1993-05-10

Hon. Roger C. Simmons (Burin-St. George's) moved: that Bill C-405, an act to amend the Income Tax Act (tax credits for disabled senior citizens), be read the second time and referred to a legislative committee in the Economics envelope.
He said: Mr. Speaker, I want to begin by telling you about a friend of mine, Tommy LaFitte. Tommy lives in a community in my riding called Port au Port near Ste-phenville. Tommy and I talk about fishing. We talk about hunting. We talk about the Blue Jays.

Occasionally Tommy and I speak French, because he is a francophone. His father settled in Newfoundland, and Tommy was born in a small village near Stephenville.

Tommy and I have known each other for less than three years. We met in August 1990, and since then we have become very good friends. As I said we talk about many things. We do one or two things together. Let me say that a year or so after we met, Tommy and I, together with a member of his family because Tommy is not the kind of fellow his family wanted to let loose in Toronto all by himself, went off to Toronto to the SkyDome to see a Blue Jays game.
What does this little anecdote have to do with the bill before us? Tommy LaFitte, and this is something I have not said up to this point, will very shortly celebrate his
102nd birthday. Tommy and I and his son Stan went to the SkyDome to celebrate his 100th birthday. I first met him when he was 99 years of age.
Tommy LaFitte expects to live many more years. He made a promise to some people at the SkyDome, the vice-president of the Blue Jays, that he would be back on his 110th birthday. Knowing Tommy, I fully expect he will be there.
Tommy LaFitte may not need the provisions of this particular bill. Tommy is pretty spry as I have just indicated. He has all his faculties, both mental and physical. He still enjoys a big birthday party of several hundred people every year. He likes to chat in either language about his 73 years as a fisherman, his years as a hunter, and his passionate interest in the Blue Jays. He can quote statistics of the better players on that team, and it has some good ones. Tommy may never have occasion to draw on the kinds of provisions we are proposing in this bill.
Tommy has a loving family around him. He has support through his son, through his daughter-in-law and through an extended family which keeps in close touch with him and visits him often. They look after not only his physical needs but see to it that he has good emotional support.
There are a lot of Tommys out there. Equally there are a lot of people out there as old as Tommy or certainly in that general age category but without family support, without financial resources and without the physical and mental stamina Tommy enjoys at 102 years of age.
It is that other group of people I would like to talk about this morning. Bill C-405 is concise and to the point, and so it should be. It proposes that a disabled senior citizen or a person who has a disabled senior citizen as a dependant be permitted to deduct from tax which would be otherwise payable an amount equal to 75 per cent of the disabled senior citizen's defined medical expenses, home help expenses and transportation expenses. In short it would allow disabled seniors to deduct certain taxes to assist them with the business of getting on with their lives.

