-budget breakfast, Maureen Farrow, the firm's chief economist, commended Mazankowski for presenting a budget that encourages economic recovery, government efficiency and increased competitiveness in the manufacturing sector".
She went on to say: "The reduced surtax rate on personal income tax will put as much as $500 million in consumers' hands in 1992-93". She also said: "The budget's emphasis on thinning the government and cutting the deficit sets a whole new tone for provincial budgets over the coming months". Possibly the member could allude to that article and place it into perspective in the big budget picture.


Jean-Robert Gauthier: Mr. Speaker, surely we could allude to the present government's budget.
The budget demonstrated to some of us and to the majority of Canadians that the government does not understand the fundamental problem that is facing Canada at this time. Instead of addressing the fundamental mismanagement that has been going on in this country the government throws a couple of crumbs out there and thinks that Canadians are going to say: "Thank you very much". They will not say: thank you very much. They will boot you out, I hope.
Look at the green plan, $75 million was cut from it. The Canadian Race Relations Foundation and the Canadian Heritage Languages Institute, the continued existence of which would underline the government's commitment to a multicultural Canada, are out. That is Reform Party policy again.
The government is indeed very concerned and very worried about the Reform Party, as is shown by most of the things it has done. It has cut social housing. The co-operative housing program, which was started in 1971 in my riding of Ottawa-Vanier when the first co-op was built in my riding, was zapped. It took it out. Social housing has gone by the door.
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I could go on and on. I see the member is rising. I will wait for his question, it may be more intelligent. The co-operative housing program was a very important program to us and this budget zapped it.


George Saunders Rideout: Mr. Speaker, I first of all want to compliment my colleague on his address.
I am sure we were all struck by the terrible statistics he presented to Canadians so they could realize just how badly this government has mismanaged the economy. He alluded to some of the issues which I would like him to comment on.
The National Drug Strategy was reduced by $32 million when we know about the serious drug problem facing Canadians and our youth. Then there is co-op housing. Poverty and housing are fundamental issues facing us as we try to raise our children and help them become productive members in society.
At the same time, we see the privatization of the Canada Student Loans Program and we know what privatization means. It means that it is going to be turned over to the banks who are not going to be giving out the student loans necessary for students to continue their post-secondary education.
What will happen is that our students, who are now facing higher costs because of the GST and other mismanagement, are now not going to be able to get the necessary loans to continue their education. Education is vital to our youth and vital to our nation.
The government considers the budget to be fair and caring. I thought that the member for Ottawa-Vanier might want to comment on the fair and caring aspects of those cuts.


Jean-Robert Gauthier: Mr. Speaker, yes, I want to comment. There was the child tax credit. Remember that? It was supposed to be a sacred trust.
My colleagues and I believed that the government's commitment to universality was paper thin. The government has confirmed that now. We now know where the government stands because day care will not be a national program anymore. The minister of health said so yesterday.
The Budget
The government has failed Canadians. How many times do I have to repeat it? It has betrayed the trust given to it by Canadians and it is time we voted the Conservatives out.


The Acting Speaker (Mr. Paproski):: Questions and comments are now terminated. The next two speakers will have 10 minutes and 5 minutes questions and comments. The first speaker is the hon. member for Halton-Peel. And next is Laval-Ouest.


Mr. Garth Thrner (Halton-Peel):: Mr. Speaker, I would like to start off by congratulating the Minister of Finance on what he has been able to accomplish in this budget. It is an excellent, creative budget for disturbing times.
I would also like to congratulate the Minister of Finance for listening to the suggestions of many of my colleagues. Many members of Parliament in the Conservative caucus spent a long time offering suggestions to the Minister of Finance. Many of us were most happy and gratified to see that the minister did view a lot of those suggestions seriously.
This is a budget pretty well ideally suited for the times. When I say that I mean that the budget takes into account the fact that we are in a period of great economic uncertainty, that Canada has suffered a lot of unemployment, particularly over the past 18 to 24 months and that we are at the end, hopefully at the tail end, of what has been a long, tough recession for people. This budget sends out a message from the government, I hope it does, that none of us are suffering any illusions about the problems we now face as Canadians.
I am not going to stand up here today and say that the economy is getting better, that the budget is going to solve all the problems overnight and Canadians should have nothing but warm thoughts about the government. We have to be realistic. We have to make sure that we respond to people's very legitimate, real and human concerns these days. This is part of what this budget does.
Most of the criticism of the budget that I have seen has been that some of the critics of the government feel the budget did not contain enough stimulative measures to attack unemployment and that the government did not somehow come up with a lot of money instantly to create

February 27, 1992
The Budget
quick solutions. That seems to be the thrust of the criticism, that I have seen to date.
I would like to address that point directly and specifically because I think it is a criticism really lacking in validity. I do not think that those making those criticisms have really taken the time to understand what the budget is trying to do.
First, if we need to have any reassurance, it is impossible to spend one's way out of bad times and into good times. We only need to look at the recent experience of the Ontario government.
The last budget in Ontario of the government of NDP Premier Bob Rae was a classic textbook example of an attempt to spend your way from bad times to good times. What that budget tried to do was the following. First, it increased civil service salaries. In fact, the size of the bureaucracy in the province of Ontario has been expanded. Second, that budget had an over-all significant spending increase in it. The spending increase was more than twice the rate of inflation at the time the budget was brought down. It was a very expensive exercise.
There were major transfers of funds to municipalities and school boards and hospitals. Basically, a lot of extra money was borrowed in order that it could be spent. So much more money was borrowed by the Ontario government during that budget that the deficit exploded from under $3 billion a year to almost $10 billion. That was an unprecedented explosion in the deficit.
Deficits, as we all know in this House, are deferred taxes. A deficit is not just money borrowed somewhere that does not need to be paid back later. Deficits are deferred taxation. Ontario tried to increase the deficit to $10 billion and at the same time raise taxes by about $1 billion so all this money could go into government spending.
What was the result?


An hon. member:: Just ask them.


Mr.   Itirner@Halton-Peel: This was the kind of budget the critics are now criticizing the federal government for not having brought in. Therefore what were the results of the Ontario budget? The premier made a television address in January and told the whole province exactly what the results of his budget were. He admitted that it had not worked. The premier of Ontario said that in effect the economy of the province was going down
instead of up as a direct result of his own economic policies, which he now quite rightly judges to have failed. Ontario now is facing a potential budget deficit not of $10 billion but of $14 billion in the coming fiscal year. The situation has gone from bad to much, much worse.
In the province of Ontario the government of the people has been forced into an austerity program. The premier has recognized that his stimulative budget did not work and now he needs to practise austerity. The premier has discovered what the federal government has already learned because the feds went through this process during the last recession of 1980, 1981 and 1982. At that time year over year spending was increased, the deficit was raised, and the debt was expanded in an attempt to spend our way out of bad times.
It did not work for Ontario in this recession. It did not work for Ottawa in the last recession. We learn from experience and example. The federal government now says that what we need to do today is to not repeat the mistakes of the past. We need to get people back to work. How do we do that? Not by repeating those other mistakes but by doing something fundamentally different. That is to create a promising economy that encourages investment. That is it.
We are trying to stimulate the economy through this budget and create jobs by creating confidence. That is the most important word today: confidence. That is what we are lacking.
I get distressed sitting in this Chamber listening to the critics of the government, such as the opposition member for Ottawa-Vanier who spoke a few minutes ago and focused most of his address on everything that is wrong. He focused on the existence of food banks, unemployment assistance and other examples of what is wrong in this economy which he was able to find, as were other critics.
I have a problem with those, opposition members and some media people, who have a stake in accentuating the negative about Canada right now. All that does is hurt the confidence necessary to restore investment to Canada.
I would like to talk specifically about this budget and the general theme of confidence. The budget does a lot not to solve any problems overnight but to move us a few steps along the path necessary to restore confidence to the economy.
February 27, 1992

For example, there are measures in this budget which will help encourage personal consumption by Canadians. They will encourage Canadians to get their money out of their bank accounts, spend it and help the economy. That is something the budget is trying to accomplish. We are doing that simply and primarily through a tax cut. Five hundred million dollars will be put into the hands of consumers this year as the personal surtax is cut. It is estimated that $1.2 billion will be returned to consumers next year through the tax cut. That is the first major thing this budget does to help restore confidence.
Second, we are trying to encourage people to get into the real estate market. This is pretty significant. I applaud everyone who for the last number of years has been trying to get a federal government to free up some of the pension funds invested in this country and get them put into the economy. The Canadian Real Estate Association, the premier of Ontario, the Leader of the Opposition, and a number of other Canadians have been trying to do that and they have finally succeeded. That is another confidence building measure.
Low interest rates and low inflation are two other points that help inspire some consumer confidence. On the business front this budget also specifically seeks to encourage investment by business people.
We will have a 2 per cent cut in the tax for manufacturers and processors. I think this is very important. Manufacturers and processors will also be able to write off the investment they have made in their equipment more quickly.
The Small Business Financing Program will enable people in business to borrow money at lower rates. Second, the ceiling on loans available to small businesses will be doubled.
I would like to say in conclusion that I almost consider this to be a dream budget. Many of the reasons why I came to Ottawa are contained in this budget: cut taxes, cut spending, cut the size of government, help the middle class through investments in their own homes, give them low mortgage rates so that their income is not sucked off in interest payments and help families. The child benefit helps families. There is tax fairness now. We will not have common law couples taxed at a lower rate than traditional families.
The Budget
These are all goals that I had when I first stood for office. I am proud to support a budget that today encourages those goals, helps return some money to middle class Canadians and gives people a real sense that there is reason to be confident and that Canada now can really see a bright and powerful light at the end of the tunnel.


Mr. Jim Karygiannis (Scarborough-Agincourt):: Mr. Speaker, I listened very carefully to my colleague from across the way. He said that our party brings forward what is negative about the budget.
I wonder if he can enlighten me on what is positive about the budget. He does not talk about the food banks. We do. There are more McDonald's today than food banks. Even McDonald's has a commercial that says we are in tough times.
The budget does not do anything for the 1.5 million Canadians who are unemployed. The budget also shows that over the next two years we are going to be running at 10 per cent unemployment.
I have problems with that when I go and face people in my constituency. Parents come and tell me: "We have a few kids. We were both employed. We have our house. We were making our mortgage payments and our car payments and I was laid off. My unemployment is running out". I look at them and I do not have an answer. If this budget does not have answers for my constituents then I believe that the budget has failed.
We cannot help but see what this government has done over the past seven years. This budget is a repeat of the budgets of the past. In 1981 and 1982 I was a small businessman. I can assure members across the way that although we were in a recession we were able to survive. We fought our way out of it. Now businesses cannot fight their way out of it. They are saying enough is enough and they are folding. The bankruptcy rates have skyrocketed. In 1981 and 1982 they were not as high.
I know that the hon. member gave us some credit when we pushed for the RRSPs. I wonder if he agrees with me that we have to look at what is negative about the budget in order for us to bring the positive aspect out. Does he see one positive aspect in this budget when we have 1.5 million Canadians unemployed and when this budget clearly states that over the next two years our unemployment will be at 10 per cent? Does he agree with me that the Minister of Finance has failed us once again?

The Budget
Mr. "Rimer (Halton-Peel): Mr. Speaker, I can be no more eloquent than my constituents.
Robert Beyette of Burlington wrote to me: "I suggest the Government of Canada run the business of the country and not the business of the people. All Canadians will win with less government. Bigger and more is not better". We have less government with this budget.
William Craig of Caledon East wrote: "I would like to see Canada get out of debt with tough measures. Re-educate and educate people to be in a position to compete globally". The budget does that.
Dave Stewart of Burlington wrote: "There will be a recovery. We are all part of the 90 per cent of Canadians surviving the recession". That is stressing the 90 per cent positive aspect not the 10 per cent negative. Mabel Mason is not a constituent. She is from Vancouver, B.C. She wrote: "To make things brighter and more secure the government should reduce taxes". The government has just reduced taxes in this budget.
Mr. Chris Creed of Burlington wrote: "I am concerned about the legacy we are leaving for generations to come". This budget is concerned about that legacy as well. It forecasts the deficit will fall to $27 billion next year, $22 billion the year after and $5.5 billion by 1995. That is reducing the legacy for generations to come.
John Beaumont of Bolton wrote: "You are suffering low polls due to taking strong measures to bring the deficit under control". He is right. The government is way down in the polls because the measures necessary to reduce the deficit and secure Canada's future have been tough. They have been brutally tough. No one on this side of the House is shying away from that. No one is less than proud of what we have done to address the problems that we inherited.


Mr. Guy Ricard (Laval-Ouest):: Mr. Speaker, first of all I would like to thank my friend from Halton-Peel for sharing his time with me for this part of the debate.

When the Minister of Finance started to work on his budget, he looked at the facts this way: He looked at what we had in the past, the debts we had to pay, what we have now and what we should do for the future.
The debts that we had to pay are simply the national debt. As my colleague from Trois-Rivieres explained
briefly, the national debt now amounts to $420 billion. When we came to power in 1984, it was $206 billion. Compound interest is $239 billion over seven years and the government has a program operating surplus of $25 billion that can be taken from this expense item. We come up with a grand total of $420 billion. From there, the minister figured out how much he could collect in taxes and how much he should spend to meet the demand for programs. He tries to balance the budget. As you know, we have been unable to balance the budget for years, for the simple reason that we spend more than we receive. What is he trying to do? He is trying to cut spending as much as possible. Of course he will have to take the axe to something. Of course he will have to re-evaluate current programs, perhaps cancel some, try to do more with less, so that some day he can balance his budget.
When people tell us that we cut programs, or that we did not provide enough incentives for business, they should look at the key points in the budget. When we are told that people are hungry, that people want to work, that there are 1.5 million unemployed, I agree with that. Too many people are unemployed. To my mind, even one person without work is too many; everyone should work but sometimes unemployment is very high, which is an undesirable situation. Whether it is 1, 10, 15 or 25 per cent, I think that in some regions it is much too high, as we all know.
Now what are we doing to put all those people to work? Do we create federal government programs? Will the federal government hire 1.5 million people and pay them or will it try to give job creation incentives? Look at the highlights: action to bolster recovery, meaning economic recovery; reducing the personal income surtax; the home buyers' plan that allows using RRSPs to buy a first home. That will surely create jobs. More highlights: action for investment, initiative and jobs, manufacturing and processing. 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, that is 2 per cent in two years. If that is not an incentive I wonder what it is. The capital cost allowance rate will be increased for manufacturing and processing machinery from 25 to 30 per cent for machinery purchased after the budget date. This is
February 27, 1992

another 5 per cent. Direct investment in all sectors will be encouraged by negotiating reciprocal agreements with Canada's trading partners, in order to reduce the withholding tax rate on direct dividends to 5 per cent.
Research and development: an additional $230 million over the next five years. Lifetime capital gains: eliminated. Small business: the government will provide a small business financing program until the end of 1992, to help small businesses in financial difficulty, including farmers, to obtain loans at lower interest rates and so on and so on. I will not bore you with an exhaustive list, because I am sure you are familiar with these details. However, the incentives are there. If companies can upgrade their equipment at low cost, train their work force and acquire new technology, this will create jobs, it will get people back to work, and we will not have the problems we have now. An unemployment rate of 10 per cent may be better than 25 per cent, but it would be a lot better if we had only 3 per cent unemployment. It would be even better if we had zero per cent, and that is our objective with this budget.
I hear people on the other side criticizing the budget. Yesterday I heard the hon. member for Essex-Windsor say, in referring to the NDP's polity in Ontario, that the Government of Ontario was concerned about people, not about industry. He neglected to say, however, that the Government of Ontario increased its deficit by $9 billion, which is what happened. Putting people first is all very well, and I certainly want to help people, but I will not help them by using band-aid solutions. I will help them if I create a climate that is conducive to creating jobs and taking care of their family.
As far as economic recovery and research and development factors are concerned, it has been a long time since businesses in this country did their fair share of research and development. They relied on what they could get from governments, and I am referring to the federal government and the provinces, to obtain technology transfers and to buy technology instead of making it. They even bought technology abroad. They even asked the federal government to set up an agency to prospect for technology outside the country, and facilitate the process of looking for technology outside Canada. We
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did not renew our equipment and we thought this would go on forever.
If you consider the problems facing the pulp and paper industry in this country, that is exactly what happened. How come the Americans can produce a ton of paper more cheaply than we can here in Canada? Because they went back to school. They did research and development.
In this budget we see that we have a surplus of $230 million for the next five years. Now you will say this is not enough, and I agree. We should have a billion. Can we afford to spend a billion dollars on research and development in 1992, with the kind of financial constraints we have? Are Canadian businesses able at this time to take the technological plunge and invest this billion dollars in research and development? I do not think so. I think we have to encourage them, give them incentives the way we are doing now for research and development, but we should not expect every business in this country to start doing research and development tomorrow morning. It just is not true, and that is not how things work.
There are two kinds of research: applied research and pure research. It all takes time and it takes a bit of logistics to get there, but it is a step in the right direction.
I am glad to see this happening. I asked the Minister of Finance during one of our consultations whether it would be possible to increase budgets for research and development. He told me he would try, but there were a lot of constraints. I said it was just as important as a grant for buying machinery, for instance. In any case, he remembered what I said, and I am very glad he did, but the fact remains that we will have to put a lot of effort into this for later on.
We might not see the results, but our children and grand children who will follow in our footsteps, here is politics or in business, will see them. They will be building the future. We have to pave the way for them. We should all join hands. All members in this House should work toward the same end. We talked about positive and negative things this morning, but I wish, keeping in mind that it is the future of our children, that the criticisms would be positive I would accept them if they were constructive. They would tend to the same goals of progress, development and competitiveness in order to give our children the future they deserve.

February 27, 1992
The Budget


Catherine S. Callbeck: Mr. Speaker, I listened to the hon. member with interest. He indicated that we must have a positive outlook. It is very difficult for the 1.5 million people who are unemployed to have a positive outlook after this budget.
I particularly want to question the member about what this budget has done to students because he failed to mention that area.
As we all know, this government has been extremely hard on students. It brought in the GST and it even taxed books. It added an extra cost for a student going to university or any institution.
The government has cut the Established Program Funding to provinces. We all know how that affected the student. That cut made tuition costs go up.
There have been cuts to student employment programs, and the list goes on and on and on.
This budget, which you would think would introduce something positive for students, abolishes the six-month free interest period on student loans after graduation. Does the government not realize that 1.5 million people are unemployed, that jobs are very scarce for students? It is very hard for our young people to find a job or a position after graduation.
I want to ask whether the hon. member agrees with me that it is time for this government to stop attacking students?


Guy Ricard: Mr. Speaker, I would like to say very simply that in the budget-I do not have the full text here, only the main points-the education credit relief for tax is being increased from $60 to $80 per month of full-time study, starting in 1992. Second, the maximum tuition fee and education credits that may be claimed by another taxpayer will be increased from $600 to $680.
We are talking about the 1992 budget. You might recall that a few years ago we set up a program called
Challenge, which allowed students to be employed in their field of study in order to make some money before going back to school. This is not a new policy. This is not something we copied from someone else. This is the continuation of a policy designed by this government in 1984. I do not see why some people are trying to scare students by telling them that everything will be cut.


Mr. Bill Attewell (Markham-Whitchurch-Stouff-ville):: Mr. Speaker, first of all I would like to compliment the finance minister. I happen to think that he has crafted a splendid budget meeting many needs of Canadians.
He listened and I can recall discussions with him in the early to late fall. Some of my objectives were to make sure that we got that deficit down. My goal was the $25 billion to $27 billion range. Canadians wanted to see more results after what they have gone through. He then came in with a $27.5 billion deficit.
I also asked the minister a question in the House about giving middle income earners a tax break. I specifically pointed to the surtax we introduced in 1985.
I am just delighted that he followed through on that issue by decreasing it from five per cent to three per cent.
Third, my constituents told me that this government must make another major reduction in expenses and the minister came through on that issue in a fine way.
I wanted to ask my colleague about the feedback he has received from his residents. I held my annual budget breakfast yesterday morning in Markham and the feedback from the 350 people in attendance was very positive. They were literally to a person, with a few exceptions, very strongly in favour and 200 out of the 350 people were high school students through corporate sponsorships.


Mr. Brewin:: Anybody out of work?


Bill Attewell: I hear my NDP friend talking. We are certainly at opposite angles to Bob Rae. He is building the biggest hole, the biggest deficit for people in Ontario we could imagine.
Will this budget stimulate the economy? Yes, it will. I would like to ask my colleague about what feedback he has heard. I am sure it is nothing like the rhetoric we have heard on the other side.


The Acting Speaker (Mr. Paproski):: The hon. member has 30 seconds to answer that.


Guy Ricard: It is pretty good feedback. I received 17 telephone calls and 15 of them were in favour of the budget. The two others said that they did not yet know if they would support it. That is 93 or 95 per cent support.


Bill Attewell: That is pretty good.


