1992-05-13

Ms. Mary Clancy (Halifax):: Mr. Speaker, I rise today to urge the government to introduce as soon as possible the much awaited legislation concerning the merchant mariners.
These men fought valiantly under the most extreme conditions, giving their lives to preserve the democratic institutions of our country. Merchant mariners lived through hell. They suffered the highest death rate of any group in the second war. About 1,150 were killed while bringing troops and supplies to Europe between 1939 and 1945, and today they are dying at a rate of one every two days.
They deserve to be recognized as full veterans in their lifetimes so that they may receive the benefits attendant with this status. I believe that such benefits-nursing care, transportation, housekeeping and other services- would help to slow down the high mortality rate.
This is the least we can do for those who were denied this recognition throughout their lifetimes. It is the least that we can do to honour those who died before this honour could be bestowed upon them.


EDUCATION
Mr. Ken Atkinson (St. Catharines):: Mr. Speaker, I would like to draw the House's attention to the major findings of the Conference Board of Canada study called Dropping Out: The Cost to Canada.
The federal Stay In School initiative stresses that the young person's success in the work force depends on getting that high school diploma. This study, which was funded under the federal Stay In School initiative, backs that up. The report findings show, for example, that
137,000 high school students who dropped out instead of graduating with the class of 1989 will cost Canada $4 billion during their working lives in lost productivity and tax revenue and higher social welfare costs.
At the same time, the study shows that a young person earns a good return from the time and money devoted to gaining a high school education. The study puts that rate of return for male students at 65.4 per cent and for female students at 74.4 per cent.
This study is critically important, underscoring as it does the enormous cost to all Canadians of even one young person dropping out of school.


HEALTH AND WELFARE
Mr. Jim Karpoff (Surrey North):: Employees at the Health Protection Branch of the Department of National Health and Welfare have once again blown the whistle on their superiors, including the minister of health.
An internal memorandum dated April 27, and signed by no fewer than 18 physicians at the Bureau of Human Prescription Drugs, criticizes the continuing removal of medically qualified personnel at the higher levels of the drug approval process.
The memo says this will, and I quote:
-interfere with the bureau's mandate to ensure the safety and efficiency of drugs and may also jeopardize the health of Canadians participating in clinical studies.
Concerns about the operation of the Health Protection Branch are not new. There have been serious allegations about the approval of the Meme breast implant. The government must move to restore the confidence Canadians must have in this important regulatory agency by ordering a public inquiry into the organization and operation of the Health Protection Branch.


CANADIANS OF CHINESE ORIGIN
[Stage Direction]
May 13, 1992
Hon. Alan Redway (Don Valley East):: Mr. Speaker, next week Canadians of Chinese origin are coming to Parliament Hill seeking long overdue redress for the Chinese exclusion act and the head tax.
Between 1885 and 1923 Canada imposed a head tax of up to $500 on all Chinese immigrants while at the same time providing financial assistance to other immigrants. In 1923 this House passed the Chinese Immigration (Exclusion) Act which prohibited illiterates, diseased persons, beggars, vagrants, idiots, epileptics, and persons of Chinese origin from entering Canada. No wonder Canadians of Chinese origin want redress.
The Progressive Conservative Party of Canada is on record since 1984 as supporting redress.
Last week the Prime Minister said he would be happy to meet representatives of multicultural or visible minority groups to see how we can improve on the good record of Canada and build a better society. Next week he will have the opportunity with Canadians of Chinese origin.


GOVERNMENT POLICIES
Mr. Bob Wood (Nipissing):: Mr. Speaker, yesterday's statistics on taxation confirm what we have been saying all along, that the government's policies have come at the expense of the working people and the wealthy have escaped relatively unscathed.
We can now add seniors to the list of the government's victims. Just last month one of my constituents received a letter from Health and Welfare advising her she was being audited for a period going back 12 years. The letter stated that because she received 87 cents more per month than she was entitled to, she now owes the government money, with compound interest of course.
Does this government have no morals? The incorrect assessment was its mistake and now its is breaking its own laws by going back 12 years for an audit. What is the cost of this harassment? To our seniors it causes unnecessary stress and hardship and to the taxpayer a warped definition of government efficiency.
First we had the clawback to old age security payments, then the announcement of the meagre 37 cent increase per month in payments to our seniors, and now illegal intimidation tactics that prey on fear and ignorance.
We were wrong all along when we stated this government is morally bankrupt because for 87 cents-


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


STUDENT EMPLOYMENT
Mr. Marcel R. Tremblay (Quebec-Est):: Mr. Speaker, a campaign to promote student employment and private initiatives was launched on May 8 across the country. This 24-year old tradition has helped students earn money to pay for their tuition fees and gives them personal satisfaction. I may add it also strengthens their determination to succeed in their studies. All these factors are essential to Canada's economic growth.
The student placement service, which operates through 400 centres, is seen as a way to help the next generation of workers join the labour force, and I urge all employers to do their share.


NEW DEMOCRATIC PARTY
Mr. Peter Milliken (Kingston and the Islands):: Mr. Speaker, the New Democratic Party in this House claims to be the self-appointed creator and saviour of Canada's social safety net even though it has never held office. Its true colours are being exposed in Ontario where it has been elected.
What is the record? Tkx cuts for corporations are announced in their budget while their federal colleagues who are out of office call for increases. Cuts in health care while their federal cousins call for no reductions. Increases in personal income taxes while their federal brothers and sisters call for tax breaks. Cancellation of projects that make liars out of more than one of their ministers.
May 13, 1992

Is this the kind of NDP government we would expect in Ottawa if that party wins a federal election? NDP hypocrites? Surely not.


CANADA-U.S. FREE TRADE AGREEMENT
Mr. Ross Stevenson (Durham):: Mr. Speaker, last Monday while opposition members here tried to blame free trade for unemployment and declining investment, outside in the real world Kraft General Foods was announcing a $74 million expansion this year so its plants at Scarborough and Cobourg, in Ontario, and LaSalle and Mount Royal, in Quebec, can supply the entire U.S. market.
Company president Doug Smith tied this expansion directly to the success of the Canada-U.S. Free Trade Agreement, extolling it as "on balance-a good deal for Canada". He pointed out how Canada's trade balance with the U.S. has jumped by billions of dollars each year since free trade began, reaching a 1991 surplus of $16 billion in our favour.
While one perhaps should not crow about such things, it is a fact that just last week Kraft General Foods announced a reduction of 1,000 jobs in the United States. That is positive proof of how capably our workers and industries can compete.


Mr. Speaker:: I am afraid the hon. member's time has expired.


WESTRAY MINE DISASTER
Mr. Lyle Kristiansen (Kootenay West-Revelstoke):: Mr. Speaker, the hearts of all members of this House go out to the grieving families, friends and workmates of those miners, now 14 in number, who have lost their lives as a result of the tragic events at the Westray mine.
There are obviously serious questions that must be asked at the appropriate time-that time is not now- about the events that led to this terrible disaster.
In order that the public interest may be served with due regard to the feelings and discomfort of the aggrieved families and others in the community, I hope
that this government will see its way clear, of its own volition to provide this House at the earliest appropriate opportunity with all studies and documentation concerning its involvement with the Westray mining operation.
We may then all fulfil our obvious obligations with a maximum degree of dignity and respect for those most personally concerned. Meanwhile, we all hope and pray that those miners remaining underground will be found alive and well.


UNITED NATIONS CONFERENCE ON ENVIRONMENT AND DEVELOPMENT
Mr. Stan Darling (Parry Sound-Muskoka):: Mr. Speaker, from June 3 to June 14, the nations of the world will meet in Rio for the United Nations Conference on Environment and Development, the earth summit.
It will be one of the largest global gatherings in history, bringing together over 100 world leaders, including President George Bush and Prime Minister Brian Mul-roney.
The earth summit marks the first time in history that nations of the world will tackle in the same meeting two pressing needs, namely the protection of the water, atmosphere and other environmental systems which make life possible on earth and economic development.
Given the magnitude of the problems facing our planet, I am sure all members of the House join me in applauding the decision of President George Bush to participate in this monumental gathering in Rio.
In the end, we will all have to change our attitudes, our way of thinking and our way of acting on common global problems. I for one believe the announcement of President Bush's attendance at the earth summit is a major step in that direction.


THE PHILIPPINES
Mr. Jesse Flis (Parkdale-High Park):: Mr. Speaker, following the successful conclusion of general elections in the Philippines last weekend, I am certain that all members of this House are greatly encouraged by the fact that one more step has been taken on the long road to democracy.

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Although final results are not expected until an estimated 28 million votes are fully tabulated over the next few days, the president-elect of the Philippines will require our co-operation to continue social and economic reforms.
In the years since the fall of the Marcos regime, Canada has proven to be a generous friend to the Philippines, but much more remains to be done.
Natural disasters continue to plague progress and therefore I, together with my constituents of Filipino descent, call on the government to maintain Canada's assistance to help rebuild the critical infrastructure which supports democracy in the Philippines.


WESTRAY MINE DISASTER
Mr. Guy Saint-Julien (Abitibi):: Mr. Speaker, mining communities in Abitibi were appalled by the terrible disaster at the Westray mine in Nova Scotia.
These communities join me in extending sincere condolences to the families of eleven fellow miners who perished in this accident.
This disaster makes us reflect on the hazards faced daily by miners across this country. It reminds us that those who do this kind of work deserve our admiration and respect.



ORAL QUESTION PERIOD


Hon. Jean Chretien (Leader of the Opposition):: Mr. Speaker, I have a question for the Prime Minister, but in his absence, I will direct it to the Acting Prime Minister.
Over a year ago the Liberal Party suggested that a national referendum be held, a referendum that should require a majority of all Canadians and a majority in each of Canada's four regions: in the Atlantic region, Quebec, Ontario and Western Canada.
Can the government give the House the assurance that if in a referendum one of Canada's regions were to vote no, the government would give up its plan? [English]


Hon. Harvie Andre (Minister of State and Leader of the Government in the House of Commons):: Mr. Speaker, as the hon. Leader of the Opposition knows, what is
being proposed is enabling legislation for a plebiscite. It is a means of consulting the people of Canada. It is not a binding referendum because our Constitution can only be changed according to the rules that exist in the Constitution.
The question of what constitutes a win or not is in a sense irrelevant because we still have the existing constitutional amending formula.
In any case, the decision as to whether there will be a plebiscite or not, the decision as to what question will be asked, is not something the government is prepared to go into now. The Prime Minister has indicated that prior to any such thing there would obviously have to be consultations with all interested parties, including the opposition.


Joseph Jacques Jean Chrétien: Mr. Speaker, a referendum is not just a poll. The Canadian people have the right to know what the government will do with the results of this referendum.


Some hon. members:: Hear, hear.


Joseph Jacques Jean Chrétien: What we are doing at this moment is making it very clear to the people of Canada that if one part of Canada says no, the Parliament of Canada will not proceed.
My supplementary question is for the House leader. We would like to know why this government has decided not to put any limit on spending. Another surprise is that it is supported by the NDP.
What is important is making sure that we have a fair referendum and that the votes are not-


Some hon. members:: Hear, hear.


Joseph Jacques Jean Chrétien: -bought but that the votes are earned.
Will the government accept amendments to make sure that the referendum is a fair one and that there will be limits on spending?


Harvie Andre: Mr. Speaker, in answering the first question from the Leader of the Opposition, I tried to make it clear, but perhaps I did not explain myself properly, that what we are all seeking is constitutional change that will unite this country. I am sure the leader of the Liberal Party feels the same way.
May 13, 1992

To get that constitutional change requires the approval of the House of Commons, the Senate, and seven provinces representing 50 per cent of the population at least. Some items require unanimity. That is what we are all striving for.
A plebiscite on this issue cannot change the fundamental fact of what is required. That is what we are seeking. A plebiscite may be useful for that purpose, for achieving the goal of unifying the country. It may not. That will be looked at.
So far as spending limits or any other requirements such as umbrella committees are concerned, the advice that we have from legal counsel is that this would be contrary to the charter of rights.
But let me say in answer to the Leader of the Opposition that of course we are willing to consider improvements to the enabling legislation, provided it is allowed under our Constitution.


Joseph Jacques Jean Chrétien: Mr. Speaker, how did the government come to the conclusion that it is illegal to limit the expenditures in a public consultation?
We have passed laws in this Parliament for years and in an election every political party is limited in the number of dollars it can spend. Why does the government want to have a referendum that will be perceived as unfair by the people of Canada and particularly in Quebec when it should make sure that the tradition and the rules that prevail in general elections will be followed in a referendum?


Harvie Andre: Mr. Speaker, as the hon. member knows, the rules governing a general election have been successfully challenged before the courts. They are under appeal now but they have been challenged.
The hon. Leader of the Opposition, as a former justice minister, is suggesting that whatever we are told by law officers of the Crown, we should say to the Department of Justice that it is wrong and we will do this anyway.
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I hear his seatmate shouting from her seat to table the legal documents in this regard. When the bill is brought forward, these kinds of things will debated and discussed. At committee stage the legal advice that the deputy leader of the Liberal Party is seeking will be given.
I hope that at that time, which is the appropriate point in time, the Liberal Party will agree that we must comply with the charter of rights.


Mr. David Dingwall (Cape Breton-East Richmond):: Mr. Speaker, I want to remind the hon. minister that to give legitimacy to a referendum, it has to be fair and it has to be perceived to be fair. Canadians do not think it is fair when well funded groups can spend as much money as they want to try to influence the outcome.
I want to ask the government House leader if he can assure the House that before tabling any legislation in this House it will contain a provision therein which will have something with regard to reasonable limits of spending? Can he give us that assurance?


Harvie Andre: Mr. Speaker, as has been explained to the hon. member in discussions we have had with officials from the Privy Council Office, the chief legal advisor to the Privy Council explained to the hon. member that the charter of rights puts constraints on what can and cannot be done.
I absolutely agree it would be futile and damaging to suggest that we would have a plebiscite that could be accused of being unfair and manipulative.
I remind the hon. member that what we are discussing, rather inappropriately, is potential legislation that will make it possible to have a plebiscite. It is not a commitment to have one. There is no indication of what question will be put to the Canadian public. It is only enabling legislation. Again I repeat, the enabling legislation must satisfy the charter of rights and if a decision is taken on the plebiscite it obviously must meet all normal tests of reasonableness and fairness.


David Charles Dingwall: Mr. Speaker, my supplementary question is for the same minister.

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The minister will know that the Prime Minister and the Minister responsible for Constitutional Affairs have assured members of this House that there would be meaningful consultations. There have been no consultations with regard to the bill. There has been an information session concerning the contents of the bill and that was on Monday.
The minister makes reference to legal opinions. In the spirit of the so-called consultations and co-operation, will he not do the honourable thing and share those legal opinions with members of this House to ascertain whether or not the legal arguments are bogus arguments, as many members in this House speculate they are?


Harvie Andre: Mr. Speaker, the hon. member's indignation is a little surprising since a week ago yesterday I discussed the measure with him. He offered no suggestions at that time. He was to discuss it with officials of his party, the chief of staff of the Leader of the Opposition on Monday. It was discussed with himself and the House leader of the New Democratic Party on Monday afternoon.
Again on Tuesday there were discussions with the House leaders and other people. At no time did the hon. member during those consultations and discussions suggest changes that could be made, except before this House in Question Period or afterwards to the media.
I remind the hon. member that we are talking about the integrity of the country. What is at issue is some details on how a plebiscite might be held if one is called. Let us not get so heated about these details, which we can work out together when the bill is brought forward, and put in jeopardy what we are all trying to save, this great country.


Hon. Audrey McLaughlin (Yukon):: Mr. Speaker, my question is directed to the government House leader.
If the government goes ahead with its referendum plan, we must ensure this exercise contributes to the country's unity and is not divisive. The government House leader will recall the following recommendation in the Beaudoin-Edwards committee's report that was
signed by his party, by the Liberals and by my own party, and I quote: "A referendum should require a national majority and a majority in each of the four regions".
My question for the government House leader is: How does the government intend to act on this recommendation, which was supported by his own party?


Harvie Andre: Mr. Speaker, if we were proposing a referendum as a means of amending the Constitution of Canada, then of course some such formula like that or another formula which would be acceptable to the provinces of this country would have to be used.
What is being proposed is a mechanism for holding, if it is deemed desirable to do so, a non-binding plebiscite on the question of constitutional amendments. This will not supersede the constitutional requirement that any change receive the approval of seven provinces with 50 per cent of the population plus the House of Commons and the Senate. Therefore, any conditions as to what is a pass or failure for a plebiscite becomes irrelevant.
Those kinds of tests have to meet a political test in the sense of being seen as fair and so on. The result will obviously have some moral influence but will not have a legal influence. Therefore, the kinds of conditions the hon. leader of the New Democratic Party is talking about are really not applicable to this legislation.


Audrey Marlene McLaughlin: Mr. Speaker, I am sure the House leader is not suggesting that the very well-respected member of his party, who was the cochair of the Edwards-Beaudoin committee, did not know that a referendum did not constitute a constitutional amendment. Of course he did and of course all the people in this House know that it requires the amending formula as set out in the Constitution, the approval of the provinces and 50 per cent of the population.
However, these are not picky details. If we are to believe that the government is sincere in seeking the opinions of Canadians, there must be some attitude on the part of the government that it is going to respect the opinions of Canadians. Therefore, I think it is very
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important that the government is able to give its rationale clearly for this referendum.
I would also like to raise the question of spending limits. The House leader said, in response earlier to a question, that when the committee met he would table the legal opinions.
I want to ask the House leader if he will table those legal opinions now about the possible challenges to spending limits under the charter of rights? Will he table them now so that we can all make an informed decision concerning the enabling legislation, not after the legislation comes to the House?


Harvie Andre: Mr. Speaker, I would remind the leader of the New Democratic Party that the Beaudoin-Edwards committee was looking at changes in the amending formula. It was not looking at whether a plebiscite as a means of consulting Canadians would be an appropriate mechanism or not.
Second, she ought not to jump to the conclusion that because enabling legislation for a plebiscite is being proposed that this automatically means it is going to occur. This, in a sense, is minutia compared to the main issues which are being discussed by the provinces and the federal government right now.
In terms of whether constraints on campaigning under umbrella committees, constraints on spending, are permissible given the charter of rights, we have a procedure in this House of first reading of a bill, which no one has really seen yet although they know the contents thereof, second reading during which we discuss the general principle, and then committee stage where we look at the kind of details the hon. member is concerned about.
I give again my assurance that should arguments be convincing that this legislation can be improved to make it appear more fair and to be more fair, then certainly we are open to them. At this time, I have no other responsibility but to accept the best legal advice given by the Department of Justice. The Department of Justice has the responsibility of advising the government on the applicability of the law in respect to proposals.
The hon. member should be patient. The bill will come forward and all members will have an opportunity to see it.


Audrey Marlene McLaughlin: Mr. Speaker, my supplementary question is for the House leader.
This government's definition of non-partisan seems to be: "We are the captain of the ship. You play by our rules. That is what we mean by non-partisan".
There is no rationale for not tabling the legal opinions this government has on limits to spending. There is absolutely no rationale unless this government wants to be partisan.
I want to give the House leader one more chance to be non-partisan. When it comes to formulating the question for a possible referendum, will the House leader give his commitment on behalf of the government that this will be a truly non-partisan committee made up of all members of this House, not only a government majority, that will help to formulate the question?


Harvie Andre: Mr. Speaker, I do not know why the hon. leader of the New Democratic Party should get so accusatory in her comments. I had just said to her that I would be willing to accept improvements to the legislation once she sees it and sees its contents. Yet she comes back and responds that that is excessively partisan on my part.
I would suggest to the hon. member one of the things that makes it difficult to engage in consultations is that at the very time I was in discussion on this bill with the House leader of the New Democratic Party, her chief of staff was out briefing the press on all the details that had been given to her in private. That is what makes it difficult to proceed.


Some hon. members:: Shame.


Mr. Brian Tobin (Humber-St. Barbe-Baie Verte):: Mr. Speaker, we in the Liberal Party are pleased that the leader of the New Democratic Party has changed her position on spending limits and now joins the Liberal Party in asking for spending limits. We think it is important.
I want to say there is no question that the people of Canada want to say yes to a new spirit of unity in this country as the government has proposed. The people of Canada want to say yes to a renewed country, but the people of Canada are clearly saying no to the old way of doing this. They want this House leader and this government to come clean today and give a commitment that contained within the referendum legislation that will be

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laid before the House of Commons on Friday will be provision for a fair and above board process, provision for spending limits.


Harvie Andre: Mr. Speaker, there is a number of suppositions. First, the bill may be produced on Friday. I have not made that final decision yet.
Second, as I have indicated to his House leader, the question of spending limits and constraints on who may campaign, how much they spend and so on, is a difficult question to address because of the charter of rights.
As the hon. member properly said in his introductory remarks, what we are talking about here is the integrity of the country, the unity of the country. We are talking about a possible mechanism for including Canadians, consulting with Canadians on this important question.
I would ask the hon. member to have the patience of waiting until the bill is actually introduced in the House and we have a chance to look at it and use the usual procedures of this House, which are as fair as any democracy in the world.
I give the assurances I gave earlier, that changes which improve things and changes that are possible given the charter of rights will certainly be entertained.


Brian Vincent Tobin: Mr. Speaker, we on this side are very concerned about the attitude of the House leader. If the House leader truly believes that the charter prevents him from imposing spending limits on a referendum, it means that the House leader is preparing, one would suppose, if he is logical, to scrap the Canada Elections Act and the spending limits for general elections. We hope that is not the case.
I ask the House leader whether he will answer the question put by the Leader of the Opposition who asked this government what happens in the event of a referendum if any one of the regions of Canada says no. Will the government give an assurance today that the government would not proceed with constitutional change in the event that any region of Canada-the west, Ontario, Quebec or Atlantic Canada-said no? Can he give that assurance to the people of Canada?


Harvie Andre: Mr. Speaker, no decision has been taken to hold the plebiscite. So to ask for assurance on how the results would be treated on something that has not been decided seems a little absurd. What is being proposed is the details of how one would hold a plebiscite if, and I underline the if, a decision were taken to hold one.
I think the hon. member is, might I say, a little premature in that question because no decision has been taken to hold a plebiscite or referendum.


PRESCRIPTION DRUGS
Mr. Ron MacDonald (Dartmouth):: Mr. Speaker, my question is for the Minister of Consumer and Corporate Affairs.
The minister and his department have repeatedly assured Canadians that prescription drug prices in Canada have increased at an annualized rate of 3.1 per cent. Yet a comprehensive report by Green Shield Services clearly states that the actual cost to consumers has been in excess of 11 per cent more per annum during that period of time.
These are the real facts. Why have the minister and his government been hiding them from Canadian consumers?


Mrs. Dorothy Dobbie (Parliamentary Secretary to Minister of Consumer and Corporate Affairs and Minister of State (Agriculture)):: Mr. Speaker, in fact the federal government is keeping the cost of the price of drugs down to about a 3.1 per cent average per year.
The hon. member knows very well that the Green Shield plan actually measures the increased costs of drugs on a different basis than the federal government's plan does. Therefore, the figures the government has and the Green Shield plan has are very similar to one another.


Ronald MacDonald: Mr. Speaker, my question then is for the Acting Prime Minister.
It is abundantly clear from this comprehensive report by Green Shield Services that Canadian consumers have been misled for the last four years on the real price increases for prescription drugs in Canada.
May 13, 1992

Will the Acting Prime Minister explain to Canadian consumers why they, senior citizens and provincial governments have been subject to the government using phoney figures for the last four years when it comes to real cost of prescription drugs in Canada?


Dorothy I. Dobbie: Mr. Speaker, that is just utter nonsense. The government has not been using phoney figures and the hon. member knows that very well.
In fact the Green Shield plan study actually looks at changes in patterns of usage, the amount of dosages that prescriptions are prescribing, and so its figures differ. The government uses the unit cost per drug. That cost has risen on the average of about 3.1 per cent per year.
That is the fair and the most accurate way to measure these drug increases.