May 10, 1993
Private Members' Business
It is worth noting that this bill reflects one of the principles that the Standing Committee on Human Rights and the Status of Disabled Persons presented in its report to the House just a few short weeks ago. One of the principles stated in the report last month was that the taxes which people with disabilities pay should be reduced by measures that offset their disability related costs.
The budget presented by my friend, the Minister of Finance, in 1991 made some significant moves in the right direction on this issue by increasing the disability tax credit from $575 to $700 for 1991 which represents altogether a tax credit of $1,085 if provincial tax is taken into account. It is a move in the right direction, and for that we applaud the minister and the administration.
However the government's action, if I may say so to the minister, has not been sufficient in all cases to allow the disabled to recover the share of their income consumed by their disability. This is particularly true of seniors with disabilities. Hence this bill. That is the reason we have it this morning.
Maybe we ought to look at a few facts which should help us in coming to the right decision on the proposal contained in this bill. We know, for example, that nearly half the people 65 and over and 8 out of 10 of the people 85 years old and over have some form of disability.
Elderly people with disabilities are severely limited in the range of normal activities they are able to pursue because of economic and environmental barriers. They are restrained, constrained and limited by economics, by lack of dollars and by environmental physical considerations.
Eighteen per cent of all seniors who need wheelchairs do not have them. One in five seniors who have need of a wheelchair do not have one. In this country, in this day and age with our reputation for affluence, with our reputation for humanity, with our well earned reputation for assisting those in need, it is mind-boggling that our fellow Canadians are having their physical movements restricted, limited, simply because they do not have wheelchairs to get from point a to point b. We are talking Canada 1993.
Twenty-nine per cent of seniors with disabilities need special features to help them move around their own
homes, such as walkers and so on, and they do not have them. More than one in four people are prisoners within their own homes, prisoners of a particular room because we have not helped them get that simple device to get from one room to the other, from the bedroom to the bathroom, from the living room to the kitchen. Twenty-nine per cent of disabled people find themselves in that category. That too is shameful.
Elderly Canadians with disabilities also have problems using public transportation. Twenty-five per cent of the people who have access to public transportation have difficulty using it because of their disabilities.
The story goes on. I have a few more facts before I come to the real point of this bill. Hearing and vision problems are also common among elderly people.
Did members know that 31 per cent of the seniors with hearing disabilities are in need of hearing devices which they do not have? One in three in that category could have their hearing capability improved if he or she had a simple hearing device. Do they know that 10 per cent of them need visual aids such as glasses, et cetera, and do not have them?
In this country in 1993 significant proportions of elderly people with disabilities require some assistance with their daily living activities. For example, 34 per cent need assistance shopping. Another third need assistance with housework. Eighteen per cent need help preparing their meals and 15 per cent need help with personal care matters.
That is what this bill is about. It is to reach out to those groups of people to help them do some of the things they cannot do for themselves. If we look at the older in that group, the people 85 years of age and over, 66 per cent of them with a disability need help shopping and 57 per cent need help with their housework.
I believe already I have said enough to demonstrate there is a need. There is a large body of people out there who could be helped by this bill, who could be assisted greatly if we allowed them to deduct from tax that would otherwise be payable those medical expenses, those home help expenses, those transportation expenses proposed in the bill.

May 10, 1993

There will be those who will say we cannot do it. It is too expensive. I ask them, before they put their foot in that one, to have a look at the bill and at the facts which relate. The bill places some reasonable limits. We will not have seniors being able to get taxis every day of the week and then deducting it from taxes that would be payable. That is not the case. If we read the definitions in the bill we find this is a very plausible proposal that will meet a need without getting out of hand in terms of the public costs that might be involved.
The first half is that there is a need, and that I have said. The other half is that the people we are talking about find themselves with fairly low incomes.
It has been found by StatsCanada in the last little while that the incomes of elderly Canadians with disabilities are relatively low. For example, 60 per cent of them with disabilities have incomes below $10,000. Income problems, we should note, are particularly severe among elderly women who have disabilities. One group that is having a particularly rough time is elderly women who have disabilities. We have to do what we can to make life a little easier for those people in particular, and we can do it by passing this legislation today.
Housing affordability is also an issue for many seniors with disabilities. In short, many barriers still affect the lives of a significant share of our disabled elderly population. The further reduction and eradication of these barriers will help the aging population in Canada to pursue productive and active lives.
I feel very strongly about this issue. I would hope my colleagues in the Chamber will see fit to give this a leg up for seniors with disabilities. They can do it very simply by allowing this bill to go to committee at the end of the hour debate.
In conclusion, we have it in our hands to do the right thing. The right thing is very obvious and is not difficult to do. Let us not be side-tracked by arguments that it is going to cost a bundle of money. I have had it costed and it will not cost a bundle of money. That is not the issue.
The issue is one of humaneness. The issue is one of fairness. The issue is one of conscience, whether we can allow to go on any longer what is going on, where senior
Private Members' Business
disabled people, including in particular senior disabled women, are having a rough time simply because we have not put in place legislation that is sufficiently humane.
My appeal this morning to colleagues in the House is to take this one small step to make life just a little easier for these people.