John F. Brewin: Mr. Speaker, I am pleased to participate in this debate on the 1992 budget and to put on the record my views, those of my party and those of my constituents from Victoria.
I would like to first comment on the budget itself. There is some good news in the budget. It is not all bad. I applaud the modest efforts the government has made to improve the management of government and the savings that it expects to get from that. That is always in order and will have support on all sides of the House.
We cannot help but support the decrease in the personal surcharge, but only as far as it goes. The move will only produce $2 per year for a single parent with two children. It produces something in the order of $19 a year for the average Canadian family and $116 a year for those whose incomes are over $100,000. It is a typical Conservative approach to tax reduction and is simply not satisfactory. However, to the extent that there is any relief at all from personal taxes in the budget it has our support.
As for the RRSP provisions, I think that when people look at them very carefully they will find that it is not the assistance they thought it would be. The repayments to the scheme that are required will be from taxable income. Therefore, the effect is that a person is simply borrowing from one's own RRSP, if one has an RRSP. Generally banks and other financial institutions will make that credit available in any event. There will be a
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modest savings in interest payments, but that is all. However, as far as it goes, it has our support.
Let me turn to the fundamentals of the budget. The budget left in the hands of the corporate sector in this country over $1 billion in business exemptions, primarily for entertainment, lunches and so forth. The government abjectly failed to tackle the issue of corporate giveaways in our tax laws. There is nothing in this budget for those who have already lost their jobs or their businesses as a result of the government's economic policies and the economic transformation this country is undergoing. Right across the country, Canadians are hurting and hurting badly. Whatever else was in this budget, it should have provided fairness and help for those who are suffering as a result of economic dislocation in Canada. The budget was silent.
The budget provided virtually nothing for job creation, and to the extent that it provided anything at all in the way of a stimulus for the economy it was misfocused, misguided and misdirected.
Unemployment will be admittedly left at over 10 per cent of the work force in the coming fiscal year. That figure is probably optimistic if past record is any sign. The government is reducing by $100 million the funds available to Canadian Jobs Strategy, one of the most successful programs in my constituency in Victoria, and presumably in other constituencies across Canada.
This budget marks no change from the failed economic strategy of this government. In fact, the budget document itself is filled with self-congratulations. We just heard it again from the member who spoke a few minutes ago.
Since 1984 this government has been leading the country to the brink of economic, social and political disaster step by step. It has done so by in large measure following the policies of the predecessor government. Despite all the rhetoric, the fundamental policies of both the Liberals and the Conservatives over the last 15 to 20 years have been in the same direction. This has left nearly a million children in Canada in poverty. In one of the richest lands in the world children are in poverty.
There remain terrible conditions on some of our native reserves and in many other communities across Canada. For hundreds of thousands of individuals the

February 27, 1992
The Budget
country is already experiencing economic disaster. As hopes disappear, incomes disappear and with that comes a rise in social tensions, family tensions, marital breakdowns, alcoholism, and crime rates, as well as continuing pressure on the social structures and fabric of this country.
This government must be held accountable, as should its predecessors, for the squandering of the resources that we have been given in Canada. The budget specifically continues to erode federal government support for education and health programs. It eliminates, finally and officially, the family allowance program which has been an important part of our social structures in Canada and a statement of our community's understanding that children are important and that we as a community are prepared to support the children of this country.
This government has said in this budget and in the accompanying statements that its solemn commitment to the people of Canada to establish a national child care program is dead. It has killed that program with this budget, and with it one of the most critical elements in rebuilding a sense of society and community in Canada.
The budget has eliminated the Science Council of Canada, the Economic Council of Canada, the Canadian Institute for International Peace and Security, and the Canada Race Relations Institute. That last one is a particularly grievous breach of commitment by this government to Japanese Canadians and others in this country. Just before the last election the government made much of its reconciliation with Japanese Canadians who were treated so abysmally during the Second World War. When it made that commitment it had the support of this party and all sides of the House. It was righting a long-standing wrong. Part of the commitment it gave the Japanese Canadian community was that it would put up money for race relations which would be matched by the Japanese Canadian community. The Japanese Canadian community has kept its part of the bargain but this government has in this budget reneged on its solemn agreement.
The budget implements the Conservative strategy and philosophy on the economy. Let me set out my understanding of that policy and that understanding.
The key element of the Conservative philosophy, which is again self-praised throughout the budget, is that
of driving inflation down as close to zero as it can get. Economist after economist has said that is a disastrous strategy and we are now seeing the results of that strategy. It has driven up the Canadian dollar. It has put our export industries in jeopardy. It has actually increased the deficit.
Half of the federal government debt in Canada today is due to the interest rates the government pays on the deficit. Only 6 per cent, I should add, is the result of operating spending by government. This government, by driving up interest rates to pursue an ideological ivory tower approach to the economy in the interests of trying to get inflation down, is destroying the Canadian economy and with it putting unbearable pressures on Canadian society.
Dr. Clarence Barber of the University of Victoria gave a very interesting speech in October 1991 in which he outlined in detail the impact of a zero inflation policy imposed by the Governor of the Bank of Canada, John Crow, with the full and enthusiastic support of this government.
The second element of the government's policy is the trickle down theory, that somehow if you help the rich the economy is going to get better. This government has helped the rich and well to do. It has hammered individual families. The GST cost individual families $570 a year. Since this government took office, individual families are now paying an additional $1,530 a year in taxes. Yet, on the other side of the coin, the corporations have been relieved.
The effect of all of this, the third element of the government's policy, is the privatization of government, the reduction of government as a partner in the economic future of this country. It is increasingly turning power over to the private sector and to the large, rich and powerful in the private sector. With that has come the decreased standard of living of people in this country.
Over and over again, economists have made it clear that it is far better to maintain a moderate level of inflation and tackle the problems of employment and unemployment than it is to have an ideological commitment to drive inflation down.
February 27, 1992	COMMONS
We in this party say that there is a key and important role for government as a partner in the economic and social development of a country, a partner with business and with labour.
The government is fond of discussing Canada's position in the international economy, but look at what its policies have led to: higher unemployment, losses of investment to the United States and elsewhere, destroying communities right across Canada, the growth siphoned off to pay for borrowing from foreign sources, a failure to diversify trade by putting all our eggs in the U.S. basket, failing to back global enterprises which are competitive and to insist in retooling the manufacturing industries in this country.
The government has step by step dismantled the shipbuilding industry in Canada. It is destroying the forest industry in Canada. It has cut back further, despite all the pleas, on research and development and most grievous of all, it has consistently reduced the money available for education and training.
Health and education spending, for example, dropped in the last full budget year by 10 per cent and defence spending has gone up. The priorities of this government, particularly now that the cold war is over, are backward.
Part of the government strategy is to drive down wages in the name of productivity. We have just seen this very week that one of the most productive car plants in North America, the GM plant in St. Catharines, is being closed despite the fact of its productivity, as part of a corporate, political decision made by its American owners. This government was silent and ineffective in its response to that.
The strategy has failed even on the terms the government itself has set down from the beginning and that is that the deficit is all important. Under this government the federal deficit has increased from $234 billion in 1985 to $420 billion in 1991. The government peddles the myth of the deficit. Look what it has done. It built a new embassy in Tokyo on lands worth $5 billion to $6 billion. It has handed out capital gains exemptions worth $11 billion in the last seven years.
In the next five years the corporate giveaways in this budget alone are worth $2 billion to $3 billion, unproductive to the future of the economy and to the creation of

The Budget
jobs, but $2 billion or $3 billion to the corporate sector in this country.
In failure to collect taxes alone the government is losing billions and billions of dollars. The last figures that I have are for 1987 when there was $16 billion in uncollected corporate taxes. Thx holidays originally handed out by the Liberal government and continued by this government have cost the Canadian taxpayer over the last 10 to 15 years $40 billion.
The government has done nothing to address private debt in this country. It talks about public debt and the ideological interest of driving down the role of government in our society, but is silent on the fact that private business has a debt in this country equal virtually to that of the public sector, $406 billion. The reality is the federal deficit as a percentage of Gross Domestic Product has declined from 8.8 per cent in 1985 to 4.4 per cent in the most recent year. Government spending as a percentage of GDP has reduced from 23.9 per cent to
21.9	per cent.
Japan invariably runs a higher deficit than Canada, and its international record is overwhelming. Public sector wages held up by this government last year as the problem represent merely 9.2 per cent of the federal budget, and on and on it goes. What we now have to do is turn our attention to an alternative approach to building a fair, just and prosperous Canada so that we can play our part in the world.
The other night there was a CBC Town Hall on television. It was fascinating watching the responses there from across this country. Out of that I jotted down a few thoughts of my own that might make an approach, a beginning to building the kind of economic policies that I think can hold this country together. The first and foremost is honesty in government. We have to start there. The government's budget in a number of areas was simply dishonest. We must start with honesty in government and begin trusting the people and listening to the people.
Second, we must begin at the community base and support community based initiatives. Some of the most dramatic success stories in Canada have happened at the community and municipal level. We have some from Victoria where the local Greater Victoria Development Economic Commission has had a number of projects which have led to a very impressive record in our community.

February 27, 1992
The Budget
Third, we must support the leading edge industries in Canada so that they can be competitive internationally.
Fourth, we must not give up on the manufacturing sector. Leo Girard of the steelworkers made that point very succinctly in the town hall meeting and I think it is an excellent one. We still have a future in manufacturing if our government is prepared to back it, a future in shipbuilding, a future in the forest industry, particularly through secondary manufacturing instead of shipping jobs offshore.
Fifth, we must begin to build and rebuild the safety net for those who are caught in the dislocation that is happening in our economy. We are undergoing a transition. Some of that is global. Some of it is brought about by the government's policies. In either case communities, individuals and families need the support of all of us as Canadians, as a Canadian family when they are undergoing the dislocations. If it means we, as members of Parliament, have to cut back on our salaries and expenses, we should be prepared to do so. It also must mean that those who are rich and wealthy in our society must be required to cut back on their privileges: presidents who are making over $1 million a year with double that in privileges, stock options and all the rest.
Sixth, we need an effective capital works program as proposed by the governments of B.C. and Ontario. It is a tragedy that this government has let that opportunity go by. In my community of Victoria, for example, we need a sewage treatment system. The federal government must contribute to that to make it a reality. We need fair working conditions. We need a new trade deal. We need a progressive tax system. We need an efficient Public Service, not beating up on the public servants in this country, but drawing the public servants into an effective management and an effective delivery of service to the people. An effective Public Service and an efficient Public Service is essential to the development of our economy and to our society.
Auditors, for example, for every dollar spent on auditors we can raise $17 billion from corporate tax evasion or avoidance.
Finally, we must put money into Official Development Assistance and in the environment. This government has cut $75 million out of the green plan and has eliminated the Canadian Environmental Advisory Committee. Official Development Assistance, improving the lot of people overseas, particularly in the Third World, is an important long-run investment in the Canadian economy. Not only will it develop support for Canada overseas, but by increasing the standard of living elsewhere then we will improve our own.
This is a budget which does not do the job. There are alternatives and the time has come for Canada to move in a new direction.


Gregory Francis Thompson: Mr. Speaker, in relation to what the member had to say, I would like to congratulate him in one sense. He does recognize that the debt position of the government, our deficit position in relation to Gross Domestic Product, has improved remarkably in the last number of years. He mentioned the figure now being at 4 per cent deficit in relation to Gross Domestic Product and just four or five years ago those figures were in the order of 8 per cent. I congratulate him for recognizing that.
In relation to what he has just mentioned in regard to town hall meetings and what he would like to see happen to the Canadian economy, I would tell the member that 90 per cent of what is on his list we are already doing or have already achieved. What he has to do is pick out those specifics that we have not addressed. If you go through that list, I think you will agree that we are working on about 90 per cent of that.
I wanted to mention the Canadian dollar because the member mentioned the value of the Canadian dollar, I guess suggesting that we would be better off with a lower Canadian dollar and suggesting that the Canadian dollar is artificially high. I want to refer the member to a study done by Swiss Bank Incorporated.
In that study, they measured the value of the Canadian dollar, what they call the PPP, the price purchasing parity of the Canadian dollar in relation to other currencies. Specifically in relation to the American currency, their conclusion is that the Canadian dollar is not over-valued. If you want to get down to the very fine-tuning of the Canadian dollar, they say there might be a difference of a cent or less, based on what the Canadian dollar was in the late fall of 1991 which then was in the 88 to 89 cent range. The dollar having dropped four cents or more, I think we can all argue quite conclusively that the dollar is where it should be.
February 27, 1992

I guess it would be up to the member to tell us or suggest what the level of the Canadian dollar should be. We cannot rely on a weak Canadian dollar to pull the Canadian economy around. The Canadian economy is on sound footing. The fundamentals are there. They are correct. That, in a sense, is what is giving us that strong Canadian dollar. I think it is a strong compliment to the Minister of Finance and the government of the day.


John F. Brewin: Mr. Speaker, the Canadian dollar in 1986 was around 72 cents and went up to 89 cents to the U.S. dollar in 1991. It has dropped a little bit as the member noted.
The fact remains in my community of Victoria which depends on tourism, on the forest industry, on exports and so forth, that the policy John Crow and this government has followed is a disaster. It is a disaster, and the proof is in the pudding. Right across this country communities are devastated by the economic policies of this government.
The member mentioned town hall meetings. During the break, I had an opportunity to meet with hundreds of people in Victoria and with many, many groups there. I began a process of discussing with them the development of federal economic policies that might enhance the economic long-term future of our community.
I would like to take the opportunity to put on the record some of the ideas that have developed.
The shipbuilding industry is one I have already mentioned. It does provide high quality jobs, but it needs government support. This government is one of the few in the western world that does not provide effective support for shipbuilding. It has allowed that support to vanish. We had the Polar 8 cancelled on us despite the firm commitment of the government. That was unfortunate.
We want to see fair funding for the Commonwealth Games instead of having the government renege on the commitments that it has made.
We want to see a new harbour management system in Victoria so that that great asset of Victoria can be used effectively for our future.
We need new customs facilities. The government has consistently ignored that. It is important that we get
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those in shape particularly in time for the Commonwealth Games.
We need sewage treatment as I mentioned earlier. It is very important for our environment and for our international image.
We need the government to restore its role in the funding of education and health programs, major employers in Victoria. They are making a major contribution to our community and our country: the University of Victoria, Camosun College, and the hospital, which is one of the best in the country.
Finally, cultural and social programs are very important in our community. We do not get our share and it is time we did.


Jim Karygiannis: Mr. Speaker, we all have seen what happened in Ontario when the New Democratic Party came into power. It ballooned our deficit by about $14 billion.
I would like to ask a question of the member. Since 1984 when this government came into power, we had 33 tax increases, including the GST which devastated our country. We had free trade with the United States which created 350,000 job losses. The jobs were just sucked away in the United States.
Now this government is talking about free trade with Mexico which is going to devastate our country once again. The Americans are against it; Bush is trying to avoid it because of elections.
My concern is that although the NDP in this House is voicing a concern, its provincial governments are not standing up. The premier of B.C. and the premier of my province of Ontario, who we know is doing a disastrous job, are not standing up to the federal government and saying: "Look, enough is enough. Thirty-three tax increases. So many people unemployed, so many jobs lost. This budget is clearly not looking after the 1.5 million Canadians who are unemployed".
It is forecasting 10 per cent unemployment over the next two years. In the city of Toronto, in greater metropolitan Toronto, we need new infrastructure programs. It has been killing our city and this government has been totally ignoring it.

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The Budget
I know that the member comes from the western province of British Columbia which is a terrific province. In that province there is a New Democratic government.
My question is: Will he go back to that province and speak to his colleagues in the other provinces where they have elected New Democratic governments so that they will stand up to this Prime Minister? Or is he just going to pay lip service like Bob Rae is doing in Ontario? Are they going to do the same thing, a ballooning of the deficit? Are their programs once again going to balloon the deficit.
Clearly the $14 billion that we have in Ontario does not wash. Is the NDP paying lip service, or does it really care about the Canadian people?


John F. Brewin: Mr. Speaker, it is interesting how the Liberals want to continue to play politics with these important issues and ignore the facts.
First of all, the economic problems in Ontario were visited upon that government by the programs put in place by the previous Liberal government and by the level of transfers from this federal government to all provincial governments, particularly Ontario, Alberta and British Columbia.
The Rae government in Ontario is making a major effort to ensure that the problems of dislocation are not borne simply by the least fortunate in our society, but are borne fairly by all in the community of Ontario.
The member refers to the previous policies of this government. Let me take the opportunity, in the minute or two I have left, to just put on record another area in which this budget is deficient.
That is in the area of defence, of which I am the spokesperson for our party. The defence budget now is 40 per cent higher in real terms than it was in the early 1980s. This budget, contrary to the impression the government intended to create, actually increases defence spending in the coming year by $150 million and a further $400 million in 1993-94.
The government is taking the correct step in withdrawing our forces from Europe as a result of the changes of the cold war, but it is taking most of that money and
applying it to the defence budget without a serious review of roles for our defence forces in North America.
There is nothing mentioned here about NORAD and the $500 million we spend there. In fact, the budget actually provides for $140 million in modernization of NORAD despite the end of the cold war.
There is no review of our coastal patrol functions and how they should be changed. There is no review of our capital spending.
There is nothing concrete done about closing bases across Canada, where the government privately concedes hundreds of millions of taxpayers' dollars are being wasted in keeping bases open that have outlived their usefulness.
Those bases should be closed in full consultation with the communities involved and there should be support for the individuals and families who have to undergo transition. But the fact remains that the government has ducked its responsibilities in this area at huge costs to the Canadian taxpayer.
The government does not even make a commitment to sell the lands in Downsview, in the heart of Toronto, which have no more military function that is needed and can be used for social housing and for other needed community facilities.
So the government has neglected its responsibilities in the defence area. It is not taking a tough position in view of the end of the cold war.
The time has come for a peace dividend for this country. It is a shame the government did not proceed with it.


M. Yvon Cote (Richmond-Wolfe):: Mr. Speaker, it is with great pleasure that I take part in this debate on the budget the hon. Minister of Finance has just tabled. Even more so since this budget reflects the good advice the minister has receved not only from his colleagues and fellow members of this House but also from people throughout Canada. Is there one member, who has not heard our fellow citizens express their opinion, their concern and even their anger at times about the way the Federal government manages its finances? The minister has attempted to gather all these comments, suggestions
February 27, 1992

and criticism from various sources as I mentioned and to consolidate them in what, I am happy to say, turned out to be a truly remarkable budget.
I must say, that this budget is the end result of much preliminary work. Let me explain. The budget before us today is one for growth and recovery. This would have never been possible had we not managed to first bring inflation under control. We will remember that 20 years ago inflation had reached 15 and 18 per cent in Canada. In those days interest rates were between 17 and 20 per cent. There would have been no use, in my opinion, to come up with a budget such as this one four, five or six years ago because inflation had to be brought down before interest rates could come down. Just when we need it, here comes this new budget. A happy ending to all the problems created by galloping inflation and high interest rates which have now levelled off at such a low rate that it is the envy of a great many nations.
We have desirable interest rates and low inflation, which now enable us to restore the back of confidence in our economy. This is what this budget is all about: restoring a climate of confidence for the people, the consumers, the small investors who have gone through rough times and of course the foreign investors. That is what we should focus on. I would like to take the time I have left to emphasize the positive aspects of this budget. I see this budget as very reassuring in terms of economic recovery. I will go into specifics in a moment. I also see it as fair for Canadian taxpayers, as well as thrifty and inexpensive in strict budgetary terms. Those are the three angles from which I will evaluate this budget.
Let us talk about the budget as it is designed to stimulate economic recovery in Canada. Canadian taxpayers and consumers will first benefit from a reduction of 1 per cent of the surtax, which will put close to $500 million in the taxpayers' pockets, and that money will be used again to buy consumer goods. If that $500 million is put back into circulation this will of course generate new confidence. Also consumers will benefit from the program allowing them to use their RRSPs to gain access to property, which is a right. Canadians will be able to use the pension fund they have set up through their hard work. They will be able to make a dream come true and borrow up to $20,000 from their own fund which amount
The Budget
they will later put back in their plan over a period of 15 years. This will also increase economic momentum and generate confidence. When things go well in the building trade, the go well everywhere. Those are two examples at the consumer level and we will be able to mention others. In fact this budget is full of initiatives.
However, economic recovery cannot rely on consumers only. Investors also have to step in, and we are talking about investors that are capable of providing a financial push, but in a very sound economic climate. Here again, there will be a tax reduction of 1 per cent. There will also be, among other things, an increase of the capital cost allowance rate on their machinery. This will give an opportunity to increase production by replacing machinery that is now obsolete, fragile, old and that should be replaced for the sake of competitiveness and productivity. Again this will help Canadian consumption.
I believe the Minister of Finance showed that he was extremely receptive to our productive labour force by providing it with the means and the stimulants necessary to work and to make work, and that is the most important thing. There is no point in investing billions of dollars to increase services if a climate of confidence has not been generated. We had to demonstrate that inflation was under control. We had to demonstrate also that interest rates would go down, and we have achieved that. Now, this climate of confidence can be generated and it is with that objective in mind that one must look at the budget. There will be no overnight miracle. It is a long-term approach that is in fact totally different from the approach in budgets of seven, ten and fifteen years ago. I agree that those budgets provided for massive investments, but the objectives were always short-term and this unfortunately led us to stagnation and successive deficits that have contributed to the debt we now have.
Beyond this recovery and the climate of confidence that it generates, I also see in this budget a more equitable vision towards society, the family and the human being. The budget heralds positive social changes. Beyond the tax reduction that every taxpayer will enjoy, there is support to the family, thanks to this very audacious reform of family allowances which will now be paid in one cheque, in a single contribution.