NATIONAL REFERENDUM
Mr. Lome Nystrom (Yorkton-Melville):: My question, Mr. Speaker, is for the government House leader. We did not have a full response to the question asked by the leader of my party.
In view of the fact that the Prime Minister and the minister in charge of the Constitution have many times talked about this being a non-partisan issue, I wonder if we could get a commitment today from the government House leader to make sure that when it comes to writing the question to be put to the Canadian people, if we get to that stage, there will be formed in this House a non-partisan committee of all the political parties of this House including the Reform Party of Canada so that we can make sure the question is non-partisan.


An hon. member:: And the Bloc.


Harvie Andre: Mr. Speaker, I say sincerely that I know the hon. member has as sincere an interest in the unity integrity of this country as anybody in the House. I give him this assurance, and he ought not to need it, because I am sure he would accept that the Prime Minister and the Minister responsible for Constitutional Affairs have at least as deep a commitment to the unity of this country as anybody else.
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On that basis he can rest assured that in fact we want all of those in this House who are committed to the unity of Canada to be a part of and contribute positively to whatever initiatives are brought forward, including possibly a referendum or plebiscite.
I want to say to the hon. member that my conversations with his House leader, the Liberal House leader, in private were all designed to try to have us work together in concert on this matter.
If in fact that is the desired way to proceed, I humbly suggest that some of the shots taken here in Question Period are not really conducive, nor do they provide much incentive to continue those kinds of conversations we have been having, which I think we ought to be able to have.


Lorne Edmund Nystrom: I cannot help but stress, Mr. Speaker, the importance of having a process at this stage that is not only fair but seen to be fair involving all members of Parliament.
My supplementary question goes back to the spending limits. I make it clear to the government House leader that our party is in favour of spending limitations so that we have a fair campaign.
In light of the fact that the Lortie commission on electoral reform in this country came out with a recommendation for very severe spending limits-and I assume it consulted legal advice before it made the recommendation-I wonder if the minister could now table his legal advice. The problem we have is if we do not have spending limits in the bill at first or second reading and we try to move spending limits during committee stage, it may be ruled out of order by the Speaker as being beyond the scope of the bill.
Could the minister now do that so we could have the benefit of the legal opinion and, if the spending limits are not there, put them in at this time?


Harvie Andre: Mr. Speaker, I am sure the hon. member will recognize that the Elections Act dealing with registered parties and penalties such as loss of seat and so on is quite a different question than a plebiscite, particularly a plebiscite in which provincial governments might in their own right participate on a yes or no side. I would ask him to reflect for a moment on what kind of restraints he would put on

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provincial governments and how they would be enforced, to give him one aspect of the problem.
But, more than that, if the hon. member desires that perhaps this time the chief of staff to the party leader could attend the briefing by PCO officials and legal officers, we could discuss in detail all these questions which I am sure he would agree are more adequately and accurately discussed and analysed in those kinds of meetings rather than during the course of Question Period, which is more designed for the audience than it is for the exchange of information.


THE ENVIRONMENT
Mr. Paul Martin (LaSalle-Emard):: Mr. Speaker, my question is directed to the Minister of Energy, Mines and Resources. The recent international agreement on climatic change sets no time or quantity limit for the signing parties. This agreement, which Canada signed, is even weaker than the green plan's modest promise to stabilize greenhouse gas emissions at 1990 levels by the year 2000.
My question is this: Although Canada signed the international agreement, will the minister make a formal commitment to the House, here and now, that Canada will abide by its domestic commitment?


Hon. Jean J. Charest (Minister of the Environment):: Mr. Speaker, the agreement or convention to which the hon. member for LaSalle-Emard referred is to us, in any event, a substantial improvement over what we expected.
Let me make myself clear. The proposed convention, which has yet to be ratified, does not meet all the objectives we originally identified. However, there is a commitment that will translate as a legal commitment for each country. There will be a reduction in greenhouse gases, with the exception of those covered by the Montreal Protocol. There is also a reference to reduction to the levels of previous years, including 1990. We feel, that this is a reflection, as the hon. member indicated, of the Canadian government's present policy as expressed in the green plan.


Paul Edgar Philippe Martin: Mr. Speaker, the reason I directed the question to the minister of energy is that it is well known there is a split between the Minister of Energy, Mines and Resources and the Minister of the Environment on this question.
However, since the minister of energy refuses and the Minister of the Environment wants to take the floor, if he is to be taken seriously then he will admit that what the standing committee on energy recently concluded is true, that the domestic implementation strategy for greenhouse gas reduction of this government is half-baked and that the provinces and the industry across this country have complained bitterly about not being consulted.
If the minister is to be taken seriously, will he call immediately a meeting of all major energy and environmental stakeholders in the country to develop the detailed action plan which is required if the government's commitment is to be taken seriously?


Jean J. Charest: Mr. Speaker, the member for LaSalle-Emard should be better informed about what the government has been doing. The minister of energy introduced in the House of Commons an Energy Efficiency Act that is part of the many steps we are proposing to take. By the way, I may add it is not just an issue of climate change, and it is important to point that out; it is also an issue of competitiveness. What we are proposing to do will make Canada over all a more competitive country.
There is a series of measures of which economic instruments is one element we will be looking at very seriously. The hon. member should look for the government's announcement for a discussion paper in this area. That is among the things we will be doing in the years to come to meet these objectives.


SMALL BUSINESS
Ms. Catherine Callbeck (Malpeque):: Mr. Speaker, my question is for the Minister of State for Small Businesses and Tourism.
Small business is the engine of growth that we desperately need to get out of this recession. Yet this government has allowed desperately needed guaranteed loans to small business to plummet by 45 per cent, a drop of $660 million.
May 13, 1992

With 1.5 million people out of work, with bankruptcy rates at an all-time high, how can this government allow small business to be denied the credit needed to get us out of this recession?


Hon. Tom Hockin (Minister of State (Small Businesses and Tourism)):: Mr. Speaker, the hon. member quotes inaccurate facts. In fact, the number of loan guarantees that have been given to small businesses through the regional agencies has been very healthy in the last two years.
They are done under the Small Businesses Loans Act. What we are doing under the Small Businesses Loans Act is we are improving it, making it more user friendly and less worrisome for the bankers to use when they meet with their clients. We are also lifting the limit under the budget from $100,000 to $200,000.
We have also brought in the small business financing program which will greatly help small business as well. That, together with having the lowest rate of corporate tax in the industrialized world should help.


Catherine S. Callbeck: Mr. Speaker, what good is doubling the loan limit if banks will not lend under this program?
My supplementary question is for the same minister. It appears from what the minister has said that he plans to do little but simply watch quietly as $660 million remains in bank vaults rather than in the economy creating jobs and much needed growth.
Why has the minister not taken a stronger line on this problem? When is he going to call an emergency meeting with bankers and help create some much needed investment in small business?


Thomas Hockin: Mr. Speaker, I am really pleased my hon. friend and her colleagues have discovered small business. These very questions were asked last week and the week before.
I made it very clear that the number of loans the chartered banks are issuing to small and medium-sized business is down. It has nothing to do with loan guarantees; it has to do with their usual files and this concerns me. I believe there is a constriction of credit in the economy, that the banks are not doing term lending any more. They are not doing risk financing any more, and this is a concern.
Oral Questions
That is why we brought in financial institution reform which, beginning June 1, allows trust companies as well as insurance companies and credit unions to get into commercial lending. We will be monitoring this closely to make sure the act adds to the amount of commercial credit available to small business.


CANADIAN REFERENDUM
Hon. Jean Lapierre (Shefford):: Mr. Speaker, my question is directed to the government House leader.
I must say that as far as his sense of equity and justice is concerned, the leader of the government would have qualified as a member of the jury in Los Angeles.


Some hon. members:: Oh, oh.


Jean-C. Lapierre: Obviously, the leader of the government wants -


Mr. Speaker:: That is a completely unworthy remark. We have a country to save and we have to keep the debate above that. It is not acceptable. I want the hon. member to apologize and put his question.


Jean-C. Lapierre: Mr. Speaker, there was no offence meant, but it is obvious that the leader of the government is using the Canadian Charter of Rights and Freedoms to violate those rights and totally ignore -


Mr. Speaker:: I am less than amused. That comment with respect to the events in the United States was a very unpleasant one. It is not proper, not fair, and I want a withdrawal or I shall go on to the next member.


Jean-C. Lapierre: Mr. Speaker, I will withdraw, at your request.
However, I want to ask the Leader of the Government in the House of Commons how he can talk about democracy and the Charter of Rights and Freedoms when he is prepared to abolish all spending limits, so that each vote will not have the same impact, since now it will mainly be a matter of who can raise the most funds. Does the government House leader really think his referendum or plebiscite can be seen as a fair and equitable

May 13, 1992
Oral Questions
process when it violates all the basic principles of democracy?


Harvie Andre: Mr. Speaker, I think the hon. member is way ahead of things.
First, I remind him of what I said earlier. The decision to have a plebiscite has not been taken. Second, it is non-binding. Therefore, it has no legal impact and to amend the Constitution will still require the approval of provincial legislatures.
I remind him of the provisions of the Canada Elections Act in terms of fair enumeration, secret ballot, and so on. I do not know if the hon. member is suggesting that he can be bought off in terms of how he is going to vote for a certain sum of money. Let us know what that sum of money is.


Some hon. members:: Oh, oh.


Mr. Speaker:: I would ask the hon. minister to withdraw that comment.


Harvie Andre: Mr. Speaker, I did not mean that on a personal level and I certainly withdraw it in that sense.
But I am sure the hon. members appreciates and recognizes that he is fundamentally unfair in suggesting somehow what we are proposing is a means to buy off or win by sheer force of money or something.
Let me just make this observation. Were that to occur, it would produce exactly the wrong result in terms of public opinion that would be sought from a plebiscite. Anybody who would seek to use the techniques the hon. member is talking about would be defeating the very purposes he or she had in mind in the first place.
I believe the hon. member would want to rethink his accusation.


Jean-C. Lapierre: I have a supplementary question.


Mr. Speaker:: The hon. member for Shefford. Please ask your question.


Jean-C. Lapierre: Mr. Speaker, I therefore ask the minister, who gives us all those assurances, how he can tell Quebecers that there is no danger and that it binds no one, when the spectre of conscription haunts us all; when at the same time he is prepared to drown the will of Quebec in the Canadian majority. How can the minister agree to hold a referendum where regional differences would be completely submerged in the Canadian total? Is his party, which recognized Quebec's right to self-determination just a year ago, now doing a complete about-face?


Harvie Andre: Mr. Speaker, what we are seeking on this side of the House and I think the national parties on the other side of the House as well, is constitutional change that will renew Confederation, will make Quebecers as well as other Canadians feel at home.
What we are proposing is the possibility of having a plebiscite which might aid in that process. There is nothing nefarious about it. That is what we are proposing and the reason.
Were we to use blatantly unfair tactics, as the hon. member is suggesting, I am sure he would recognize it would be contrary to the objectives. The people of Quebec as well as the people of the rest of Canada would recognize that unfairness and it would be self-defeating for us or anybody else to do so.
The hon. member ought not to jump to the conclusions he has, because if he thinks about it he will recognize they are erroneous.


INDIAN SCHOOLS
Mr. Rod Murphy (Churchill):: Mr. Speaker, my question is for the minister of Indian affairs.
May 13, 1992

The minister knows that the Red Sucker Lake School was closed on Monday by Labour Canada which found the school to be unsafe. The minister has agreed to a meeting with the MLA, the chief, and the education director this evening.
I have a very serious question to ask the minister. Why is it necessary for aboriginal children in this country to go to schools that are condemned and found unsafe by Labour Canada?


Hon. Thomas Siddon (Minister of Indian Affairs and Northern Development):: Mr. Speaker, the answer is quite simple. It is not necessary for aboriginal children to go to such schools. Wherever there are conditions of the sort that the hon. member has described, we will ensure that there are alternative arrangements provided.
The hon. member knows that there are a number of infrastructure improvements slated for the community of Red Sucker Lake. There are new sewer and water provisions and a new electrification program which I announced in Manitoba a couple of months ago. There is also a new school which will be constructed in the year 1994-1995.
In the meantime, the department has offered and done a complete inventory of necessary maintenance and improvement which should possibly be a solution for the interim period. It is certainly within the lifetime interests of this school to upgrade and do this maintenance pending the completion of a new school.


Rodney Edward Murphy: Mr. Speaker, the minister should also be aware that this school was condemned and the repairs that the department is talking about are temporary. He should also be aware from a letter I received from his predecessor in 1987 that this school is being delayed by three years.
His own department has found that 5 of the 58 schools, almost 10 per cent of the schools in the province of Manitoba run by Indian Affairs, or under the funding of Indian Affairs, have serious health and safety risks.
Why is it that this federal government is not providing more money to make sure that there are good schools for Indian children in this country?


Thomas Edward Siddon: Mr. Speaker, the facts as the hon. member generally states them are not correct.
The government has committed hundreds of millions
Oral Questions
of additional dollars of funding for approved infrastructure for aboriginal communities. I mentioned a moment ago the electrification of a whole area of north central Manitoba that this government has facilitated by a commitment of $80 million.
The school that the hon. member mentions was built in 1957 and additional classrooms were added in 1972 and 1976. The school can be brought up to modem standards. It has a life expectancy of 50 years and in the interim period necessary repairs and maintenance will be provided.


EXTERNAL AFFAIRS
Hon. Lloyd Axworthy (Winnipeg South Centre):: Mr. Speaker, my question is for the Secretary of State for External Affairs.
This morning the Secretary-General of the United Nations released a report to the security council in which he said: "The situation in Bosnia-Hercegovina is tragic, dangerous, violent and confused".
The Secretary-General went on to urge members of the United Nations to support the European Community's diplomatic efforts. In light of this report and the urgings of the Secretary-General, I want to ask the minister if she would reconsider the posture taken yesterday in refusing to join the European Community in its diplomatic sanctions against Serbia and clearly establish the willingness of Canadians to engage in comprehensive action against that aggression.


Hon. Barbara McDougall (Secretary of State for External Affairs):: Mr. Speaker, I will be examining the Secretary-General's report.
Of course, in light of some of the conclusions that he has drawn based on Mr. Goulding's visit, at the moment I am not prepared to change our approach in terms of keeping our ambassador in Belgrade. However, we are certainly in accord with some of the other steps that are being taken, as I said yesterday, in terms of other diplomatic action through CSCE and so on.
We are in constant touch with the United Nations on this. We will continue to be in touch with the Secretaiy-General and the peacekeeping forces. As well we will be in touch with our own peacekeepers who, as the Secretary-General has noted, because of their location in Sarajevo are facing appalling conditions.

May 13, 1992
Oral Questions


Lloyd Axworthy: Mr. Speaker, the minister mentioned our own peacekeepers.
I want to quote a statement made by Brigadier General Lewis MacKenzie, a Canadian, who is chief of staff of the UN peacekeeping operations. He said in an interview on Newsworld just a few minutes ago: "It is going to take much more than the diplomatic efforts we have seen to date to bring about a lasting peace in the region of Yugoslavia".
The question is clearly this: If our own chief of staff of peacekeeping, a Canadian, sees the need for more comprehensive, effective efforts, why does the minister not see the need for more efforts? Will the minister at least listen to Brigadier General MacKenzie who is on the ground, knows what is to be done and is asking for more efforts than this government is prepared to give?


Barbara Jean McDougall: Mr. Speaker, first of all, let me say that we are not the only ones. There are Nordic countries that have peacekeeping forces in the Croatia area.
The hon. member never listens to my responses. No wonder he asks such silly questions.


Some hon. members:: Oh, oh.


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


Barbara Jean McDougall: Mr. Speaker, we are dealing with a very complex situation in terms of all of the parties involved in the military activities. There are rogue armies, the Serbian army and the withdrawal of the Yugoslavian army. It is very important to Canada as it is to other countries that have peacekeeping forces in the Croatian region, such as the Nordic countries. They are also keeping their ambassadors there. The situation is changing virtually hour by hour.
I have said that for the moment this is the action I am taking. I stand by that action, but we will be in touch, as always, with the Secretary General and with our peacekeepers in terms of further action.


Lloyd Axworthy: Just like you did with the co-op in Moscow.


Barbara Jean McDougall: Do you see what I mean? He does not listen.


CANADIAN FORCES BASES
Mr. J. W. Bud Bird (Fredericton-York-Sunbury):: Mr. Speaker, I have a question for the Minister of National Defence.
Yesterday we were advised that the Department of National Defence has engaged the services of a master broker to direct all military relocation activities at Canadian Forces Bases installations in Canada. This single contractor is responsible for assigning business to local realtors and law firms without apparent benefit of local competition by companies in the area.
My question is this: How can local businesses and professions now be assured of a chance to compete, and how can the Department of National Defence be assured of the benefits of a competitive business situation?


Hon. Mary Collins (Associate Minister of National Defence and Minister Responsible for Status of Women):: Mr. Speaker, I think, as my hon. colleague is aware, that for the first time we are involved in a comprehensive approach to looking at our relocation costs and the services provided to our military members.
We hope that with this effort we are going to be able to ease the trauma of moving and also produce savings for the public purse.
I would like to advise my colleague that the military members may use the services and the network of people engaged through the relocation services, but they also remain free to engage individual real estate brokers or lawyers in their own community as they wish.
May 13, 1992

I would also suggest to my hon. colleague that should he have suggestions, because this program is in its infancy and we would be delighted to hear from him. We want to ensure that this program is not only fair and effective, but does produce the kind of cost savings that we believe are possible.



ROUTINE PROCEEDINGS


Harvie Andre: Madam Speaker, I am very pleased to table in the House today, in both official languages, Orders in Council announcing appointments made recently by the government.
Pursuant to Standing Order 110(1), these Orders in Council are deemed to have been referred to the standing committees indicated in the appendix.


GOVERNMENT RESPONSE TO PETITIONS
Mr. Jim Edwards (Parliamentary Secretary to Minister of State and Leader of the Government in the House of Commons):: Madam Speaker, pursuant to section 36(8) of the Standing Orders, I have the honour to table, in both official languages, the government's response to six petitions.
[Editor's Note: See today's Votes and Proceedings.]



WESTERN GRAIN STABILIZATION ACT


Hon. Charles Mayer (Minister of Western Economic Diversification and Minister of State (Grains and Oilseeds)):: Madam Speaker, I wish to table, in both official languages, the annual report for the 1990-91 crop year of the Western Grain Stabilization Act.
Madam Speaker, you will be interested in knowing that pursuant to Standing Order 32(5) this document is deemed permanently referred to the Standing Committee on Agriculture.
Routine Proceedings



LIVESTOCK FEED BOARD OF CANADA


Charles James Mayer: Madam Speaker, I also wish to table, in both official languages, the annual report for the 1990-91 crop year of the Livestock Feed Board of Canada.
Pursuant to Standing Order 32(5), this document is deemed permanently referred to the Standing Committee on Agriculture.



ENVIRONMENT


Hon. David MacDonald (Rosedale):: Madam Speaker, I have the honour to present, in both official languages, the third report of the Standing Committee on Environment in accordance with Standing Order 108(2). Your committee has considered the topic of conservation of the Grand Banks' fish stock both within and beyond the 200-mile limit.
Having received evidence from the Government of Newfoundland and Labrador, it is clear that one of the most productive marine environments is at risk.
We therefore recommend that Canada pursue, with all urgency, all available means diplomatically under international law and through public information initiatives, both bilaterally and multilateral!/, including at the United Nations Conference on Environment and Development, to ensure that such fish stocks on the continental shelf beyond the 200-mile limit off of Canada's Atlantic coast, known as the nose and tail of the Grand Banks, are harvested in accordance with the principle of sustainable development. The committee will re-examine this issue pending the outcome of the earth summit itself.



HOUSE MANAGEMENT

[Stage Direction]
36TH REPORT OF STANDING COMMITTEE
Mr. Albert Cooper (Peace River):: Madam Speaker, I have the honour to present the 36th report of the Standing Committee on House Management. Pursuant to Standing Order 92(2), this report is deemed adopted when laid upon the table.

May 13, 1992
Routine Proceedings
37TH REPORT OF STANDING COMMITTEE


Albert Glen Cooper: Madam Speaker, I also have the honour to present the 37th Report of the Standing Committee on House Management regarding the selection of votable items among Private Members' Business. Pursuant to Standing Order 92(2), this report is also deemed adopted when laid upon the table.
[Editor's Note: See today's Votes and Proceedings.]



INCOME TAX ACT


Hon. John McDermid (for the Minister of Finance) moved: for leave to introduce Bill C-80, an act to amend the Income Tax Act, to enact the Children's Special Allowances Act, to amend certain other acts in consequence thereof and to repeal the Family Allowances Act.


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


PETITIONS
Mr. Mac Harb (Ottawa Centre):: Madam Speaker, it is my honour and pleasure to present in this House a petition signed by Canadians concerning housing co-operatives. As you know, housing co-operative are an affordable alternative to regular rental housing and help meet the huge demand for social housing in Canada.
Whereas the latest federal budget reduced the commitments for social housing in 1992 by 34 per cent and resulted in the cancellation of the Co-operative Housing Program; whereas only a strong federal presence in housing can ensure equal access to the decent affordable housing to which Canadians are entitled; for these
reasons, we ask Parliament to urge the government to restore its commitments for social housing by reinstating the co-operative housing programs.


Mr. Bill Vankoughnet (Hastings-Frontenac-Lennox and Addington):: Madam Speaker, pursuant to Standing Order 36,1 have the honour to present to the House a petition from a number of my constituents living in the Bancroft area situated in my riding of Hastings-Frontenac-Lennox and Addington.
These petitioners are supporting the government's commitment as stated in the Speech from the Throne, May 13,1991, to introduce legislation which could permit a national referendum on the Constitution.


Mr. Jim Jordan (Leeds-Grenville):: Madam Speaker, I have a petition from constituents in my riding from Brockville, Maitland, Prescott, Malloiytown and Cardinal. It seems appropriate that I present this petition today. They are petitioning the government to make sure that any amended Canadian Constitution has been approved by the Canadian people before their Constitution is altered in any way.


Mr. Sergio Marchi (York West):: Madam Speaker, I have the honour to present to the House three petitions from residents of my riding of York West on the drug problem in our Canadian society.
These petitioners are asking the government to amend the Narcotic Control Act so that the proceeds from drug seizures, financial assets, rather than flowing just to the general revenues of the federal Government of Canada in Ottawa, be shared with local police forces and local organizations, both of which are on the leading edge of trying to combat drugs in our streets and alleyways.
I would hope that the government and the Solicitor General come through very quickly with amendments to the Narcotic Control Act to do just that.
May 13, 1992

Routine Proceedings
NATIONAL REFERENDUM	NATIONAL REFERENDUM


Mr. Lee Clark (Brandon-Souris):: Madam Speaker, as someone who has believed for some time that holding a referendum or plebiscite could indeed be unifying in the sense that it would permit Canadians throughout all of Canada to participate in the process, I have the honour to table today a petition signed by many residents of Brandon-Souris indeed calls upon the Government of Canada to enact legislation providing for a referendum of the people, binding upon Parliament to accept or reject constitutional amendments proposed by the government.
Furthermore, they ask that the acceptance or rejection of the proposed amendments be determined by a majority vote of the total votes cast in the whole of Canada together with a majority vote of the majority of provinces, with the territories being given the status of one province.


Ms. Beth Phinney (Hamilton Mountain):: Madam Speaker, I have a petition signed by citizens of Canada from the Ottawa area, the Hamilton-Scarborough area and the Edmonton area. These petitioners feel that the Court Challenges Program, which the government has recently announced it will be cancelling, assists in the defence of equity and minority language rights cases that may otherwise not be pursued due to the prohibitive cost of court actions.
These petitioners urge the government to consider the advisability of reinstating the Court Challenges Program which facilitates accessibility to the Charter of Rights and Freedoms of all Canadians.


Elizabeth  (Beth) Phinney: Madam Speaker, I also have thousands of signatures here which brings to about 400,000 those I have presented to the House by petitioners. These 400,000 have come to my office and there have been many other thousands that have been presented by other MPs across Canada.
These petitioners feel that they are exposed to serious deficiencies in the criminal justice system. They are asking that Parliament recognize that crimes of violence against the person are serious and abhorrent to society.
They ask the government to amend the Criminal Code of Canada, the Bail Reform Act, 1972, and the Parole Act accordingly.