Mr. Jim Karpoff (Surrey North):: Mr. Speaker, I am pleased to support Bill C-405. The New Democratic Party would like very much for this bill to receive second reading and be referred to a committee for more detailed study. There are aspects of it we would like to take a look at in committee, and we might make some suggestions for improvements.
The principle of this bill has a lot of merit. In 1991 the census showed that 4.1 million Canadians, or 15.5 per cent, were disabled. But when one looked at the age group 65 and over, that figure showed that 46 per cent of all seniors 65 and over were disabled. Of that number, 31 per cent were severely disabled, meaning they would have difficulty performing daily functions, using public transportation and caring for themselves.
When one looks at earning an income we find that 70 per cent of the total population is normally employed. But when one looks at the disabled population, that figure drops down to 40 per cent, and even that 40 per cent is quite misleading when one looks at the gender differentiation. The 40 per cent breaks down into 30 per cent for women and 49 per cent for men. Sixty per cent of those who are employed and disabled make less than $10,000 a year.
One of the things that we would like to have looked at in committee is whether the bill should be broadened to include not only disabled persons over the age of 65 but all people who have disabilities. They face additional hardship and cost because of their disabilities.
This legislation talks about additional medical expenses. That is fairly clear, particularly when one includes within the definition of medical expenses some of the newer technologies that are available to assist the disabled, everything from telephone adaptations to assist people who are hearing impaired to a whole variety of mobility devices from wheel walkers to sit-down walkers to motorized wheelchairs designed to assist those who are disabled and unable to get around like the general population.

May 10, 1993
Private Members' Business
There is a discussion of home help. One of the things that makes it very difficult for many disabled to remain independent and in their own homes and out of the institutions which end up costing the taxpayers a great deal more money is the fact that they cannot care for themselves adequately.
They need assistance in daily routines within their own homes. These daily routines may simply be heavy cleaning or doing the weekly washing, but it may also include preparing meals, shopping, doing minor maintenance around the home and assisting them even in getting in and out of a wheelchair or into bed. It would not cost taxpayers if we provided some tax relief to these people, allowing them to remain independent in their own homes. In fact it could be a considerable cost savings.
Another area mentioned is transportation. Last week I held a series of coffee parties in my riding. One couple phoned my office and asked if we could provide them with transportation. Both of them were disabled and they had not been out of their home since Christmas because they could not afford specialized transportation. They depended on neighbours and friends even to get out to try to shop.
When we examine some of the issues we should be looking at in committee, particularly if the committee broadens its thrust so that it looks at extending this bill not only to those 65 and over but to all disabled people, one thing we should be examining is the participation rate of disabled people within the employment market. Even in our Canadian Jobs Strategy program the participation rate of disabled people has fallen dramatically in the last two years or three years. In 1987-88 the participation rate was about 4.2 per cent. By January 1992 it was down to 1.6 per cent.
This federal government has cut $100 million annually for training from each of the two budgets. We talk about private industry picking up the cost of training, particularly for the disabled, and yet we know that the private sector provides only 25 per cent of gross domestic product for training, compared to twice that amount spent in the United States and four times in Britain and Germany. We have to develop and emphasize employment equity programs to assist the disabled to move into the employment market.
The federal government introduced employment equity legislation in 1986, but of course it had no teeth. It was only a reporting piece of legislation. The government even exempted itself and its direct employees from having to report. We should contrast this with what the Government of Ontario has done. In 1992 it introduced mandatory employment equity legislation. It has goals and timetables to make sure that it really happens. However some companion legislation and changes from the federal government are required and this is one of them, to allow for tax deductibility for these expenses.
In my last minute I would like to comment on what the government side is going to say: Where are we going to get the money? Let me suggest that it could do away with some of the expense allowances for corporate executives.
In Vancouver they are in the process of building a new hockey rink. I wonder how much of that is going to be financed by tax dollars for box seats by the multinationals, big companies and the wealthy, in that they can write them off in their taxes. It would be much better if we gave a tax break to the disabled rather than to the wealthy and the corporations.
This government has extended the Liberal mistake on family trusts for the wealthy. It would be much better to give a tax break to disabled men and women than to give and continue a tax break for wealthy families.
The question is not whether there are funds available, but what choices we have. Too often over the last number of years governments have chosen to give tax breaks to the wealthy and the powerful corporations. I say they should be giving them to the more deserving disabled.