February 27, 1992
The Budget
We will help families who cannot make ends meet in these hard times. Poor, economically vulnerable families will find in that single monthly benefit of $143 per child, more than $1,700 a year, a boost to their well-being and to the improvement of their living standard.
That is another vital aspect of this budget we must remember. Of course, the home ownership measure will produce a sense of security, of economic progress and will also create for our families, our children, a better living environment, a new quality of life.
Thirdly, Mr. Speaker, this budget costs little. Of course we could have spent billions more, we could have added expenses to the deficit and transferred the whole thing to the debt. We could have done all that, but our concern, our priorities do not reside in this short-term view based on spending billions and billions; quite to the contrary, we wish to arouse a sense of effort, an enthusiasm for more competitive communities through dignity in our families.
The third aspect of this budget is that it is economical. We had to give it some thought and make internal transformations so that our population could strive at getting better living conditions and a better outlook on life. In this regard, we had decisions to make. For example, we had to eliminate a total of 46 government agencies in order to get the money we will be distributing to people. What I mean, is that the budget contains cuts but the amounts saved are given back to the people who need it, through other equitable and fair measures or programs. Of course, as some people said, the cuts could have been more severe.
But first, the government had to retarget those cuts to make them efficient and to give some dignity to Canadian families. Therefore, I see this budget as a responsible measure that really addresses the problems and, most of all, that does not compromise the future of our community.
As a matter of fact, the day after the budget, I saw some very interesting things, Mr. Speaker. We can always be accused of partisanship, but on February 25,1 read in The Globe and Mail an editorial entitled "A Good Recipe For Tough Times". It is a good headline. It
reflects the ingenuity that the minister demonstrated in his budget, and I quote:

"Finance Minister Mazankowski faced a number of challenges as he prepared his first budget. He has credibly addressed each of the challenges without succumbing to the ill-considered advice of provincial premiers and others who demanded that Ottawa try to spend its way out of the recession. Mr. Mazankowski has found ways to intelligently support a recovery".

That is a responsible government. There is another title on which I could elaborate with su.cessive quotes. Mr. Dubuc, of La Presse, entitled his editorial "Wilson's Iron Hand, Mazankowski's Velvet Glove". And there are many more. People are just expressing their satisfaction with regards to how, in a long-term strategy, despite all the difficulties, this government has been able to control inflation, lower interest rates and put itself in a position to restore confidence.
Another headline: "Budget Brings Confidence, Business Community Seems Encouraged." I used those quotes to show without any partisanship, that some people see this budget as a responsible and courageous measure.
In closing I want to say to all Canadians that to govern does not mean only to look after tomorrow's needs. It means to think about the Canadian family 10 years from now, to improve the quality of life, of the environment, of education and of work conditions. It is in that perspective that the government tabled this budget. Again I am proud to be part of this government because it was able to take its responsibilities.


The Acting Speaker (Mr. Paproski):: It being 1.48 o'clock, I do now leave the chair until 2 p.m.
The House took recess at 1.48 p.m.


[Stage Direction]
AFTER RECESS

The House resumed at 2 p.m.
February 27, 1992

Catherine S. Callbeck: Mr. Speaker, once again students are being hurt by this government's policies. The budget abolishes the six month interest free period on student loans after graduation. This will place students deeper in debt as they prepare to launch their careers.
The federal government seems to be oblivious to the fact that its economic policies have made jobs scarce for students. It seems intent on making it as difficult as possible for students to get started in their careers.
With the GST on books, the fact that $800 million will be cut in transfers for education and health this year and cuts to student employment programs, one would think this government has gouged students enough.
I call on this government to recognize that if our country is to be competitive, if our workforce is to succeed, if our economy is to prosper, the federal government will need to stop attacking students with its policies and start assisting them.


AIR-SEA RESCUE
Mr. Peter L. McCreath (South Shore):: Mr. Speaker, during the 1988 election campaign the government promised that it would locate a fisheries patrol and air-sea rescue helicopter in southwestern Nova Scotia. Shortly after the election Tom Siddon delivered on that promise and the helicopter came to Yarmouth.
During the last three years the helicopter has had a profound impact in deterring fisheries violations in the Scotia-Fundy region. As well, there are a number of fishermen alive today who owe their lives to the existence of that helicopter.
Now the contract is up for renewal. One hears that there is a push from officials in Ottawa to discontinue the helicopter service. In the strongest terms possible I urge the Minister of Fisheries and Oceans and the Minister of National Defence not to yield to these recommendations.
The helicopter service must remain in Yarmouth. The lives of Nova Scotia fishermen must not be put on the chopping block.


THE BUDGET
John F. Brewin: Mr. Speaker, in the budget the government recognized on the one hand the end of the cold war by announcing the withdrawal of all Canadian forces stationed with NATO in Europe. Yet on the other hand the government failed to deliver on the peace dividend that the historic events in Europe required.
In this budget the government is actually increasing defence spending by $150 million in the upcoming year, by $400 million next year, while it cuts the Canadian Institute for International Peace and Security, cuts Official Development Assistance, cuts $75 million from the green plan. The government is actually increasing spending on capital projects under the defence budget. This is simply bizarre.
The time has come for the government to take a new look at the role of Canadian forces in the post cold war period, to cancel the NORAD agreement, to come up with a new role on our coasts and to begin to produce a peace dividend to deal with global poverty, the global environmental crisis and a new approach to-


Mr. Speaker:: The member's time has expired.


MINING EXPLORATION
Guy St-Julien: Mr. Speaker, the Association des prospecteurs du Quebec is very disappointed with this budget in which the government did not take into account any of the fiscal measures suggested by the association in order to restore funding for mining exploration in Quebec and in Canada. Since the elimination of the Canadian Exploration Incentive Program in February 1990 the federal government does not think that the mining exploration activity, and hence the mining industry is a key component in the economic development of our resource areas and of Canada.

February 27, 1992
5. o. 3i
If Canada wants to remain one of the world leaders in the mining industry, the government will have to realize that the mining industry knows no boundary and that it operates in the countries offering the best conditions for its development. Canada now has an effective and competitive mining industry, which needs further support from the government to keep playing a major role in the global economy.
Mr. Speaker, the federal government keeps the flowthrough shares intact and must sign, as soon as possible, a Canada-Quebec subsidiary agreement for the mineral sector of Chapais-Chibougamau, and one for the other mineral sectors in the Abitibi-Temiscamingue area.


PORNOGRAPHY
Ms. Mary Clancy (Halifax):: Mr. Speaker, the judgment this morning by the Supreme Court of Canada on pornography constitutes a victory for Canadian women and children. The highest court has recognized that there is a link between hard core pornography depicting women and children in violent, degrading and dehumanizing acts, and violence against women and children.
It has ruled that the undue exploitation of sex and the degradation of human sexuality is harmful toward those involved in such acts and to society in general. Consequently it violates the principles of equality and dignity.
The court has also acknowledged that the message of obscene materials is analogous to that of hate propaganda. Women can also claim victory because the court has recognized that a solution to the problem needs a multi-pronged approach. In the words of the judges, "education and legislation are not alternatives but complements in addressing such problems".
Today the government cancelled the Court Challenges Program, thereby shutting out many women and many minorities from the judicial process. Today, the news from the court was good, tomorrow the opportunities will be gone.


NATIONAIR
Mr. Gilbert Chartrand (Verdun-Saint-Paul):: Mr. Speaker, for several months some people have been desperately trying in bad faith to ruin the reputation of Nationair, a Montreal firm which hires more than 1,800 workers. Lately the daily newspaper The Gazette has published an awful article, written by Mr. Mackintosh about the crash of a Nationair aircraft in Saudi Arabia. Everyone in the business and most of all the unions know very well that the company has nothing to be blamed for. Somehow Nationair fights a lonely battle against some vipers whose only goal is to destroy it.
I am wondering if this is not a conspiracy against a Quebec company. More than a thousand jobs are at risk in this whole thing, which is pretty sordid. What are the people concerned waiting for to make a public announcement that Nationair is as safe as any other air carrier in Canada?
As a member of Parliament from the Montreal region, it is my duty to protect those jobs. The Nationair employees need support. As far as I am concerned, I trust them and I travel with Nationair.


MACEDONIA
Jim Karygiannis: Mr. Speaker, I am rising to bring forward concerns that have been raised across this country in light of the Prime Minister's meeting of January 27 with Mr. Gligorov who is representing one of the newly independent states created out of the remains of Yugoslavia.
This coming Saturday thousands of Canadians will be rallying on Parliament Hill to express their concerns over the situation in what is being called Macedonia.
I and many other Canadians have a problem with this new state, which is provoking unrest with its claims of Greek territory and giving aid to groups which advocate civil unrest.
February 27, 1992

I would like to ask the intentions of the Prime Minister in regard to official recognition of this country by Canada. I would also like to ask that this government today give assurances to this House and to the half million Canadians of Greek descent that prior to extending recognition to this area the government will get assurances from Mr. Gligorov that his government's intentions toward Greece and other neighbouring countries will not be the cause of future problems.


WITH GLOWING HEARTS
Garth Turner: Mr. Speaker, this coming Sunday evening, March 1 at 7 p.m. on the CTV television network across Canada, Canadians will view a program called With Glowing Hearts. This show celebrates our country's national anthem O Canada and the outstanding artists and recording stars who recently made possible this new and spectacular version of the anthem.
I urge everybody to watch this and reflect on how great a country we have in this our 125th year.
Let me take this opportunity to salute the proud Canadians who made all this possible. Ross Carlin, Bryan Lyon, Hayward Parrott and Eric Robertson began this journey of patriotism. Along the way we were joined by some corporate leaders of vision, namely Canada Post, Coca-Cola, Canadian National, Ford Motor Company, Prudential Insurance and Maclean Hunter. It has been my extreme pleasure to have been associated with all of these outstanding people and corporations.


THE BUDGET
Ms. Dawn Black (New Westminster-Burnaby):: Mr. Speaker, we soon enter the 21st century. Would the government please leave the tar sands and join the rest of us.
I share the outrage of women all across Canada. For women, the Conservative budget means no to pay equity,
no to equality, know your place. The arbitrary date this government has set for pay equity is costing 70,000 women $1 billion. This government just refuses to listen.
It eliminates advisory boards and councils. It dismisses the rulings of the Human Rights Commission. It threatens legislation to circumvent the courts.
Today Court Challenges, the very program which fights for equality, is to be phased out.
As we speak human rights groups are gathering here to protest.
This government would rather pay lip service than pay fairly. This government would rather pay for food, drinks and escort services than pay equality. This government is saying no to equality. This government is saying no to democracy. And this government is saying no to Canadian women.


NATIONAIR
Mr. Vincent Della Noce (Laval-Est):: Mr. Speaker, the 450 Nationair crew members who are locked out since November 19 are victims of a fool's deal stirred up in Toronto by the bigwigs of the Canadian Union of Public Employees, better known as CUPE.
I am wondering if CUPE's president, who is himself an Air Canada employee, is not simply trying to kill Nationair and Mirabel just to run for re-election claiming to be the one who put that Quebec national company in its place.
I think it is a conspiracy to discredit Quebec. All they want is to eliminate a genuine Quebec company that is taking an ever bigger part of the market and discredit it at the same time, for unknown reasons-Nationair and Mirabel.
I would hope that Nationair's locked out employees will wake up soon and regain control of their union. With their boycott, they are going to jeopardize not only their own jobs but also the future of 1,800 other people who have nothing to do with that labour conflict.
We really cannot afford to lose 200 jobs in Quebec.

February 27, 1992


CO-OPERATIVE HOUSING
Mr. Alfonso Gagliano (Saint-Leonard):: Mr. Speaker, once again, the Conservative government penalizes the middle class. This last budget proposes unjustified cuts in the Canada Mortgage and Housing Corporation spending on new housing co-ops.
According to Monique Blanchet, who heads the Federation des cooperatives d'habitation de Vile de Montreal the federal government's withdrawal from this sector will mean that 500 units will not be built in the Montreal area this year.
The government thus hopes to save $622 million over the next five years at a time when the need for social housing keeps increasing. In fact, the Conservative policy will affect tens of thousands of units in Quebec only.
I ask the government to reconsider this irresponsible proposal and I plead it to stop penalizing the have nots for its mismanagement.


SMALL BUSINESS
Mr. Bill Casey (Cumberland-Colchester):: Mr. Speaker, one of the best federal government programs for small businesses is the business improvement loan under the Small Businesses Loans Act. Under this program the federal government will guarantee loans to purchase or improve land, buildings, and equipment for small business.
Until the recent budget the limit for qualifying loans was $100,000 for small businesses with sales of $2 million or less. The proposed changes in the budget increased these maximums to $200,000, to be paid over a 10-year period. The business improvement loans make it easier to borrow money while providing banks with much more security.
This program is not well known to the business community but applications should be available from any chartered bank, from the small business loans administration, an FBDB office, or me. In fact I am sending a brochure on the program to every business in my riding. But if I miss anyone please contact my office and I will forward the information right away.


CANADIAN RACE RELATIONS FOUNDATION
Ms. Margaret Mitchell (Vancouver East):: Mr. Speaker, on September 22,1988, the Prime Minister, on behalf of all Canadians, apologized for the racist treatment and internment of Japanese Canadians during the Second World War.
As part of the redress package he announced: "In commemoration of all who suffered these injustices, we will establish a Canadian Race Relations Foundation to foster racial harmony and cross-cultural understanding in Canada".
Bill C-63 to establish the foundation was passed in 1990. We learned in Tuesday's budget that this bill has not been proclaimed after two years.
This allows the government to renege on redress promises that were made by this House on behalf of all Canadians. Funding for the foundation and also for the important Heritage Language Institute will be withheld indefinitely.
We agree with the National Association of Japanese Canadians that this delay indicates the eradication of racism and discrimination "is not a high priority of this government".


THE LATE GEORGE RICHARD AGAR RICE
Mr. Jim Edwards (Edmonton Southwest):: Mr. Speaker, the dean of Canadian broadcasters is dead.
George Richard Agar Rice died Tuesday in Edmonton at age 92, having spent 66 years of his life as an active Canadian broadcaster.
From his founding of CJCA for The Edmonton Journal in 1922, he went on to establish his own CFRN-AM in 1934, CFRN-FM in 1948 and CFRN television in 1954. He was a co-founder of the CTV network.
Dick Rice was a philanthropist who chose to endow Edmonton and Canada in the performing and visual arts, in post-secondary education and worthy community projects. He was a visionary who anticipated technological and social trends. He was a giver, not a taker, who knew service must precede success.
February 27, 1992

He organized Alberta's 1967 celebrations of the centennial and received an honorary doctor of laws degree for his service to and support of Alberta's three universities. He held the Order of Canada and the Alberta Order of Excellence.
Above all, he was a mentor to three generations of Canadian broadcasters of whom I had the good fortune to be one.


THE BUDGET
Hon.   Chas. L. Caccia@Davenport: Mr. Speaker, in 1990 when the Minister of the Environment launched the green plan he said:."Canadians want their green plan to be adequately funded. Cabinet has authorized a $3 billion budget over five years".
In 1991 the funds were stretched over a six-year period. In 1992, $150 million were deferred to a later date. Clearly with these actions the government is breaking faith with its commitment to the environment.
But that is not all. The government is now closing down the Science Council, the Canadian Environmental Advisory Council, the International Centre for Ocean Development.
These decisions are short-sighted and damaging to the well-being of Canadians. These useful bodies have served the public interest well. By suppressing these voices, the government continues its agenda to dismantle Canada.



ORAL QUESTION PERIOD


Hon. Herb Gray (Windsor West):: Mr. Speaker, I have a question for the Prime Minister arising out of the spending estimates tabled today.
In Tbesday's budget the government said that it is committed to restraining its spending. In that budget the government had no money for the Science Council and the Economic Council. In today's estimates, the government said that it will be spending millions of dollars on a museum of humour.
Oral Questions
Why is there no money for research, the unemployed, day care but millions of dollars for a museum of humour? Is this because the Prime Minister wants a showcase for all his broken election promises?


Hon. Benoit Bouchard (Minister of National Health and Welfare):: Mr. Speaker, I think that the hon. member knows full well that this grant was given to a Montreal cultural agency exactly two years ago for a fixed period of time for the development in Montreal of a building representing millions of dollars in investments and hundreds of jobs. I would like to hear the hon. member from the opposition tell us that he is opposed to a cultural agency that could create jobs in Montreal.


Herbert Eser (Herb) Gray: Mr. Speaker, yesterday, the minister talked about priorities. He said that because of the new priorities it was possible for him to break his promise of putting in place a national child care program. I ask the minister once again why is a museum of humour more important than child care facilities for Canadian families in Montreal and everywhere in Canada?


Benoît Bouchard: Mr. Speaker, I ask the hon. member of the opposition to tell us, contrary to what his colleague the hon. member from Montreal regularly tells us about job creation, that he is opposed, and I would like to hear it directly from the hon. member, to Montreal cultural agencies creating dozens of jobs for Montrealers in a city where 600,000 people are below the poverty level. That is what I ask the hon. member.


Herbert Eser (Herb) Gray: Mr. Speaker, the minister does not have the courage to answer my question. Why is the government spending several million dollars for a museum of humour when, at the same time, it is cutting back its co-op housing program which means that 500 new units will not be built this year in the Montreal area?
There are 10,000 names on the waiting list for such units in the city of Montreal.


Benoît Bouchard: Mr. Speaker, once again the hon. member knows full well that this cultural organization, incorporated in Montreal, organizes a summer festival which generates millions of dollars for the people of Montreal.

Oral Questions
I am asking the hon. member on behalf of my colleagues from the Montreal area whether he is against government subsidies to organizations which create hundreds of jobs in Montreal.


THE BUDGET
Mr. Paul Martin (LaSalle-Emard):: Mr. Speaker, my question is for the Minister of Finance.
The minister is bragging about helping our job creating industries when, at the same time, his budget predicts real interest rates three full points above those in the United States, our main competitor. This is an unbearable anti-competitive gap.
How does the minister think he will create jobs while imposing such a costly burden on Canadians? By praying?


Hon. Don Mazankowski (Deputy Prime Minister and Minister of Finance):: Mr. Speaker, I am sure the hon. member will be pleased to know that the bank rate dropped by six basis points today. That is a clear example of the confidence in this budget.
There are also some other very encouraging signs. In spite of all the gloom and doom that the members opposite always raise, it is interesting to note that General Motors is calling back 2,700 workers in this coming year at the assembly plant in St. Therese. It says: "This is because of the high quality levels of union co-operation and we were able to persuade the head office to make us the only Firebird and Camaro producer in the world. We are alive and well and ready to compete".


Paul Edgar Philippe Martin: Mr. Speaker, surely the hon. minister has been in the job long enough to understand the difference between real interest rates and nominal interest rates. Our real interest rates are crippling compared to the American's.
The assumptions that are set out in the budget are less than honest as, indeed, was that answer.
The minister says he is going to lower the unemployment rate, yet he also calls for economic restructuring without any adjustment measures and that means massive job loss.
He calls for real interest rates to continue at a level substantially higher than the American's. No retraining, little R and D.
Who does the minister really think is going to turn the Canadian economy around, John Crow or St. Jude the patron saint of hopeless causes?


Donald Frank Mazankowski: Mr. Speaker, the Canadian prime rate is 7.5 per cent. The U.S. prime rate is 6.5 per cent. What is the hon. member complaining about?


THE CONSTITUTION
Hon. Audrey McLaughlin (Yukon):: Mr. Speaker, my question is for the Minister responsible for Constitutional Affairs.
There has been great progress made in the talks of the joint parliamentary committee. All of us on that committee are working in the interests of unity of this country. I truly believe that all of us who have worked on the committee feel that commitment very strongly as federalists.
I want to say to the minister that, yes we are now down to the wire and negotiations go this way. We all understand that. Also, we want to make reasoned decisions and we want to make them in the light of day and not at 3 a.m. or 4 a.m.
In the interests of working toward unanimity which we would like to see, will the minister consider a delay of one week until the House resumes after its one week recess so that we can meet again to come up with the final report rather than having to do that tonight and tomorrow morning?


Right Hon. Joe Clark (President of the Privy Council and Minister responsible for Constitutional Affairs):: Mr. Speaker, I agree entirely with the leader of the New Democratic Party that there has been extraordinary progress made on the great majority of substantive issues. None of us would have believed this progress to be possible two or three months ago.

I am as conscious as anyone in this House, perhaps more conscious than others, of how much progress we have made in public opinion since the low point in November when party differences made Canadians begin to wonder if this would all come apart.
It would be the worst possible signal for a Parliament that has achieved so much agreement on so many important issues to appear unable to keep its deadline tomorrow. That would be a very, very major problem to the cause of Canada and to the interests of federalism.
My strong inclination would be, knowing the strain everyone is under, to urge the parties to continue in the spirit that has marked most of our discussions so far.
They should continue to try to find agreement and to meet our deadline. If we do not meet tomorrow's deadline, we are forced back on other deadlines that the country faces.
Canadians want us to get on with this matter. They know there is remarkable agreement and they want us to continue on that path of agreement. I believe that if we have the will in this House we can do that and we can do it tomorrow.


Audrey Marlene McLaughlin: Mr. Speaker, I want to say to the minister that I have been one of those people who has not advocated a delay of the report of this committee.
At the same time people want us to resolve the Constitution, do it expeditiously and deal with the very important matters of the economy as the minister has said as well as other issues.
Surely Canada is worth one week's time. I also want to be very clear that we are not talking about it because people are under stress. We are all under stress. We all agree with that. That is our job.
Does the minister not think, in the interests of trying to send a positive and, I hope, unanimous message to the country, that one week would not be worth considering?


Charles Joseph Clark: There is no question I made the decision back in April that this country was worth everything I could give to it. I have been trying to proceed in that spirit since that time.
Oral Questions
I am extremely worried about the signal a delay would send. I know, as the hon. leader of the New Democratic Party knows and the Liberal Party knows, there has been progress on aboriginal issues, on issues of institutional reform, on issues of powers for Quebec, potentially on issues of 121, the economic union.
There has been extraordinary progress made in this committee and the country is taking heart from it. Federalists in Quebec are taking heart from it. This is a fragile thing, a very fragile thing.
We saw that three or four months ago when this Parliament looked as if it was going to let the country down. This Parliament cannot let the country down again. It would seem to me that the best thing for us to do would be to realize that this country has to be the preoccupation of all of us. It is better for us all.
It sends a better signal to Canada and to our future if we respect the deadlines we have all known for months that we have had so that we can go on to meet the other deadlines that we all know we have to meet.
If we do that, we can then get on to deal with the other issues that all of us believe this country should be free to deal with.