Mr. Ken James (Parliamentary Secretary to Minister of Labour):: Madam Speaker, I rise today to present seven petitions which pursuant to Standing Order 36 have been certified correct as to form and content.
These petitioners from across my riding of Sarnia- Lambton call upon Parliament to enact legislation providing for a referendum for Canadians to express their acceptance or rejection of constitutional amendments proposed by the government.
According to the signatories, this acceptance or rejection would be determined by a majority vote across the country as well as by a majority vote in the majority of provinces.


Mr. Don Boudria (Glengarry-Prescott-Russell):: Madam Speaker, pursuant to Standing Order 36 of the House, I have the honour and the privilege to present petitions signed by many constituents in the very beautiful region of Plantagenet, Ontario, in the riding of Glengarry-Prescott-Russell. The residents of Plantagenet, Ontario want to show their disagreement with the government's policy to eliminate the Court Challenges Program.
I also take the opportunity to commend the hon. member for Ottawa-Vanier for his good initiative in circulating these petitions. It is thanks to members of Parliament like the one for Ottawa-Vanier that Canada is a good place to live.


Mr. Svend J. Robinson (Burnaby-Kingsway):: Madam Speaker, I have a number of petitions to present today. First I have a petition which is signed by residents of the lower mainland of British Columbia and co-ordinated by the Simon Fraser University child care society which notes that the goods and services tax is applied to feminine sanitary products such as tampons and pads, that these products are necessities for women between puberty and menopause. Whereas the government has, decided that the GST should not apply to certain foods because they are necessities, the petitioners urge that Parliament consider removing the goods and services tax from women's sanitary products.

May 13, 1992
Routine Proceedings EXTERNAL AFFAIRS


Svend Johannes Robinson: Madam Speaker, I have a second petition which is signed by residents of Burnaby, Vancouver, Surrey, Langley all in British Columbia, and Winnipeg, Manitoba, including Winnipeg Transcona.
These petitioners note that two Canadians, Christine Lamont and David Spencer, who have been sentenced to 28 years each in a Brazilian prison, have suffered miscarriages of justice, cruel and unusual treatment in Brazilian prisons, and discrimination in sentencing and parole and that the cumulative effect of these irregularities provides ample ground for the Government of Canada to seek a remedy on their behalf, which is expulsion in accordance with Brazilian law.
Therefore, the petitioners call 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.


Svend Johannes Robinson: Finally, Madam Speaker, I have a petition which is signed by nearly 1,000 residents of cities, towns and villages from coast to coast to coast in Canada, including from my own constituency of Burnaby-Kingsway.
It notes that in February 1985 the Flouse of Commons asked the Standing Committee on Justice and Legal Affairs to prepare a report on equality rights in Canada; that the committee submitted a report in October, a unanimous report recommending that the Canadian Human Rights Act be amended to prohibit discrimination on the basis of sexual orientation; that the government accepted the recommendation in March 1986 and has yet to move on it; and that the Canadian Human Rights Commission has called for the amendment.
Therefore, the petitioners call upon Parliament to urge the government to bring forward an amendment immediately to add sexual orientation to the Canadian Human Rights Act as a prohibited ground of discrimination.


Kenneth David Atkinson: Madam Speaker, I have the honour to present three petitions. The first two
are signed by individuals from Niagara Falls, Niagara-on-the-Lake and St. Catharines. They refer to the murder of Nina de Villiers and are reinforced by the brutal murder of two young women since in the Niagara area and the disappearance of another young woman.
The petitioners request that Parliament recognizes that crimes of violence against the person are serious and abhorrent to society and amends the Criminal Code of Canada, the Bail Reform Act, 1972, and the Parole Act accordingly.


Kenneth David Atkinson: The third petition, is signed by individuals from St. Catharines. It requests a referendum of the people binding upon Parliament to accept or reject constitutional amendments proposed by the government.


Mr. Jack Whittaker (Okanagan-Similkameen-Merritt):: Madam Speaker, I have two petitions to present to the House today, both having been approved under Standing Order 36.
The first one is from a group of people within my riding. The petitioners are asking Parliament for a referendum of the people binding upon Parliament to accept or reject constitutional amendments proposed by the government, and that the acceptance or rejection of the proposed amendments be determined by first of all a majority vote of the total votes cast in the whole of Canada, together with a majority vote in a majority of provinces with territories being given the status of one province.


John R. (Jack) Whittaker: The second petition, Madam Speaker, is with respect to alcohol as a drug. The petitioners advise that people are unaware of the health risks posed by alcohol, that this is especially true for pregnant women, that alcohol consumption has been linked to impairment of a person's ability to operate machinery or an automobile, and that warning labels are already in place in jurisdictions such as Yukon and United States.
May 13, 1992

The petitioners are requesting that Parliament consider requiring labels on all alcoholic beverages to warn consumers including pregnant women of the health risks involved in the consumption of alcohol.


Mr. Lawrence MacAulay (Cardigan):: Madam Speaker, pursuant to Standing Order 36,1 am pleased to present a petition on behalf of a number of fishermen and people who support the fishery from Sturgeon and Montague in the district of Cardigan.
These people depend on the facilities provided by small craft harbours. Whereas the slip at Graham Pond, Prince Edward Island, is in a state of disrepair, the petitioners humbly pray and call upon Parliament to urge the government to ensure that all necessary repairs are made to the slip at the small craft harbour facility at Graham Pond, Prince Edward Island.


EXTERNAL AFFAIRS
Mr. Nelson A. Riis (Kamloops):: Madam Speaker, it is an honour and indeed a privilege to present a petition on behalf of a number of residents throughout western Canada. They point out that two Canadians, Christine Lamont and David Spencer, have been sentenced to 28 years in a Brazilian prison. They have suffered miscarriages of justice, cruel and unusual punishment in Brazil prisons, and discrimination in sentencing and parole.
The petitioners go on with a whole set of concerns about these two folks being held in prison and are asking 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.


QUESTIONS ON THE ORDER PAPER
[Stage Direction]
(Questions answered orally are indicated by an asterisk)
James (Jim) Stewart Edwards: Madam Speaker, the following questions will be answered today: Nos. 272 and 302.


Mr. Young (Acadie-Bathurst): Routine Proceedings
With respect to the staff of the Financial Management Information and Systems Branch of the Comptroller General, (a) what is the total number of staff (b) how many are classified as executives (management category) (c) what is the average salary of the executives (d) how many of the executives had had practical experience in the design, development or operations of computer systems?


Hon. Gilles Loiselle (President of Treasury Board and Minister of State (Finance)):: (a) The Financial Management Information and Systems Branch has 43 permanent employees at the present time,
(b)	Of this total staff, 15 are classified as executives,
(c)	The average salary of these executives is $78,000,
(d)	Although the OCG is not accountable for the design, development or operation of computer systems (this specific responsibility rests with individual departments; the Treasury Board Secretariat provides over-all policy direction) all the executives in the Branch have experience in the information management environment. The possession of such experience is considered essential in order that the OCG is able to effectively discharge its accountability for ensuring that there are sound, cost effective financial management systems in place across government. While the experience of the executives is primarily in the strategic information planning or business/information requirements aspects of information management (as is appropriate to the role the office plays) a number of the executives have very extensive experience across the full spectrum of activities in this field of endeavour.


Mr. Butland: With respect to the recent advertising campaign concerning the taking of Vimy Ridge, (a) what was the total cost of the advertising campaign (b) what companies or individuals were paid to create the ads (c) what was the cost of the ads (d) who paid for the ads (e) what was the cost of placement of the ads (TV, radio, print) (f) what was the cost of production of the ads?


Hon. Gerald Stairs Merrithew (Minister of Veterans Affairs):: (a) The aim of the television commercial was to inform Canadians about the 75th anniversary of the Battle of Vimy Ridge. The total cost was $1,130,110;
(b) The advertising company awarded the contract, Communications Consultants Ltd., is the agency of record for the department;

May 13, 1992
Routine Proceedings
(c)	The media placement cost was $1,054,000;
(d)	Veterans Affairs Canada paid for the advertising;
(e)	See response to (c);
(f)	The production cost was $76,110.


Madam Deputy Speaker:: The questions as enumerated by the parliamentary secretary have been answered.


James (Jim) Stewart Edwards: I ask that the remaining questions be allowed to stand.


Madam Deputy Speaker:: Shall the remaining questions stand?


Some hon. members:: Agreed.


James (Jim) Stewart Edwards: Madam Speaker, I ask that all Notices of Motions for the Production of Papers be allowed to stand.


Peter Andrew Stewart Milliken: Madam Speaker, I have a new Notice of Motion for the Production of Papers on the Order Paper. Normally I would not get up and ask the government to look at it carefully because I know it is a notice that was only given a week ago.
However, it is asking for documents concerning the persons who travelled with the Prime Minister on a trip to Calgary in April 1991. These documents were requested under the Freedom to Information Act by a reporter, and apparently the reporter was given heavily censored editions of these invoices with the figures stroked out. It really was one of the most shameful things I have heard of in terms of release of information.


An hon. member:: That is not a point of order.


Madam Deputy Speaker:: The hon. member rose on a point of order. We are talking about notices of motions and we are getting into debate as to why that notice of motion should or should not be presented.
The hon. member himself says he presented it only a week ago. I will listen to the hon. member a little longer, but he should not enter into debate.


Peter Andrew Stewart Milliken: Of course not, Madam Speaker, I would not think of doing that on a point of order.
I was suggesting that the information is already available. It is just a matter of bringing it into the House and making it public, as the parliamentary secretary should do. It is not a case of the government having to go and dig out the information; it has already been dug out.
I would ask the parliamentary secretary if he would implore the House leader, his boss, the government House leader, to get this information and bring it to the House as expeditiously as possible so that this motion could be approved.


Madam Deputy Speaker:: The hon. member could always call it and transfer it for debate.


James (Jim) Stewart Edwards: Madam Speaker, the hon. member is being more prescient and all knowing than even I gave him credit for being, because he somehow has come to the conclusion that this information is readily available. I am not certain how he would know that and I certainly do not know that.
If he would be so kind as to give us the specific reference of the motion that he is referring to, I will endeavour to give it my personal attention.


Peter Andrew Stewart Milliken: I would be happy to help the parliamentary secretary out. I will gladly give him the reference. It is Motion P-17 standing in my name on page 22 of today's Order Paper and it is the only one standing in my name. If the parliamentary secretary could look at it, I am sure he could get the information very quickly.


James (Jim) Stewart Edwards: Madam Speaker, if the hon. member had simply done that when he rose to his feet, I think I would have been able to oblige rather readily. However,
I do wish to question his use of this time to try to score doubtful debating points.


Nelson Andrew Riis: Madam Speaker, the other day the Minister of Supply and Services indicated that he would be tabling a list of all constituencies and the amount spent on procurement in each constituency. I checked with the minister yesterday and he agreed that this would be done forthwith. He had the list.
I wonder if I could ask my hon. friend, the parliamentary secretary to the government House leader, whether he too would perhaps take this under advisement and see if that could be tabled as soon as possible.
May 13, 1992


James (Jim) Stewart Edwards: Madam Speaker, I will give that matter my full attention.


Madam Deputy Speaker:: Shall all notices of motions stand?


Some hon. members:: Agreed.



GOVERNMENT ORDERS


Hon. Bill McKnight (for the Minister of Finance) moved: that Bill C-75, an act to amend the Excise Tax Act and the Income Tax Act, be read the second time and referred to a legislative committee in the Economics envelope.


Mr. Peter L. McCreath (Parliamentary Secretary to Minister of State (Finance and Privatization):: Madam Speaker, I am pleased to rise today to speak on behalf of the government on Bill C-75, an act to amend the Excise Tax Act and the Income Tax Act.
This bill amends the Excise Tax Act and the Income Tax Act to implement two key measures announced on December 6, 1991 to boost the transportation sector. These measures include a temporary loss offset program with a partial rebate of the federal excise tax on diesel and aviation fuel and an exemption from withholding tax for cross-border aircraft leases.
In addition to these two measures, the government also announced on December 6 changes to the capital costs allowance regulations which will increase the rate at which many transportation assets can be written off against taxable income.
As well, funding was announced for an institute for research in trucking issues and an owner-operators' trucking co-operative. I think all members will agree that a strong transportation sector is vital to all Canadians, to consumers and to businesses.
The measures contained in this bill and the other initiatives announced in December 1991 are the results of a review of the tax system as it applies to this sector to find ways to help the transportation sector cope with
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short-term cash flow needs. They also represent a substantial commitment from the government to transportation. These measures complement the nearly $1 billion in benefits to the transportation sector resulting from the replacement of the inefficient manufacturers' sales tax with the GST.
I would like to take a few minutes to outline the excise tax transportation rebate loss offset program. The excise tax transportation rebate is designed to provide an immediate benefit to firms in the transportation sector with significant cash flow needs. The federal excise tax rate on diesel and aviation fuel is currently 4 cents per litre. This bill will implement an excise tax rebate of 3 cents per litre on diesel and aviation fuel purchased in 1991-1992.
Transportation businesses that use fuel subject to the 4-cent per litre federal excise tax are eligible for the tax rebate. However businesses which are exempt from income tax will not be eligible.
Businesses that elect to receive this rebate will be required to reduce their income tax losses by $10 for every $1 of rebate received. This feature will effectively target the benefits of the program to firms most in need.
Loss carry forwards would normally be used to reduce taxable income in future years when a firm becomes profitable. Firms that receive the rebate must cash in these losses. The rebate thus provides an immediate cash flow benefit at the cost of lower loss carry forwards to offset income taxes as conditions improve.
The reduction in loss carry forwards means they will be paying income taxes sooner than if they did not claim the rebate. Businesses will be able to file claims for fuel purchased or imported in 1991 as soon as this bill receives Royal Assent. The administrative mechanisms are in place to ensure that the rebates will be paid quickly to eligible claimants.
Claims for rebates for fuel purchased or imported in 1992 must be filed during the first six months of next year. No rebate will be payable on fuel which is exempt from the excise tax or where a refund or other rebate is payable.
For example, aviation fuel used on international flights and marine diesel used for voyages through international waters are exempt from excise tax and so will not be eligible for this rebate.

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In order to make it easier for independent owner-operators to access this program, this bill provides an alternative rebate which trucking businesses may elect to claim in place of the standard rebate. Under this simpler option a rebate of 1.5 cents per litre on excisable fuel may be claimed up to a maximum of $500 annually. It will be significantly simpler as no assessment of the business's current or future income tax liability will be required.
This excise tax transportation rebate will give Canadian transportation businesses an important short-term boost of about $120 million in each of the two years. This will help to ensure we maintain the vibrant transportation sector essential for Canada's economic well-being. The bill will also enact the government's proposal to exempt from non-resident withholding tax all payments on cross-border aircraft leases negotiated on an arm's length basis. This exemption will apply to all lease payments made after the announcement date, December 6, 1991, for leases entered into after 1990.
The non-resident withholding tax is a tax imposed on most cross-border payments such as interest, rent, royalties, dividends and payments for businesses and services. The statutory rate is 25 per cent but this is often reduced in bilateral treaties to 10 per cent or 15 per cent.
Currently the government provides an exemption for aircraft leases where the aircraft is used outside Canada. The industry has told us it is difficult to comply with this and that it has imposed operational constraints on Canada's airlines. Extending the exemption to all aircraft will simplify the provision and also enable Canadian carriers to access offshore leasing markets to finance new acquisitions.
This withholding tax exemption will cost the Canadian treasury about $15 million a year. The benefits to Canadian carriers on the other hand will be much greater because the current rules limit the ability of Canadian airlines to access foreign leasing markets.
In closing, this government recognizes that the transportation sector is an important part of the basic infrastructure of Canada. These two measures will give a timely boost to that sector and with the measures introduced in the budget will provide stimulus to the
economy while maintaining the government's commitment to sound fiscal management.
In recognizing the importance of these measures to the transportation sector and to the Canadian economy as a whole, I urge all hon. members to give their full support to this bill and to ensure that it is approved by this House as soon as possible.
Madam Speaker, I think you will find there is unanimous consent for the following motion:
That the motion for the second reading of Bill C-75, an act to amend the Excise Thx Act and the Income Thx Act, be amended by having the bill referred to the Standing Committee on Finance rather than the legislative committee.


Madam Deputy Speaker:: The hon. member has moved a motion and I want to make sure there is unanimous consent from the House. I will read it again for the hon. member.
That the motion for the second reading of Bill C-75, an act to amend the Excise Ihx Act and the Income Thx Act, be amended by having the bill referred to the Standing Committee on Finance rather than the legislative committee.
Is there unanimous consent?


Some hon. members:: Agreed.


[Stage Direction]
Motion agreed to.
Mr. John Manley (Ottawa South):: Madam Speaker, I am glad to hear the words of the member on the government side pledging support for Canada's transportation sector.
Part of this bill is directed at legislating some of the changes that were announced last December by the government with respect to what really amounts to nothing short of a crisis in Canada's trucking industry.
You will recall, Madam Speaker, that last year we had for a period of time a vast array of rigs outside the parliamentary precincts on Wellington Street here in Ottawa as truckers from all over came here to express not only their grievances but their concern that they were being put in a position where they were going to lose their businesses and their vehicles, all as a result of their inability to be truly competitive with truckers in the United States.
The response contained in Bill C-75 is appreciated. This party supports it but it falls well short of what could have been done and what should have been done on behalf of the trucking industry.
May 13, 1992

I am going to take a few minutes to revisit many of the suggestions that my colleague from York West brought forward on this issue last year and which provided the government an opportunity to begin to take some action.
He suggested, for example, that a shorter period of depreciation of equipment be permitted. This is addressed in part in the announcement that the minister made last December but even then it fell well short of what is needed. While the trucking industry indicated a need to more rapidly depreciate equipment that is very expensive and which they had acquired, the minister's response was to allow depreciation to be accelerated with respect to purchases of tractors and trucks after December 1991. He did not touch the question of trailers or the rate of depreciation of existing equipment that was already owned by many of these small businesses, in particular those that were already in financial difficulty.
My colleague called upon the government to provide relief on its tax on diesel fuel. As the member opposite outlined, there is some such relief in Bill C-75. From what I can understand and in discussions that I have had, virtually nobody in the trucking business is going to be taking advantage of the rebate on diesel fuel because it entails a 1 to 10 loss of the loss-carry-forward provisions under the Income Tax Act.
I realize that is very technical, but essentially the point is this: In the trucking industry, as in all businesses, we enable, under the tax system in Canada, businesses to carry forward business losses for a period of up to seven years. If a loss is incurred this year and profit is earned next year, we allow the profit next year to be reduced by this year's losses so as to spread out the tax burden a little bit more fairly, rather than rigidly limiting it to one year at a time. That is one of the reasons, as it happens, that occasionally businesses that are profitable do not pay any tax, because they may be profitable this year, but they may have experienced losses the previous year.
What the government has done is to require these trucking businesses to give up $10 of loss-carry-forward for every $1 of fuel tax rebate that they claim. In effect, with roughly a 44 per cent or 50 per cent corporate tax over all, including federal and provincial taxes, the loss-carry-forward that is lost to the trucker is much greater than the value of the rebate if they return to profitability in a short period of time. It really would only
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be effective for companies that are holding losses from five, six or seven years earlier which would otherwise expire.
In point of fact, although the government has tried to make this sound like it is a generous provision, it is really of little, if any, use. It provides for a 1.5 cent rebate up to $500 for small trucking companies. Anything helps, but Canadians will be interested to know that for a large rig that may be about 1.5 to 1.75 of a tank of fuel. That is how much the government is helping out in this circumstance.
My colleague from York West suggested that something be done with respect to the GST in order to help the truckers. The member opposite who spoke on this bill praised the GST as being an assistance to this industry.
Our suggestion was that the remittance cycle for truckers be extended a little bit, from 45 to 70 days, and that the time taken to provide GST rebates to truckers be reduced. This would help the cash flow situation that these operators are in. Again there is no response from the government. Again the truckers are left on their own to try to deal with the problems they have.
We suggested that there be permission for tax deductibility of the cost of an operating licence from income. This is an historic complaint. In 1987 when deregulation of trucking was brought in, trucking companies in Canada had as much as $200 million in the value of trucking licences that had been previously issued. These licences maintained value and could be bought and sold in the marketplace. With deregulation, the asset value of a licence was immediately reduced to zero.
When deregulation came in, it spawned the possibility of much more competition but without any kind of adjustment period for existing companies to take into account the increased competition, together with the loss of an asset, which in many cases was quite valuable.
It is interesting to compare the approach our government took to that which was taken in the United States, where in similar circumstances trucking companies were able to write off the existing cost of their licences over a two-year period. That gave them an opportunity to make the adjustments that were necessary by sheltering some income in those two years and to make certain adjust-

May 13, 1992
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merits so they could be as competitive as the new competition on the roads.
There is a lesson here for the farming communities across Canada. We know very well that behind closed doors the government opposite is negotiating the elimination of our marketing board system and expects to replace it with a system of tariffication. Farmers who have paid a lot of money for their quotas ought to be looking at what the government did in trucking and thinking about what is going to happen to the value of their quotas when the system of supply management is abandoned.
If the trucking example holds, it would appear that what is going to happen is nothing. The value of the quota will be reduced to zero overnight and the farmers will be entitled to continue the existing system of depreciation which is of very minor assistance to them. Beware. That is what happened to the truckers and we see no assistance whatsoever in this bill.
We suggested last year that efforts be made to improve the federal-provincial co-ordination on policy matters affecting the transportation sector. We have seen no movement on that issue whatsoever.
We asked for improved enforcement and increased penalties for those engaged in illegal cabotage in Canada. There has been no movement on that.
We urged the federal government to increase its investment in road infrastructure. This is a very important matter because in talking about these rebates for excise taxes on diesel fuel and so on, we have a very significant source of revenue for the Government of Canada, which it takes directly out of this industry. It is approximately $5 billion in revenue for the Government of Canada.
One would think that when that much money is being sucked out of the system, the federal government would be looking for ways to reapply those revenues to make it a better system for the trucks to use. One would think it would be going into road infrastructure. Do members know how much is going back in? About 5 per cent.
While there is a major burden on our industry which is endeavouring to compete with the United States, a
major burden reducing our competitiveness, in return the federal government offers a pittance, a 5 per cent pittance to the cost of the infrastructure that is essential to this business.
We will support the bill and we will not endeavour to delay it in any way. It is with a great deal of disappointment that we note that the government's response to what is really nothing short of a crisis in this important sector of our economy is so poor and so inadequate.


Mr. Iain Angus (Thunder Bay-Atikokan):: Madam Speaker, at the outset I would like to indicate that I am going to be splitting the time available to the New Democratic Party with my colleague, the member for Essex-Windsor, 50/50. Therefore I will rely on you to tell me when it is time to wind up.


Mr. Vanclief:: Time is up.