Audrey Marlene McLaughlin: Mr. Speaker, the signal will be clear: the country comes before everything. It comes before the parties; it is Canada that counts and, in my opinion, Canada deserves an extra week. The minister does not seem to agree.
I have another question. Would the minister consider, with his caucus and with the Prime Minister, the fact that it is more important to take time to examine carefully everything that goes into the search for unanimity?


Charles Joseph Clark: Mr. Speaker, I am always reasonable and flexible, but I believe there are certain realities here. There is right now, in Quebec and elsewhere, a momentum in favour of Canada that we do not want to jeopardize. It may be a difference of opinion, but I believe that the signal sent by Parliament if we cannot meet our own deadlines will be perceived as a bad signal that could discourage federalists in Quebec.

Oral Questions
Moreover, I am convinced that if we do not meet our deadline this will be perceived or reported as an indication of deeper differences than the ones that actually exist. The reality is that there is a great consensus among the federalist parties here and we do not want to give Quebecers or others the impression that we do not agree on basic issues, because we do agree on the basic issues. I believe it is in our interest to indicate to the world, to Canada, and to Quebec that we agree.


Some hon. members:: Hear, hear.


MAIN ESTIMATES
M. Douglas Young: Mr. Speaker, the Main Estimates for the Department of Employment and Immigration have been reduced by some $177 million.
Can the minister explain why the government has withdrawn over $100 million of the funds allocated to job creation and to training when the number of public servants within his department has increased by over 1,500?


Hon. Bernard Valcourt (Minister of Employment and Immigration):: Mr. Speaker, I could provide details on the 1,546 person-years that were absorbed by my department, but the reason is that we wanted to have additional resources to serve Canadians who need the unemployment insurance program. We have also added 367 person-years, again to help the unemployed workers who need advice in the manpower centres. The party that the hon. member represents complained a few weeks ago in the House that people were not getting service because of a shortage of staff. Now we have the staff.


M. Douglas Young: Mr. Speaker, I have a supplementary question for the President of the Treasury Board.
The Auditor General in his last annual report said that the deficit for the fiscal year ended March 31, 1991, was understated by nearly $2 billion.
Can the President of the Treasury Board assure the House that there will be no more cooking of the books and that approved accounting standards will be respected when the government reports to Parliament and to the Canadian people?


Gilles Loiselle: Mr. Speaker, I would like to remind the hon. member that over a period of 15 years, I do not recall the auditor having given clearance to government except maybe last year.
There is an honest disagreement between the auditor and the comptroller. They both agree that the amounts are right. Where to put them in the books is where the disagreement is and I am not one to decide between them. I will let the auditor and the comptroller sort out their problem themselves.


Mr. Don Boudria (Glengarry-Prescott-Russell):: Mr. Speaker, my question is to the Prime Minister and it concerns today's estimates. Today's estimates officially end the Prime Minister's drug awareness program. Given that it was the Prime Minister himself who on September 14, 1986 called Canada's drug problem "an epidemic", when precisely was the epidemic cured and by whom?


Benoît Bouchard: Mr. Speaker, I agree with the member that the drug strategy has well served Canadians for the past five years. We have had wonderful results which we will communicate to Canadians. At the same time I am aware that this strategy will be over at the end of March. We are working within the Department of Finance to see what we can possibly do.


Don Boudria: do not think that answered the question.

I would like to direct my supplementary question to the Prime Minister. It is also on the estimates. Once again, today's estimates make no mention of the number of person-years in the Prime Minister's Office. Canadians would like to know why, and especially what does the government have to hide regarding the number of person-years in the Prime Minister's Office?


Gilles Loiselle: Mr. Speaker, if the hon. member takes the trouble to look at appendix II, he will find the number of person-years clearly indicated there. Indeed a Liberal member pointed out to me this morning that the number was 119 higher and he found it amazing that it could be higher when the budget was the same. I suggested that he read some more.
February 27, 1992

Oral Questions


Steven W. Langdon: Mr. Speaker, my question is for the Minister of Finance. In his budget speech earlier this week the minister talked about a substantial peace dividend for Canadians and said "defence spending will be cut".
Today the estimates show that rather than cut, the defence budget will increase next year. Can the minister explain why his budget speech tried to fool Canadians and will he make real defence cuts and use the money to get people back to work in this country?


Gilles Loiselle: I think I have to explain to the hon. member how the estimates work. He will recall that we made projections for this year with a deficit number. This was based on a certain projection of growth in various departments. It is from that base that we are cutting the expenditure and not from some other base that the hon. member has in mind.


Steven W. Langdon: In other words, a cut is not a cut in this case. It is an increase that is just a little bit slower. Such nonsense.

My supplementary question is for the minister. The case of the Meme breast implant clearly shows that we cannot count on companies to report a defective product. The estimates show a $36 million cut in the Health Protection Branch. How can the minister justify taking money from a branch or division which recent events have shown is so necessary for Canadians' health?


Gilles Loiselle: Mr. Speaker, I will check the figure that the hon. member put forward. Again I believe that all the cuts or increases in the government's budget are explained in full in the supplementary budget. The hon. member has a perfect right to disagree. Everyone would want us to spend more on everything. Unfortunately it is not possible to do so. We must make adjustments within our available resources and that is what happened in this case.


UNEMPLOYMENT
Mrs. Christine Stewart (Northumberland):: Mr. Speaker, my question is for the Minister of Finance.
On Tuesday of this week 70 employees were permanently laid off at the GE plastics manufacturing plant in Cobourg. Yesterday, Nestle foods announced the permanent lay-off of 130 employees at its Stouffers plant in Trenton. They join a growing list of thousands more in Northumberland.
I would like to ask the minister what specific programs are in the minister's budget to provide for these unemployed workers.


Hon. Michael Wilson (Minister of Industry, Science and Technology and Minister for International Trade):: Mr. Speaker, I think if my hon. friend looks at the budget she will see that there is a package of elements there from a reduction in the manufacturing income tax, the increase in the capital cost allowance, the change in the withholding tax which is very helpful to companies like Nestle which want to continue to employ a number of workers in her riding, as well as the changes to the large corporations tax that were announced last week and the changes to the research and development tax credit.
All of these proposals together are designed to make companies more competitive so that they can compete against other countries for business and in that way maintain and increase employment in their companies. There is a very clear objective in the budget to do exactly what she is looking for, and that is to create jobs and maintain the competitiveness of Canadian companies.


Christine Susan Stewart: Mr. Speaker, I challenge the reply that states that these programs are creating jobs. They just are not.
Two more years of anticipated unemployment at current levels is totally unacceptable. A caring society turns with special attention sacrificing the well-being of the rich and powerful to assist the disadvantaged. Family violence and child poverty are increasing with unemployment at enormous human and social costs to this country. The budget is seriously deficient.

February 27, 1992
Oral Questions
What emergency measures will the government initiate to meet the needs of our own country's poor children and destitute families?


Michael Holcombe Wilson: Mr. Speaker, I think my hon. friend again is ignoring some of the very key elements of the budget. She says that provisions that have been in place for two days simply are not working. I think that is a very unfair and totally unrealistic comment to make.
The proposals that my colleague from health and welfare and the Minister of Finance put together in this budget are specifically designed to deal with the problems of family violence. The proposals, as I said in my previous answer on corporate taxes, are designed to improve the capacity of those companies to increase jobs. All of these things together will provide a budget which is a very sound balance of both economic policy and social policy.


NATIONAL DEFENCE
George Saunders Rideout: Mr. Speaker, my question is directed to the Minister of National Defence.
The budget had a direct impact on my riding with the closure of the supply depot putting over 200 people out of work. Three successive Ministers of National Defence have committed this government to build a new supply depot, not close one. As recently as last October a letter to me from the minister confirmed that the project was on course. Why has the government broken its promise?


Hon. Marcel Masse (Minister of National Defence):: Mr. Speaker, the Department of National Defence has cut its budget forecast by nearly $6 billion over the past four years. The strength of the Canadian Forces was cut by 11 per cent, thus proportionally reducing the need for supply depots.


George Saunders Rideout: It is nice to see that the minister talks about cutbacks, but they can build a museum of humour. This is no joke, Mr. Speaker.
The employees were told by this government not to worry, that a new supply depot would be built and they would have work. How does the minister explain to
Allan Meredith, Bernard Bourque, Tina Agnew, their families and all the other workers at the Moncton depot who woke up yesterday morning and learned that they no longer had jobs that it has broken its commitment to them?


Marcel Masse: Mr. Speaker, it is obvious that given the reduction in personnel we had to streamline depots. Therefore there will be two major depots in Canada, the Edmonton depot and the Montreal depot. By cutting down the establishment we had to reconsider the decision regarding Moncton.


THE BUDGET
Mr. Howard McCurdy (Windsor-St. Clair):: Mr. Speaker, my question is directed to the Minister of Industry, Science and Technology.
In the throne speech and in the so-called prosperity papers this government talked about the knowledge economy. It promised to double the number of scientists, engineers and mathematicians. It promised to cut the illiteracy rate by half, to quadruple worker training, to achieve a 90 per cent graduation rate from high schools, and to enhance science and technology.
My question to the Minister of Industry, Science and Technology is: Where in the budget is that prosperity agenda?


Michael Holcombe Wilson: Mr. Speaker, the prosperity agenda is very much in that budget. I mentioned in response to a previous question the various elements that are there to support the competitive position of Canadian companies. That will help Canadian companies provide jobs and opportunities for the younger people going through the education system.
The proposals that my colleague, the Minister of National Health and Welfare, has put forward on family violence and other problems of children in poverty are also designed to address this problem. A very high percentage of the dropout rate is because of family violence and drug and alcohol abuse. This will help those people who suffer from those problems to stay in the education system, get the education that is important for
February 27, 1992

them, and be a prominent part of the work force when they graduate.


Howard Douglas McCurdy: Mr. Speaker, there are 1.5 million Canadians who would call this government, in spite of what the minister says, heartless and cruel.
When we look at the cuts to the Canadian Jobs Strategy, the real dollar cuts in the Industrial Research Assistance Program and the granting councils, when we look at cuts in other knowledge based programs, was not the real reason the Science Council was killed that the Science Council was going to say, in addition to this government being cruel and heartless, that it was stupid? But the Canadian people are not.


Michael Holcombe Wilson: Mr. Speaker, I think the Canadian people can see through the empty rhetoric in a question like that.
The Canadian people are looking for the substance that is in the budget of my colleague, the Minister of Finance. That addresses many of the questions which have been put forward in the community based program, the community based consultations on the prosperity initiative. People were looking for precisely the response that the Minister of Finance gave in this budget in order to create jobs and create a stronger economy for the present and the future.


COMMUNITY NEWSPAPERS
Mr. A. H. Harry Brightwell (Perth-Wellington-Waterloo):: Mr. Speaker, my question is for the Minister of Communications.
As of March 1, small community weekly newspapers will be subject to commercial postal rates. In 1991 the minister postponed scheduled postal increases until March 1, 1992.
Given the importance of these weeklies to their local communities, and indeed I have eight weeklies serving my riding, does the minister have plans to provide any kind of further relief to these publications?


Henry Perrin Beatty: Mr. Speaker, as my hon. friend mentions, last year we
Oral Questions
announced a one-year delay in the new increases in postal rates for community weeklies. During that time we have taken advantage of the opportunity presented to us to meet with the Canadian Community Newspaper Association to deal with issues related to rates and other problems that community newspapers are having in Canada.
I am pleased to be able to inform my hon. friend that the government today will be announcing a decrease of some 50 per cent for a one-year period for these rates for small community newspapers.
In addition to that, weeklies excluded from Canada Post rate code 2 by virtue of their being located within regional municipalities will also become eligible for these concessionary postal rates. Some 430 small community newspapers across Canada will benefit from this.


THE BUDGET
Mr. David Walker (Winnipeg North Centre):: Mr. Speaker, my question is for the Minister of Finance.
Close to one million Canadian families work hard to make ends meet on incomes between $30,000 and $50,000 each year. Like the poor, they are finding times very tough. Yet for these working couples the minister can only offer $4 a month more under the proposed child tax benefit.
How can the minister stand in this House and suggest that $4 a month will in any way help these families provide their children with proper food, clothing and medicine?


Donald Frank Mazankowski: Mr. Speaker, I appreciate the hon. member's question and I clearly understand the difficulties that families are facing.
A combination of the reduction in the surtax in this budget and the improvements in the child benefit package that my colleague the Minister of National Health and Welfare has announced means a family with two children earning $50,000 and a single earner will save $280 a year. A two-earner family earning $50,000 will save $240 a year. A single parent with two children earning $50,000 will save $394 a year.

February 27, 1992
Oral Questions
I realize that may not sound like a large sum of money, but it is an important sum of money that will help parents clothe their children and maintain a household. At least it is going in the right direction. As the economy improves and as we can get better fiscal order in the management of the government's affairs, we will be able to do better.
What we have today is a very difficult challenge of balancing the needs of families and the needs of Canadians with the fiscal reality we must face. We are trying to do our best.


David Walker: Mr. Speaker, my supplementary question is for the same minister.
In columns 4 and 5 of table 4.3 on page 137 of The Budget Papers it is clearly stated that for a family earning $50,000 a year with two children the difference between the new and the old programs is simply $44 a year or less than $4 per month.
In the budget the government has asked 600,000 Canadian women to give up their family allowances in order to "help children who are suffering in Canada for no good reason at all". There are now over 2.5 million Canadians dependent on social assistance who will not be covered by the child tax benefit. If the system is not designed to help the poorest of the poor, how can the minister defend the end to universal family allowances?


Benoît Bouchard: Mr. Speaker, based on the question the member raises I would like to correct what I consider to be two mistakes.
The first is that the poor people on social assistance will continue to get family allowance. It is there, $1,020 a child, and it will remain.
Second, the federal money we provide to the provinces through the CAP is $6.5 billion and it goes directly to those on social assistance. For example, they have transportation, prescriptions, and sometimes even housekeeping benefits, money which is not available to low income workers. That is exactly the reason we have put the emphasis on that category of people. Basically women with $15,000 a year receive fewer direct benefits than those who are on social assistance.


PRINTING INDUSTRY
Hon. Roy MacLaren (Etobicoke North):: Mr. Speaker, my question is for the Minister for International Trade.
The Canadian printing industry which employs some
78,000	people is being systematically undermined by the United States customs service's arbitrary use of country of origin rules to protect American printers and to impede Canadian exports to the United States.
As in the Honda and in the softwood lumber instances, this is another example of the Americans exploiting the free trade agreement to serve their own protectionist ends.
I ask the minister: What is the government doing to prevent these abuses of the free trade agreement and to ensure the survival of the Canadian printing industry?


Michael Holcombe Wilson: Mr. Speaker, this might have been a question more appropriately put to my colleague, the Minister of National Revenue. Since my colleague raised it with me yesterday I am pleased to respond to it.
The Minister of National Revenue has written to the Canadian Printing Industry Association reviewing the administration of this particular matter and also discussing with it a basis for implementing this policy in a way that would provide a level playing field between companies in the United States and Canada.
My hon. friend should know that one of the objectives we have in the North American free trade negotiations is to deal with this particular problem. We tried to deal with it in the U.S.-Canada negotiations. We were not successful at that time but it remains an objective in the upcoming negotiations.


Mr. Sergio Marchi (York West):: Mr. Speaker, my question is for the same minister.
We should not be writing to the Canadian industry. We should be taking it up with the Americans. This government is doing absolutely nothing about this trade harassment which costs the Canadian printing industry some 1,700 jobs and on average $160 million a year in lost opportunities.
February 27, 1992

While American printing products flow across our borders free of any impediments, why does the Canadian government continue to shamelessly accept harassment of Canadian goods entering the American market? When will it begin to Canadian defend the interests of Canadian and the thousands of jobs in our Canadian printing industry?


Michael Holcombe Wilson: Mr. Speaker, the rhetoric does not help the situation. My hon. friend should know that we have taken steps on an ongoing basis to help particular companies in Canada deal with the problems of getting into the United States.
There is a recent case involving the Eddy Match Company where Canadian officials went to bat for the company and got a very fast decision on this particular problem. The result was that the company's shipment was promptly released and sent to its destination in Canada.
We are working on it at the negotiating table as well as at the border.


THE CONSTITUTION
Hon. Lucien Bouchard (Lac-Saint-Jean):: Mr. Speaker, my question is for the Prime Minister. The Minister responsible for Constitutional Affairs has just said that he has felt an overall momentum in this country toward the renewal of the Constitution which leads us to believe that the Beaudoin-Dobbie report to be tabled tomorrow would recommend that special powers be delegated to Quebec. But we already have the real answer. We heard it today: 92 per cent of English Canada has said no to a special status for Quebec. I would like to ask the Prime Minister if the results of this survey would match those hidden away in the Privy Council safes?


Charles Joseph Clark: Mr. Speaker, I hope that the hon. member has better sources to quote his short term and long term fans than a headline.


Lucien Bouchard: Mr. Speaker, never mind the closed door conferences with pre-
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written scripts. Never mind the rhetoric and the smoke screens. What is important is what the real Canada thinks. How can the minister deny that this real Canada, outside Quebec, has rejected by a 92 per cent majority the idea of a special status for Quebec?


Charles Joseph Clark: Mr. Speaker, I for one have just taken an active part in a tour of the Saguenay home of the hon. member as well as in five national conferences. I know that the questions asked by the Gallup Institute can sometimes have shortcomings, but I also know that among the people who attended these five national conferences there was an open-mindedness about the future of Canada like never before. I sure hope that all the members of this House are prepared to encourage the people of Quebec to see Canada for what it is today, because what Canada is today is a country prepared to have a wide vision, a vision encompassing Quebec, as it is, within a modem Canada.
 * *


NATIONAL REVENUE
Mr. Terry Clifford (London-Middlesex):: Mr. Speaker, my question is for the Minister of National Revenue.
The deductibility of legitimate business expenses from taxes is a practice woven into the very fabric of Canadian society. I was shocked to learn, however, that some people including NDP members opposite actually believe escort services are legally tax deductible.
Can this be, Mr. Speaker? With all due respect to the world's oldest profession, have the escorts and their clients actually got off the hook? I ask the minister to clarify this and end the hysteria.


Hon. Otto Jelinek (Minister of National Revenue):: Mr. Speaker, I obviously do not have the experience in this matter of the hon. member and members of the NDR I know New Democrats are experts in this field.


Some hon. members:: Oh, oh.


Otto John Jelinek: I am happy to have the opportunity, if we are referring to escort services as the New Democrats and the hon. member have just done, to say it is of a personal nature.

February 27, 1992
Oral Questions
These escort services are non-deductible to businesses and to anybody else. I have taken it a step further. I have instructed my officials to review existing directives and interpretation bulletins to make them clear enough for even the New Democrats to understand.


COURT CHALLENGES PROGRAM
Margaret Anne Mitchell: Mr. Speaker, hidden in the speech of the President of the Treasury Board is the termination of the Court Challenges Program which funds equality rights test cases under the charter. This is one more blow to Canadians seeking equality and justice.
My question is for the Minister of Multiculturalism and Citizenship. Will he tell Canadians whether the Court Challenges Program is no longer worth while or important in continuing clarification of the charter? Why is there this attack on human rights? Has he changed his mind since he supported funding last May?


Hon. Gerry Weiner (Minister of Multiculturalism and Citizenship):: Mr. Speaker, this was an effective program that was available and provide financial assistance for the preparation and defence of test cases involving equality and language rights under the Canadian Constitution.
The program has been with us for some time, parts of it since 1978 and other parts since 1985. There is now a solid base of jurisprudence for future years and the remaining finer points are now those of provincial jurisdiction. I guess that is why we acted as we did.


SMALL BUSINESS
William D. (Bill) Casey: Mr. Speaker, my question is for the Minister of Finance and it refers to the budget papers where they refer to the Small Business Financing Program for businesses that are experiencing financial difficulty. It looks like a good program but I do not really understand it.
I wonder if the minister could explain, in terms that I might understand, what the program is, how the low
interest loans are permitted, what businesses qualify, and when more information will be available.


Donald Frank Mazankowski: Mr. Speaker, I thank the hon. member for that question.
May I take this opportunity to congratulate him for his efforts in keeping Aerovox open as a result of his own personal initiative.
The provision to which the hon. member referred is available to both incorporated and unincorporated businesses. The rules that will be applied will be the same rules as those applied under the Small Business Development Bond program which was in existence a few years ago.
The effect will be that it will treat interest payments paid to the lender as dividends and the lender can thereby qualify for a dividend tax credit. This will mean substantial reductions in interest rates to the person who is making the loan.
I agree with the hon. member. It is a good program and it will be available in the very near future.


CO-OPERATIVE HOUSING
Alfonso Gagliano: Mr. Speaker, my question is for the Minister of Finance.
In his first budget on Tuesday evening the Minister of Finance cancelled the co-operative housing programs. In so doing the minister just cancelled 500 units that were to have been built this year.
What kind of housing will the Minister of Finance suggest for the 10,000 families in Montreal alone that are on the waiting list?


Donald Frank Mazankowski: Mr. Speaker, under the provisions of the Social Housing Program, the federal government will be spending $2 billion a year or $10 billion over the next five years. That is a lot of money.
In terms of the social housing component, it will be increasing at the rate of 3 per cent per year which is greater than the rate of inflation.
February 27, 1992


PRIVILEGE
Dawn Black: Mr. Speaker, I rise on a question of privilege. I am totally outraged and offended that the Minister of National Revenue in this House of Commons would imply that those of us in the New Democratic caucus either use the services of an escort service or are somehow employed by-


Mr. Speaker:: The hon. member rises on a matter that was the subject of an exchange two minutes ago. It may well be that the consequences of the exchange have created some consternation or some annoyance but it is not a question of privilege.


POINT OF ORDER
Donald Frank Mazankowski: Mr. Speaker, during Question Period today the hon. member for Winnipeg North Centre in his supplementary suggested that I was providing inaccurate information to the House on a question that was posed. I would simply ask him to refer to table
4.4	on page 138 and he will see that the answer corresponds to that table.


Mr. Speaker:: The hon. member may very well consult those pages. I would ask hon. members on both sides to do the best they can to restrain from carrying on debate by way of notices of privilege or order after the Question Period has ended. I would hear the usual Thursday afternoon question.


BUSINESS OF THE HOUSE
Mr. David Dingwall (Cape Breton-East Richmond):: Mr. Speaker, my question is to the government House leader. Perhaps he could indicate to the House the business for tomorrow and for Monday and TUesday of the week we return after the March break.


Hon. Harvie Andre (Minister of State and Leader of the Government in the House of Commons):: Yes, Mr. The Budget
Speaker. Today the House will complete the second day of debate on the budget. On Friday, February 28, it is the government's intention to call Bill C-61, the borrowing authority bill for second reading.
On Monday, March 9, after being adjourned for a week-it sounds like a holiday but I am going to work in Calgary-we will complete second reading of Bill C-61. My intention now is to call the third and fourth days of the budget debate on Tuesday and Wednesday, March 10 and 11 respectively. I will engage in discussions with the members of the opposition in respect of other business for the remainder of that week.



GOVERNMENT ORDERS


[Stage Direction]
The House resumed consideration of the motion of Mr. Mazankowski that this House approves in general the budgetary policy of the government; and on the amendment of Mr. Gray (Windsor West) (p. 7631); and the amendment to the amendment of Mr. Langdon (p.7633).
Roy MacLaren: Mr. Speaker, in participating in the debate on the budget I shall leave it to a number of my colleagues who have already and will no doubt draw attention to the deplorable record in this budget of support for stimulus that would bring immediate employment and benefit to the Canadian people. Quite obviously the government has not chosen to respond to the widespread desire on the part of Canadians to see measures to bring about that necessary stimulus.
In fact, the real message in the minister's recent budget speech, as distinct from the rhetoric in which it was dressed, is that Canada's current recession is simply part of a normal cyclical downturn, one which mirrors, he says, a world-wide economic slump. As a corollary of that belief, he offers the reassurance that the economy will soon rebound on the strength of renewed consumer spending and an export led growth principally to a resurgent U.S. market.

The Budget
We have heard that forecast for several years now. This all too predictable analysis of Canada's current economic malaise ignores two fundamental points. First, the Canadian economy went into recession a full year earlier than that of its major trading partners, principally the United States, and its effects will prove far deeper.
The second fundamental point is that it is far from clear that the world economy as a whole-beyond Canada, the United States and Britain-is in recession as this government would have us believe.
Continental Europe, Japan and especially the newly industrializing countries of southeast Asia continue to post healthy and in some cases quite remarkable growth rates at the very time that we in Canada are mired in recession.
Moreover, to the extent that the rest of the world will experience growth and an economic slowdown in coming months, it will likely be the result of the deterioration of the North American economy over the past year. It is still a formidable power able to drag the world economy down with it.
This real picture of where Canada stands raises a central question. Is Canada experiencing a typical cyclical downturn from which we can expect to rebound shortly with renewed vigour or are Canada's economic problems more deep-rooted? Are we experiencing a crisis of productivity, not simply a recession, which reflects the decline in our relative economic position world-wide? If the latter is the case, if we are experiencing a decline in our relative economic position worldwide then there is a danger in using the language of recession too freely. It masks the underlying fact that Canada's productivity growth, the real measure of our international competitiveness, has been at a standstill for almost a decade, since long before we entered the current period of recession.
Talk about recession distorts the real problem which is that North America, especially Canada, is systematically losing its ability to sell its goods and services on world markets.
Much of the blame for this state of affairs can be laid at the feet of governments over the last decade. Mammoth public and private sector borrowing during the 1980s both at home and abroad fuelled a decade of over-consumption. This in turn has numerous implications for Canada today.
First, this policy of ongoing borrowing has tended to crowd out necessary investments in Canada in industrial capital, research and development, infrastructure and human resource development. Such investments are critical to Canada's ability to compete in Europe, Japan and throughout Asia.
Competitors who long ago recognized that the quality of investments, and by extension the ability to innovate and upgrade continuously, are the new touchstones of success in a post-industrialized global economy.
Our poor record in Canada on research and development, our decaying roads, airports and railways, and our growing education deficit are symptomatic not so much of domestic constraints, as this government would have us believe, but of a fundamental misallocation of our national resources over the last decade.
Second, a decade of Keynesianism run amok has accumulated massive deficits not only at home but abroad, deficits which by definition must be paid back. They must be paid back at some point in the future either through greater Canadian exports, declining imports or a combination of both.
Most dangerous of all, these policies have created the illusion among Canadians that all was well, that our competitive position was secure.
As long as we had money to import an increasing range of products from abroad, which we did with such alacrity during the 1980s, and as long as our living standards continued to rise we were satisfied that North America's economic position was as unassailable as ever.
What was overlooked was that this consumption was being financed largely by borrowing, not by exports. Indeed, to a large extent, this recession we have all encountered today reflects the fact that neither governments nor the average Canadian can continue to borrow at levels reached during the 1980s. We have only to examine our more than $400 billion federal debt, our growing foreign indebtedness, and our inflated bond rates to recognize that our credit is all but used up. The party is over.
February 27, 1992

This budget talks tough but it does very little. The fundamental assumption underlying this budget is that the Canadian economy will automatically correct itself. It assumes the consumers will return to spending and that Canadian exports will suddenly be in demand again on world markets. It assumes that the national debt will be paid down through a combination of high growth and low interest rates.
This would be news to most Canadians. Many are caught up in the same general credit crunch as the government. Many others are losing their jobs precisely because their companies and their products are no longer competitive in world markets. Most Canadians are concerned about their economic security and their future. They are decidedly less concerned with "reflating" the economy by opening their already beleaguered pocket-books.
Nor is it clear that we can expect miracles from export-led growth. The Americans are suffering from much the same problems as Canada while our exports overseas, where we face real trade imbalances, are steadily losing ground. Meanwhile our trading partners overseas do not seem to be any more disposed to buy our exports than they were a year or two ago.
It is even less clear that the government can continue to lower interest rates indefinitely when it is becoming increasingly difficult to attract foreign lenders in a world hungry for investment capital.
Even the government's claim that low inflation will hone Canada's competitive advantage rings false when we recognize that the statistics reflect not so much a fundamental restructuring of industry and labour as a profound withering away of our industrial base and growing unemployment. This hollowing out of our industrial base has been accelerated by the excessive reliance this government has placed on high interest rates, and consequently a high Canadian dollar, as the sole method of combating inflation.
There can be no magic, no easy return to high growth because, in a very real sense, our growth crisis existed long before this so-called recession. The fundamental economic problems which have led us into this quagmire-the national debt, declining productivity and our deteriorating competitive position world-wide-have not gone away despite the very real pain now being experienced by Canadians and the optimistic forecasts of this government's seventh budget.
The Budget
Staying the course is simply not good enough. The real issue is how the Government of Canada can help Canadians to be more competitive in the world marketplace.
Only by building a more competitive industrial base can Canadians have the means and the confidence to restart our domestic engine. Only producing goods and services which the world wants will maintain our living standards and correct our growing trade imbalances.
In the end, this means foregoing consumption for investment in industrial capacity, infrastructure, training and so forth. The question is not so much what policies should be enacted but who has the political will to enact them.
It is now unfortunately all too clear that this government does not have that political will. All that we have in this budget are a few modest proposals. There are small adjustments to the taxes for manufacturing and processing. There is a small increase in capital cost allowances. There is a slight modification to small business loans.
These are not answers to the pressing competitive challenges which face Canada, challenges that will only increase in the immediate future. The government's answer is not in this budget. The answer is certainly not in the year-long consultations on international competitiveness which it launched a few months ago.
For reasons that pass all understanding the government has launched a task force to travel across the country asking questions to which all Canadians already know the answers. Canadians know already that our education system is in serious need of an overhaul if we are to compete effectively, if we are to achieve those standards of affluence to finance the social programs essential to Canadian well-being.
What is there in this budget to encourage Canadians to think that their government recognizes the need for a greatly strengthened government initiative in the fields of education, training, and retraining? What is there in this budget to encourage Canadians to think that the government has finally recognized the profound impact the continuing high levels of functional illiteracy have on our productivity? What is there in this budget to demonstrate that this government is prepared to lead the way in ensuring that Canadians receive the education, the life-long retraining that is essential for Canadians to prosper in a global economy? What is there in this budget to assure Canadians that their government recog-

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The Budget
nizes the vital role research and development plays in making Canadians competitive in a global economy?
I touched for a moment on the small measure that the government has offered. That is not a response. There is an essential need for Canadians, business and labour, to recognize the role of research and development.
What is there in this budget to ensure better understanding between business and labour by offering tax incentives so that business can share the ownership of the productive capacity of our country with employees? What is there to ensure that we channel our savings into productive investment in this country?
There is nothing in this budget to encourage the provinces to lower, reduce, or eliminate those internal barriers which trammel our effective competition abroad. This budget fails to take a long-term view or a short-term view of what has to be done to make Canada competitive. On those grounds, this budget fails.


John Patrick (Pat) Nowlan: Mr. Speaker, I have a question for the member for Etobicoke North for whom I have a great deal of respect. I compliment him in part for his very reasoned critique of the budget.
I gather from what he has said there is more show than substance. He answered part of that in the rhetorical questions he said the budget did not cover.
But he did not seem to mention a word-and I am very interested in view of his experience in government and also in the financial community and the affairs of this country-in terms of broadening and maintaining or expanding our competitive advantage.
I totally agree with him in terms of this international task force on international competitiveness, which is a glorious waste of time and money. What part does he think the Economic Council of Canada plays in this? Is that what he would normally think is a healthy step to help build on our competitive advantage, or has the Economic Council of Canada outlived its usefulness?


Roy MacLaren: Mr. Speaker, I am always happy to engage in however brief a discussion with my colleague
from Annapolis Valley-Hants, for whom I have real respect.
He of course touches on a central issue and that is the ability of the government as a whole, including of course the Economic Council and the Science Council, to identify and address those issues which can render Canada competitive in the world marketplace.
My own view, and I suspect he would share this, is that the government should not proceed to the abolition of the Economic Council of Canada and of the Science Council. It should enhance their ability to perform the functions originally envisaged for them.
Now, it may be that there would be an advantage in rolling together those two institutions. After all, science policy and economic policy, and indeed to a degree social policy, have become virtually indistinguishable.
If Canada is to be competitive, as he and I would both seek, in the global economy then it would seem to me to be incumbent upon the government to address the future role of those two councils in an imaginative and constructive way; not to abolish them, but rather to consider whether by relocating them, by restructuring them, or indeed merging them, they could play that arms-length role of advice to the government which could indeed benefit all Canadians.


Mr. Maurice Foster (Algoma):: Mr. Speaker, I listened with great interest to the member for Etobicoke North who, of course, is very concerned with the Canadian economy.
It seemed to me as I listened to the speech that the Minister of Finance was tiying to sprinkle a little bit of benefit over the entire Canadian economy so that he would gather some headlines for the next day or that the government was actually doing something about the economy. Perhaps that is his objective and perhaps to some extent he has succeeded.
But the concern of many people is that we are facing practically an implosion of our manufacturing and processing industry in this country. A light sprinkling of reducing corporate taxes by one per cent or the surtax by one per cent is really meaningless.
February 27, 1992

I do not think anything has drawn this more to my attention than the food-processing industry. The foodprocessing industry is in a free fall in this country because of the free trade deal with the United States. In fact, some 18,000 jobs have been lost. Some 70 processing plants across the country have closed.
The government did a good thing a couple of years ago. They set up an agrifood competitive council which has been looking at the problems of that industry because it has been falling apart.
It is interesting that about two weeks before the budget came out it recommended that in order to try and give that industry a jolt, to try to stop industries and plants from moving to the United States and moving to Europe and moving to Mexico, and so on, that the capital cost allowance should be doubled for new productive plant operations incremental to what we have.
It was recommended that it be doubled from 25 per cent to 50 per cent, a straight line write-off year after year. When the budget came down it was increased by 5 per cent. Therefore, instead of having a 50 per cent capital cost write-off year after year after year, it was increased by 5 per cent which like so many things will have zero impact.
I do not think anything could demonstrate the problems of the budget and the problems with our country than this particular recommendation of an independent body appointed by the government.
I would like to ask the hon. member if he sees this kind of dribbling of small improvements as totally ineffective in resolving the implosion we are facing in the manufacturing and processing industries in this country.


Roy MacLaren: The hon. member is right. We have seen a few measures in the budget. They are measures in their modest way moving in the right direction but they are essentially tinkering. They do not address the fundamental question which faces Canadian industry today and that is its ability to adjust to a global economy.
What we have in place of that necessary adjustment assistance is a little bit of tax adjustment here or a little tax expenditure there that does not address the need to render Canadian industry competitive.
The Budget
The hon. member will know that in the case of the free trade agreement with the United States, for example, the government chose to follow one-half of the recommendations of the Macdonald commission.
That commission recommended that Canada negotiate free trade with the United States. The other half of the Macdonald commission, which the government somehow overlooked, was that in parallel it would be incumbent upon the Government of Canada to put in place those policies to render Canadians competitive.
Somehow a collective amnesia overtook the government at that stage. It forgot. It did not see that part of the Macdonald commission's recommendations.
One can have various opinions about the efficacy of the free trade agreement but I do not think that anyone could possibly argue that the primary failure of the free trade agreement is the primary failure of the Canadian government to put in place the programs which would have enabled Canadian labour and Canadian business to compete effectively in the U.S. market.
I would suggest that beyond the Canada-U.S. Free Trade Agreement remain those same questions that confront Canadians, that challenge Canadian industry.
The government having moved toward freer trade has abdicated its other responsibility. It said: "We will lower barriers or eliminate barriers, but we will not offer the Canadian people the leadership in rendering themselves competitive".
What has this government done to improve the educational system, to improve the system of training and retraining? What has this government done to encourage substantial research and development in Canada? What has this government done to break down internal barriers in Canada which can render this country more effective, more competitive internationally?
The specific instance that the hon. member cites in the case of food processing is a classic example. Down came the barriers. "Sorry, we have no assistance for you making yourselves more competitive in the food processing industry. We will not provide you with any leadership. We will not provide you with any tax incentives. We will not provide you with any training or retraining. We will not provide the leadership which could make a reality of international competitiveness for Canada. What we have done", says the government, "is penalize Canadian

February 27, 1992
The Budget
workers and Canadian business by not matching our commitment to freer markets with effective adjustment assistance".


Mr. Ross Belsher (Parliamentary Secretary to Minister of Fisheries and Oceans and Minister for the Atlantic Canada Opportunities Agency):: Mr. Speaker, to the member opposite, I am glad to see him acknowledging that the government is moving in the right direction although he chides the government that it has not done enough.
However, in making his assumptions about what the government is doing or not doing in the amount of room that it has to manoeuvre, it is interesting to note that an article in this morning's Gazette entitled: "Economists Disagree Over Ottawa's Budget Forecast" states: "In contrast the C.D. Howe Institute said the budget is framed in a credible, economic forecast which leaves more room for pleasant than unpleasant surprises". Toward the end of the article it also talks about a survey of 20 analysts last week by MMS International that found that most are more optimistic than the Minister of Finance.
I want to ask the hon. member opposite: Would he not rather the government move in the right direction and not move too far so as to upset the apple cart, but to keep the things if we have a fragile recovery which is going on-


The Acting Speaker (Mr. Paproski):: I regret but the time has expired for questions and comments. You will have to ask him behind the curtain.


Hon. Frank Oberle (Minister of Forestry):: Mr. Speaker, I want to thank you for giving me an opportunity to contribute a few words to this debate.
I want to congratulate my colleague and good friend, the Minister of Finance, for an excellent budget. He promised a realistic budget and he delivered on that.
For our colleagues who have served as long as you and I have in this House this budget is no doubt a bit of a novelty in the sense that it has a tax cut. I would be hard pressed really to remember when there ever was a tax cut in any of the budgets that various Ministers of
Finance have laid before the House which is always a big occasion here.
This budget is not just important for what it contains. It is more important for the message that it attempts and perhaps successfully conveys, the message to investors, the message to business, and the message to consumers.
The message is that the government intends to stay the course. It is going to continue to restrain government spending. It is going to continue to cut and reallocate expenditures. The budget also demonstrates that the government has listened not only to the voices that we hear every day, the shrill voices, but also the voices of ordinary Canadians.
I just dug into my own mailbag. I know all of us have our own files for people who make comments on certain aspects of our work. I will just remind you of a few things here.
I had an ongoing dialogue with Mr. Taylor, an accountant, all the way from Tumbler Ridge in my riding and Don Thompson from Fort Nelson. He constantly points out to me some of the inequities in our family law and how married couples, in particular, are treated with respect to income tax. There is obviously some satisfaction in that the budget has responded to that.
Ms. Birchall from Dawson Creek, B.C. writes to me and complains about public service wages and points out, as does Mr. Fuhr from Fort St. John, that perhaps members of Parliament and ministers should take a lead here. So there is some comfort in the budget.
Perhaps the only bad point in the budget is that my salary has been decreased by 5 per cent, but what a small sacrifice to make in an effort to restore the kind of confidence that is necessary among the public if we are to succeed.
Mr. Haagsman of Hudson's Hope, British Columbia places a high priority on the need for government to control spending. Mr. Don Clapper of Prince George talks about the high interest rates. It goes on and on and on. All of us have these files. It is important to send a signal, to tell people that they have helped to write the budget and the government has listened.
February 27, 1992

There are some very important themes in the budget: reducing the burden of borrowing, reducing the burden of taxation and regulations. Admittedly it is not, as we all know, the easy course. The easy course would have been to follow the advice that we are getting, particularly from our friends opposite. Anyone who has ever managed a business or anyone who has ever managed a department would know how difficult it is to reduce spending, to reduce staff, to forgo some opportunities out there that would make one look good from time to time.
From all indications the message has been received. The reaction from those to whom the message was directed is very positive at least in the early stage. The dollar has increased. The market shows positive signs. Frankly what this budget shows are the beneficial results of the tough measures and stem policies we have consistently followed since we came here in 1984. The confidence that we have earned, staying firm against all odds and political sensitivities, particularly during these recessionary times, will bode well in carrying through our mandate.
One of the criteria of assessing a budget has to be the quality and the accuracy of the assumptions that a finance minister makes in his forecasting. For the benefit of our friends opposite who are criticizing this budget and our approach, let me quote a few figures. I will go back to the 1991 budget. The Minister of Finance had to make certain assumptions. He said that in 1991-1992 the rate of inflation would be 5.6 per cent and in 1992-1993 it would be 3.2 per cent. Our memory is good enough to remember the opposition's critique of this particular forecast, that never would we be able to achieve that in such a short period of time. We all know what the inflation rate is today. It is less than 2 per cent. We exceeded our expectations in this area.
Let us look at interest rates: 9.5 per cent for 1991-92; 9 per cent, 1992-93; 7.5 per cent, 1993-94. All of us know that we are a year ahead of our forecasts. We have done very well. The rate of unemployment was estimated at 10 per cent in 1991-92 and 9.98 per cent in 1992-93. Admittedly we are out; we have erred by 1 per cent or 1.5 per cent and the unemployment rate, as we would all agree, is unacceptably high.
The forecast on the deficit is particularly telling because it is right on.
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I want to make some comparisons with a similar budget at a similar time in an economic cycle 10 years ago, the so-called MacEachen budget of 1981-82. The deficit in 1980 was $12.1 billion. The Liberals were fighting deficit spending. They had been increasing, as we know, their operational spending by 15 per cent a year on an average over the preceding 10 years. The deficit was the big problem. The forecast in that November 1981 budget was that they were going to get the deficit down to $10 billion; there would be a $2 billion reduction in the deficit.
When all was said and done, he had to bring in another budget in June at which time it had grown to 19.5 per cent, just 100 per cent out. When it was actually finished, at the end of the fiscal year the deficit was $24.6 billion or a 139 per cent mistake.
These are the kinds of comparisons we have to make to put into context what we are doing.
Let us look at interest rates, Liberal interest rates at their highest. The chartered bank prime rate was 22.75 per cent. They are 8 per cent today. These are some of the figures one would have to put on the table when one compared the approach used by our predecessors to confront some very difficult situations such as the one we find ourselves in at the present time.
It is important to point out these things because opposition members are urging upon us the same policies, the same kind of advice that they were following at that time. We all know from the 1981 to 1983 experience what the consequences of following such advice would be. You cannot spend yourself rich; you cannot drink yourself sober. There is no limit to their idea of how gullible the public is in actually giving it any credibility when they make these suggestions. We know what the programs were that they foisted on the Canadian public at the time.


The Acting Speaker (Mr. Paproski):: I gave the minister the wrong signal. He has until 3.55 p.m. as far as his time is concerned. I do not want him to go any faster than he has to.