Iain Francis Angus: Don't you all wish.
I want to begin back before this time last year when not just in Toronto, which has had years of experience with truckers circulating around the legislature since at least before 1975, not just in Windsor where the truckers blockaded the bridge to the United States, but here where, I think for one of the first times, the Elouse of Commons experienced the sheer power of the transport trucks parked on Wellington Street for days on end. They made it very clear to this House and to Canadians that the trucking industry was in jeopardy.
I want to begin before that time, because I want to talk about the underlying causes of what we saw on our roads, our bridges and our streets last year. The problem began with a decision taken by the Government of Canada to deregulate trucking, and then a decision by the then Liberal government of the province of Ontario to follow suit and deregulate trucking in that province.
That decision created great expectations. There were a whole bunch of independent-minded individuals who said: "Great, now I can get a rig. Now, I can go into business and earn my living by carrying produce. I do not have to go through a complicated and expensive regulatory procedure. I do not have to prove that there is a need for my services. I just have to convince a bank manager that I am a good financial risk. I just have to go out and get insurance and then I am in business".
May 13, 1992

A lot of people did that. In fact, so many people did it that it very quickly became obvious that there were more trucks than there were cargoes to carry.
Under regulation there was a balance. I admit that the Ontario Highway Transport Board in its regulation setting and decision making was flawed, there was some over-protection. However, by throwing out the total system we raised expectations that were possible to fill in the short term but impossible to sustain in the long term.
Add to that the Canada-U.S. Free Trade Agreement. Add to that the recession. Add to that the inevitable consolidation of the trucking companies, again as a direct result of deregulation both in Canada and the United States. Also add to that the reality that as a country that has one-tenth the population it is physically impossible for us to create a megatrucking company that could compete on a level playing field with an American carrier.
Add to that mix our taxation laws, whether fuel taxes, write-offs, investment or what have you. Then mix in the difference in labour laws and safety laws and our geography, which is a ribbon along the Canada-U.S. border with most of our commerce being east-west. Our neighbours to the south have a fully integrated grid system.
Mix that all together and we had the makings of a disaster for the trucking industry. What we saw a year ago outside this Chamber, in Toronto, in Windsor, in Cornwall, in British Columbia and elsewhere was a cry from the truckers saying: "Help, we are in trouble. We cannot make ends meet. We are being outdone by our American competitors. They are fuelling up south of the river and taking their cargo to Montreal and Toronto with still enough gas to get back to the border".
Although, we also heard some stories about the bus only making it to the top of the bridge and somebody then having to come across with a jerrycan to fill it up to get it over the hump back down to the United States where it could fill up with extremely cheap gasoline, most of it coming from Canada. There was an advantage in doing so in terms of over-all costs.
They cried out for help and this government responded with peanuts. In fact, someone suggested that they were invisible peanuts, or peanuts painted with
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invisible ink, because they are here today and gone tomorrow.
First, it is only for two years. Second, you may take the $500 through your reduction in the excise tax of 3 cents a litre, or the 1.5 cents a litre, but you have to pay it back later.
It is a short-term tank and a half of gas or fuel oil that really is not going to deal with the underlying problems affecting the trucking industry, which is too many truckers, too little cargo and too much effective competition from south of the border.
A week ago today I was in Quebec City where I sat in on the third annual North American conference on road transportation. Truckers and trucking companies from Mexico, the United States and Canada came together to talk about their future. While they voiced optimism about their ability to compete, as I sat there listening I said that I had heard this line before.
I heard it from Max Ward, who used to be the owner of Wardair, which is now part of Canadian; I heard it from the gentleman who was the owner of City Express, now gone. They were pumping up their chests about how great deregulation was going to be and how they could beat the big boys.
However, they did not. The reality of the situation of the system in Canada and the U.S. today is that it is bad news for Canadians and better news for the Americans.
As I sat there I began to understand that what the government has done to try and address the problem is minuscule. It really does not deal with those problems. For example, it does not deal, nor does the North American free trade agreement, with the fact that when a Canadian carrier takes a load from Toronto to Milwaukee the Canadian carrier can pick up another cargo in Milwaukee and bring it back to Canada, but it cannot relocate. It has to pick it up from the same terminal.
However, Canada in its usual generosity has said to American carriers that it thinks it logical that the carriers should be able to reposition themselves so that when they bring a load into Windsor it is okay to pick up more goods in Windsor and take them to Toronto where they can pick up their other load to go back to the United States.

May 13, 1992
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Once again rather than trying to hammer out a deal at the bargaining table, whether it is a sectoral agreement or it is in the North American free trade agreement, Canada has given up things before it had to, it has given benefits to Americans that are not reciprocated. They are not reciprocating in the United States so we do not get the same advantage.
We must realistically deal with the problem before our trucking industry. We must develop adjustment programs that will allow truckers to get out of the business and move on to something else with a more stable future. We must downsize the industry to ensure that there is a better balance between supply and demand.
We must also make sure-and I regret that we have to go to this point-to eliminate any of the competitive disadvantages that Canadian carriers find themselves in, whether it is taxation, write-offs or whatever.
Elowever, on the safety side we have to negotiate to ensure that the American truckers match if not better whatever standards we have in Canada, whether they concern safety, labour, hours of work, or whatever. That is also very clear.
I know that my time is up. I appreciate the opportunity to address this bill. We will be supporting it at second reading. We look forward to a reasonably short review in committee because it is important, despite how miserly the government has been, to give the truckers at least the option of tapping into this particular assistance as soon as possible.


Peter L. McCreath: Madam Speaker, I listened with great care to my hon. friend and I cannot help but observe that he describes the economic benefits to the trucking industry as peanuts. I suppose only the NDP would consider $120 million for two years, for a total of $240 million, to be peanuts. In my judgement it is rather considerable assistance to the industry.
It is important to point out that this measure was in response to what the trucking industry had requested of the government. This last off-set program is a shortterm measure responding to the current cash flow pressures facing the transportation sector. That is why it is a two-year program. I would also point out that this is one of a number of measures that have been introduced.
For example, reference was made to the GST. I would simply point out to my hon. friend that fuel taxes were
lowered for this sector by three cents a litre as a result of the introduction of the GST.
This measure is one of several measures but it is definitely a measure that will be of benefit to the industry.


Iain Francis Angus: Madam Speaker, I appreciate the member's intervention.
It may be $160 million to the Treasury of Canada, but it is not much to a mom and pop operation. It will not make the difference between whether they are in business or out of business. It is insufficient to deal with the problem.
With regard to the GST, I would like the hon. member to give me a list of truckers who have said: "Son of a gun, my gas tax went down because of the GST". To my knowledge nobody has seen that effect on their costs.
If we want to talk about what the truckers demanded, Truckers for Canada said: "Protect Canadian trucking jobs and stem the streams of our jobs to the U.S." Nothing has changed there. It also said: "Stop the senseless granting of new extra-provincial licences". The province of Ontario, and the then Minister of Transport, Ed Philip, did that very thing. He told the Ontario Legislature that there would be a moratorium for two years on truck licences so that no more truckers could get into the business.
Truckers for Canada also asked the government to: "Impose or sponsor negotiation of a Code of Ethics, minimum rate structure and standard contract on the highway so carriers cease to compete on the backs of their owner-operators; implement fuel tax, and depreciation rules that work with us instead of against us". I grant that the government has moved part way, but there is still a lot of work to be done if we are to ensure that what is left of our trucking industry can survive and be of benefit to all of our communities.


Mr. Steven W. Langdon (Essex-Windsor):: Madam Speaker, this is a case in which the trucking industry across this country has put forward in many different ways-sometimes in the form of direct protest, sometimes in the form of position papers, sometimes in the form of discussions with ministers at both the federal and the provincial levels-its very deep concerns about what is happening to it as an industry and what as a consequence is happening to thousands of truckers across this country.
May 13, 1992

In my constituency literally dozens of companies have had to shut down or they have had to reduce their operation sharply because of their inability to cope with the deregulated situation established through government legislation by this present federal government.
We have in front of us at the moment a bill which offers some relief. I do not want to suggest that it does not offer any relief. It does. The point is and the point which my colleague made quite effectively I thought is that the amount offered is extremely limited.
The member for South Shore suggested that in fact what we were talking about was $120 million over two years and this was something that should be taken quite seriously. What he fails to recognize is that parts of the legislation indicate that that improvement in cash flow for trucking companies, for truckers, which will come out of this legislation because of the three cent per litre rebate which will be provided, will be paid back by these truckers in the future through their inability to deduct as much as they otherwise would have been able to from their expenses.
The consequences in fact for the treasury of this country are very much less than $120 million. Exactly how much less, it is going to be difficult to be sure of until we see how the whole thing works out over the years.
For the existing companies, those companies which take up this benefit will be required to reduce their income tax losses which they could write off by $10 for every $1 which is rebated to them as part of this three cent per litre rebate.
That tells me that if companies continue to absorb significant losses, and that certainly looks to be the case because there is nothing fundamental which has been done to deal with the problems of the trucking industry in this legislation or in any of the measures which the government has taken, it is quite likely that in the years ahead every single penny of these rebates will be paid back by trucking companies and independent owner-operators which are continuing to suffer losses and cannot deduct those losses at their full value, but instead must deduct them at significantly less value.
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What we have here is a very minuscule response to a very considerable problem in this country. It is a considerable problem which we in Windsor especially have felt the brunt of. It has not just been a case of our truckers who have lost their jobs, but the frustration which these truckers have felt. There have been continual blockades which have taken place on the Ambassador Bridge between Windsor and the United States which certainly has brought home to this government the need to take some action. That I am willing to recognize.
It has also brought considerable economic loss and chaos in many cases to the economy of my city. Windsor and Essex County have suffered considerably in terms of lost economic benefits from the blockades which have taken place. We have considerable concern not just for truckers, but for the future of our community's economic base, that what the government does is something which sufficiently responds to the problems of truckers across this country.
As I look at the original demands which truckers made, there is no way that one can suggest that those small items which the government has put before us today respond to the concerns which truckers put forward when these protests first began.
If we go back to the first protest for instance, and I am quoting here from some of the demands put forward by Canadian truckers fighting back, they talked about the reduction in the fuel taxes. There has been a response to that. They also talked about a five year tax exemption on new and used equipment for the trucking industry. They talked about exemption from the GST. They talked about seeing to it that there was an attempt to hit foreign truckers coming into this country, especially American truckers, in a way that those truckers had to pay the excise tax on fuel which Canadian truckers have to pay. They asked for lower insurance rates for the trucking industry. Most important, they asked for stepped up monitoring and enforcement of regulations. They suggested that the cabotage laws, those laws which make it illegal for trucking companies from the United States that have shipped a load to Montreal, let us say, to pick up a load in Montreal and bring it back to a Canadian destination such as Windsor. They asked for strict enforcement of the laws against that.

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I have seen and have held in my very hand examples of bills of lading of foreign trucks which were loaded in Montreal, owned in the United States and driven by American drivers, brought back to Windsor and unloaded at destinations in Windsor.


An hon. member:: It is called deregulation.


Steven W. Langdon: In fact this is something that even under the government's deregulation is illegal, yet because the federal government has not been prepared to permit the provincial governments to enforce these laws against cabotage, this kind of illegal activity that I have been describing, truckers in Canada have found themselves continually out-competed by this kind of illegal action on the part of American truckers.
It is not just a question of illegal action either. The regulation which we need in this country if we are going to see a future that will be at all bright for our truckers is regulation which re-establishes some control over the number of interprovincial licences that are issued. This is not something that the government has not heard about.
I quote here from a letter from the Minister of Transport of the province of Ontario written last May in which the Minister of Transport in Ontario said: "I feel it is also of vital importance that you give some indication and support for the plight of the truckers by announcing measures similar to those taken by Ontario. In particular, an announcement of a moratorium on interprovincial and trans-border trucking licences should be made immediately to arrest the precipitous decline of the Canadian trucking industry".
That has not taken place. Instead what we have had are a puny set of tax measures, a puny set of changes in capital depreciation possibilities and a puny set of grants to set up a co-op purchasing system for independent owner-operators. All of these are good moves.
My final comment is: Why could the government not have listened to truckers and taken not just these tiny, baby steps but some significant action to put the trucking industry in Canada on a fair competitive basis against the United States?


John Paul Manley: Madam Speaker, I was interested to hear the finance critic for the NDP talking abut loss carry-forwards and accelerated depreciation. As he knows, a colleague in his party, the member for Nickel Belt, has made a virtual career of denouncing corporations which find themselves in a position where they make a profit in a given year but are not obliged to pay any tax. Given the tenor of the member's remarks, I wonder if he is prepared to say that the NDP would not impose a minimum corporate tax on trucking corporations which were profitable if it was in a position to apply loss carryover from previous years. If he would make that exemption, are there any other sectors to which he would make such an exemption? In fact, what is the NDP position on loss carry-forwards for business losses?


Steven W. Langdon: Madam Speaker, it is interesting to hear the transport critic. He used to be the the associate finance critic and we used to trade insults back and forth in that context. We now have to trade comments back and forth in this context.
What I think is the important question, and I regret that my friend has not dealt with that in his question, is the whole issue of deregulation and the need to reregulate some of these issues.
Let me deal with the question he has raised. The Fair Tax Commission in Ontario has reported quite recently with respect to a minimum corporate tax and has indicated that the minimum corporate tax, if it was applied on a national basis, would be able to look to a pool of $6.6 billion per year which escapes tax in profitable companies and escapes tax not because of loss cany-forward provisions-


John Paul Manley: Some do.


Steven W. Langdon: Not the $6.6 billion. I don't know if my friend has had a chance to read the report of the Fair Tax Commission in Ontario. It seems he has not. I would suggest that he do so.
If we look at including loss carry-forwards, in fact the number of companies and the level of money which escapes taxation in profitable corporations each year is very considerably greater than $6.6 billion. If we leave out the question of loss carry-forwards, what we are talking about is still $6.6 billion of taxation. We have suggested at the federal level and we will continue to stress the need for this kind of initiative, that if there was a minimum corporate tax which saw to it that that $6.6 billion, to take just that year from which these figures come, was subject to tax at a minimum level of taxation,
May 13, 1992

at least let us say of 20 per cent, we would be talking about close to $1.5 billion in extra revenue.
At the federal level it would give us tremendous new inputs, tremendous new revenues to be able to address some of these very trucking problems which are in front of us.
We are not going to be able to address the problems that I have been talking about or those that my friend has been talking about without improved revenues. That is why we have to put the corporate minimum tax approach into effect. After all, it is something that has existed in the United States for some years. It has worked quite successfully and has not exactly killed capital as it did in the United States.


Madam Deputy Speaker:: Is the House ready for the question?


Some hon. members:: Question.


Madam Deputy Speaker:: Is it the pleasure of the House to adopt the motion?


Some hon. members:: Agreed.


[Stage Direction]
Motion agreed to, bill read the second time and referred to the Standing Committee on Finance.

Paul Edgar Philippe Martin: that Bill C-74, an act to amend the Customs Act, the Customs Tariff and the Excise Tax Act, be read the second time and referred to a legislative committee in the Economics envelope.


Peter L. McCreath: Madam Speaker, I am pleased on behalf of the government to introduce debate on Bill C-74, an act to amend the Customs Act, the Customs Tariff and the Excise Tax Act.
Bill C-74 seeks to amend legislation administered by Revenue Canada, Customs and Excise, relating to the introduction of penalty and interest provisions, and to postal and courier provisions in the Customs Act, the Customs Tariff and the Excise Tax Act.
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These are important measures and require a number of amendments, many of them of a very technical nature.
I intend to deal with the penalty and interest provisions first, then pass on to the courier and postal issues.
Revenue Canada, Customs and Excise has been involved with several significant initiatives during the last few years designed to streamline operations, to ensure the integrity of program delivery, to improve service to client groups and to enhance revenue collection capability.
The purpose of the proposed amendments relating to the penalty and revised interest provisions is threefold: first, to correct imbalances in the current interest provisions of customs legislation and to introduce penalties for the lack of compliance in certain instances; second, it is to enhance voluntary compliance by providing an incentive for the provision of timely and accurate information to customs; and third, it is to help create a level playing field for Canadian importers and Canadian businesses.
For the vast numbers of importers who voluntarily comply with customs requirements, the proposed amendments will have no impact on day-to-day operations. Rather, these measures are aimed at those commercial importers who find it financially rewarding to delay filing their accounting documents or paying their fair share of duties and taxes.
I would like to assure this House that these measures are not designed to affect the travelling public. The legal provisions for paying interest to importers to whom Revenue Canada owes money are much different from the provisions that apply to money which is owed to the department by importers.
This imbalance has resulted in a decided disincentive for importers to declare the correct origin, classification and value of their importations. The result is that duties are unpaid. It has also provided an incentive for customs clientele to delay paying amounts owing, thereby providing themselves with free working capital at the expense of both the Crown and those importers who do comply.
The current interest provisions are being revised in order to remove the incentive not to comply and to bring them more into line with normal commercial practices.

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The root of the problem lies in the current legislation. For example, if an importer pays excess duty a refund is given of the excess plus interest from the day after the duty was originally paid to the date of the refund cheque.
If an importer, however, underpays duty by not declaring the correct amount payable at the time of importation, and the underpayment is corrected by either the importer voluntarily amending the entry or by customs detecting and correcting the incorrect declaration, the importer pays no interest whatever on the duty which should have been paid in the first place.
Current rules allow importers five days from the date of release to file accounting documents for the goods and pay the duty and tax at the end of the month. There is no provision which permits customs to charge interest if the importer does not pay on the due date.
The recent move to monthly payment of accounts presents an even greater incentive to late file accounting documents, especially for large shipments imported close to the end of the month cycle. By postponing accounting past the 24th of the month, the importer would gain one month of interest-free use of the duties and taxes due unless the legislation is changed.
The proposed amendments contained in this bill are designed to ensure that the importing community meets its obligation to pay duties and taxes in a timely way.
In sum, the bill will provide for the application of interest and penalty charges in the case of late accounting for goods, the late payment of duties and taxes, and in the case of subsequent assessments and reassessments. Their application will be tempered by the ability of the Minister of National Revenue to waive them and to extend time frames for payment.
We are also taking the opportunity to bring the interest provisions into line with commercial practices by charging and refunding interest on a compounded daily basis.
I want to emphasize again that the proposals will have no negative impact on the vast majority of importers who file documents and pay duties and taxes within the prescribed time periods. Moreover, when importers have legitimate reasons for being late, allowances will be made.
What we are trying to ensure is that deliberate or chronic late payers are not rewarded by having what are in effect interest-free loans at taxpayers' expense. The legislation would remedy the problem.
I would now like to turn your attention to the second part of my comments on Bill C-74, those dealing with the importing of parcels through the mail.
The proposed legislation would modify policies which encourage significant Canadian shopping through foreign mail order houses. It would also change a system which encourages Canadian mail order houses to establish direct marketing operations outside Canada to sell back into the country. This has resulted in a significant loss of federal revenue and is a subsidy to those who use the mails to import goods.
The proposed changes would help level the playing field between Canadian retailers and foreign mail order firms by ensuring reasonably equitable duty and tax treatment. They would also ensure any changes to achieve equity are done in a fiscally responsible manner.
The current postal imports remission order, the courier imports remission order and the GST legislation allow parcels valued at $40 or less to be imported without duty and tax. There has been growing criticism in recent years that these exemptions and their administration, in particular on the postal side, are having negative effects on Canadian businesses.
The government has heard from many people asking for changes to the existing system. Representations were received from the Retail Council and the Canadian Direct Marketing Association, independent retailers and other Canadian small business people and by members of this House.
The mail order firms we heard from are located not only in large metropolitan centres such as Vancouver, Calgary, Ottawa, Toronto and Montreal, but also in small communities such as Viking, Alberta, Goodwood and Pakenham, Ontario, Aylmer, Quebec, and Clarenville, Newfoundland.
There has been an increasing number of Canadian purchases from foreign mail order distributors. Customs has experienced a 46 per cent increase in the volume of dutiable and taxable parcels over the last two years and it estimates that in 1990 Canadian purchases from foreign mail order houses exceeded $900 million.
May 13, 1992

Sales into Canada are expected to grow as foreign mail order houses target the Canadian market with aggressive catalogue distribution and media advertising campaigns. Foreign mail order firms have recently begun to market their products in Canada in substantial numbers, particularly since 1988, through the distribution of catalogues. Others are expected to follow their lead upon completion of test marketing currently underway.
This is an important issue affecting an important sector of the Canadian economy, the Canadian direct marketing industry which represents a total annual sales volume of $7.8 billion. Of that amount, there are approximately 600 firms and an estimated 35,620 people employed in catalogue direct marketing with an estimated $2.2 billion in sales volume.
A study commissioned by the Canadian Direct Marketing Association concluded that the postal and courier exemptions have had a severe impact on the Canadian industry and created a competitive disadvantage for Canadian catalogue firms in the under $40 price market. It is estimated that Canadian catalogue firms lost $260 million in sales in 1990 and that approximately 4,170 jobs have been lost since 1986. The current exemption levels are considered to have played a significant role in these losses. By 1995 the total industry loss is projected to be 7,430 jobs and annual sales of $469 million.
In terms of annual industry sales growth in Canada, it is estimated that between 1977 and 1985 these were healthy at 7 per cent. Since 1986, these have stagnated at a compounded annual rate of 3.2 per cent. Comparable U.S. growth was 8.3 per cent from 1977 to 1985 and 12.4 per cent from 1985 to 1990.
Why the difference in growth rates? Hon. members will be interested in some of the statistics that provide part of the answer.
An Ontario based firm selling a Canadian-made article for a $40 catalogue price would deliver it to a customer in Canada for $50.26 including GST, provincial sales taxes, shipping and handling. However, the same company could ship the Canadian-made good to the U.S. and deliver it to the same customer in Ontario for $45.36 with the same dollar value of profit margin and after allowing for differences in postal rates.
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In an industry where net profit margins typically run on the order of 7 per cent to 8 per cent of sales, this 10 per cent difference is clearly critical and can be directly attributed to the exemptions levels.
Therefore, you can see how the duty and tax exemptions for parcels valued at $40 or less creates a serious competitive inequity for Canadian retailers in competing for Canadian mail order business.
Canadian retailers must charge GST and a provincial sales tax on their sales when mailed to customers within the province as well as pay duty on their imports. However, mail imports valued at $40 or less are not subject to the GST or duty and the federal government does not collect provincial tax except when it is harmonized with the GST on goods.
For all the above reasons, we have proposed legislation that would lead to the implementation of the following changes on July 1, 1992:
The exemptions which allow duty and tax-free entry of postal or courier imports valued at $40 or less would be reduced to $20.
Revenue Canada, Customs and Excise, would engage Canada Post to perform specific functions currently performed by Customs. Such services would include the collection of duty, provincial sales tax where harmonized, and the GST.
Canada Post would charge a $5 fee for the handling and collection services. This is in line with the government's effort to help recover costs where appropriate from those who benefit from the service. The fee is similar to that charged by other countries.
Canada Post would also bear the cost of clearing priority courier items through customs as is done by private couriers. The proposed legislation also provides for the voluntary registration of foreign mail order firms for the collection of GST and duties.
Non-resident mail order houses would be given the option of collecting and remitting applicable duties and taxes, that is, the GST and any provincial sales taxes harmonized with the GST, on all shipments over the $20 exemption limit sent to Canadian destinations.
Postal shipments on which duty and GST have been pre-collected will not be subject to the $5 handling fee since all costs associated with the assessment, collection,

May 13, 1992
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and remittance of these duties and taxes will be absorbed by the foreign suppliers.
Providing foreign mail order houses with the option of pre-collecting duty and tax on their shipments to Canada is important as it would reduce the number of dutiable and taxable parcels to be processed by Customs and Canada Post. A number of foreign firms have already expressed an interest in pursuing this option.
As a complement to the exemption on postal and courier imports the customs tariff also provides for the importation of gifts duty and tax-free if they are valued under $40 with duty and taxes payable only on the amount over the exemption level.
Under the proposed legislation the gift exemption which allows duty and tax-free entry for gifts sent to Canadians through the mail or imported personally by non-residents would be increased from $40 to $60 bringing us into line with other countries. This is in response to numerous recent representations from individual Canadians across the country. The gift exemption is intended to deal with unsolicited gifts for family and friends abroad. These goods do not compete against goods sold in Canada. There has been much criticism regarding the level of exemption on gifts because it is lower than those of other countries.
The review of the exemptions for postal and courier imports provided an opportunity to reassess our policy on gifts and to consider the merits of amending the exemption levels to make them more liberal.
I want to conclude by saying that the proposed legislation is not a panacea for the complex issue of cross-border shopping through the mail. Moreover I do not expect that all Canadians will be happy with it. However it proposes measures that are equitable and a good start on the road to ensuring that Canadian mail order firms can compete with foreign competitors in Canada.
In addition, the initiative before us also proposes effective remedies to imbalances in existing import penalties and interest provisions. The bill moves Canadians in the direction of a fairer and a more just system of doing business and I commend it to all members.
There have been consultations and I think you will find, Madam Speaker, there is unanimous consent for the following motion:
That the motion for the second reading of Bill C-74, an act to
amend the Customs Act, the Customs Thrift, and the Excise Thx Act
be amended by having the bill referred to the Standing Committee
on Finance rather than the legislative committee.


Madam Deputy Speaker:: The House has heard the motion. Is there unanimous consent for this change?


Some hon. members:: Agreed.


[Stage Direction]
Motion agreed to.
Don Boudria: Madam Speaker, it is my pleasure to speak on this bill on behalf of my colleagues in the Liberal Party.
A number of the amendments we are talking about this afternoon are indeed technical in nature, as the member for South Shore indicated earlier this afternoon. Nevertheless that is not universally the case.
I want to speak briefly on schedule 7 of the tax act which is amended to provide for the lowering of the exemption for the importation of products through the mail.
The member, when reading his prepared notes, indicated to all of us this was something that members had made representations about for some time. That is quite true and people in the industry wanted a change.
What he did not say is that it is his own government which raised the exemption to start with and the only reason it has to be lowered is because the government raised it for reasons that no one of this side of the House can understand.
I certainly did not ask for that exemption to be increased, my colleagues did not ask for it, and certainly the Canadian retailing industry never wanted that exemption to be increased at all. The government increased that exemption to $40 and is now lowering it back to $20; in a sense admitting, although belatedly, that it made a mistake to start with.
I want to express what this has done in the constituency of Glengarry-Prescott-Russell and elsewhere. In my riding there are Canadian mail order houses and many Canadian retail operations. Retailers and mail order houses in my riding were stuck. In each case they
May 13, 1992

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were competing against American companies which were exempt from those very things we were asking Canadian businesses to pay.
For example, the exemption was supposed to be for $40 purchases. If you are a U.S. mail order house what do you do if someone in Canada buys three or four items, the total value of which is $99? You send them in three or four little boxes. What do you achieve? You are below the $40 maximum for each individual box being shipped. Therefore no duty, no GST, no provincial sales tax was paid.

Madam Speaker, is a retailer in my constituency or yours exempted from collecting customs duty or GST or provincial sales tax, if the item is worth less than $40? Of course not. All retailers are obliged to collect these taxes from everyone, to the last cent; five cents here, four cents there, $10 here, $50 on another item, and so forth.
There is no exemption of any kind for businesses in our constituencies. However, big American companies like L.L. Bean can ship merchandise to Canada without being subject to the same regulations Canadian retailers must comply with today.

This issue was raised in the House a long time ago. [Translation]
On May 30, 1990 I raised this matter in a speech in the House of Commons, and I may refer you, Madam Speaker, to Hansard at page 12063. At the time, I had a question for the Minister of National Revenue, the same minister we still have today. Madam Speaker, I see from my notes that you were in the chair. I am sure you will remember I told the minister that a company in my riding, McIntyre and Dodd Marketing which operates from its head office in Rexdale but has a distribution centre in Hawkesbury, Ontario, and another one in Laval, Quebec, ships merchandise across Canada.
In his letter to me, dated May 22, 1990, the president of the company, Mr. John Dragan, said the following:

I would like to draw your attention to a loophole in our laws that an American company is making use of that if it continues may force us to close our Hawkesbury plant. Our plant in peak periods last year employed 165 people.
As you may be aware, the Canadian government, a few years ago changed the dollar value amount on parcels that enter Canada from the United States through the postal system to be duty-free if the value is $35 or less.
Actually I think the amount was $40. In any case I will continue:
The U.S. company in question, Direct Marketing Enterprises out of Westbuiy, New York, is using Canadian media to promote its mail order products with a return address in Windsor, Ontario.
This scheme was quite clever. The U.S. mail order company would rent a postal box in Windsor. If Canadians wanted to shop from this mail order house they certainly felt they were buying in Canada because this U.S. company had rented a postal box in Canada. What about the conscience of Canadian consumers? It was of no concern because they thought, mistakenly of course, that they were buying from a Canadian company.
I will continue with the text of the letter:
The orders are dispatched to a fulfilment operation in Detroit where the orders are processed -to the border ready to be mailed at the closest Canada Post parcel centre. The average value of each parcel is under $35 therefore allowing the goods to be duty-free.
We see how it works. A U.S. company advertises in Canada, rents a postal box in Canada, gets the orders sent there, goes to the Canadian postal box, picks up all its orders, carries them physically or electronically across the border to the United States, and then ships its merchandise back into Canada using the Canadian postal system. In so doing it totally circumvents the goods and services tax, any custom duties that are due on the parcels, as well as the provincial sales tax. Is that fair? Of course not.
I raised this issue in the House of Commons, as I indicated previously, on May 30, 1990. Here is what the Minister of National Revenue said at that time.
"Madam Speaker, I would like to take this opportunity to answer briefly the concerns of my hon. friend".

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This was, of course, in answer to my question.
"As he pointed out in his comments, it is true that I am very much aware of this growing problem. I say growing because this law has been in place for many years."
That is not entirely accurate, but in any case he continued:
"It is apparent that there are some organizations south of the border that are starting to abuse what was initially a good law to benefit families and other non-commercial uses, as the member pointed out. I have already met on at least two occasion, and perhaps more, with individual business people who have outlined exactly the same concern, the latest of which was just a couple of weeks ago. At that time I told them, and I give my hon. friend the same commitment, that I would begin discussions immediately not only with my officials but with officials with the Department of Finance to see how we could rectify the situation".
The minister agreed to take appropriate steps to correct the situation, and that was on May 30, 1990. Today, May 13, 1992, we are finally considering this bill, not to get rid of the problem but to lessen the impact somewhat.

The problem is still going to be there, although of course this bill will make things somewhat better. Will this bill stop L. L. Bean of the United States from sending shirts into Canada at $19 each using the postal system and using a separate padded envelope for each shirt? Obviously not.
I say that what the government is trying to do is in the right direction in this regard but it does not go far enough. It should have made that exception for only those things that are of nominal value. If someone walks across the border with an ice-cream cone or something, we do not charge the tax on it. I am willing to accept that.
I am willing to accept some nominal provision where it is not worth the trouble of collecting a tax and, even if we did collect it, it would not have any deterring value.
Unless it meets those two tests, the exemption should not be there. The $20 exemption that is there will still enable companies to ship goods in three or four different bags into Canada. It will still enable them to circumvent our laws. That $20 should have been perhaps $4 or $5 or some ridiculous small amount to stop that nonsense.
I am not against U.S. mail order houses if they want to sell into Canada. So be it, but they should not be exempt from our laws. I have to pay tax. You have to pay tax, Madam Speaker.


Peter Andrew Stewart Milliken: I have to pay tax.


Don Boudria: The member for Kingston and the Islands pays tax and everyone else. The store owners of my riding and the store owners of Bonavista-Trinity-Conception and elsewhere are not exempt from charging the GST on purchases because they are below $20. Why should we give that exemption to U.S. retailers selling through the mail? They can sell all they want. I have no objection providing they operate under the same rules. We should not give an incentive for people to crossborder shop.
It is bad enough that the problem of cross-border shopping exists without us as legislators actually encouraging it. That is the problem I see with what we have done in the past.
We are somewhat attempting to correct it today, but I say to the parliamentary secretary that I hope he and his colleagues will entertain amendments at committee in order to reduce that even more, in order to ensure that the exemption is not $20 but that it only covers those things of nominal value.
It has been estimated that in 1990, $1 billion worth of dutiable and taxable goods came into Canada duty-free as a result of the exemption which I asked to be corrected almost two years ago in this House.
It still has not been done.
Mail orders to the U.S. are increasing at a rate of 30 per cent a year. That is an alarming rate. Thousands of jobs in the retail industry are at risk. It is unfortunate that it took us so long. Again I am glad to see some positive move but the government should have eliminated the exemption altogether, except for things which are of nominal value. If someone sends me a letter in an envelope from the United States I do not expect to pay duty on the fact that the envelope costs 15 cents and the fancy letterhead costs 25 cents. That is obvious. Those things are of nominal value.
For consumer products being shipped in, anything that has more than a nominal value should be taxed, just as we make our own Canadian retailers collect the tax here. No U.S. retailer should be getting a break that we do not give Canadian businesses.
May 13, 1992

Sears Canada, probably the largest mail order company in this country cut down on some of its operation earlier this year. It was in the media everywhere. I do not recall the specific number of jobs but it was extensive.
Mr. Milliken What about Marks & Spencer?
Mr. Boudria My colleague reminds me that only today we heard in the news about the giant retailing operation Marks & Spencer and the difficulties it is suffering right now.
It is not just that store. It is not just that chain. It is the same everywhere in the retail industry.
Allow me to return to McIntyre & Dodd Marketing Inc., which operates out of Hawkesbuiy in my constituency. Some moments ago I reminded the House of the letter in which the president of the company told me that in 1990 it had 165 employees. Today it has 52. That is all caused by this. It said so at the time and the government took way too long to address the problem.
I want to make a few remarks in closing. The parliamentary secretary spoke of the gift exemption. That is an exemption in case your relative or mine in Florida sends a mug in the mail or a small little present saying: "Thinking of you in Florida", so that one does not have to pay duty on those products. Right now that exemption is $40. The government is increasing it to $60 because it says that other nations have exemptions which are $60. That might be so.
However we are a trading nation. We depend a lot on our trade. We import a lot of manufactured products from other countries, and from one country in particular. Therefore we should be particularly cautious in that regard. If the $40 exemption is increased to $60 I predict that some people will use it as a loophole the same as they used the other device.
It is obvious. What do you do? You phone or write your relative in Detroit, in Massena, New York, or in Burlington, Vermont and say: "Dear relative, send me as a 'present' two shirts in the mail or whatever product, and I will send you the cheque later". It is the same thing. We are offering another way for individuals to circumvent the rules. We should not be increasing that exemption from $40 to $60.


Peter L. McCreath: We are just making it like the rest of them.
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Don Boudria: The member said the government is just trying to make it like the rest of them. Had his government thought of that it would not have provided for that other ridiculous exemption which it is now trying to close.
Even if I accept his argument to make it like the rest of them, would any other jurisdiction accept what has happened with this cross-border shopping nonsense over the last couple of years?


An hon. member:: No, not a chance.


Don Boudria: I can guarantee that the rest of them, to use his terminology, would have addressed the problem in far less than two years. The so-called "rest of them" would have taken care of their constituents, which is something this government has failed to do.
The parliamentary secretary said, and I know the position of his government, that the gift exemption is intended to deal with unsolicited gifts from families and friends abroad. How does one know if the so-called gift is solicited or unsolicited? In other words, how do we know if there is a pre-arrangement between two people?


An hon. member:: Who is to tell?


Don Boudria: It says: "These goods do not compete against goods sold in Canada". That is not so.


An hon. member:: How do they know that?


Don Boudria: How can one make the determination that a product that comes in from elsewhere is not competing against a product from Canada.


An hon. member:: Oh, oh.


An hon. member:: You phone your friend down there. He just said it. Listen to his speech.


Don Boudria: The member across really should review this.
It says: "There has been much criticism regarding the level of exemption on gifts because it is lower than those of other countries". I ask my colleagues if any of them have ever received a letter of complaint from a constituent saying that the exemption for gifts coming into Canada from outside was not high enough. Has the member for Kingston and the Islands ever received such a letter?

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Peter Andrew Stewart Milliken: No, never.


Don Boudria: Has the member for Bonavista-Trinity-Conception ever received such a letter?


Mr. Mifflin:: Never.


Don Boudria: I rest my case.
It says again, and this is the position of the government: "The review of the exemptions for postal and courier imports provided an opportunity to reassess our policy on gifts and to consider the merits of amending the exemption levels to make them more liberal". I did not know this government could make anything more liberal.


Peter Andrew Stewart Milliken: It must be an awful strain for them.


Don Boudria: It must be an awful strain on the government.
I am in favour of this government becoming more liberal. Do not get me wrong. As a matter of fact, most of the country is arriving at that conclusion right now, and I appreciate that immensely. I would even accept a vote of confidence from the member across, if he happens to live in my riding, although he probably does not.
The point is that the government is telling us that because it was reviewing the postal and courier import provision it had the opportunity to increase the other. In fact, it is telling us that it is a kind of quid pro quo but it is a quid pro quo that no one on this side of the House asked for. In the last five years not one opposition member has asked for that provision to be changed, has asked for a new loophole to be created. None of us want that.
I say to the parliamentary secretary that when this bill goes before committee he and his colleagues should take the time to rethink that exemption. They should at the very least leave that exemption the way it is. I would even venture to say that it should be lower, but never mind. If they want to leave that particular exemption for gifts at $40 we can probably accept that.
In terms of the $20 exemption on goods sent through the mail, so-called solicited goods, sales through the mail, it is only a small patch on a giant problem. I am
informed in discussions with people here in this House that the L.L. Bean Company, for example, sends catalogues all over the place.
It sends them to virtually anyone who has ever bought anything off shore. It somehow secures those names and then sends these catalogues here. Of course, it is located outside the country and people generally know it.
What about these other outfits that have a "let's pretend" operation in Windsor, Toronto or in an area near the border of the United States? It is only a "let's pretend" operation. There are no jobs there, there is not a group of people doing this. There is only one person who crosses the border to get the mail out of the mail box and then brings it to the other side in order to be able to shift the products from the United States back into Canada afterwards.
There are no jobs for Canadians in that kind of a scam. Meanwhile, this company that kept 165 of my constituents working in 1990 now only has 52 employees, because of that very provision. It exists everywhere.
This one we can measure because it is a mail order company. How do I measure the loss in sales to a store in Hawkesbuiy or Cornwall because of this provision? I cannot. I can measure the mail order house because it is mail order house to mail order house. When the GST came in and the Canadian dollar rose it lost most of its business and had to let go approximately two-thirds of its employees.
I can measure that one but I cannot measure those other jobs lost elsewhere in the retail industry because that provision made it awfully attractive to do what these companies are doing. It was, and McIntyre & Dodd Marketing described it well, a loophole in the system. It was a loophole that was created by the government some years ago. The hon. member for Etobicoke, when he was Minister of Finance, in his first or second budget increased that exemption for reasons which again we do not know.
He created a new industry of people using the loophole in order to displace Canadian jobs. Now we are partially plugging up the loophole, but not totally.
May 13, 1992



In concluding, I want to say that my colleagues and I intend to support the provision in this bill that partly closes the existing loophole for those who ship U.S. merchandise on behalf of a business. However, I fail to see how we could agree to increase exemptions for so-called gifts entering Canada.
I hope that when the bill goes to committee, the government will take this opportunity to consider the amendments I am submitting today on behalf of my colleagues.


Mr. Bill Blaikie (Winnipeg TVanscona):: Madam Speaker, we have before us one more occasion on which to say that this particular government is obsessed with the symptom rather than the disease when it comes to cross-border shopping.
The government has quite openly spoken about this bill as an attempt to deal with cross-border shopping, and much of what it implements in the details of Bill C-74 is not objectionable in principle in and of itself. I can even imagine that there might be some ambiguity surrounding the arguments put forward by the hon. member for Glengarry-Prescott-Russell.
I myself have not had any representations asking for that particular exemption to be increased from $40 to $60, or increased in any way whatsoever. I can also argue that if there is an argument for an exemption period the government might want to increase it from time to time to take account of the reality of price increases, et cetera.
The fact of the matter is that the basic intention of this bill is to deal with a situation that was created in my opinion by a number of things, but first of all and most recently and most dramatically the reality of the GST, the goods and services tax.
If the government were serious about wanting to address the problem of cross-border shopping, it would have to do two or three things. First it has to remove the most prominent reason why people now feel pressured into cross-border shopping in a way that they never did before.
I mean the possibility for cross-border shopping was always there; it is not as if this were just created. The phenomenal increase in cross-border shopping has not just happened in a vacuum. It has happened because of
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the GST. It has also happened in my judgment because of the free trade agreement. It is not directly always because of the free trade agreement, but because the free trade agreement has created a mentality or a consciousness among Canadians that the border no longer matters.
The government is telling Canadians through the Canada-U.S. Free Trade Agreement, and now the possibility of NAFTA or the North American free trade agreement, that we are moving into a world in which there are no borders and in which capital and corporate agendas are no longer expected to respect in any way the fact that they originate or are located in a particular community and therefore have some accountability for the economic well-being of that community. If they are free to do whatever they like, whatever serves their own immediate economic self-interest, then should it surprise the government that individual Canadians are acting likewise? They are saying that the government has basically used the old maxim many Canadians observed that even though things might have been cheaper in the United States, they still felt some obligation, some moral obligation even, to spend most of their money in Canada and maybe just slip down across the line once a year for the fun of it and pick up a few bargains.
The government has basically told Canadians it is old-fashioned, that it is the kind of attitude one might hear from the NDP or somebody else who is not embracing the new world order of globalization, liberalized trade and global markets. "All this stuff about buying Canadian, looking after your own community and making sure your neighbour has a job is passe. Who cares about that kind of stuff any more? Let's get with it, ladies and gentlemen. Let's get into globalization", which in the short term means Americanization, "and let's look after number one". Whether that number one be an individual, whether that number one be a corporation or whether that number one be a provincial or federal government, all of them are guilty of cross-border shopping in one way or another. From day to day and week to week we find various levels of government have snuck across the border in order to procure certain products, certain services or certain contracts.
Just the other day in Manitoba, for instance, we heard that a local guy who recycles pop bottles is going to go out of business because the provincial government which used to buy this stuff from him is now going to buy it somewhere in the United States. Can we imagine putting Winnipegers out of business because "this is a better

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deal" for the taxpayer? What kind of bookkeeping is that, what kind of bookkeeping?
This is the problem with everything. There is no sort of megabookkeeping going on so that we can take account of what all these decisions mean in terms of the larger social and economic impact. Instead, there is just one person in one department looking at one set of books and saying: "This is good so let's do it". Whereas if we were looking at the whole set of books we would see that it was not good. The over-all impact of this stinks. It is not good for the community. It is not only not good for the community; in the long term it destroys community because it destroys the very notion that people can move with moral impunity to do whatever they like, whatever serves their own economic self-interest.
I know that I am railing against the idols of the age, but nevertheless this is the way I feel and this is what I see happening here with respect to cross-border shopping. To erect just a few penalties here and there is not going to do the trick, I am sorry. It is not going to do the trick because what needs to be broken is the entire mentality of cross-border shopping.
That mentality got its start with the free trade agreement. Unless that is broken and the way of looking at the world that that involves, I think the government hopes in vain that individual Canadians are somehow going to give up their previous position to act in the way that the government has told people much more powerful than them that it is okay to act.
I will also refer to the whole question of the GST which obviously is a major contributor to this problem, but before doing so I want to say a bit about the high dollar. That is also a problem and that is not unrelated to the free trade agreement.
I am one of those who believe that it is part and parcel of the unwritten agreement that comes with the Cana-da-U.S. Free Trade Agreement that the Canadian dollar will be maintained at a certain level.
I remember Mitchell Sharp, a former Liberal Minister of Finance, coming before the Standing Committee on External Affairs and International Trade in the fall of 1984 and saying to the committee then, when we were studying the elements of the deal, that anyone who thought we would be able to enter into this kind of agreement with the United States and maintain a
70-cent dollar was dreaming in Technicolor. He argued then, and he may still be proved to be right, that some day we would be looking at parity, that the United States would not allow free and open access to its markets from a Canada that had a dollar that was 20 cents or 30 cents lower than its own.
All these things are related, but I have something to say about the GST. It is not as if the GST were an absolute necessity. This is the way it has been portrayed by the government, as some absolute fiscal necessity. It is not an absolute fiscal necessity because there are other ways of raising the money the GST now raises.
For one thing, if we did not have the GST, there is a lot of money we would not have to spend in the first place. There is an enormous amount of money spent collecting the GST in terms of setting up the new administrative costs, the money that the government itself pays in terms of GST and the effect GST has on inflation that in turn has an effect on transfer payments which the federal government has to pay.
If we work out all the costs to the government of the GST, it is not as if we have to replace the entire amount of money the GST now brings in. We only have to replace the difference between what the GST costs the federal government and what the GST brings in.
We have said over and over again to no avail that the Minister of Finance is quite insincere when he says: "Tell us what the alternatives are". We tell him what the alternatives are and he does not even bother to comment on them. Maybe that says something about what he thinks of our alternatives, but the fact is that there have been alternatives put forward and these alternatives have been found unacceptable by the government.
Why have they been found unacceptable by the government? It is because these alternatives would require that the government stand up to its corporate backers in the Business Council on National Issues and demand that the corporate sector in this country pay up, that it fair pays its share and that it forgoes some of the breaks and shelters and loopholes, et cetera, that it now enjoys. We have put this together. I have mentioned them all in the House singly and severally on many occasions, but I mention them again as things which if taken together in some combination could replace the GST.
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The manufacturing and processing tax credit was created at one point to offset the manufacturers' sales tax. It was eliminated by this government when it brought in the GST but the tax credit stayed. I think that runs up to $1 billion or something like that, at least it did.
The dividend tax credit was designed to avoid double taxation. The fact is that most of the corporations which paid the dividends are not paying any taxes anyway. Instead of preventing double taxation we have no taxation at all.
The intention of the government to renew the tax break for trusts was created in 1972 by the Liberals, which is a renewal of a tax break that would benefit a very small minority of very wealthy Canadian families.
The business and entertainment tax deduction amounts to about $1 billion a year and maybe is one of the best examples of what is wrong with the tax system.
Neil Brooks, who is one of the people heading up the Ontario fair tax commission, was recently quoted in a paper as saying that there is more fraud going on at a Toronto Blue Jays game than there is in any welfare office across the nation because seat after seat after seat at Blue Jays games, hockey games or any other games are bought by corporations. The money that is paid for those seats is tax deductible under the particular measure that I mentioned, the business and entertainment tax deduction, and this money is allegedly spent as part of the cost of doing business. They can deduct the cost of these seats which are given out perhaps in some cases to clients, but in many other cases to family and friends and the Canadian taxpayer pays for this.
People in my riding cannot deduct the 500 bucks they need to buy tools to do their job, which is really a cost of business. They cannot deduct that. However, some big shot in Toronto or elsewhere can deduct the cost of sending his entire family to a Blue Jays game.
You tell me, Madam Speaker, that this is a fair tax system. There is the business and entertainment tax deduction. If the government was looking for a way to at
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least chip away at its fiscal problems, it could have looked at that. The government did not. It would not do that, no, sir.
Then there is the whole question of capital gains. One of the things that I found most offensive in life here as a member of Parliament was in 1985. It was the first Conservative budget when the half a million dollar lifetime capital gains tax exemption was announced and the whole Tory backbench rose as one in standing ovation as if this was the greatest thing that ever happened. This was the highlight of their political lives. What a wonderful thing, what a wonderful break. For whom? Not for anyone in my riding.
Obviously for many of the people who are the movers and the shakers over there, this was a wonderful thing. This was orgasmic. I have never seen anything like it. The Conservatives have since moved to reduce it. They moved in the last budget to reduce it again, except in the wrong way.
We have always maintained that the capital gains tax exemption should exist to a certain extent for principal residences, for small businesses and for farms. One of the other dimensions of personal residences, if you like, at least as far as I am concerned, is the family cottage.
What did the Tory government decide to do about capital gains? If you are making money in the marketplace you can still write that off against your capital gains tax exemption.
The government is going to go after the family cottage, the family camp, because the government is tough. Let us go after all those individual cottage owners who have had cottages for years and may now want to pass it on to another generation through an actual sale; the Tories will get them, they will nail them.
In the meantime the big boys will continue to do whatever they like. That is Tory tax reform; get more from the little guy. The evidence mounts week after week, month after month, that under this government the ordinary Canadian is paying more and more and more taxes. The evidence also shows that the people at the very top are paying less taxes.

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Where I come from that is wrong, plain old-fashioned wrong, just as it is plain old-fashioned wrong to screw your own country whether you are a provincial government or a company or an individual by spending all your money somewhere else. I know that is old-fashioned. I know I am sounding like some kind of antique around here but I do not apologize for that.
What else could we have used to offset the alleged need for the GST? There is the interest deductibility rule by which companies borrow money in Canada, write off the interest in their taxes so they can buy up Canadian companies and put them out of business. This is great. We are financing all this. All this so-called new investment in Canada is actually money borrowed in Canada, accompanied by a tax break, to put Canada out of business. We are the only country in the world foolish enough to finance our own extinction. We could look at that.
As I implied a few minutes ago, we could look at making the income tax system more progressive, even just making it as progressive as it used to be. It used to be the case that somebody who made $50,000 did not pay the same rate as somebody who made $450,000. No, the Tories have said, "Tory tax reform. There is no distinction to be made between somebody who makes $50,000 and somebody who makes $450,000. They are all the same". I do not think so, Canadians never thought so, and Canadians never asked for a tax system that did not make those kinds of distinctions.
We could also look at some kind of wealth tax or inheritance tax beyond a certain limit. This has to be done federally because provincial governments simply cannot do it. They end up competing with each other as they did when this particular kind of tax was given to the provincial jurisdiction in the early 1970s and eventually no one has the tax at all. People who would be the target of such a tax, who have a lot of money, are the very same kind of people who are very skilled in moving their money around.
I could talk about the money that could have been raised and still could be raised by a green tax which would not only have the effect of raising money but of discouraging environmentally unfriendly behaviour and products. There are all kinds of ways that the government could do otherwise than maintain the GST. If it wanted to do that, that is eliminate the GST, it would not
have to come forward with bills like this which basically do very little to address a symptom of a larger problem than the larger disease which is both the GST and the free trade agreement.