Frank Oberle: The advice we are getting is to borrow money to stimulate the economy. They say that we should throw money at everything, whether it is education, research, or whatever it is. To throw money at it is their solution.

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The Budget
They also say that we should keep out foreign competition. In a situation in which we found ourselves being more dependent on foreign trade than any industrialized country in the world, they should realize how preposterous some of these suggestions are.
I leave it to my colleagues to speak more about the details and the positive aspects of the budget. Let me just look at a few examples of the approach used by our predecessors at a time like this and what it produced.
In my previous incarnation I was Minister for Science. When I assumed the portfolio in 1985 I was faced with the so-called SRTCs, the scientific research tax credits. In 18 months they cost us $2.5 billion because everybody agreed that the country would have to engage in research and stimulate scientific activities to break out of a cycle and to become internationally competitive. What did it cost? All we had to do was offer people 120 per cent tax credits for any investment in scientific activities and, if it happened to require building a building or whatever. That was okay too. The country, scientists and people responded.
When it was all said and done 18 months later very little science and very little research had been produced. There was a lot of frivolous spending and trading off of tax credits. The cost to the Treasury was $2.5 billion.


John Patrick (Pat) Nowlan: That is why they won the election.


Frank Oberle: Yes, that is why they won the election, as my friend from Nova Scotia says.
Then there were the fast-track buildings. I inherited one of those too. It happened to be in Winnipeg. It was painted pink. It acquired the name of pink elephant in Winnipeg. It was a beautiful, world-class centre and the architects should have received a world-class prize. There was a stainless steel spiral staircase in the building, the cost of which would have produced for sure two cures for cancer if it had been spent on science. There was an elevator right beside it, but the spiral staircase was the attraction of the building, which was sitting right in downtown Winnipeg.
But there was no science conducted there. It was just a building. It was my job to coerce and coax some private sector people to get in there and make some use of it.
Frankly today, with a bit of effort, we actually do make some use of it.
Then there were the MURBs. Do we all remember the MURBs. I know a doctor of 55 to 60 years of age who was in the declining years of his career. He invested all his savings in Liberal government MURBs. He is still paying off the bill. He is literally living on his measly old age pension, having wasted his lifetime savings. All of us know people who were sucked in by the MURBs. They were to stimulate housing, get the housing industry going, create jobs and make us competitive.
Then there was the accelerated home mortgage program which was going to help all poor people get into homes. Members know how that worked. The payments would be very low; people could get into a new house with $300 a month. Of course the difference between the $300 and $700 that the payment should have actually been was added on to the mortgage.
After five years you could walk down the street and people were throwing keys at you. People were running away from their homes in droves because they cost $10,000 more than they could have built new houses for five to ten years later. That was the accelerated home mortgage program.
These are some of the policies that these people are urging upon us now.
They want to fix the municipal infrastructure. We have all heard about that. I want to tell the tale of two cities in Canada. The only criterion of the optimum size of each of these cities is one wants to be bigger than the other. The names of the cities are Montreal and Toronto.
I represent Prince George and Chetwynd. I talk to people who represent cities like Chicoutimi and smaller ones throughout the country.
The other criterion was that one had to have a bigger Olympic stadium than the other city and the taxpayers of Canada helped out a bit here and there. Now these cities want my people in Prince George, Chetwynd, Hudson's Hope and Pouce Coupe to pay for their water and sewer. Having paid for their own already, the people of Chicoutimi and so on are saying: "No. If the people of Montreal have problems with their water and sewage they should
February 27, 1992

do the same thing we did, build their own secondary treatment centres".
The Liberals and the municipalities are saying: "Let the federal government pay for it and everyone else can participate". People are not that enthusiastic about these kinds of things. This is something that the provinces and the municipalities ought to worry about a bit more.
We have and we will continue to work from the premise that without a strong economy and without a fiscally stable national account the government can really deliver nothing but a fool's paradise. There is no school of architecture for a castle in the sky.
The reality is and has been for some time, the reality that we inherited when we came here in 1984, that our economy has been operating on a sort of post-Christmas blues. It is time for us now to trade in the gifts that do not fit and pay the bills for those that do.
Canadians know what is important to them. Canadians know what they want. They want price stability once again. Yes, we do want to get back to the good old days. Mr. Speaker, you and I remember those days when we built our first homes. We could take out a mortgage for
6.5	per cent-mine was 6.75 per cent-for 25 years. We knew it would be 6.75 per cent. We knew what our payments would be for 25 years. I was lucky enough to be able to pay it off a little earlier. We could plan our family budgets around that.
That is really what is meant by price stability: to get back to a rate of inflation that is never more and perhaps a bit less than the growth in the economy, never more than what the country can afford in terms of the increase in the money supply so that we have stable, fixed interest rates. That is what price stability means. That is what we are trying to get back to. That is what people want. They want predictability, they want security, and you do not get that with 22 per cent mortgage rates. Ten years ago a $75,000 mortgage cost $300 a month more than it does today. Are there any benefits to homeowners, to poor people with children? Of course there are and frankly the people know it.
Let us just consider for a moment what we have deprived ourselves of by not following the kind of policies that our friend, our previous finance minister, and our present finance minister have charted for us. It costs us $40 billion a year to service the debt. Could you imagine what we could do with $40 billion? For one thing we could get rid of the GST because it produces roughly
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$20 billion to $22 billion. We could get rid of the GST. That is the first thing we could do.
Then we could bring in a universal child care program perhaps. The cost of that is estimated at $6 billion to $7 billion. Look at all the money we would have left. We could even transfer some money to the provinces to help their cities renew their municipal infrastructure and to start rebuilding their city cores. Can you imagine what we could do? We could double old age pensions. We could help the deprived and those who live on the margins of life.
Our friend and colleague, the Minister of Finance, has brightened the light at the end of the tunnel quite a bit because he is taking us a giant step closer to the day when we will have a balanced budget just three years from now. For some of our colleagues and practitioners of the art of politics, it seems to be a major preoccupation to resist progress at any cost. Perhaps in their spare time they decry the fact that there is not any progress. The people of Canada know a good budget when they see it and they see a good budget here.


Mrs. Coline Campbell (South West Nova):: Mr. Speaker, I listened throughout the hon. minister's speech and I must ask how one individual can interpret what was said in the House the day before yesterday and another one interpret it in such an opposite direction.
To me it was a laissezfaire budget. I come from an area that is dependent on natural resources. The minister certainly represents one of those resources here in the House, forestry, a renewable resource, an industry that is certainly suffering to an extent that we have never seen here in Canada before. This laissezfaire budget increases the Canadian dollar today because business seems to be happy, takes away housing measures that are needed not only to stimulate building but to help thousands of Canadians to have shelter whether they are seniors, whether they are poor or whether they are working Canadians who wanted to get into a co-op. All that is a stimulation to the forest industry if you have housing or rural and native programs that would help repair or build houses for people.
I cannot believe that the people who used to be able to get a few dollars in the winter time or a cord of wood that would be sold away would like to hear this minister say: "Keep the Canadian dollar going high, it certainly helps our exports". I cannot believe that this was such a good budget. I cannot believe that he did not read one letter from an unemployed person in his riding. I have to say

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The Budget
that I see people who are in the natural resource sector and who are unemployed and who have never been unemployed, people who are over 40 and have never been unemployed and who are over 50 and have never been unemployed. They are shocked at being unemployed in this great country. The Minister of Finance stands up here, good salesman that he is, as a former Minister of Transport who got the mess that we are in getting rid of VIA. Look at our air industry that does not know where it is going. Agriculture, follow us all the way to the GATT and we will protect you, not telling us what else we are going to get out of the GATT.
Follow us all the way, farmers, all the way to the GATT and we will protect you. We know the day after it is signed if there is no article XI where we will be.
This week we had a minister stand up here and I do not know if he mentioned unemployment once. I do not know if he mentioned the renewable resources that we have here in Canada and what the direction must be to get out of this made-in-Canada slump, this attitude of people toward this government that we are not moving. There is no vision for Canada except Bush or what the Americans tell us.
Will the Minister of Forestry tell me what he did to influence his cabinet colleagues to help the forestry industry to revive, to get people back to work, to give them some respect rather than staying home wondering where they are going to get a job in this country?


Frank Oberle: Mr. Speaker, some of the advice I gave my colleagues is already paying handsome dividends in implementation. We have, perhaps my hon. friend does not know, experienced a heavy demand on our lumber products. The price for dimensioned lumber and spruce, pine, and fir shipments has increased by 30 per cent since the beginning of the year. Why do we not try and be a little positive. There are no more shutdowns. There are recalls in the mills.
My friend is right when she says that one of the pieces of advice we have been getting from the opposition and from people outside is that we should drive the dollar down, thus helping the research sector. Let me just give her an idea. If a low or a weak currency were a solution and a ticket to prosperity, why is it that all the countries
with firm, stable, high currencies are the richest countries in the world: Germany, Japan, Switzerland. Why do they not lower their currency and get even more rich? Why are Mexico, Guatemala and countries that have a less stable currency not the rich countries? Is there some kind of a value or virtue in driving down your dollar and cheating the people you trade with in a short period of time by paying for their goods in a watered down currency?
Let me tell the story of the low dollar in the forest products industry. My friend would remember that in 1976 our dollar was actually above the U.S. dollar by 1 cent. Our dollar was worth $1.01 U.S. The return on investment and sales of the industry was 9.7 per cent that year with that high currency.
As well, I would remind my hon. friend of the "Diefenbuck" in 1963 when the dollar was down to 93 cents and they said it would be the doom of the Canadian economy because we had too low a dollar. I remind him of all these things. I take them ahead now when the great architects, the social engineers, were sitting in the treasury benches and had driven the dollar down to 73 cents; 73 cents was the worth of our dollar in 1985. The return on investments and sales of the industry, zero. The industry was broke. It did not help them a bit.
In 1989, the dollar was at 84 cents. The returns were up something like 12 or 13 per cent. Sure, the dollar is a determining factor of the industry's prosperity. The Swedes devalued their currency and pegged their krona a few years back. You ask them if they would ever do it again. Sure it gives you short term relief for three or four months, but do you know that for every dollar you sell you have to buy something back. When you buy it back, you pay in higher currency. It brings about inflation. It brings about higher interest rates. Do you see why you had 20 per cent interest rates and what the reason for that was? The reason was 12 and 13 per cent inflation and the low dollar. Do you understand that? Sure I could write a budget and an economic policy that would satisfy and work in the best interest of the forest industry. I could do that in the morning before breakfast and I could throw in all the other resource industries and write a budget before noon. But when you look at the total picture and the total economy and at the future of our children and grandchildren, then you have to sit down
February 27, 1992

and think. That is what we did when we wrote this budget.


Mr. Rey Pagtakhan (Winnipeg North):: Mr. Speaker, the hon. member spoke of a realistic budget, but how can he call it realistic when he has not addressed the realities of today. I submit that this budget is more like a shell game where the movement of the hand is quicker than the movement of the eyes.
I ask how this government can face the 1.5 million unemployed Canadians and the 2 million people forced to take welfare assistance and at the same time admit that the unemployment rate will remain at nearly 10 per cent for the next two years.
What answer does the member and his government have, if any, to a couple in my constituency, both pensioners, forced to support their unemployed son and daughter-in-law and not even get a tax break? What answer does this government have for constituents who feel aggrieved that capital gains exemptions would be allowed on other assets but not on their only second real estate asset? How would this government ensure our youth and children will have a future through education and training programs?
In the middle of his speech he said he would like to speak on "A Tale of Two Cities in Canada". Perhaps he should have spoken on the tale of two terms of the federal Tory government in Canada. In the first term we saw an increase'in taxes 33 times. It doubled the national debt. It imposed the GST. It choked the provinces. It allowed poverty to increase.
During the second term taxes continued to increase, cuts continued to be imposed on provinces, the recession happened.


The Acting Speaker (Mr. Paproski):: I am sorry. The hon. member's time has expired. I am sorry I cannot get the minister to answer.


Mr. Brian Tobin (Humber-St. Barbe-Baie Verte):: Mr. Speaker, I will not say that I am happy to participate in the budget debate, but I am anxious to participate in the budget debate.
I have to say to the minister who has just spoken that I found his comments in one respect extremely offensive
The Budget
and, let me say, beneath a minister of the Crown. At one point during his debate, rather than relying upon substance, relying upon facts to deal with the municipal infrastructure program that has been proposed by members of this party, the Federation of Municipalities and by most of the provinces as a job creation measure, rather than relying upon a proper analysis of the program to show either its merit or lack of merit, what did the minister of the Crown say? He said: "Well, back in my riding my taxpayers are not going to want to support a municipal infrastructure program. Their tax dollar is going to help Montreal and Toronto. Therefore, they do not support this program".
I want all members present to think about what the minister said. The minister was practising the politics of division, a subtle form of tribalism. That is what he was doing. A federal minister of the Crown who should be speaking for all of Canada, all the time, tried to attack a job creation measure in the face of 1.5 million unemployed, not on the basis that the program did not make sense or was not worth while, but by trying to conjure up the image that the people who live in his riding-it is a great riding. I have been there. I have visited the minister's riding-might see some of their tax dollars going into Toronto or Montreal. To appeal to the tribal instinct, to be opposed for that reason and that reason only, is a shameful performance by a minister of the Crown.
In every region, every province of this country, there are major capital intensive projects that have benefited from the tax dollars of the rest of the country and they are not all in Montreal and Toronto. Some are in Atlantic Canada, some are on the prairies, some are in British Columbia. There is a major particle collider super-duper project now going ahead in British Columbia at the cost of hundreds of millions of taxpayers' dollars, not only from the taxpayers of British Columbia but from right across Canada. That is right and proper and is as it should be.
There are major federal facilities in the minister's own riding-I have been to his riding-that have been built with taxpayers' dollars from all across Canada. That is as it should be.

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The notion of a municipal infrastructure program proposed by the leader of the Liberal Party, the Liberal Party, the Federation of Municipalities, and by almost all of the provinces is a major proposal to invest in the infrastructure of this nation and to put some of our people back to work. That is as it should be. It should be weighed on its merits and not attacked by the tribal politics of this minister who suggests that we do not want to have a project because it means that the money from taxpayers of one region might be spent for the benefit of taxpayers in another region.
We are a nation, or we are not. We believe in sharing the resources, sharing the wealth, sharing the opportunity, sharing the potential and sharing the problems of nationhood, or we do not. It is disappointing to see a minister of the Crown who ought to know better appeal to tribal instincts as a means of attacking a worth-while project.
Why is that project so important? It is important because it was not contained in the budget. This budget has to be measured against the reality of Canada today. The minister said he was going to bring in "a realistic budget". That is the standard he established. It would be a realistic budget. That is what he told us.
What is the reality of Canada today? The reality of Canada is that there are 1.5 million Canadian citizens who have taken the trouble to register at a Canada Manpower Centre and say that they are ready, willing, able and anxious to work, that they are available for work, want to work, need to work, want the dignity of a pay cheque. However, nobody is calling. A million and a half people.
There are another 2.5 million people who have given up. They have not even registered at the Canada Manpower Centres. They have not even made an application lately. They are on welfare. Four million people either registered, are anxious, able, and actively looking for work, or have given up. That is the reality of our country today. With four million either unemployed or on welfare there are millions more-and every member of Parliament knows it-who live in fear every day that when they go to work in the morning the boss is going to tell them that their job is disappearing soon, or that they are going to be laid off.
There is fear in this country today. There is fear felt by the average working man or woman such as has never been felt before in our history. People are afraid.
The very morning of the budget I was going upstairs to have breakfast in the cafeteria of this building. The lady who served breakfast looked around to make sure that nobody could overhear her and said: "Mr. Tobin, do you think there will be something to get the country working again in this budget? Because I am afraid, I am afraid for my job, I am afraid for my sons and daughters, I am afraid for my friends. I have never felt afraid before". There is fear in the land. Even an employee of the national government, supposedly the safest job in the world, even someone employed in the House of Commons feels fear.
How do we measure this budget? We were told it would be realistic. Does this budget put back to work the
1.5	million who want to work but cannot find work? Does it offer to retrain, to stimulate, to motivate the 2.5 million who have gone on welfare? Does it give a sense of security, a sense of being able to sleep at night, to the millions more who are working but who fear losing their jobs at any time, even for a moment?
Not at all. Against that standard, against that test, this budget has failed this country.
Not only does the budget say to those who are unemployed, those who are without work: "You are on your own", but it then goes on to predict right in the budget paper-and these are not my words. These are not the words of the opposition. This is not the analysis of those who want to score political points. It is right in the budget document. It then goes on to tell us that unemployment is going to stay at a level in excess of 10 per cent for the next two years, in the range of 10 per cent. It tells us that 1.5 million unemployed people and
2.5	million people on welfare, that 4 million Canadians are acceptable losses in the so-called war against inflation.
I find that absolutely callous. I find it cruel. Frankly, measured against the responsibility of any government with a heart, I find it cowardly that a government would stand and say that not only has it no plan of action to deal with cruel levels of unemployment but it projects that those levels of unemployment will exist for at least another two years. Then, far enough into the future when supposedly no one can argue with the government it says: "By the way, 24 months down the road unemploy-
February 27, 1992

ment will mysteriously and miraculously fall to seven per cent".
A government that could find absolutely no money for the farmers being driven off the land across this country-40,000 of whom were here in front of the Parliament Buildings only a few days ago-a government that can find no solace, no money, no support for the fishermen being driven from the seas in the face of the onslaught of foreign overfishing, a government that could offer no hope to those without skills who have even given up looking, a government that could offer no concrete program, no municipal infrastructure program, or any other program for the 1.5 million unemployed, that same government found some charity in its heart to include $7 million in this budget to build, what? A museum of humour in Montreal. It is here in black and white, $7 million to build a museum in Montreal.
The government says it is going to make hard, tough choices. That is what the minister who spoke before me told us. He said: "We will make the tough choices for Canada". Seven million dollars for a museum of humour. That has to be the most public and sickest joke this country has experienced for some time. Perhaps the first item that ought to reside in the museum of humour is this budget.


Mr. Blenkarn:: I thought you were going.


Brian Vincent Tobin: The member for Mississauga South who has announced that he is no longer chairman of the finance committee and is going to resign in advance of the onslaught of the polls in the next election, that courageous member, who having served as a Conservative member of Parliament for eight years will not even stay around to face his constituents in the next election, barks at me as he departs the Chamber. It is a single act of bravery on the way to being consigned to the dusty and forgotten shelves of the history of this place. The member ought to get on his feet and talk about this budget.
This government says that it wants to do more for the children of Canada. It says that one of the great accomplishments of this budget is that we are going to do more for children. It has killed off, to quote the minister of health-the killer-a national child care program and
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it has announced that it is going to spend $2.1 billion over the next five years for Canada's children. What it does not tell us, because it dare not, is that it has slashed and cut $3.2 billion in child benefits over the last five years.
The government actually expects to be applauded for spending $2.1 billion over the next five years when it has cut $3.2 billion over the last five years.
Perhaps the part of this budget that is hardest to swallow coming from an administration that since its inception in 1984 has introduced 33 tax increases equalling nearly $2000 in additional taxes for an average family of four, is the claim that it contains a tax cut.
The government got up, pounded itself on the chest and said: "We brought in a tax cut". It expects Canadians, like Pavlov's dog, to get up and applaud over this tax cut.
Mr. Speaker, being a man of great integrity I know that you are interested in knowing exactly what this tax cut amounts to. What has the government cut? Has it cut the personal income tax rate? No. Has it cut the GST, the tax on all goods and services? No. Has it narrowed the tax on goods and services in Canada and eliminated some items? No. Well what did it cut? It cut the rate of a surtax on personal income. It did not cut the personal income tax rate, ladies and gentlemen listening across the land. That is not going down one cent. It cut the surtax.
What is this great surtax? It was introduced in 1985 by this government as a temporary tax targeted at reducing the deficit. Now it is 1992 and it is going to cut the temporary tax marginally and it expects applause.
What do the budget papers say about this tax cut? Those who have the document should refer to page 135. What is this great tax cut? It is going to stimulate the economy, send consumers rushing to the nearest mall and create thousands and untold thousands of new jobs. Let us look at it.
These again are the budget papers. These are not my notes. These are not Liberal documents. These are not New Democratic Party documents. These are not press documents and these are not political documents. These are budget documents, the government's own numbers.

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What will this mean for a one-earner couple earning $15,000 a year with two children, in other words, the poorest amongst us? Four people in one house, one unit, one apartment, one building with an income of $15,000 a year are going to have a great big tax cut. The government has outlined it for us. It works out to be $2. They are going to get a $2 tax cut this year. A family of four with an income of $20,000 is going to have a tax cut of-get ready, get a grip on yourself, turn up the pacemaker-$6. By the way that is $2 a year, $6 a year, not a day, not a month, not a week, but a year. A family of four with an income of $30,000, it gets more generous as we go on, is going to have a tax cut of $15. If you have a family income of $40,000 you will get a tax cut of $27, but if you get all the way up to $100,000 you get a tax cut of $111.
You would have to be the world's greatest used car salesman, and I say that with all respect to used car salesmen, to stand up and suggest that this so-called tax cut of $2 a year, $6 a year, $15 a year, or $27 a year is going to stimulate the economy?
If this budget was a used car it would have no wheels.
The Government of Canada cannot be serious when it suggests that it is trying to reach down to assist those greatest in need and to give an economic shot in the arm to the economy of this country. It cannot be serious when it says that it wants to demonstrate some compassion on the one hand and on the other hand get this economy going again.


Mr. Benjamin:: No, they really believe that stuff.