Mr. Jim Peterson (Willowdale):: Madam Speaker, the bill we have before us today in this House is an effort by the government to deal with a very serious economic problem that Canada has, the problem of cross-border shopping.
Since free trade came in, businesses in many parts of Canada have been decimated. People from the lower mainland in British Columbia go to the United States, to Seattle, on a regular basis to do their shopping. When you go to places such as Windsor, Wallaceburg, Sarnia, the area near Detroit, the Niagara peninsula, Kingston; all along that border right into the maritimes, wherever there are populations along our border the problem of cross-border shopping is decimating Canadian communities. Retail stores are closing down. It is reflected in the high unemployment figures in Canada, unemployment figures which have spiralled.
The phenomenon has been described to our Liberal task force on deindustrialization by many concerned municipalities. They talk about how major shopping plazas are closing down. Major retailers are then moving out. The people are left without work. What do they say are the causes of this cross-border shopping? First of all and number one, the Canadian taxes on gasoline and diesel fuel.
We talked to a trucker who, in the past six months, had not purchased any of his diesel fuel in Canada. He always crossed the border to do that.
Another cause of course is the higher taxes in Canada on cigarettes and liquor.
Third, people talked about the higher taxes and higher costs of some of the foods in Canada. But the two main things were our taxes on gas and on diesel fuel and the taxes we impose on alcohol and cigarettes.
I am not arguing that smokers or drinkers should have an easier ride, but we are living in a world that this government took us full square into through the free trade agreement. It gave it to us. It must have foreseen the consequences of the thousands upon thousands of lost jobs and the billions of dollars in lost sales every year because of this phenomenon.
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We cannot ask Canadians to be patriotic when they are only doing what the government told them to do: shop in the United States, that is fine, that is what free trade is all about. We heard the Conservative speeches when they were telling us about free trade and how it was going to be good for us. Even if we are patriotic Canadians, we just do not have money to throw away when we can buy a lot of these goods cheaper across the border. We have been bringing this issue to the attention of the government for a long time.
Finally the Minister of National Revenue reacted. I am glad he reacted, but did he deal with the number one issue, the taxes on gasoline and diesel fuel? He did not touch it in this bill. Our truckers in Canada suffer a 20 per cent to 25 per cent cost disadvantage vis-a-vis their American counterparts.
A lot of these truckers are small, independent people who own their own rigs. They have big mortgages on them. They cannot compete with companies like Hunt that come up from the southern states where the wages are so low and the actual cost of buying a truck is less. The depreciation on trucks for tax purposes is more, as well as all of the advantages they have on repairs and the costs of tires and things like that. The facts were there. They did not touch this particular issue.
Canadians still get an advantage out of going to the United States to buy their gasoline. You fill up, it becomes a ritual. You go there once a week to fill up with gas and at the same time you fill up with a lot of other things.
Let me talk about one other aspect of this whole cross-border shopping phenomenon that is very devastating to Canada. It is the Canadian mail order direct marketing industry. We had in place before this bill a law which said that American mail order firms could sell into Canada and if the value of the goods was under $40 there would be no Canadian duty, no Canadian excise tax, no Canadian tariffs, no GST and no provincial sales tax.
Is that fair? If they were buying in Canada from a Canadian these things would have to be paid. It is patently obvious that there was not a level playing field between U.S. mail order houses and Canadian retailers.
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As well, there was not a level playing field for Canada's direct mail order industry because when we sold to Americans by mail order the Americans did not say: "Ho, ho, free ride". They said: "You will pay about $10 Canadian in fees, postal processing fees and inspection fees". Every mail order that went from Canada to the United States was tagged with a $10 U.S. fee.
What has the minister done in this bill to create a level playing field between Canadian retailers and U.S. mail order people and between Canadian mail order people and U.S. mail order people? In this bill he has done two things. First, he has reduced the exemption level from $40 to $20. It is a good move. We agree with lowering that threshold and we appreciate the efforts of the government to try to deal with it. However, we ask whether the government went far enough. Should it not have gone further? Should it have lowered the exemption to the neighbourhood of $5 where the handling and other fees would not have been adequate to deal with it? At that level there would not have been the incentive.
We know that there are certain people who are prepared to take advantage of this $20 loophole. For example, if you want to order from some U.S. direct mail order house, such as L. L. Bean, and you want a radio that costs $15, a shirt that costs $18, and a pair of pants that costs $17 you do not order them all together. You can get them shipped individually. That is one way to do it. That way you avoid the Canadian taxes and duties, the GST.
As well, there are cases in which a U.S. mail order house pretends that it actually has a Canadian arm, that it is a Canadian company because it has a postal box in Canada. It advertises all sorts of goods and asks us to send our orders to a postal box in Windsor. Even if a Canadian is trying to be patriotic and buy Canadian they can get caught by the postal box syndrome.
The U.S. company can then pick up the orders and mail them back into Canada. It can avoid all the taxes by splitting the orders so that there is nothing over $20 in any one package.
This bill is an effort that is reasonable but it does not go far enough. What is even more shocking is that it has now imposed a $5 mail processing fee on U.S. mail orders coming into Canada.

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Why did the government not do what we asked it to do before and impose a fee of $10? That is what the U.S. charges Canadian mail order firms selling to Americans. Why did it not give us a level playing field?
I do not know the reason. Our Canadian mail order industry has lost 4,000 jobs in six years. It calculates it has lost $260 million in sales just because of that disparity of the U.S. imposing a $10 fee and Canada imposing nothing. Again, it is a half measure.
We now have a $5 fee but the Americans are still charging us $10. Is that a level playing field? Why did the government not give us the extra $5 so that Canadians had a chance? I wish someone in the government could explain this to me.
I give the Minister of National Revenue all the credit for good intentions in dealing with the issue. He finally heard what we were saying about the devastating impact of cross-border shopping but his measures obviously could not have been undertaken in consultation with the people most affected.
Did he talk to the truckers about why they still go to the United States to fill their tanks with diesel fuel? Did he ask why cross-border shopping has become a family ritual for people living within 50 miles of the border in the last three years? Did he ask why there are now tour companies in metropolitan Toronto which organize bus excursions not to see Niagara Falls, New York, or plays in New York but to go shopping.


John Horton McDermid: They have been doing it for a long time.


James Scott (Jim) Peterson: Yes, they have been doing this for a long time, but the Minister of State for Finance and Privatization must admit that cross-border shopping has increased incredibly over the last few years. He knows that.
The member from near the Chatham area knows what is happening in his community simply because people now have changed their shopping patterns.
Was this anticipated as part of the free trade agreement? If it was, why has the government not done something about it? If it was not anticipated, why was the homework not done? Maybe the government did not believe its own rhetoric that Canadians would be able to
go down to the United States and get all these goodies duty free.
Maybe it did not want them to. Maybe it hoped they would not do it. However, this measure we are facing today to attempt to undo some of the damage already caused to Canada is a measure which, at best, goes only halfway. Another thing that the government has tried to do is to increase the amount on gifts that can come in from United States duty, tax, and provincial sales tax-free from $40 to $60.
Why increase gifts that come duty-free from the States? What is the point? Is it to help Canadians who want to get gifts from their families in the United States? Perhaps, but is this good? Does this create any jobs in Canada? Does this help our retailing industry in Canada? Does this help Canadian producers in any way?
What is the idea behind increasing the amount of gifts from the United States into Canada that is duty-free from $40 to $60? There are already enough exemptions when people do go to the United States themselves. They can bring in $300 every three months, or whatever. They have increased these limits.
Are we really saying to Canadians: "We want you to get more from the United States?" How does this square with the government's so-called buy Canada program? This buy Canada program, which we have not seen the details of yet, was one of the major recommendations of our task force on deindustrialization. However, if the government is going to ask Canadians to support Canadian products and Canadian producers, is this bill before us not in conflict with that principle? It is not running on all fours with it. It has not gone far enough in closing some of the loopholes we have seen.
I would like to ask the minister why he did not recommend to cabinet that we deal with the real causes of cross-border shopping. As we heard in testimony from the mayors of the communities that are devastated, it has something to do with the taxes on fuels.
The government did try to deal with something in terms of cigarettes. What did it do? It said: "We have a problem with Canadian cigarettes going into the United States and then being smuggled back into Canada. We are pretty bright. What we will do is stop up this loophole. We will impose a tax when they leave Canada".
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That means if you are buying cigarettes you can buy Canadian cigarettes on which the duty has already been paid, so they are a lot more expensive in the U.S. stores, or you have the option of buying American cigarettes which have not had this duty levied on them, so they are a lot cheaper. What was the Canadian shopper going to the United States going to do? Is she or he going to buy the Canadian cigarettes that are duty paid and are a heck of a lot more expensive or buy American cigarettes? It was obvious. The government had it backward.
The government had to back down on that tax, and thank goodness it did. I give it credit for listening. It took a lot of coaching and a lot of cajoling. It took the tobacco industry saying to the government: "Hey, you are going to hurt Canadian tobacco sales and we are going to move our operations out of Canada because we can no longer compete because you have these screwy taxes". The government listened. The hon. member for Lambton- Middlesex, the hon. member from Chatham and others said: "Your tax is screwy. It does not work. It is backwards".
Thank goodness, I give the government credit. It listened and it backed off.
However, did the government do anything about another major cause of cross-border shopping which is that during the short period of two or three years the dollar went from under 80 cents, 76 or 78 cents, up to 90 cents U.S.? That gave Canadians a 12 percentage point premium to shop in the United States. It made their imports from the United States 12 percentage points cheaper.
Did the government realize this when it was exercising its very tough monetary control and putting interest rates up to record highs in terms of real interest in Canada? The real interest rates under this government were higher even than the real interest rates in 1981 and 1982 when actual interest rates hit 22 per cent. This government in its obsession with dealing with inflation was prepared to drive up interest rates, drive up the dollar, make us non-competitive and hurt our exporting industries. That exacerbated the cross-border shopping problem.
We are glad that the dollar is coming down, and it should go down lower. However, real interest rates in
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Canada are still very high, they are still a lot higher than in the United States. When this government chose, for all Canadians, to get into bed with the Americans surely it realized that we had to have a level playing field. However, did it give that to us? We have had a high tax, high dollar, and high interest rate policy which has made competition very difficult. These were anchors around the necks of Canadian producers.
I know my time is running out. In conclusion, government is dealing with the issue, but government is not dealing with it to the full extent that it needs to be dealt with. What have been brought in are half measures at best. We urge government to reconsider what it is proposing and to deal with the real issues.


John Horton McDermid: Mr. Speaker, I appreciate the opportunity to reply to some of the questions that were posed by my hon. friend.
First of all, in all fairness when we are talking about cross-border shopping it is a very complicated matter. It not only involves the federal government but it involves provincial and municipal governments as well.
Municipal tax bills are far less in the United States. Therefore, businesses are paying less overhead. One reason-and we cannot argue with this-is that teachers are paid twice as much in St. Catharines as they are in Buffalo. That ends up on the municipal tax bill. Our retailers have to pay that. I am not saying that we lower salaries to teachers, but I want to make the point that in comparing these things we have to be very careful.
The hon. member is the brother of a former provincial premier who raised taxes on gasoline and cigarettes. So did the federal government. The provinces play a very important role in this as well. Municipalities, provinces, federal government, they all play very important roles.
By the way, I have no sympathy for the people who buy their cigarettes in the United States and get their lung transplants in Canada, or who buy their booze in the United States and get their liver transplants in Canada. The same ones who shop in the United States come back here and complain about medical services they might or might not be able to get here.

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I have a very difficult time with that, where they buy their products in the United States and then come back here to Canada and demand all the services. I have a difficult time with that, so let us make it clear where I am coming from.
To answer some of the specific questions that the hon. member posed to me during his speech, he mentioned when we lowered the limit from $40 to $20. As you will remember, Mr. Speaker, it was at $20 for many years and was raised to $40 to try to take away some of the administrative problems.
Let me put this in perspective. In lowering it from $40 to $20, the post office has to deal with 5 million packages a year. That is 5 million packages it has to check to make sure that the value is correct. We are asking the post office to do that. If it was lowered by his suggestion from $20 to a $5 limit on a package, another 9 million packages would have to be checked. It is a tremendous expense to check these packages to make sure they are in fact within the proper limit. The hon. member should take that into consideration.
The $5 fee is a handling fee. The post office said: "We will do this work for you but it is going to cost us a lot of money and we need a $5 fee in order to examine these packages to ensure that in fact they meet those dollar limits".


Peter L. McCreath: It is also a further deterrent.


John Horton McDermid: That is right. It is a further deterrent, but it is there for a purpose.
The free trade agreement and duties have nothing to do with cross-border shopping. We have our limits as to what we can purchase there. Then when we bring the product in, we have to pay the sales tax on it, if it is over and above the limit.
We are supposed to pay the provincial and federal sales tax on it at the border plus any tariffs that are still on it, over the exemptions that people are allowed. The exemptions are: $300 in one year; $100 after having been out of the country for 48 hours; and the $20 incidental after 24 hours. That is important.
As far as the gift exemption is concerned, I think this is important also. The United States gift exemption is $50 U.S. into the United States; ours is $60, which is fairly comparable. If we are shipping gifts into the European Community, the exemption allowed is $72 Canadian.
They are a little more generous than we are, but it is all in the same ball park. It is fairly close as far as gifts are concerned.
I want to comment on one last thing, if I might, because he asked a series of questions that should be answered.
He gave the example of the American mail order firms using Canadian addresses. As of July 1, Customs will not allow American mail order firms to use Canadian addresses. So that problem has been answered as well.
I hope I have answered the questions that my hon. friend has presented today. We have looked into those suggestions that he made and found that especially lowering it from $20 to $5 would make a tremendous cost to the Canadian taxpayer for handling those types of problems.


James Scott (Jim) Peterson: Mr. Speaker, I have two comments concerning what the minister said. First of all, he tried to distance himself from his government and his government's policies by saying that he personally has no sympathy for people who go to the United States, buy alcohol and come back to Canada to get liver transplants.
Nobody has sympathy for that. But what is happening is that this government's policies encourage it. That is what is happening. The government's policies encourage it because our tax rates and therefore the cost of alcohol and cigarettes-and I am not making a case for people using either-are so much higher, just as they are for gasoline. I am not saying that people should buy gasoline there but some people do. They go to the United States because it is so much cheaper.


John Horton McDermid: Your party supports that.


James Scott (Jim) Peterson: I am sorry. We have consistently said the government has not dealt with the major causes of cross-border shopping. This government's tax levels encourage people to go to the United States to buy those things.


John Horton McDermid: Your party supports that.


James Scott (Jim) Peterson: The government is the author of a program-it has been in government eight years-of free trade plus going to the United States to buy these things that people buy. Tell me how it helps Canada when a trucker has not bought his diesel fuel in Canada for the last six months.


John Horton McDermid: We don't have the diesel fuel, the province does.


James Scott (Jim) Peterson: It is the province's fault.


John Horton McDermid: Check your facts.


James Scott (Jim) Peterson: I know, I know. If it is not the government's fault then it is the Liberals' fault because we were in government until 1984. It is the provinces' fault because they impose taxes. Yes, they do impose taxes. And I will tell you why they are imposing more and more taxes. It is because the transfer payments from the feds to the provinces have been chopped and cut.
Let me say this. Ceilings. What are ceilings for? To cut the rate increase.


John Horton McDermid: Ceilings?


James Scott (Jim) Peterson: Mr. Speaker, does the hon. minister have the floor? I know he gets veiy excited but I would encourage him to bring to the House the decorum he expects from all other members.
The hon. minister said that the government has done a marvellous thing by imposing a $5 fee on U.S. mail orders coming into Canada. This is an administrative fee to reimburse the post office for its costs of looking at these packages and determining values.
Do you know what, Mr. Speaker? Good. The post office is being reimbursed $5 and the United States post office is reimbursed $10 if a Canadian mail order house is trying to sell to the Americans. Why did the government not give us a level playing field when it knew what the problem was, when it was told that because of not having that $10 comparable fee it cost our mail order houses in Canada about $260 million in lost sales and 4,000 lost jobs over six years?
We were told. Why did the government not impose the same level as the Americans? They charge $10 Canadian and we are now only charging them $5. Are we out to help the Americans? Was that deliberate? Is the government deliberately trying to help them or was it just stupid? What was it?


Ronald MacDonald: My question is for my hon. colleague. We have just seen a lot of hot air escape from the government benches. We have seen a lot of theatrics over there but I want to get back to the
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reality of the day. We are not going to be side-tracked by this type of nonsense from the government benches.
It appears to me the fact of the matter is that people are being driven south of the border. They either request goods through United States mail order catalogues or they drive across the border to get gasoline. Or, those who live in a border area go over on a daily basis to pick up milk and bread and whatever else they need.
Since the minister has such an aversion to those other vices, let us talk about food that they go over and pick up on a daily basis.
There is an awful noise coming from the other side. There is an awful noise coming from the minister. Perhaps if he would like the floor he can get the Speaker's attention.
The point that I was trying to make is that it appears the drive across the border is being encouraged by the Prime Minister and his Minister of Finance, who have not been able to come to grips with the horrendous tax problems we find in our system vis-a-vis the United States. Perhaps my hon. colleague can address the real problem that the bag of wind on the other side obviously omits.


James Scott (Jim) Peterson: I thank the member for Dartmouth. Of course, taxes in Canada under this Toiy regime have gone up 33 times in eight years. Now, I suppose that is our fault because we were the government before. Okay. The government should accept responsibility for what it has done.
Now, with the cost of food, this government supposedly is supporting farm marketing boards. Is it going to support our farm marketing boards for which we know Canadian consumers are happy to pay a little bit extra? But, do not pretend that they will not go to the United States to buy some of these goods as well.
The government must accept responsibility.


Ronald MacDonald: Mr. Speaker, this is an appropriate time for us to talk about the problems this government has caused vis-a-vis the flood of people and capital out of this country.
There are some provisions in the bill before us that we support and indeed that we have called for and the government has finally listened, albeit perhaps too late.

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And there are some other provisions in this bill that we simply do not support because we think they are contradictory to the spirit of the first part of the bill.
One does not have to be a genius to sit down and figure out that Canadians do not voluntarily allow their capital to leave the country, knowing full well that each time they go across a border and buy goods in the United States of America as opposed to their local home town the impact of that is going to be lost jobs and lost revenue to border communities.
We know full well that Canadians probably do not consciously sit down and say: "If I order from L. L. Bean instead of going to Sears in Halifax"-when Sears used to have an order office in Halifax-"it is going to take away from revenues, is going to take away from the quality of life in my community because dollars are going to be leaving and we are going to be shipping it over to the good old U.S.A." They do not consciously do that. If they had their druthers, I do not think that they would do it.
But the fact of life is that over the last number of years this tired old government has made too many promises about tax reform that it simply has not been able to fulfil.
I remember way back when I was just a member of the public, listening to all the promises made by the Prime Minister opposite and his members of the government when they talked about fundamentally changing the face of Canada. I remember clearly the Prime Minister said: "Give me four years and you won't recognize this country".
The border communities know what he meant, because those border communities now know that they cannot recognize their main streets any more. When going down the main streets of border communities one will find place after place vacated. There are notices of sheriff's sales and bankruptcy signs in the windows. This is because of this government's economic and tax policies.
I know full well that Canadians are very different from Americans. As Canadians, we try to do things differently and we try to support each other. If things cost a little more in Canada for the quality of life that we have, then
so be it. I think most Canadians, if they had the resources to be generous in that direction, would accept that.
What has happened successively over the last eight years, most important the last three and a half years, is this government has abandoned and betrayed every single promise that it has made to the middle class of Canada and to those below the middle class, those below poverty level, that it is going to ensure there is a more equitable tax system in Canada. The problems this bill seeks to address are real. The problems this bill seeks to address have been caused 100 per cent by this government's tax policy and this government's economic policy. I think we have to recognize that on all sides of this House.
The government has come in with a regime of taxation which over a period of time has increased the over-all tax burden on the middle class. Believe it or not, most people who are cross-border or mail order shopping are not the people living below the poverty line. They are not the people who are making $14,000 a year living in Dartmouth, Welland, or anywhere else in this country who are trying to keep a roof over their head and trying to keep their children fed, clean, and clothed. They are not the people. The people who are doing this are the people in the middle class. They are the people who are feeling the pinch harder than they have ever felt it before because of this government's policies. We all remember the promises of fundamental tax reform and we have seen what the Tories mean when they say fundamental tax reform. You can also read that to mean we are going to take more from you and we are going to give you less back by way of services.
My hon. colleague from Ontario has just indicated that over the last number of years this bunch opposite has increased taxes 33 times. There have been 33 tax increases. If you listen to the group opposite, you would think they had reduced taxes by 30 per cent when they talk about their agenda for economic change, how they are going to inflict prosperity on all Canadians.
What the government has done by its economic policies is inflict poverty on far too many Canadians. It has inflicted hardship on far too many Canadians and the only prosperity it inflicted on anybody is on American

companies that live in the border areas in the United States. That is the only prosperity it has effected.
It came in with free trade which has closed factories in and around our border areas. All through southwestern Ontario the manufacturing base has been absolutely devastated by this government's free trade deal.
I hope everybody has a good memory out there. Another broken promise: Free trade is going to bring thousands of jobs to Canada, prosperity is around the comer. I heard the Prime Minister saying that when I was running against a Conservative. I told people they should not listen to him. They listened to what I had to say and they listened to the Liberals in Atlantic Canada.


An hon. member:: And you lied to them.


Ronald MacDonald: Excuse me. Did I hear a member opposite say that I lied to somebody? You had better be careful with your words. I will stand up to anything that I said to my electorate, and I hope the Prime Minister and you and your group opposite will be able to do the same thing. If you get up and you tell the public what you promised them back in 1988 and you stand on your record, each and every one of you will have another job the next time the Canadian public has a chance to eke out their judgment on your record.
There is no question at all that the Prime Minister and his gang opposite promised generous assistance programs. The member opposite might want to forget this one. If I were a Tory I would. We were going to have the most generous assistance programs, adjustment programs, ever with free trade. The ministers opposite, time and time again-


Peter L. McCreath: Mr. Speaker, I rise on a point of order. I am enjoying my hon. friend's rhetoric but I see no relevance whatsoever in his remarks to the bill before the House.


The Acting Speaker (Mr. Paproski):: I appreciate the fact the hon. member has brought this to my attention.


Ronald MacDonald: Mr. Speaker, I will make it very relevant. The reason people are availing themselves of mail order houses across the border is precisely because the government has put them in a position where they can no longer afford to buy Canadian made goods. I cannot put it any more succinctly than that.
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Even my colleague from South Shore who sometimes has great difficulty with comprehending what Canadians are saying, not just in my riding, is having trouble comprehending the message they are sending him and his government in his riding. He knows full well the cause of cross-border shopping is economic. It is economic because of a tax regime this government has put in.


An hon. member:: Oh, oh.


The Acting Speaker (Mr. Paproski):: Gentlemen, please. I would ask for a little decorum so that we can hear each other speak in debate.


Ronald MacDonald: Mr. Speaker, I know my hon. friend opposite gets very agitated when he hears the truth, so I understand some of his problems this evening.
To speak specifically to the bill, what this bill seeks to do is address a problem indirectly. That problem is to try to stop the cross-border mail order shopping that goes on that has cost Canadian businesses millions of dollars in lost revenue and has cost thousands of jobs in Canada.
I think the measure to drop the amount that can come across the border from $40 to $20 is indeed a good measure, but perhaps it comes a little too late. I think of what happened at the Sears catalogue office in Halifax. The Sears catalogue office in Halifax, because of reduced orders that were coming in, made a decision that it had to rationalize its Canadian operations. It shut down the mail order office in Halifax and put that in Belleville. That is wonderful for the people of Belleville and I hope that they enjoy their new jobs, but I will tell you that for the hundreds of people who lost their jobs in Halifax-Dartmouth, these types of measures are too little and much, much too late. To close the bam door after they let the horse out, as my father would say, is a pretty stupid thing to do.
We on this side of the House have said consistently over the last number of months that the government's economic policies and taxation policies were driving money across the border and driving jobs across the border.
We agree with the government that finally the limit of goods that can come in from those mail order houses has been reduced from $40 to $20, but I just wonder how many parcels valued at $60 are now going to come across

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in three different packages of $20. That is something that we still have to address and this bill does not.
There is another part of the bill that I simply think is ludicrous. The minister of state tried to get up and justify it. He is the great justifier of all the government's deeds in the House here, as we know. He said: "Well, you know, we are trying to harmonize". Every time I hear harmonize I think of 100, 200 or 300 jobs leaving the country. Every time this government harmonizes, workers shudder because right after harmonization comes pink slips and UIC, albeit they cannot get as much as they used to because the gang opposite even changed that program, for goodness sake.
This measure says that goods valued at $40 which used to be able to come in without any problem are now going to be reduced to $20, but on the other hand gifts that are coming in on non-commercial carriers across the border now go up, from $40 to $60. I guess if a fellow really wanted, because his pay packet kept getting less every day because the government's tax bite keeps getting bigger, to get around the rules, I suspect at least in Atlantic Canada, he would have all kinds of opportunities.
In the last little while in Atlantic Canada there probably have been more individuals who have had to leave Atlantic Canada and go to other parts of the country. Maybe they can zip over and mail some stuff across as a gift, I do not know. I suspect that is against the spirit of the law. There have been many exoduses of Atlantic Canadians. Nearly everybody in Atlantic Canada has got somebody down in Boston whom they visit. To take it from $40 to $60 I think makes a mockery of the first provision, which was to increase for mail order houses the amount that can come across scot-free from $20 to $40.
This earlier provision, the reduction from $40 to $20, is one that I can support. I think it starts to address the problem, but there are all kinds of other problems. There is a problem, as my hon. colleague from Ontario said, dealing with taxation, with the price of the excise tax on gasoline.
The minister of state was quick to bellow out from his place-my God he was jumping up and down like a
jack-in-the-box-to remind my colleague that excise taxes are provincial. I think that is correct, they are provincial, but let us look at this because that is a problem as well for the loss of dollars from cross-border shopping. I think this is relevant. If the minister could get up in his questions and raise taxation policy at a provincial level, my hon. colleague from South Shore might see that I am as relevant in this as the minister was when he was answering a few minutes ago. If you deal with that type of problem, you will very quickly see the reason for the federal government deficit.
Federal government members like to stand up and say that their deficit is at $30 billion or $31 billion, as if we are all supposed to get real happy over that. It is at $30 billion or $31 billion and even in this worst recession we have had since the depression, it has been able to hold the line.
There is another figure that Canadians should know. It is that the cumulative provincial deficit in 1988-89 was about $4.1 billion. Because of this government's economic policy, because of a series of tax increases, by capping transfers to provinces, by slowing the rate of growth in program expenditure, it has effectively caused the cumulative provincial deficits in Canada to go from $4.1 billion in 1988-89 to an estimated $24.1 billion this year.
The hon. minister might get up and play a little shell game and say: "It is not our fault". This government has mismanaged the economy badly, and then with a sleight of hand it has transferred its mismanagement on to the backs of the poorest provinces. Those provinces are faced with a much reduced tax base. Unfortunately some of them have had to go to the sin tax, like gasoline and excise taxes, to try to maintain quality programs in health care and education.
I do not need any lessons from the minister about where the root of the problem is. The root of the problem lies in about 38 people on the other side who surround the Prime Minister, who have lost all sense of direction as to where they think they are taking this country. The problem lies in a tax system that favours Canadians purchasing goods from Americans as opposed to Canadians. The problem lies with a government that was so hell bent on lying in bed with the Americans that it passed a flawed trade deal.

This bill gives and takes. It goes forward two steps and falls back three, but that is almost the best record I have seen from this government in a long time.
In conclusion, I would hope that the government, in the waning hours of its mandate, in the dying days of Toiydom in 1992, will do a little mea culpa and look at some of the other problems it has perpetrated upon the Canadian people and come in with some measures to offer relief to those Canadian retailers and consumers who have been battered so badly by their economic agenda.


Peter L. McCreath: Mr. Speaker, I notice we have now heard from three Liberal members and one New Democrat. In the case of all four, when they have spoken on this bill, they have supported it. They have supported the measures in it.
I listened with care to my hon. friend from Dartmouth.
I am pleased to see that the hon. member from Stratford is here because after a performance like that he may wish to commend the hon. member for Dartmouth for a summer position at the theatre in Stratford.
My hon. friend, like his colleague before him, spoke about cross-border shopping and the issue in the context of the free trade agreement and the context of the policies of this government. I think it is important and time that people recognized that cross-border shopping and the fact that it exists, more than anything else, proves the wisdom of what this government has been saying about competitiveness.
Why do people shop in the United States? They shop in the United States because they believe they are going to get a better deal, and sometimes they do. Sometimes they do not, mind you, but they have been convinced in some circumstances that they will get a better deal over there. In many instances, they shop there because they get a better price.
My hon. friend would like to say that the reason the prices are better in the United States is because of the policies of this government. That is a lot of nonsense and I suspect, because I know he is a very intelligent man, he probably knows that. He is just playing politics with the issue. I guess that is what sometimes goes on here.
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This government has been saying that our businesses have got to get themselves to the point where they can compete on an economic basis. Some of the problem- my friend would probably say most of the problem-has to do with levels of taxation in this country. We do have higher taxes in this country in many respects. Some of them are federal taxes. Some of them are provincial taxes. Indeed, some of them are municipal taxes.
The hon. minister of state commented earlier on the levels of municipal taxes directly related to the cost of education, because of the level of teachers' salaries here as compared to the United States, as an illustration. The same could be said with respect to the cost of health services in this country and the fact that Canadians want those services. Granted there is a problem. If somebody says: "I want the benefits of the Canadian health services, but I am going take advantage of the lower taxation levels in the United States", that is an issue, with all due respect, that my hon. friend can hardly with any logical reason lay at the feet of this government because those issues are totally unrelated.
We heard talk earlier from the hon. member for Winnipeg Transcona with respect to the high Canadian dollar. We had a very low Canadian dollar and what advantage did Canadian business take of it? Did they use that as an opportunity to improve their competitiveness? No, that margin was squandered. One of the reasons why the Canadian dollar has risen is because of the confidence the international community has in this country. That is one of the reasons the pinch is there and things are not quite so easy.
I am coming to my final point with this document I received in the mail. For the second time this year I received a letter from the Liberal Party of Canada asking for my financial support. The reason it wants my financial support, it tells me, is that I can help get rid of this government and I quote from this letter:
"You can help elect the party that is prepared to institute an economic plan to benefit all Canadians". Later on the letter says: "We must establish a fair taxation system based on an individual's ability to pay. We must replace the totally unfair GST". Who pays the GST? We all pay the GST. People who spend more money pay more GST. People in the lower economic

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strata are shielded from the impact of the GST by the GST credit.
Yet we are told that these are the people who are going to bring us an economic program with fair taxation. I listened with interest to what my hon. friend said. I read with interest this letter of solicitation from the Liberal Party of Canada to me. The Liberals can take me off the mailing list. I am not going to vote in the leadership in Nova Scotia. I am not going to send money to the Liberal Party because this country already has the best government it is going to have for quite some time and I look forward to the election next year.


Ronald MacDonald: Mr. Speaker, my hon. colleague said that I should be in Stratford, or at least he thinks my abilities might be useful there. If that is the best he can do I would urge him to take more lessons.
I cannot believe that the member actually got up in this debate and tried to tell people that the GST has been a positive thing for people on low incomes .Either the member is so blinded by his party's own rhetoric when it comes to the goods and service tax or he does not speak to the people in his riding who live in poverty.
Only a Conservative member from the south shore of Nova Scotia would get up and brag about a tax that has pushed more businesses into bankruptcy, that has cost the Canadian economy, small businesses in Canada, $10 billion in thi first year according to the CFIB.
We are living in a time when we have had record bankruptcies. Over 60,000 Canadians and over 16,000 Canadian businesses were driven into bankruptcy because of misguided tax policies such as the GST. Only a Tory from the south shore of Nova Scotia would get up in front of the public of Canada, but more importantly his constituents, and say bold-facedly that he supports the very economic activities and programs that have thrown his own constituents out of work.
The former chair of the finance committee said one day to a group outside the House: "There are a lot of us who can talk our way into this place, but once you get here you should learn something because you can also talk your way out of the place". I would leave that advice with my hon. colleague opposite when he starts talking about the wonderful impact of his government's economic policies on his own constituents.


Mrs. Coline Campbell (South West Nova):: Mr. Speaker, just a comment and then a question.
On May 8 the minister for tourism announced a new $3 million program. The title of it was "Tourism Canada's new campaign reminds Canadians". The government is spending $3 million to remind Canadians to stay in Canada. That is all very well and good. Most of the reasons we are not having tourists coming into Canada is because of the GST that has been put on-


Peter L. McCreath: What does this have to do with Bill C-74?


Coline M. Campbell: Just hold your horses. What I am saying, Mr. Speaker, is that in the newspaper yesterday I was looking at "Canada 125, Buy Canadian".
This government put the GST on goods here in Canada which forces Canadians to go to the United States to buy. I would think that if the hon. member for South Shore asked his Minister of Finance to take away the GST on goods here in Canada there might be less cross-border shopping. There would be less need to go across the border or have mail orders sent out to bring goods back. In that way we would help our big major companies across Canada as well as the small companies that are hurting. It is a known fact they are hurting because of the GST.
I ask the hon. member for Dartmouth whether or not he thinks that it would be wiser to have the GST taken off for travellers coming into Canada to help our tourism. Also, does he not think the tax should be taken off gas, off cigarettes and off the common goods that Canadians go across in order to buy? Would that not be more reasonable than lowering it to $20 and up to $60 on the other side?


Ronald MacDonald: Mr. Speaker, the comments that my hon. colleague has made point once again to the complexity of the disaster that the government has perpetrated upon Canadian retailers and upon Canadian consumers.
It has brought in a tax system, and the hon. member opposite me might not like to hear this, which is so badly flawed, which is so highly complex that it literally has been driving businesses and dollars to the United States. At the same time the flip side of this nightmare that it has created on every street in Canada is not only does it drive Canadian dollars south of the border, but it ensures
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that tourists from the U.S. are less likely to come north of the border. It is a double-edged sword, each side of which is equally lethal to Canadian businesses.
My hon. colleague from South West Nova knows full well the impact that the GST and other tax measures have had on cross-border shopping in reverse. Crossborder shopping in reverse is when Americans come up to see the beautiful country that we have, places like Meteghan, Yarmouth, Clare and Digby. They used to come across on the ferries. But because of that double-edged sword which drives Canadians south to purchase through mail order houses, they are not coming up in the numbers they used to. It has a double impact. It is like a big spiral.
People are being laid off in the tourism industry in her riding. When the Americans do not come and spend, her people do not have the money to buy Canadian. That starts the cycle again and they pick up an L. L. Bean catalogue instead of a Sears catalogue because the goods in it are a few pennies cheaper and they add to the problem. It is vicious cycle which people in her riding have been driven into by this government's policy.
In conclusion, I am glad that she entered into the debate. She is protecting the interests of the people in her constituency, as the member for South Shore should be doing. Maybe then he would be less reckless in his rhetoric.


Mr. Dennis Mills (Broadview-Greenwood):: Mr. Speaker, I would like to come at this bill from a different angle. We have listened this afternoon to the fact that basically the bill reduces the tax-free thresholds for goods imported by mail or courier from $40 to $20. We all support that. I would like to go back to a committee meeting we had earlier today in industry and trade where the minister of tourism talked to us about the new Travel Canada campaign. In the course of his explaining the campaign to us, he brought to our attention that Canadians spend annually a little over $15 billion outside the country. I think approximately two-thirds or $11 billion is spent in the United States. Over all we have a current account tourism deficit in this country of close to $7 billion.
We have from a scenic point of view, from a cultural point of view and historic point of view great cities. We
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have one of the greatest tourism assets anywhere in the world. Yet we are sitting here with a $7 billion deficit.
When I look at this amendment to the customs legislation I see that the government is trying to address but a small aspect of the problem we are having with cross-border shopping. I agree with the Minister of State for Finance and Privatization that cross-border shopping is a complex issue; it is not simple. When I pull myself back and I see a $7 billion tourism deficit, I have to say to myself that there is a much deeper problem.
When the minister of tourism appeared before a committee today, he announced this new Travel Canada campaign which we on this side of the House support and wish him well with. The problem is that it is only $3 million. First he said that it was the first time that a national minister of tourism had put forward a Travel Canada campaign.
We are talking about a sector of our economy that is the second largest employer in the nation. We are also talking about a sector, tourism, that has the ability to make us feel good about our country because the interaction on tourism, whether it is going out to dinner or going fishing in some other part of the country or skiing or travelling north, we are talking about an instrument that can build a terrific sense of pride, a terrific sense of national unity.
We are spending $3 million to handle a sector where there is $15 billion being exported; $3 million to try to handle a sector where there is a $7 billion deficit. That is part of the reason why we have so much cross-border shopping. Yes, it is our tax regime, especially the GST, which is a disincentive to a lot of Canadians. That poorly designed GST came at a time when so many people right across this country were in deep economic pain and that GST exacerbated the problem.
We should pull back a little from the tax complexities and the tax designs which need to be reformed in this country and think about the bigger picture. We do not do enough in the tourism sector to pump up this country. We do not do enough to pump this country to ourselves. We certainly do not do enough to pump Canada to the Americans coming here. We are conscious of using taxpayers' money, but we know historically that the return on tourism dollars has never failed this country.

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The return on tourism dollars is one of the greatest returns of any taxpayer's dollar ever spent.
Rather than sort of tampering with our Customs Act-and I give the minister marks for doing this, but it is only a band-aid-I think we should be spending $40 million or $50 million encouraging Canadians to spend some of that $15 billion at home. When those dollars are spent at home there will be more people working. This means there would be less of a draw on the unemployment insurance fund. There would be less of a draw on the welfare fund. Therefore we would not need to tax people the way we do right now.
We have a proven asset with tourism. We know that a vibrant tourism economy will create jobs immediately and will create cash flow immediately. On top of all that, at this point in time when our national will or our national spirit is so fragile what better time to make Canadians feel good about their country.
I live in a riding in downtown Toronto which has three main streets. There are really four main streets but the businesses on three of them depend on tourism. Along the Danforth I have close to 150 of some of the nicest Greek, Chinese, Italian and Vietnamese restaurants. I have a beautiful group of Chinese restaurants along Gerard Street and I have a similar group along Queen in the south end of my riding. When those restaurants are filled and there are line-ups one can almost feel the spirit or the confidence of the community coming back. That spirit has a rub-off effect in terms of the sports stores, the clothing stores, the jewellery stores, or whatever other retail operations are in the community. We can feel it, not to mention jobs for summer students, jobs for students in the evening or jobs for students on the weekends.
When I see this bill today changing customs legislation and reducing the taxes on parcels being sent to us, I say it is fine. It is certainly a good deal for the post office. My goodness, $5 every time an invoice is checked. The minister said earlier there were seven million parcels to check. That is $35 million a year in revenue just for checking invoices. Good for the post office. I applaud its business acumen.
We are avoiding, not addressing, the main issue here. The reason why we have people flocking to the states to
the tune of billions and billions of dollars a year is that our tourism mechanism is not working.
I for one have great respect for the Minister of State for Tourism, this minister from London. He is dedicated to the file but he is one voice in that Cabinet. I remember when I was here in 1980-1984 working for Prime Minister Trudeau. Even then we tried to sell the idea of let us pump tourism and it was a tough sell then. But now, when we have such a rush on cross-border shopping, when we have such a deficit, we have to come to the support of the tourism sector in this country. We have to give it more money to promote the merits of travelling in Canada.
We cannot just link the importance of travelling in Canada to its beauty, to our cultural heritage, to our history or to our cities. We have to link the importance of travelling in Canada to the entire community. We have to link it to jobs. It is jobs for our students. It is jobs for our people.
If our work force is mobilized again, as I said before that will reduce the costs or change the design of our tax regime. This will mean there will not be a great temptation to run off to Buffalo for a $3 bottle of vodka, a $3 package of cigarettes or a cheap hotel room.
We have the finest tourist operators anywhere in the world. When people come to our country from Japan, Germany, England, France or the United States they think our country is one of the greatest tourism spots in the world.
In fact, with the little advertising we give our tourism sector we are still the eighth most visited country in the world. Can we imagine what another $40 million or $50 million in tourism promotion could do for us? No one in this country could ever question that tax expenditure because the money would come back instantly, not to mention the galvanizing effect it would have.
If there is one thing we need in this country right now, it is to feel good about everything we have, to feel good about everything we are enjoying. We should do a little less tinkering with some of our legislation. We should take a macro-economic look at our department of tourism and give it the resources it needs so that over the next 90 to 120 days every restaurant, hotel room and tourist operator in this country receives a flood of tourists from all over the United States, the same way Buffalo and other border states have received us during the last six months.
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Coline M. Campbell: Mr. Speaker, I rise to take part in this debate. This is a very simple bill. It is a bill that says the government wants to reduce the mail order section of the Excise Tkx Act from $40 to $20 and it wants to penalize anyone whose mail order is over $20 by putting a set amount on that mail order. By the same token if somebody wants to send a gift into Canada, it goes from $40 to $60.
I am not against cross-border shopping. I am not against mail order. I am not against the gifts being higher. What I am against is the fact that we are not on a level playing field with the Americans.
I say that for several reasons. In the last year we have had GST put on everything in Canada from meals to cigarettes and goods made in the U.S. that come to Canada duty-free. As I say, we do not have a level playing field but we have many border towns. We have the largest border in the world with a very friendly neighbour. We have towns within about 125 miles of the border. We have 80 per cent of Canadians living near border towns. Therefore it is unreasonable for the government to continue maintaining a goods and services tax at the expense of all those companies that are going bankrupt, closing their doors because they have no sales. We see mail order companies like Sears reducing its services in Halifax and many jobs being lost.
Yet since May 81 have seen two things the government has done to try to stimulate Canadians. It had an ad in the papers saying: "Canada, 125 years, Buy Canadian". I think it is the government; it is somebody. It is a little late to be buying Canadian when most of what we are selling is coming from the States.
It would be better to say that we are going to give Canada a new deal, that we are going to start looking at our research and development, and that we are going to start looking to see what we can do to sell into the United States in a much greater capacity than we have done in the last few years.
That is not the vision this government has. It says that the goods and services tax stays, except for here and there. According to The Financial Post the net income of
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Canadian families has taken a fall. This was 1990 that it looked at. It did not look at 1991 or the first part of 1992 when on top of everything else we have had the goods and services tax. It said: "After tax family income was lower in 1990 than in 1980 when the effects of inflation are removed. The average family earned $42,159 in 1980, compared to $41,434 in 1990. Between 1985 and 1990 income rose 2.7 per cent". Then it went on to say that Statistics Canada's survey of consumer finances found that income taxes took up almost 20 per cent of family income in 1990, up from 15 per cent in 1980.
"The income tax take has been steadily rising throughout the 1980s," the agency noted. It also reported that: "Canadian families paid an average of $10,199 in taxes in 1990 from $7,684 in 1990 dollars in 1980".
If you add to that the GST and the fact that that 80 per cent of Canadians live within 125 miles of a U.S. border town, you would have to ask yourself: "Why would a Canadian not go across the border to shop?" You would have to be crazy to think that they would not when you add our GST on top of what should be a level playing field, including a provincial sales tax.
It seems to me that the government would be far better off, instead of trying to keep the GST on so many goods, to lift the GST and allow some of those goods that would have a level playing field be the same here in Canada as they would be there if they were American-made and the duty was off. That is since the free trade agreement. The idea people have is that: because of the free trade agreement, it must be cheaper to go and shop there. They do not realize that if it was made in the U.S. it should be the same price here, but the GST and the provincial sales tax raises prices and there may be other reasons, such as the Canadian dollar.
Unless this government starts looking at that type of measure we are going to continue to have cross-border shopping. Reducing the exemption from $40 to $20 for a mail order is still going to take jobs from companies like Sears Canada which cannot compete because of all the taxes that the government takes.

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This is a trickle down effect. Whether it is transportation costs or gas to bring the goods into Canada, it goes all the way through. The GST was just a killer on a declining family income when income taxes are taking more and more of the family income.
The government has had to correct it because it has seen what has happened to places like Sears. It has also said that now anyone can go there and buy up to $60 and have it sent as a gift. You just have to have somebody in the States who is going to say: "Gift?", and it comes in at $60. They do not pay GST, they do not pay any provincial sales tax. If it happens to be a state that does not have any state tax then it comes in even cheaper.
I just cannot understand a government that, on one hand, maintains the GST as a disadvantage, our take-home pay has been falling behind, and yet it says: "This week buy Canada", when 80 per cent of Canadians live within 125 miles of the U.S. border.
I come from a tourism area. Therefore, I will go one step further and say that it insults me as a Canadian to see the Minister of Tourism introduce a program of $3 million. I am not insulted at the partners who took part in that program, I think the partners in that group were Saga, Air Canada and Cook. I do not want to go on and name partners, but they are putting something into it too because they feel that they should, for Canada.
Our biggest industry is Americans who come to Canada. I do not see why this government, and Americans can get a rebate in certain areas, could not give Americans as they came in a card that would say: "This makes me exempt from paying the GST in Canada". The fact that they have to pay the GST on everything is a negative and as a result we are not getting the tourists into Canada.
At the same time, we have a $3 million program to try to keep Canadians in Canada. It does not make sense. I cannot see the sense of it. I would think that Canadians are probably going to stay in Canada this year because incomes are down, their jobs are gone and they do not have much hope from this government that things are going to improve because of the direction it is going.
I would think that the Canadians who will tour in Canada are going to be looking for the best deals. That means probably going across the border to shop because there is no GST, or if they cannot go across the border using mail order.
It is a little late for this government to be correcting something that it should never have introduced in the first place. Second, it is a little late to be correcting a mail order regulation when it should have thought before introducing it that Canadians were going to use mail order.
I have to go home tonight and I know I will have one or two of the booklets, maybe from L. L. Bean or Land's End, which are flocking in, along with other things in my mail. They want me to buy their product which normally, without the GST or the provincial sales tax or the transportation charges, would be the same price because it has been made in the U.S. and brought into Canada.
Like everything else it takes this government two years to realize the effect it has had. This government has literally taken all the will, all the hope from Canadians because it has not stimulated the economy. It does not look as if it is doing it, even though the recession appears, or so we are told because it is an election year in the United States, to be ending in the United States, which should affect us. I cannot see it because I see stores that are closed, I see hundreds of jobs gone in my constituency that will not be there afterward. Those people will have to move.
I see the fishery in such a state that I cannot believe. In a short period it has gone from the fishermen directing it to the companies. I see a tourism industry that used to be bountiful, used to bring a lot of jobs, create a lot of jobs, bring a lot of tourists and American dollars into Nova Scotia, particularly my constituency, South West Nova, via the ferry from Yarmouth to Bar Harbour and the ferry from Yarmouth to Portland. I do not see that. I do not know how much longer we can live with the GST on those visitors coming into Canada.
I would suggest that maybe the government come up with some idea rather than this $3 million program to send Canadians who probably do not have the money to travel across Canada but perhaps have enough money to go across the border. I would suggest that it start looking at the GST on some of the goods that these people go to the United States to buy and could buy here. I would suggest that the government look to see if it cannot bring in some type of program under which American tourists have a card given to them when they come in at the border and are told: "If you show this you will not pay
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the GST in Canada". If they do not show it then it is their fault.
I would also suggest that being a gas-producing country where gas is so much cheaper-you just have to look at Irving which sells it in New Brunswick and Nova Scotia and then go to Maine and see Irving in Maine. It is all taxes-GST, provincial sales tax, plus the taxes that are put on gas to begin with.
This government must wake up and realize that it has overtaxed people to a point which has forced them to cross-border shop, to a point where they have no desire to shop in Canada and they will go to the U.S. to shop. It has overtaxed people to the point that there is not enough income to shop any more in Canada. We are draining the initiatives of all these people who are in service sectors in Canada because of a poor policy.