Brian Vincent Tobin: My friend from the New Democratic Party from the riding of Regina-Lumsden, a great member of Parliament who is leaving-it will be very hard to fill his shoes but we will find a good Liberal to do it-says that the government really believes this stuff. I am not as cruel as he. I do not believe that even the government believes its foolish claim to stimulate the economy with that stingy, miserly, miserable, ridiculous, insulting, cold, cruel, callous-hearted $2 tax break. Not even the government believes its own rhetoric when it tells us it is going to stimulate the economy with that. The government also claims that it is providing some minor tax cuts. Even my friend, the member for Mississauga South, would admit they are minor. The member would admit with his great expertise that they are minor, that they are going to really instil a new degree of confidence in the
business community. The reality is that the collection of minor measures, designed to give some kind of break to business, to engender a degree of confidence in the business community, are dramatically offset every time the interest rate rises. When real interest rates in Canada are posted alongside U.S. rates they are dramatically higher in this country than is the case south of the border.
Those so-called minor concessions are more than wiped out when we see, as we did today, the value of the Canadian dollar going up. We are an exporting nation. Whether we are exporting fish, mineral products, forestry products or manufactured products, this is an exporting nation. It is one of the largest exporting nations in the world. It is one of the nations of the western world, the G-7 group, most dependent upon exports for its financial health. When our dollar goes up, our ability to compete as an exporting nation declines.
The government pursues blindly its policy of high real interest rates and a high dollar. Canadians are being led to believe that interest rates have dramatically fallen. We acknowledge that and we applaud that. The cost of doing business in Canada compared to the cost of doing business south of the border is still dramatically higher. My friend from Mississauga South would acknowledge that because we cannot argue with the numbers.
There is nothing here that is going to dramatically improve the confidence level in the Canadian business community. What do we have? We had a Minister of Finance who declined to wear new shoes the day he delivered the budget. The reason he did not wear new shoes is because he did not deliver a new budget. This budget is a retread of the last four or five budgets presented by the previous Minister of Finance. It is the same old policy from the same old government that got us into the mess we are in in the first place.
Canadians wanted change, constructive change. They wanted proactive government, a government determined to get this country working again. Against that test, this budget has failed this country. This budget has not contributed to a healthier economy. It has not contributed to a healthier political climate. It has not contributed to national unity. It has not contributed a single thing to those people who most need at this time in our history the chance to go back to work, the dignity of a pay cheque and some restored confidence in the fundamental health and strength of this country.
February 27, 1992


Donald Alex Blenkarn: Mr. Speaker, I always enjoy the humour of the hon. member and he undoubtedly will be the first guest if there ever are guests at the museum for humour. He will intrigue us all. The whole country will benefit from his humour. It is too bad, having made such a humorous speech, it did not have some reality in it. One of these days he will find out that unemployment rates are determined by Statistics Canada and not by the Unemployment Insurance Commission. After he is around here for a while he will leam that.
Let us get down to something else he talked about. He grabbed viciously at page 135, dealing with the savings people make on the surtax. He did not go over to page 138. If he would like to go over to page 138, let us talk about the savings of a single parent earning $20,000 a year. It is $639, not bad.
If we get down to a single parent with $100,000, it is $328, but get down further. These tables are there and they are substantially different. That is really what counts.
There is a program to reduce a surtax. A surtax is an extra tax. That surtax is coming down in year one by 1 per cent, from 5 per cent to 4 per cent, in year two from 4 per cent to 3 per cent and hopefully, as the minister comes forward next year with a budget, he will be able to go down from 3 per cent to 2 per cent or 3 per cent to 1 per cent, or maybe eliminate it completely as this country grows, as it is growing as business confidence is clearly demonstrated in this budget.
He talks about the dollar. Does he not realize the dollar in exchange markets with the United States is strong? Would he have a weak dollar? Would he have a chicken dollar? It is strong, but it is down 500 basis points since the first of the year.
What kind of an economy would he like? Would he like a strong economy like Germany, the largest trading country in the world, where its currency and relation to the dollar has done nothing but harden year after year after year? Or would he like a weak currency like the currency of Argentina?
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It is clearly the Liberal policy to have the Argentina policy. Borrow more money because borrowing only got you in trouble. Build more public works with more borrowed money so the rate of interest can go up and up and up and put the country out of work.
If borrowing made the country strong and if borrowing made the country rich, this country with its debts would be the richest in the world by far.
If the hon. member's policy in his tribute to humour is to borrow more money for more projects, then we would not be in the mess we are in. I guess that is the humour of the Liberal Party.
Let me advise him too, while he is shivering in his boots, that should I get the nomination for the Progressive Conservative Party in Mississauga South I will be contesting the election as it comes up.


Brian Vincent Tobin: Mr. Speaker, I hope that those who were paying attention to this debate will note that the member complained that I used the table on page 135 that showed that there was only a $2 reduction in the surtax on personal income.
Then he asked me why did I not refer to page 138. Please note that he started to quote from the page but when he got a look at the numbers he swallowed hard and shucked them aside and said what does it matter?
Let us quote from page 138. Page 138 is the combined effect of both the surtax reduction, the $2 cut, and the child tax benefit. The member wanted me to quote that page. Let me quote from it. If you are a single parent and you have an income of $10,000 a year, standing right here or a parent with $100,000 a year standing right here, what does the government do?
It gives the combined child tax benefit and surtax reduction for a single parent with a $10,000 income of $500. If you make $100,000, 10 times more income, you get a benefit reduction of $328. That is why the member swallowed hard and sat down. He realized that it is totally indefensible that the total tax benefit to a single parent with a $10,000 a year income is $500 and the same person with $100,000 a year income-10 times more- gets a break almost as big as that person starving to death with only a $10,000 income.

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The Budget
That is why the member was in shock when he picked up page 138 and attempted to use it as an arrow in his bow. He found out he shot himself in the head which is not unusual for the member for Mississauga South.


Rey D. Pagtakhan: Mr. Speaker, I was really dumbfounded when the member for Mississauga referred to the speech of my colleague, in this debate, as humour.
That is an insult to Canadians. My colleague most eloquently, more so perhaps than any member of this House, was able to reflect the needs of Canadians because he is sensitive and caring. That is what the Liberal Party is all about.
As I was listening to my colleague I learned a few more things. I learned that there is such a thing as Tory arithmetic. If you want to say that you are doing good, do bad things for six years and in the last two years pretend you are doing something good. In the equation, it will look like you are doing good. That cannot fool Canadians.
I also learned that Tory reality is fantasy. It is fantasy. It has forgotten about the unemployed, those forced to receive welfare assistance. I also learned that a Tory promise is one that is broken even before the last word is said or put on a piece of paper, as has been the case with the national child care program. I also learned that Tory honesty is when one plays a shell game.
I would like to ask the hon. member to comment further. I would like to listen to more of his eloquence so that Canadians can be truly represented in this House. I hope the hon. member from Humber-St. Barbe-Baie Verte would oblige.


Brian Vincent Tobin: Mr. Speaker, am I out of time?


The Acting Speaker (Mr. Paproski):: You have one and a half minutes.


Brian Vincent Tobin: One and a half minutes.


An hon. member:: You just got warmed up.


Brian Vincent Tobin: No, I do not have to get warmed up. This government has warmed me up. It has put fire in my belly. It has redoubled my determination that I shall be there with the people of Canada when next this crowd has the courage to confront them at the polling booth.
I am delighted that the member for Mississauga South has again refired his interest and found his heart and is ready to go out and face his constituents. I find it passing strange that only a few months ago he had lost his heart, but obviously he thinks there is enough fantasy in this document to go out and face his constituents again.
In the part of the country where I come from, this document, this budget will never wash. You know the people of my province are proud to say when they see this kind of guff-and here comes the biggest guffer, the member from St. John's West-they are proud to say that we are from Newfoundland not Disneyland and this kind of fantasy will never fly where people put up with no guff from the likes of the member for St. John's West or, for that matter, the member for Mississauga South.


Ms. Barbara Greene (Don Valley North):: Mr. Speaker, it has been quite entertaining sitting here listening to the blarney.
First of all, I would like to compliment the Minister of Finance on an excellent budget that I think makes progress in a number of important areas. I would like to concentrate my remarks on the changes in the social system in Canada that are presented in the proposal for child benefit changes.
Much of this came from the report of the child poverty committee that I chaired, as well as the family caucus committee that I also participated in. I think the earned income supplement is really something that is quite revolutionary for Canada and is something that we can be very proud of in introducing.
One of the things that our committee noticed was that people who escaped poverty in Canada were employed. They had jobs. In order to escape poverty you have to have a good job in Canada. One of our recommendations was that the minimum wage be set at a level equivalent to the low income cut-off for an individual. This is so in a few provinces in Canada, including Ontario and Quebec.
In Ontario, an individual can make, using the minimum wage, about $12,480 for full-time work. A family with two income earners under this program, with the added earned income supplement will be out of poverty. They will be able to earn an income if they both work of $27,500 in total with the child benefit, the low income cut-offs for Ontario for a large city. The highest one with
February 27, 1992

the 1986 base is $26,803. That is going to be a major incentive for people to work. Similarly, a single parent in Ontario can make $12,480 at full-time employment. They will get $1,520 for their child benefit, an increase of $500. They will also get a full equivalent to married tax exemption and they are eligible for child care expenses. Admittedly, they would not get very much there but they will not pay any tax at all. Therefore, they are going to be getting $14,000 tax free, which is a very substantial improvement over where they are now.
The statistics in the book look at averages and they are sometimes misleading. What you really have to do is look at how it affects people individually. The biggest problem we have in Canada is trying to help people to work and to make it fairer for people to work. Our problem is not in keeping people happy and productive at the very upper end of the income level. Our problem is helping people at the lower end to become active and participating members of the community. If they can go out and work and earn an income that is above the poverty line, their children will be a lot better off and have better opportunities. They can earn the minimum wage, work hard and they can move up the ladder and can eventually attain quite a good income.
We had recommended a guaranteed earned income supplement and suggested a federal-provincial task force to design it. Very cleverly the finance department has been able to develop a system that makes use of the existing family allowance identification system and simply meshes information from the tax form to the family allowance so that cheques can be sent out on a monthly basis. The cheques will begin in January 1993, assessed on the basis of this year's financial situation.
Many people have been unemployed this year and their situation may be worse than it will be next year, but they will be getting those benefits in the first three months based on the income they received this year. Next year they will get it based on the income they have next year. Therefore, instead of people going through the tax system and being assessed through that means, it is giving it before on the basis of the last tax forms so there will not be the need for a mathematical change at
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the end of the year. They have already assessed the money. I think it is very cleverly done.
In Ontario we are looking fairly good right now as far as the poverty situation is concerned. We have welfare incomes at a basic needs level. It is about 65 per cent of the poverty level, substantially higher than most provinces in the country. Eight out of ten provinces do not have welfare at the basic needs level. This is a problem we have to address in order to give equal opportunity to children across this country. This was also a recommendation of our poverty report.
The concept was that welfare would cover basic needs. Quite clearly there are enormous gaps. New Brunswick has the worst situation. It is well under 40 per cent of the poverty line. Around 60 per cent is the basic needs level.
Our concept was that the federal child benefit would be on top so that there would in fact be an adequate income for families to look after their children, something that would allow for discretionary needs beyond basic food, shelter and clothing.
While nothing additional has been given to the welfare recipient in this budget, a structure has been put in that I think is appropriate. I would, of course, have liked to see something more at the bottom end for welfare recipients and the child benefit but given our financial situation, I think this is a good start.
I believe the minister will be meeting with ministers of the various provinces and, hopefully, working to get some kind of national standards for welfare. It is important to have the gap between welfare and the working person. People have to be better off when they are working in order to have the incentive to work. Therefore, I think you need to have that kind of gap. Of course the New Democratic Party has a very different concept. They still have the gap, but what they would like to have is the minimum wage that is 60 per cent of the average industrial wage, which would be about $8.10 per hour. I think that would create poverty in this country such as we have never seen. I think the entire retail sector would be wiped out. I do not think, to be realistic, that we could possibly conceive of an $8.10 minimum wage in this country. I think going up to a minimum wage in each province at the low income cut-off and to welfare at a basic needs level, as well as this program that helps the

February 27, 1992
The Budget
working poor, would go a long way toward rectifying the problems.
The other area that I am concerned about is day care and the Canada Assistance Plan program for day care. Our committee had recommended that the 5 per cent limit on the Canada Assistance Plan, which applies in the three provinces that currently do not receive equalization, be lifted for the subsidized day care program alone. This was not done by the minister and I am disappointed about that. He felt that he did not have sufficient money. I do not think it is a big ticket item at the present time. Currently, we spend $275 million on subsidized day care. If you lifted the limit I do not think that too many provinces would be able to dramatically increase that at the present time, although of course provinces like Ontario would get a recovery because of the fact that they are now picking up an awfully large amount under the Canada Assistance Plan.
I think in the long term the program would develop slowly to increase the number of subsidized day care spaces. Having worked on this issue since 1972 in Toronto, it takes time to get day care centres built, it takes time to train workers. So it would be a gradual increase.
That program is geared to income. It helps the very needy and it helps people to work. I think very strongly that we should be expanding that program and assisting the provinces, because it is a provincially initiated program, to develop it. We also recommended various measures which could encourage business, schools and churches to take an interest in the day care issue and to help provide space and lower operating costs so that the cost of day care could be affordable to a lot of people.
In my community every single school has a day care centre and the high schools have them as well. The people who can afford to attend are the people who do not need subsidy. We have very few subsidized spaces now in Toronto. I personally find it repugnant that people who need to work or would otherwise be in poverty cannot get the subsidy that would allow them to have their children properly looked after. When you are in an urban area such as ours, there are very few people at home who can look after children, so the system of getting the neighbour down the street does not really work very well. Of course, at the income levels we are
talking about, many of these people would not be eligible for very much of a day care expense deduction. So I think that subsidized day care program is extremely important in helping people to work.
We had also recommended that the day care expense deduction be changed to a refundable child care tax credit. I understand that the numbers that the Department of Finance came up with were rather dramatic. Once again, I think as long as you are charging a fee not everybody is going to take advantage of this. People who want to stay home with their very young infants will juggle their timetables to have a parent there. They will take their holidays and so on. I do not think there are outrageous amounts of money involved. I hope our committee will be looking further at that. I certainly intend to pursue the matter.
I think we made a very major step here and I think those who are standing up and saying that-


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


Coline M. Campbell: Mr. Speaker, I have a question to the hon. member. I, too, am very pleased to see the use of the income tax system to provide, even if it is only in terms of a child benefit, a uniform income, for a start anyway. By this time next year, without any future stimulation to the economy, you may have to provide it to all people on social assistance across Canada. That may be the start of the guaranteed income. This is just the start of a guaranteed child benefit.
However, my question is one of concern. I realize that a person receiving a disability pension under Canada Pension, receives increments each year, according to the indexation. If they are also on family benefits, perhaps not in Ontario, but certainly in Nova Scotia, the family benefit is decreased by the amount of the increase of the Canada Pension. It is directly related. The provincial social services will take it away immediately on the payment. I am wondering if there is anything that the member can do to impress upon the minister there should be guidance given to the province, as the member so well said here about it, that it should be over and above, it should be help for.

I realize that it should be help for, but I know many provinces will take away the exact amount the person receives unless the federal government says to the provinces that this cannot be done. It sort of negates the whole aspect. If a woman who receives $800 a month for two children has her child benefit increased next January and immediately in February it is taken away, all I can see benefiting is the Canada Assistance Plan because the province is not paying for it. The Canada Assistance Plan benefits as well because the federal government will not be paying for it. Where you take away the child tax deduction from every family in Canada and take away the family allowance from every eligible mother in Canada and substituted this, all in all on the ledger, you have just taken it away from one part to pay the other. Maybe the hon. member would like to comment on that.


Barbara Greene: I very much agree with the member. I do not think we should have this system that has gone on for so many years in which the provinces and the federal government play games. We need national standards that ensure the income people receive from welfare and the benefits they receive are adequate to meet their needs, that they cover the basic needs level.
Similarly, when the federal government gives someone an increase, there is no way that the provinces should be taking that money away. This is why we said very clearly in our report that the child benefit should be on top, and I think that is most important. It does require negotiations with the provinces. The minister will be meeting with the provinces. I hope that these are high priorities on his list as I think this game which has been going on has hurt poor people in Canada and has made no one really responsible. It should be stopped. We need a far more accountable system. If you have national standards and if the federal money is on top, we can say that all Canadians have an adequate level of income and that children have the discretionary income available to their families so they can participate as full members of Canadian society.
I for one want universal opportunities for-


The Acting Speaker (Mr. Paproski):: There are still a couple of questioners here.


Margaret Anne Mitchell: I listened with care to the member. I know she is very sincere and
The Budget
has worked hard on the child poverty committee. I wonder about some of the implications and the kind of almost dream-like thinking that the focus of these benefits is really to try to help poor people to work. It is like saying people are on welfare because they do not want to work and certainly a small bribe of an extra child benefit is not going to do very much. I wonder how people are going to find a job. She talks about two parents working and how it might bring the family with the child benefit out of poverty. Where are the people going to get the job especially in her province of Ontario where unemployment is so high? She said it looks fairly good, 65 per cent of poverty level. For families, I am sure that does not feel very good at all.
So where are they going to get the work? Even if they find a job where are they going to get the child care programs?
This government has refused to do anything about child care and in her province of Ontario they are taking away the availability of CAP funds for child care. The dream she had that this would magically solve unemployment for people is just crazy. I ask her: Where are these people going to find jobs? How are they ever going to get child care in order to take a job, if they are lucky enough to find one?


Barbara Greene: Mr. Speaker, I welcome this question. Quite clearly in Ontario we do have a very serious problem. People cannot afford to work. If you have more than two children right now, you are better off on welfare than taking a minimum wage job.
What will happen under this program is there will be an additional incentive to work. What I would ask the provincial government in Ontario to do is to provide more subsidized day care spaces rather than higher welfare rates.


The Acting Speaker (Mr. Paproski):: I was trying to get a couple of more questions in here. I will not be able to do it. Questions and comments are now terminated.


Mr. Jean-Luc Joncas (Matapedia-Matane):: Mr. Speaker, first I would like to thank my colleague from Don Valley North for sharing her allotted time with me. The budget that we are defending now is, in my opinion, an excellent budget since it clearly follows up on what

February 27, 1992
The Budget
Canadians have told us. I want to thank the Minister of Finance who consulted us before tabling this budget.
We know that in 1984, when we came into power, the accumulated debt already stood at $200 million. Quite often people do not make the difference between the accumulated debt and the annual deficit. A quick calculation shows that the debt we had then stood at $206 billion. Now, thanks to the efforts of this government since 1984, we have operating surpluses when you exclude the debt that was already there.
Last year we already had an operating surplus of $12 billion with our programs. If you make a projection over the next year, we might have a surplus of $25 billion. What must be explained to people is the fact that to those $206 billion that we had in 1984 you have to add the $239 billion in accumulated interest. So, if you add up the debt of 1984 with the compounded interest and then subtract the surplus you arrive at a total debt of $420 billion.
It is not easy for a government that comes into power, to have to manage such an operating deficit from the start. It is like asking a family that spends $100 per week on groceries to pay the rent, the interests on debts, or to make monthly payments on the car or the house when it is already $16 short to pay the $100 grocery bill. So you have to work on reducing superfluous expenses to eventually be able to pay only the grocery, then the interest on the debt, then reimburse the capital on that debt, and so on.
That is what the Conservative government is in the process of doing. We already have operating surpluses and a deficit that gets lower every year so that by 1994-1995 we will be able to start paying off the debt.
I think that this is a positive sign and that the management and operation of a government are a long term business rather than a short term one. When asked what they think of the government's approach the business community and the small business owners say that they support it. Who creates jobs? Small businesses, promoters and people like them. That's why we must manage the government in a way that will reassure them.
In this budget we announced a 1 per cent cut in personal income taxes this year which should inject $500
million in the economy. With another 1 per cent cut next year $1.2 billion more will flow into the economy. They say that 1 per cent is not much but if we had not done it we could have saved close to $2 billion which would reduce our deficit or our debt by the same amount. So I think that measure make things a little better for people and it represents an injection in the economy of a total amount of $2 billion over the next two years.
We also know that business-I mentioned it earlier-is the motor of our economy. But for too long it has been overburdened with taxes. Tax measures were not an incentive but rather a hindrance. Then a reduction of 1 per cent in the business tax rate was announced in the present budget. One knows that business profits are taxed from the very first cent after one year. When the tax rate on these profits is cut by 1 per cent, this percentage point is important for the business person who can then sell its product at a lower cost, thus promoting exports, increasing sales, which inevitably fosters job creation. When products are sold, more workers have to be hired. That is how things should be done, working together with the business people to create jobs for the future.
Furthermore, we are enabling business people. I know from experience that when you buy machinery you can claim capital cost allowances. So, when we announce a 30 per cent capital cost allowance rate in this budget this actually represents a lot of money for a business. Let us say you have $100,000 worth of equipment. If you deduct 30 per cent this represents $30,000 in deductions from profits. That is an incentive and it shows businessmen that this government sides with them and gives them an opportunity to tap an increasingly competitive world market in the years to come. Once again, that will mean new jobs.
Small businesses will also be allowed to access more risk capital at slightly lower rates. The maximum amount has been raised from $100,000 to $200,000. That will give the small business or the entrepreneur who wants to start a business good credit terms. It was also announced that $230 million would go to research and development.
All those budgetary items will be incentives for business. I heard the president of the Association des manu-facturiers du Quebec say on budget night that this kind of budget is a boost to small businesses and that he is quite glad at those announcements.
February 27, 1992

The Budget
I want to emphasize also that this government gives us sound management. Since 1984, if we exclude interest costs on the accumulated debt, we have surpluses in operational budgets.
Furthermore, we have just done away with 46 government agencies which did not amount to much in the eyes of the Canadian public. In so doing, we are saving $22 million a year.
We often hear people, constituents from my riding, say that the Senate is expensive. You know that $22 million is approximately half the cost of the Senate and over a five-year period, we can save $1 billion. These are savings again, not expenditures.
Naturally, we have decreased the salary of the prime minister and the other ministers and it is not the first time we do so. It might seem very little but if we had done the opposite we would surely have been blamed for it. We decreased salaries and it is commendable.
Of course some corporations will be privatized and my colleague from Don Valley-North mentioned child benefits. All in all, I think this budget is an extraordinary one and I am convinced it will have an impact for years to come and it will revitalize the Canadian economy.