Dennis Joseph Mills: Mr. Speaker, I want to compliment my colleague on her remarks. I know that her tourism community is in deep pain right now because of the lack of real aggressive promotion in encouraging people to come to this country.
I want to refer back to an incident that happened, I think it was in 1984 during the Anti-Inflation Board, when a group of public officials went out and investigated different companies. With regard to this particular company they said: "Listen, you are making so much money that we want you to roll your prices back". The company went along with the rollback. It found that by rolling the prices back that it actually increased its business activity.
The intention of this amendment is to create a more level playing field and not put us at a disadvantage, to reduce cross-border shopping. My concern is that there is a possibility that we may have exacerbated the problem. When you change the threshold you might create such a level of awareness in the actual process that you will actually get a lot more people participating in this type of shopping arrangement.
In other words, the attention we are giving this issue is going to create a whole new type of shopping between
Government Orders
countries. Many people will find ways of getting around the price structure. Ultimately, without intention, we may be creating a whole new industry that never existed before.


Coline M. Campbell: Mr. Speaker, I thank the hon. member for his question. I think I know what he is getting at. It is the awareness that as we talk about cross-border shopping people will wonder what it is about and then go and find out that they can save, particularly as it relates to the 7 per cent GST and perhaps a sales tax. They might discover that if they take an overnight trip to the States, shop, and stay in a hotel and it will not cost nearly as much as staying here.
When you start digging around you will find out that there is a provincial sales tax, the GST, taxes on the gas, and taxes on food when you go out to eat. All those things come together to give the impression, and it is not an impression but a reality for some people, that it is cheaper to go the 125 miles because that is what 80 per cent of Canadians have to do.
Over and above that there are so many Canadians who are now spending so much time during the winter months in the United States that we now hear people saying: "I am going to wait until I go to the States to buy the things I want that I would have otherwise bought here". That is again to avoid the GST and the sales tax and the transportation costs. Those things even themselves out in terms of costs.
Coming from an area near New Brunswick, where you hear a lot about people going over the border just to buy groceries and things like that, it is a reality. It seems to cost less to buy chicken in Maine than it does in Canada. Canadians have always understood that there are costs to our jobs. What has happened with this government is that there is no understanding of the jobs involved or of the considerations. It has all gone out the window.
When you look at supply management at GATT and the efforts it has put in, which I do not think are good enough, or when you look at the GST as compared to what you can buy in the United States, Canada is not in a level playing field with the Americans. That is an awareness that I do not think talking about it relates. It is a reality when you live that close to the border and you see somebody across from you being able to buy some-

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Private Members' Business
thing for their children and it costs you anywhere from 7 to 17 per cent more here in Canada. That is a reality.
The problem is taxes. We should be saying that we are going to remove the taxes and get people working again and get our industries back. We are not doing that. It is all negative. We do not have the income which was growing in the 1980s but is not growing now. On top of that, when we look at the 1990s, we see a 20 per cent federal tax on family income. That income is lower than in 1980. In 1991 and 1992 with the 7 per cent GST coming on top of that, Canadians have far less. There are no bargains apparently for Canadians in Canada because they are taxed.
I think that is why we have the cross-border shopping. Until we find a government that is going to look at some of these individual cases, give American tourists a card to exempt them so that tourists will come and we will have jobs in tourism, rather than the reverse of going downhill, we just will not win. We do not seem to have a government that comes up with any new ideas.


The Acting Speaker (Mr. Paproski):: Questions and comments are now terminated. Is the House ready for the question?


Some hon. members:: Question.


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, bill read the second time and referred to the Standing Committee on Finance.

[Stage Direction]
The House proceeded to the consideration of Bill C-7, an act respecting the status of the artist and the professional relations between artists and producers in Canada, as reported (with amendments) from the Standing Committee on Communications and Culture.

The Acting Speaker (Mr. Paproski):: There is a ruling on Bill C-7, an act respecting the status of the artist and the professional relations between artists and producers
in Canada. There are six motions in amendment to Bill C-7, an act respecting the status of the artist and the professional relations between artists and producers in Canada on the Notice Paper for the report stage.
Motions Nos. 1 and 2, standing in the name of the hon. member for Mount Royal, will be grouped for debate and voted on separately.
Motion No. 3, standing in the name of the Minister of Communications, will be debated and voted on separately-
Motion No. 4, standing in the name of the Minister of Communications, and Motion No. 5, standing in the name of the hon. member for Mount Royal, will be grouped for debate. An affirmative vote on Motion No. 4 obviates the necessity for a vote on Motion No. 5, while a negative vote on Motion No. 4 will require a vote on Motion No. 5.
Motion No. 6, standing in the name of the hon. member for Regina-Qu'Appelle, is identical to Motion No. 5 and will not be selected.
Instead of proceeding with Motions Nos. 1 and 2, can we call it seven o'clock?


Some hon. members:: Agreed.


The Acting Speaker (Mr. Paproski):: It being seven o'clock p.m., pursuant to Standing Order 36, the House will now proceed to the consideration of Private Members' Business as listed on today's Order Paper.



PRIVATE MEMBERS' BUSINESS


Ms. Barbara Greene (Don Valley North) moved: that Bill C-235, an act to amend the Criminal Code (offences of sexual nature), be read the second time and referred to a legislative committee in the Departmental envelope.
She said: Mr. Speaker, this bill is intended to address some of the particular ways in which victims of sexual assault experience violence at the hands of the judicial system.
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Clauses 1, 2 and 3 will require judges to inform the complainants and the accused of their right to apply for the exclusion.
Clause 4 of the bill attempts to give great priority to the victims' safety and piece of mind by requiring the accused persons to establish why they should not be detained in custody until the conclusion of the judicial proceedings.
When women and, indeed, men and children are sexually assaulted and personally violated, the trauma, the pain and the fear they experience continues often for the rest of their lives.
Fewer than 40 per cent of female sexual assault victims and less than half of wife assault victims even report these crimes. Studies show that the reluctance to report is related to fear of retaliation that would result in further violence or death, lack of confidence in the police and the courts, guilt and embarrassment.
Women who are abused by a man with whom they are in an intimate relationship typically suffer from low self-esteem, fear, loss of control and isolation. They internalize blame and minimize the impact of the violence. They perceive that they have limited options for setting their lives on a new course, and their negative self-worth keeps them dependent and passive.
Women who have been sexually assaulted are approximately five times more likely to have a nervous breakdown, six times more likely to attempt suicide and eight times more likely to commit suicide or die prematurely.
An Ontario study of randomly selected women over 18 living with a male partner showed that physical and sexual violence against women and children causes emotional trauma that leads to alcohol and drug abuse by the victim as a means of easing the physical and emotional pain.
Compared to women who have not been physically or sexually abused as adults, 40 per cent more battered women report using drugs to sleep and 74 per cent more battered women report using drugs to relieve anxiety. Sexually assaulted women are two and one half times more likely than other women to use drugs to help them
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sleep and nearly four times as likely to use drugs to combat anxiety.
A recent study of women who are in psychiatric wards in Toronto general hospitals reveals that 90 per cent of them had suffered from severe sexual and/or physical abuse in their childhood.
Sexual assault is very different from other assaults. It is violence which intends to degrade, humiliate and intimidate. Far too often, the judicial system also degrades, humiliates and intimidates women, and does not protect them.
It is clearly evident that many professionals including police, lawyers and judges fail to understand the pain that victims of sexual assault experience through the court and judiciary. The report The War Against Women by the status of women committee documents many examples. Indeed, as a former municipal politician and a teacher, I personally know many victims who have had devastating impacts on their lives.
The experience of one of my own constituents was what prompted me to produce this particular bill, which I first brought forward in 1989. My constituent is a slim, fragile woman in her sixties who is a former part-time school secretary. She is divorced and living on a modest income from the proceeds of the sale of her home in a quiet neighbourhood in a nice apartment building which has a lot of seniors living there.
She was sexually assaulted in the garage. She was one of eight women who were mostly elderly, but included a 16-year-old, who were viciously sexually assaulted and/ or raped by a brutal young man. He was caught by a young woman who heard the screams of his last victim and was charged, but swiftly released on bail.
At the preliminary hearing, my constituent and several other victims who were able to testify, testified. My constituent did this willingly, but was totally unprepared for the brutal interrogation by the defence lawyer which followed. All the victims were similarly treated.
The prosecutor did not apply for the exclusion of the public, and my constituent and the other witnesses were never informed of their rights to apply for a private hearing. Of course, as a courteous, dignified and law-

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abiding citizen, she did not expect to be treated in such a vicious way.
The judge and the Crown allowed this to happen. When she turned to the judge seeking help, he had fallen asleep during my constituent's testimony. Following this devastating experience, my constituent's psychiatrist sent a letter saying that she could not testify again, but would be willing to sign an affidavit.
In spite of repeated inquiries, my constituent heard nothing further for years. Only recently has she discovered that the charges against a man who had raped or sexually assaulted eight women were dropped. Perhaps it is part of the actions following the Supreme Court decision regarding a backlog in the Ontario courts, but she does not know. She has no desire to revisit the experience and is not pursuing the matter. She has had enough of the courts. She is still experiencing fear, sudden pain, sudden rushes of terror and paranoia which cause her to be unable to leave her apartment or go into the garage by herself.
The lack of information to witnesses by the police, the brutal questions of the defence lawyer, the lack of sensitivity by the prosecutor, the doziness of the judge, the appalling injustice of this are all issues that need to be addressed but are difficult to legislate. One thing can be addressed and that is to at least let victims know their rights to greater privacy.
The second part of my bill deals with putting the onus on the accused to establish why he should not be detained in custody until the conclusion of the judicial proceedings.
One of the most common complaints of victims is that they are deeply afraid of their assailants. We have seen time after time that dangerous people are released. My constituent still lives in terror of her assailant.
Jonathon Yeo was allowed bail. Victims of wife assault frequently live in terror of their abusive husbands. They lay charges only to find their assailant is back at their door.
As a former municipal politician, I have had women approach me seeking protection and I have been unable to help them. If violent offenders are suspected of being a threat to any person they should not be allowed out of custody and the onus should be on them, not the overburdened Crown, to prove they are not a threat.
In conclusion, these are two measures which I believe will improve the situation for sexual assault victims. I
understand the minister supports the measures in principle but would like them to apply more narrowly than to fall on all the types of offences identified in section 274.
I would be willing to accept such amendments and would therefore request that the subject matter of the bill be referred to the justice committee for consideration and possible amendment before it is brought back to the House.


Mary Catherine Clancy: Mr. Speaker, I rise to speak to this bill brought by the hon. member for Don Valley North with mostly supportive responses. I would like to bring up a few points that may be dealt with if the bill is to be referred to the justice committee.
Under existing criminal law, under the amendments proposed by this bill, parties involved in a criminal trial do not have a right to have the public excluded from the court room. Public exclusion comes about only as the result of a judicial order. Exclusion orders are provided for in section 486 of the Criminal Code and they are permissive, meaning the judge or justice has discretion over whether or not the public can be excluded.
There is good reason for this because the history of a public trial is part and parcel of not just our democratic system but the adage that is still very true that "justice must not only be done, it must be seen to be done".
However, there is reason for exclusion of the public for a variety of reasons, many of which are germane to the kinds of cases my colleague has referred to in her remarks, particularly matters of a sexual nature; sexual assault, matters relating to children and so on.
The right of the accused and the prosecutor under section 486(2) of the Criminal Code is the right to apply for a judicial order for public exclusion and the right to be informed of the reasons if the judge or justice declines to issue the exclusion order. Clause 1 in Bill C-235 would extend this right to the complainant and provide for a right to be informed of the right to make an application for public exclusion.
By virtue of sections 486(3) and 486(4) the complainant has the right to make an application for a publicity ban on identity and the right to be informed of this right. Although it is true the exclusion of the public from the court room and a ban on publicizing the identify are not synonymous, there are certain similarities that I suspect might again provide for many of the things that the hon. member is looking for. Again I applaud her decision to refer this to the justice committee. We should have the
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justice committee review all these sections together, look at exactly what it is the hon. member is trying to achieve, what we would certainly support her in attempting to achieve, and perhaps forge new sections of the Criminal Code that would be quite specific, clearing out one area of detritus if you will, and giving us the kind of specific to the offence situation that we are concerned about.
I would merely make a comment here in the need as evinced by the hon. member to support the wishes of complainants in matters relating to such sensitive areas as sexual assault.
We are all aware of the case that took place in Toronto not too long ago where a judge extended the publication ban and indeed a gag order on the complainants themselves who were victims of incest. The perpetrator was duly convicted. The complainants, the victims of the crime, wished to go public about their experiences. I do not know if I have their motivation absolute but one presumes it is a combination of the wish to educate and inform and also a certain amount of catharsis and healing in the same process, and they are forbidden to do so.
I think we might also, if the hon. member were willing, look at that aspect of publication bans and public exclusion.
I might add that the other problem under the section I mentioned is that the complainant does not have the right to be informed of the reasons why the judge or justice declined to order a publication ban. That too, I think, is a right that a complainant should have.
It is true that the hon. member and I come from metropolises of quite different sizes within the judicial system. The criminal justice system, in particular in my province, because of people knowing each other better tends to be perhaps more co-operative than in the larger city where people do not know each other so well. Obviously law cannot depend upon the societal and social relationships of the participants.
I would therefore support most strongly the hon. member's intentions and her recommendation that the
Private Members' Business
bill be sent forward to the justice committee. I would hope that when that happens the hon. member and I will both find ourselves at the justice committee where we can further discuss this matter and come up with the kinds of amendments that will enhance the situation.
With regard to the further sections of the act proposed by the hon. member, I certainly would support them and will recommend to my caucus that support be forthcoming as well.


Mr. Ian Waddell (Port Moody-Coquitlam):: Mr. Speaker, I rise as justice critic for the New Democratic Party to respond to this private member's initiative. It is a very interesting bill and a good initiative.
I want to congratulate the member for Don Valley North. She is, as you know, Mr. Speaker, and this House knows, a fighter for women's issues and she constantly plugs away at these matters and it comes from the heart. You can see it.
That is why when the member brings in a bill, it is really worth considering and worth looking at. I congratulate her for her bill and I know she will continue to plug away on these particular issues.
I want to say a couple of general things before going into the member's bill specifically. The bill is good in a general sense, in that it gives victims some power, some access to the judicial system. This is what has been lacking in our judicial system in my view and I think in the view of the hon. member.
Sometimes the victim who becomes the witness in the criminal proceeding, the complainant, is treated by the prosecution, and indeed by the judge and even by the whole court system, as the accused. We tend to forget who the accused is. The victim leaves the court process, as many witnesses do, with a bad taste in his or her mouth. Often it is her because it seems to apply especially to women victims and especially in the area of sexual assaults. We all know it is hard enough to get complainants in sexual assault cases to go to court to make the complaint and then get it into court without having all the difficulty that the people have when they get to court.

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Private Members' Business
I know the government has brought in a lot of justice bills recently. It calls them law and order. I call them lawn ornaments. I feel they have been bills that have responded to the Supreme Court decisions which have overturned laws of this country because of the charter of rights or they have dealt with things in a general way.
When I saw the Minister of Justice appear before the justice committee yesterday on the estimates, I found that she was great at intellectualizing. She is great at talking this broad picture, but when it really comes down to how the system of justice works for real people I feel she should get herself into a court, get herself down there and maybe have a look at how things really work.
Let me deal with the bill. There are basically two parts to the bill of the member for Don Valley North, as I see it. The first clause is the explanation and it reads:
This amendment would provide the opportunity to the complainant to apply for the exclusion of the public during judicial proceedings; at present, only the prosecutor and the complainant are afforded that opportunity. The new subsection (2.01) would require the presiding judge to inform the complainant and the accused of their right to apply for the exclusion.
That seems to me to be good. I would like to hear all the arguments and that is why I would like to see it referred to the justice committee. I think the hon. member has made a good suggestion on the general principle of the bill. It seems to me that this is a fair procedure and it requires the judge to say: "Hey, you have that right and you can do that". I think that is important. The reason it is in there is so that we can get more complainants, especially women, in sexual assault cases.
I heard the debate in the House. It was a stunning debate, a great debate in the House of Commons when we debated on principle the rape shield bill. We heard from all over the House of Commons, especially from women members of the House of Commons, how serious this situation was. They recounted case after case of women who had been assaulted usually through the family, I am afraid to say, or through people they knew. We heard about the violence and so on and about the difficulty of bringing this out in public, never mind getting it into the judicial system.
It seems to me that this is a good amendment. The first clause is going in the right direction. The second clause I have a little bit more difficulty with. It is basically clause 4 of the bill. Two and three are consequential amendments to the first part. Clause 4 is separate. Clause 4, the explanation of the bill, says:
The new section 522.1 would put the onus on the person accused
of an offence of a sexual nature to establish that he should not be
detained in custody until the conclusion of the judicial proceedings.
Section 522.1 is the section of the Criminal Code that will be put in there if this bill passes.
One can see the problem. There was a recent case where a woman did everything she was supposed to do in our present judicial system and she ended up getting killed. She was murdered. She complained against her husband. She made all the proper complaints to the police. They were separated. She went to court. He was pulled in court. He was released. She said she was in danger and she was; he came back and killed her.
Fortunately that does not happen in many cases. It is the exception rather than the rule. I say it is an exception. I mean you do not release people and they go out and murder their wives.


Mary Catherine Clancy: Don't play with your statistics, Ian.


Ian Gardiner Waddell: In my experience it has been.


Mary Catherine Clancy: There were 17 cases in Nova Scotia in one year.


Ian Gardiner Waddell: My friend said there were 17 cases in Nova Scotia in one year. I am open to hearing that. In my experience as a Crown attorney and as a defence counsel it seemed to me that it was rare. It happened and it was a tragedy when it happened. I will hear that, I hope, in the committee.
The point I want to go back to is bail because this deals with bail. In the bad old days, I will call them before the Bail Reform Act in the seventies, people who were accused had to make bail. Many poor people could not find money for bail and they were locked up, unnecessarily in my view. The test was whether they would come back to court for their trial. People were locked up. We had a system of bail bondsmen and so on. A lot of people spent more time in custody awaiting their trial than they did even if they were convicted after a trial. It was a bad system.
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When the system was reformed and changed there was a lot of reaction against it. It was tough to get that reform through. Police forces and other groups said: "You are just letting these crooks out on the street". It was hard to make that reform, but I think we have come to the point now where the new bail reform system has been generally accepted. Some people still complain, but it is generally accepted. It is basically a good system, a very progressive system that puts Canada in a good light.
I am concerned that if we put the onus on the person accused of the offence to explain why he should get out of custody, we are in fact beginning to dismantle the progressive bail reform laws. That is my concern.
I understand the difficulties. I understand what the hon. member is trying to do. As I understand it, she wants to improve the help to a sexual assault victim and improve the way that situation is dealt with. There might be other ways of doing that. Judges have to be more aware of the situation. Judges have to be educated in the facts of what is happening out there in the world with respect to sexual assaults against women and violence against women. The prosecutors have to be educated. In some ways we are doing that as we get more and more equality and as we get more and more women prosecutors in the process, more and more women judges, and some other judges getting judicial education.
The public has to be educated and the public is being educated. The member for Halifax a moment ago was telling me that I should know a little bit more about the number of murders committed by people in a family violence situation who were released after being charged. The public is being educated and getting more educated. I think we are on the right track there.
I draw the Chair's attention to the debate in the House on the rape shield bill. But I say this: In correcting one wrong let us not create another wrong. That is my concern about the second part of the bill.
I do not have a concern about the first part of the bill. I think it is a good idea. The member for Don Valley North suggested that this bill be referred in principle,-I gather the subject matter,-to the justice committee
Private Members' Business
because we are considering a number of bills and laws on this veiy nature. There is a real momentum in the House of Commons at this particular time in our history to face the issue of violence and violence against women.
We are proud of Canada for generally being a safe and non-violent society, but it is too violent in certain areas. We have to tackle that and I believe we are prepared to do that.
I will sit down, shut up and hope that the government will allow this bill to be referred in principle to the justice committee. Again I congratulate the hon. member for Don Valley North on her effort in this bill.


Mr. Rob Nicholson (Parliamentary Secretary to Minister of Justice and Attorney General of Canada):: Mr. Speaker, I would like to join my colleagues in congratulating the member for Don Valley North on bringing this bill and this subject before the House of Commons.
Like the last speaker, I am very pleased that the bill begins by talking about victims. A trend we have seen in the last couple of years, particularly with legislation that has been brought before this House, is the idea that the judicial system has to look after everyone's rights, including victims.
It is interesting that just yesterday, in changes to the Parole Act, the Solicitor General referred to provisions within that bill which give more rights to victims. So for the second day in a row I welcome the fact that Parliament is again discussing the subject of victims.
As was pointed out, the bill touches on a number of different areas. The member for Don Valley North made the case very powerfully in terms of what happens to people who get caught up within the judicial system, particularly women, because women are the victims of the vast majority of sexually related crimes.
It is an important subject and I have to disagree with the last speaker to a certain extent when he said that we are preoccupied with bills relating to lawn ornaments. I do not agree with that. We have passed some very important legislation that touches on the rights of individuals.

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Private Members' Business
The gun control bill is a substantial and important piece of legislation, one that I think brings about considerable improvement within that particular area. And this is an area of concern. The hon. member herself pointed out that very often when crimes are committed with a firearm women are the victims.
These are not lawn ornaments; these are substantial pieces of legislation. With the rape shield law, again in the same area the member has raised this evening, on the question of how women in particular are treated within the judicial system, what is necessary to obtain a conviction for those who commit rape and other serious crimes? It is important legislation for all Canadians and one that all members of Parliament can take a great deal of pride in, because it is a good piece of legislation and one that helps.
Just a few years ago when we made changes to the law as it relates to children testifying in court, some of the rules of evidence as they relate to children went back at least a century, if not two centuries. I think they were founded on some wrong assumptions as to the way children behaved. But I was very pleased that we were making changes in the Criminal Code, ones that are a little more sensitive to children, who are very often the victims of sexual violence.
I do share some of the concerns that the hon. member who just spoke had regarding the bail provisions. The bail provisions, as I read them in this act, cast a very wide net. The hon. member alluded to the fact that perhaps the whole area could be narrowed to get at what it is she would like this House to deal with.
As it would stand now in this particular piece of legislation, the bail provisions as they relate to the most serious crimes in society, specifically murder and treason, would apply to, for instance, an offence of nudity. I do not think that is exactly what the hon. member wants to get at. I think she wants to narrow it to those most serious offences of sexual assault. But, as I say, the way it is worded now it casts a wide net.
It would be a helpful suggestion for this matter to be referred to the Standing Committee on Justice and the
Solicitor General. As I said, I was interested to hear the member for Port Moody-Coquitlam who sits on the justice committee. It is a demonstration of good faith in getting this matter discussed before the committee that he has indicated he is prepared to spend his time and to urge committee members to take up this matter.
Heaven knows, they have a lot to do at the present time, but this too is important.
I commend the hon. member who has had in her three and a half years in this House a record of sticking up for those who get caught up in the judicial system, who are victims, she wants to see changes in the laws to make sure that the laws of this country are fair to them as well as to the accused and others who are involved in the judicial system.
I commend her for that. I hope the House takes up the suggestion of referring the subject matter of her bill to the standing committee on justice.


Barbara Greene: Mr. Speaker, I rise on a point of order. I believe you will find that there is unanimous consent for the following motion:
That the bill be withdrawn, the order discharged and the subject
matter referred to the Standing Committee on Justice and the
Solicitor General.


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


Some hon. members:: Agreed.
Order discharged, bill withdrawn, and subject matter referred to Standing Committee on Justice and the Solicitor General.


The Acting Speaker (Mr. Paproski):: There being no further members rising for debate, the time provided for the consideration of Private Members' Business has now expired.
It being eight o'clock p.m., this House stands adjourned until tomorrow at ten o'clock a.m., pursuant to Standing Order 24(1).


[Stage Direction]
The House adjourned at 7.31 p.m.
[Stage Direction]
Thursday, May 14, 1992