Catherine S. Callbeck: Mr. Speaker, the hon. member started his speech this afternoon by saying that it is a remarkable budget in response to the needs of the population. He went on to talk about the tax cuts of 1 per cent on the surcharge.
We have to remember that it is this government that has raised taxes 33 times since it came to power, including the GST.
This 1 per cent that he talks about for a family of four with a $15,000 income amounts to $2 a year. I do not understand how the hon. member can call that remarkable.
On the second point, he said that the budget responds to the needs of the population. I have a very simple question to ask the hon. member. If he says that the budget responds to the needs of the population, how does it respond to the needs of the 1.5 million people who are unemployed?


Jean-Luc Joncas: Mr. Speaker, in her question, my colleague says that this government imposed taxes including the GST; this tax system had already been planned for a long time. It had even been discussed when her party was in power.
When the GST was implemented it was clear in the government's mind that it would enable us in future years to lower the personal income tax rate.
Very often workers tell us that it is no use killing oneself working or earning a little more if the government takes more in taxes. They have no choice. If they earn more, the government taxes it away. With the GST, we can have lower income tax rates and decide ourselves whether to consume or not and indirectly to pay tax or not, which is not the case with income tax. I believe that the orientation of this kind of tax, the GST, is good for consumers and they understand it more and more.


Mr. Benoit Tremblay (Rosemont):: Mr. Speaker, I heard the hon. member for Matapedia-Matane say in referring to the budget that it would reduce the deficit. I was bom in his riding, Mr. Speaker, and the unemployment rate there is now between 30 and 35 per cent. There is nothing about fighting unemployment in this budget either in the regions or urban centres.
However, the most outrageous measure this budget contains is probably the cut affecting co-operative housing. Housing co-operatives are a proving ground for entrepreneurship where people with modest incomes develop a sense of solidarity so that together they can become homeowners. The budget does contain home ownership incentives for people who are well off but the co-operative housing program has been cut altogether. This reflects a total lack of concern while at the same time the government says: We are concerned about children, about poor families, and we have overhauled the family allowance system. We will give you a cheque, but don't try and do anything for yourselves. Don't try to develop any solidarity with the kind of groups I have in my own riding, Mr. Speaker, such as the Societe populaire d'habitation de Rosemont and the Ateliers populaires du Plateau Mont-Royal, which help people to take control of their lives.

February 27, 1992
The Budget
I see the hon. member for Laval. When he was mayor, he always refused to allow co-operative housing. No wonder!


The Acting Speaker (Mr. Paproski):: The period for questions and comments has now expired.


Leslie Gordon Benjamin: Mr. Speaker, I want to direct some remarks not only to the government and the Official Opposition but to my own party as well.
I first want to get rid of this mythology that the NDP and the CCF before they were the big spenders. Mr. Speaker, name me a provincial, municipal or federal government where the NDP got us into this kind of mess.


An hon. member:: Ontario.


Leslie Gordon Benjamin: The Ontario deficit was in excess of $8 billion when the NDP took power. It was increased by $1 billion putting people to work.


An hon. member:: Now it is $14 billion.


Leslie Gordon Benjamin: In my own province we are not the big spenders. Tory and Liberal governments all across this country were the big spenders and they spent it on the wrong things. Let me tell the House why.
We have to rebuild our nation. If we want people in all parts of our country to have confidence in this country, we need policies of full employment. We did it before and we can do it again.
I am amused by the colleague who just spoke about the private sector, small, middle and big businesses. I find it strange, in nearly 24 years of being here, that whenever they are in trouble they are the first ones to come to Ottawa with their hands out-and I have been in dozens of committee meetings-asking for something from the government. At the same time the Chamber of Commerce and the Canadian Manufacturers' Association tells us: "Leave us alone, don't interfere".
I want to illustrate what we did before and what we can do again. I will start with my own province. It was totally bankrupt in 1944. We could not give Saskatchewan government bonds away. Our total highway system was run into the ground. Our farmers and our municipalities were faced with seed grain and relief debts. If those debts were translated into 1991 dollars, it would put the
provincial deficit five times higher than it is now and, thanks to eight years of Tories, we have a $7.5 billion deficit in our province for one million people.
The experts, the economists, the press and even Liberals and Tories said what we did could not be done. We did not know any better; we just went and did it anyway. From 1944 to 1956 we rebuilt every mile of highway in that province, the largest number of miles per person of any province in the country because it is all flat and far.
We tripled our power generation capacity and in those 12 years took electricity to 40,000 farms. We were bankrupt and we borrowed money. In the short term we increased our deficit but we had full employment. We took sewer and water to hundreds of communities, towns and villages in our province. We still have too damn many communities in the country now that do not have that, especially in the north. We have no excuse. We did it before with policies of full employment.
The Liberal government of the late forties and early fifties, we scared the hell out of it as a result of the 1945 federal election. It did some marvellous things in those years. I want to remind my colleagues that we financed the entire Second World War without a nickel of foreign investment. This chronic appeal that we need to have foreign investment is baloney. We paid for all of that ourselves. Following the war we paid for what we had to do because the infrastructure of our economy and our nation was ground to a halt.
With 10 years of drought and depression and 6 years of war the whole place had to be rebuilt, and we did it. Even the business community was demanding that the government intervene, that the government provide incentive, motivation and challenge to the whole nation.
I wonder if the governments of this day-and I even worry about the NDP governments in B.C., Saskatchewan and Ontario-have the imagination and courage to do it. We are not in a recession. We have been and are now in a depression.
In relative terms, by comparison people are suffering today to the same degree or to a larger degree than they were in the dirty thirties. I say do not try to kid the troops about this being a recession that is going away. We have been trying to kid the people through this Parliament for the last two years that somehow or other the recession is
February 27, 1992

going away. It will not go away without some national and provincial leadership.
Let us look at the debt of my province and the federal government in 1945. It is many times greater than the one we have now, translated into 1991 dollars. It is all relative. By 1956 my province which started out bankrupt had paid off the entire debt from the dirty thirties and the Second World War. The federal government repaid all its debts from the dirty thirties and the Second World War. That debt was all what we owed because we financed the whole war ourselves.
What we need is the courage, the political will, and the political risk to challenge this nation, to challenge the people and put before them a rebuilding of all our country.
When we look around to see how much there is to be done, the crying need, every city in this country has a waiting list as long as an arm for chronic care beds, co-op housing, senior citizens' housing, and low income housing. Most municipalities in this country need to rebuild or rejuvenate their sewer and water systems as well as their streets and sidewalks.
We need a national fund to which the federal government, the provincial governments and the municipalities contribute and borrow from. The federal government can say that they can have it at 4 per cent and that it will pay the difference on the interest. This will put people to work.
I recommend and urge my colleagues to read a book called The Unnecessary Evil by Professor Bellan from the University of Manitoba who is no NDPer. He refers to all the hysteria and hypnotism members of this place, including some from my party, have about deficits and debts. Most of it is money we owe ourselves. Some 80 per cent of our national debt is money we owe ourselves. I meticulously buy Canada Savings Bonds every year and the government pays it back to me with some nice interest, but I do it because I want to do it.
Surely a fundamental change in the direction, the nature and the purpose of our society, is overdue. It does not matter whether it is a Tory, a Liberal or an NDP government if we do not have the courage and the
The Budget
political will to do it, to make this fundamental change in the direction of government, in the direction of society. Of course it will mean increasing deficits in the short term, but the only way to pay off deficits and debts is with full employment: they are working and they are paying income tax. They do not want and would not need home care in most cases. They would not need benefits provided because they are unemployed and whatnot, if there was full employment.
We could do what we did during the war. We had a declaration of war and this country did a magnificent job. We put one million men and women in uniform. I remember working in the shipyards as a 17-year-old in 1942 and 1943.1 got paid well and I paid my taxes and I bought War Savings Certificates and War Savings Bonds.
We can do the same thing again. There is no reason why we could not and why we should not. The economists I listen to on the TV and the radio and read in the newspaper never had to look for jobs. They do not know-if you do not mind me saying, Mr. Speaker-their ass from a hole in the ground.
This change that I am asking for is nothing radical. It is not terrible socialism. It is what the people in my province and in my country did before.
Does the government want to do something about national unity? Bring in full employment policies so that people in other parts of Canada including Quebec have some confidence in their future. Change these outrageous, conventional wisdom ideas from the 1890s and the 1930s that too many people who governed or advised us had. It just takes some imagination and some will and we can do it. The money is there; we can make sure it is there. We can do all the things that need to be done.
My goodness, I read in the budget that the co-op housing project was cancelled. It should not be cancelled. It should be doubled or tripled. When we have to tell people to use their own savings to buy a home and that they have to pay it back, all we are doing is making them use their own money to get themselves a home. I thought it was a good move by CMHC to cut the down payment from 10 per cent to 5 per cent. Good idea. I remember when I bought my first house. I had quit the railroad because it was going to hell in a hand-basket. I used the $1,9001 got back from my contributions, with no interest on it, for a down payment on my first house. I am

February 27, 1992
The Budget
not complaining. I worked hard and I did my best, and I think I have had modest success.
We cannot forget about our own history, our own individual experience of the times we went through, good and bad. I am an adherent of John Maynard Keynes and when times are good I am going to raise taxes and when they are bad I am going to lower them. I am going to increase the deficit when times are bad. If you are not prepared to do that you are not going to have full employment. You are not going to put this country to work. You are not going to rebuild it. Think about all the things that have to be done, and need to be done, in this country.
When I read about aboriginal people on reserves in the north who live in the utmost squalor I think that we have a lot of nerve crying about the human rights of people in China or anywhere else. There are about 5 million people in this country who are deprived of basic fundamental human rights, such as a decent home, a job, and the amenities that others have like sewer and water systems and electricity. We have no excuse for not doing it. I do not give a damn which party is in government.
I want to say to my colleagues in the three provincial NDP governments that if they go along with this hypnotism and hysteria about deficits and debts they are not going to be a hell of a lot different from the Tories and the Liberals. God knows they got us into enough trouble and are keeping us in that situation right now, unless there is a change by all our parties in what we do and how and when we do it.
I would urge the government to make a declaration of a national economic emergency and do the same damned thing we did when we had a declaration of war, do the same things we did when we had to rebuild our total economy after the war. That would challenge our people. It would give them some faith in this place and the people they elected.
I hope that my colleagues will appreciate that I am just trying to remind the House of what we have been able to do before and could do again. It will not be easy. All the experts will criticize us. What do they know? They never dug a ditch in their lives. They have not been there. Most of us have been there, one way or the other.
Unless we make this kind of a change in the direction and the purpose of our political parties we will not learn from history and will repeat the same mistakes.
I am not sure if this is the last budget I will speak on or not, but you have not heard the end of me yet.


Mr. Jim Jordan (Leeds-Grenville):: Mr. Speaker, it is always a pleasure to hear from the hon. member for Regina-Lumsden and to hear some of his suggestions.
I am particularly interested in some of his analogies here today.
I would like to get his reaction on the fact that I noticed in the Main Estimates that the government has cut, for example, from the Atlantic Canada Opportunities Agency, the Department of Employment and Immigration, and Canada Post.
If any group approaches me as a mainly rural MP, it is in reference to the service that Canada Post provides and that has been cut.
But then away down in there-and you have to find it-is $3.3 million for this museum of humour which is planned for somewhere in Canada next year.
I know you have to prioritize. I know there is a pecking order when dollars are scarce, but I just wondered whether the hon. member for Regina-Lumsden would have prioritized in that fashion to take away services from Canada Post, take away from some other agencies which we thought were doing a pretty good job for Canadians and plug in a bunch of money for something called a museum of humour? Would he react to that?


Leslie Gordon Benjamin: If I thought for one moment that the museum of humour would have some of my corny jokes in it, I might go along. No, that is not a priority. I do not put that at the top of the list. It is nice to have and when we can do it, we will do it.
I want to remind my hon. friend too, that all these different agencies in Atlantic Canada and the prairies are patchwork. We need a national effort, like the one for the declaration of war, directed to rebuilding our economy and full employment. If you did that you would not need all these little jerk-water operations that do good work but ain't going to solve anything.

We need more than that. We need a national will. My goodness, you cannot let this country go down the drain because we are worried about the deficit. "It's only money", as my mother used to say when she was financing her restaurant, borrowing everything she could find. It is only money. It is our money and it is our country and we can do it and we will do it again. I would not make the museum of humour a top priority. If we do not build it for another three or four years, tough cookie.


Coline M. Campbell: Mr. Speaker, I would like to ask the hon. gentleman in the House who talks of his last budget but not the last time we will hear from him. I could probably say it might be my last budget in this House too since I am not coming back.
Reading today's Globe and Mail, one of the business commentators said: "Infatuation with infrastructure, costly". And he compares it to a sky-deck or something like that in downtown Toronto.
Just for the record, and before the weekend comes and maybe just to enlighten some of the people opposite, infrastructure to me coming from the east might be roads, sewers, water systems, things that affect the environment. It might mean a war. It might mean an improved access for business to go into a community because those services are there. Where Toronto has become so costly it might help someone outside of Toronto to attract business. Would he like to comment on such a stupid statement out of downtown Toronto that would support this government?


Leslie Gordon Benjamin: Mr. Speaker, I am sorry to hear that the hon. member is not going to run again because I think she has been a good member. I wish she would run again, but for a different party.
When I listen and read the commentaries of the business community I think we have to tell them as a nation and as a government and as a Parliament of Canada what must be done. You must co-operate and we want you to do it voluntarily. You are going to invest.
If you are not prepared to do that voluntarily, and it might mean you take a little smaller dividend and less in corporate executive salaries and expense allowances, we will give you two choices. It is either compulsory or you have to.
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Because we did that during the war. The business community was told in no uncertain terms: "We are going to bust your ass". It was either compulsory or they had to. The War Measures Act covered the whole thing. They did and they did a marvellous job.
The self-serving comments and demands by the business community, most of whom I would not hire to run a chicken coop because they take turns going broke, con lenders into giving them money and they do not know what the hell they are doing. I suspect that half the bankruptcies we have had they brought on themselves. When banks are writing off loans-


The Acting Speaker (Mr. Paproski):: I regret the member's time has expired.


John R. (Jack) Whittaker: Mr. Speaker, I appreciate the time of the House for this point of order.
I have spoken to all the parties in the House including the independents and I believe I have the unanimous consent of the House of the following motion.
That notwithstanding any Standing Order and the usual practice of
this House, motion M-22 be dropped to the bottom of the order of
precedence and the ordinary hour of daily adjournment on Friday,
February 28, 1992 be deemed to be 3 o'clock p.m.
The seconder is the member for Vancouver East.


The Acting Speaker (Mr. Paproski):: The House has heard the terms of the motion. Is it agreed?


Robert Nelson David Hicks: I would like to confirm that consultations have taken place. The government side is in agreement.


The Acting Speaker (Mr. Paproski):: There has been agreement or are you withholding agreement?


Mr. Shields:: It can be brought forward maybe after the vote tonight or before the vote tonight to confirm.


The Acting Speaker (Mr. Paproski):: Is it the pleasure of the House to adopt the motion?


Some hon. members:: Agreed.


[Stage Direction]
Motion agreed to.
Jack Wendele Shields: Mr. Speaker, I was a little bit disappointed in my friend from the NDP who spoke earlier.

February 27, 1992
The Budget
I was disappointed in some of the remarks he made because I think he was talking about businesses and how businesses do not contribute to the economy of the country. He was using this old rhetoric of robber barons and that kind of thing. He said that businesses should be forced to voluntarily cut back so that they do not make profits or take much less profits. Therefore it would help the country to get going.
The member might disagree that is what he said but certainly that is what comes across.
I would like to suggest that businesses in the community and in the country, particularly public companies, are financed primarily not just by the banks as my hon. friend would suggest, but by pension funds. Many of the shares of public companies or many of the companies which trade on the stock market, are held by pension funds.
Where do these pension funds come from? They come from the major unions in the country. Let us put something on the table which I think is very important, something that seems to go beyond the thinking of the New Democratic Party which really represents labour. I cannot understand this fallacy it keeps talking about of big business taking all these returns or the banks. They always talk about the banks making these profits that are absolutely obscene. This is the kind of thing we hear. Those same banks are owned by shareholders, who are union membership by way of their pension funds.
If you do not get a return on investment from a public company primarily owned by pension funds and individual investors then the return is not going to come to the pension funds like all those that are subscribed to the pension funds would want them to be. Think about that for a moment. It is all intertwined. You cannot say that one part of the economy is not pulling its load while another part is.
Another thing the member said which I would like to take issue with is that it is our money. It is not our money. We are so interwoven in the international monetary community that we totally depend on the international monetary community to loan us money on a short-term and a long-term basis to keep the economy going because we have a massive debt, a debt that has accumulated by compounding interest since 1984, when
it was something like $190 billion to $200 billion, and now it is over double that.
It has not doubled because this government did not curtail spending. It has not doubled because we put up the printing presses and started pouring money into the economy. It has doubled because of compound interest. People will never forget that when we took office in 1984 the government of the day was borrowing $16 billion to live. We had to borrow it to pay old age pensions, to pay health care, to pay family allowances, and to operate government.
By raising taxes, which is one thing, and mainly through a 75 per cent cut in government expenditure we have turned that around from being $16 billion in the hole every year to the point where we now have approximately $10 billion more each year than we really need to operate the government. However, that $10 billion goes to pay the interest on the debt.
It means that we do not have to borrow $10 billion to pay the interest. Instead of borrowing $45 billion to pay the interest we are borrowing $35 billion. They fail to remember that.
They talk about the budget not being sensitive to people. Let me go back to the compound interest and show how it has pushed up the debt. The national debt in 1984-85 was $206 billion. Compound interest on the 1984-85 debt was $239 billion. We had an operating surplus for the year 1984-85 of $25 billion giving us a total national debt of $420 billion.
We keep hearing from the Liberals and the NDP: "Spend our way out of this. We have to really spend some money and start throwing it around". If we do that we increase the debt. If we do that we destroy the confidence of the international monetary community. When we try to bring investment into the country they say: "No, no. We don't want that". That is the Argentine solution, hyper-inflation. That is the kind of thing that happened.
I want to tell my hon. friends that I was there when this was attempted by the opposition party, the Liberal government, with the support of the NDP. In the early 1980s, when we had a recession, I saw interest rates go up to 25 per cent and I paid them in my business.
I know what happened in my business. As a result of that I lost everything I had worked for until that time,

everything. I lost absolutely everything because interest rates went to 25 per cent, and we lost two western banks because of those rates. That is what happened.
It should never happen again. This government will never allow that to happen again. This government is going to stay the course, and this government has stayed the course. Sure, we are concerned that there is unemployment, but my hon. friend says we should demand full employment. What do we do? Do we do it by government decree? We saw that in the U.S.S.R. We saw what happened with a forced economy in the U.S.S.R. It no longer exists. I want to tell you, Mr. Speaker, that is not the position this government is going to take.


Leslie Gordon Benjamin: Stuff a sock in it.


Jack Wendele Shields: Well, that is interesting. Let's see what happens when interest rates come down. Today the dollar went up. Today the dollar is stronger. Interest rates have come down. I understand they have come down by 30 basis points.
Just a few years ago we were paying 14 per cent or 15 per cent on one-year mortgages. We have now brought them down to just a little over 8 per cent, 8.5 per cent.
What is the impact of lower mortgage rates? I will tell you what they are. Based on a $75,000 mortgage, the payment at 14.5 to 15 per cent was $893.91. That has dropped to $584. That is the payment. That is putting money into the pockets of individual Canadians who can go out and spend it the way they want to. That will create jobs in small businesses. That will create jobs across the country.


The Acting Speaker (Mr. Paproski):: Order. It being 5.45 p.m., it is my duty to interrupt the proceedings pursuant to Standing Order 84(4) and put forthwith every question necessary to dispose of the amendment to the amendment now before the House.
The question is on the amendment to the amendment. Is it the pleasure of the House to adopt the amendment to the amendment?


Some hon. members:: Agreed.


Some hon. members:: No.


The Acting Speaker (Mr. Paproski):: All those in favour of the amendment to the amendment will please say yea.
The Budget


Some hon. members:: Yea.


The Acting Speaker (Mr. Paproski):: All those opposed will please say nay.


Some hon. members:: Nay.


The Acting Speaker (Mr. Paproski):: In my opinion the nays have it.
And more than five members having risen:


The Acting Speaker (Mr. Paproski):: Call in the members.


PAIRED-MEMBERS
[Stage Direction]
Crosby (Halifax West)	Nowlan
Mr. Speaker:: I declare the amendment to the amendment lost.
It being 6.13 o'clock p.m., this House stands adjourned until tomorrow at 10 o'clock a.m. pursuant to Standing Order 24(1).


[Stage Direction]
The House adjourned at 6.13 p.m.
[Stage Direction]
Friday, February 28, 1992