Mr. Marcel R. Tremblay (Parliamentary Secretary to Deputy Prime Minister and Minister of Finance):: Private Members' Business
I would like to start by thanking the hon. member for raising the issue of the tax treatment of senior citizens. This government shares the hon. member's concerns, especially about the tax treatment of disabled senior citizens.
However, the proposal before us today in Bill C-405 also raises a number of practical problems. One problem is that this proposal would not apply to recipients of the disability tax credit under the age of 65. Although senior citizens are more likely to be eligible for the disability tax credit-nearly 40 per cent of those who claim the credit are over 65-all individuals eligible for the senior citizens tax credit, whatever their age, must live with serious deficiencies.
Individuals are eligible for the disability tax credit if, as a result of their disability, they are markedly restricted in their activities of daily living. This criterion identifies a deficiency as serious if its effect is equivalent to that of being blind or being confined to a wheelchair. Since age is already a consideration when determining eligibility for a disability tax credit, there is no reason to provide additional tax benefits based on the age of recipients of the disability tax credit.
I also want to point out that our tax system already allows for the effect of age on the ability to pay of senior citizens in this country. It does that through the age credit and the pension income credit. In 1993 the age credit reduces federal and provincial income tax of individuals over 65 by approximately $915. Persons receiving a pension income from a private plan may also claim the $1,000 credit for pension income, which reduces federal and provincial income tax by up to $260.
Altogether, disabled senior citizens receive up to $2,290 in tax relief from the federal and provincial governments. However, disabled individuals under 65 receive a total of approximately $1,120, or less than half the amount disabled senior citizens would receive.
Another problem raised by Bill C-405 is the very high subsidy it would provide to those who are eligible for the tax credit. This raises concerns about fairness to other taxpayers and also about the potential for excessive use of medical products and services. This problem has two aspects. First, the proposal would allow senior citizens eligible for the disability tax credit to claim the full amount of expenses incurred. However, both in Canada and the United States, tax relief only applies to costs over and above a certain percentage of the claimant's net income.
In 1993 the federal Medical Expense Tax Credit allows the taxpayer to deduct 17 per cent of eligible medical expenses in excess of the lesser of $1,614 or 3 per cent of the individual's net income. The 3 per cent rule is used to restrict the tax credit to medical expenses over and above normal health care expenses in Canadian households. In the United States, the tax relief applies only to expenses in excess of 7.5 per cent of net income.
The second and by far most important reason why the proposed subsidy may be too high is that a 75 per cent federal tax credit results in a real subsidy of over 115 per cent, if we consider the impact on provincial income tax.
The government realizes that the needs of disabled senior citizens are important. However, I am sure hon. members will agree that a subsidy for more than 100 per cent of expenses does not make sense. It would merely encourage unnecessary expenses incurred for equally unnecessary or inappropriate treatments. And all Canadian taxpayers would have to make up this substantial revenue shortfall.
In fact, the question arises whether the tax system is the right mechanism for providing the kind of subsidy intended by Bill C-405. After all, the tax system's main objective is to obtain revenues from the public in as fair a manner as possible, so that the government can fulfil its mandate to offer the products and services that are part of the Canadian social fabric.
Measures like the disability tax credit, the medical expense tax credit and the age credit add to the fairness of the personal income tax system. The purpose of these measures is not to subsidize senior citizens and the disabled but to provide tax relief based on the impact that age, the seriousness of a disability and exceptional medical expenses have on the individual's ability to pay taxes. That is why these credits are set at a rate of 17 per cent, the initial marginal tax rate at the federal level.
That being said, I would like to point out that, on the basis of a number of factors, we can assume that generally expenses related to the disability of persons who claim both the disability tax credit and the medical expenses tax credit are almost entirely compensated for under the tax system. It is estimated that individuals who claim both the disability tax credit and the medical expenses tax credit received about $212 million in tax relief in 1989. According to data taken from the Statistics Canada Health and Activity Limitation Survey, disabili-

May 10, 1993
Private Members' Business
ty-related expenditures were evaluated at about $226 million.
As far as government spending is concerned, I may remind the hon. member that provincial programs offer substantial subsidies to senior citizens and the disabled, and that the federal government-through the Canada Assistance Plan-shares in the cost of these programs. The programs subsidize a considerable part of the cost of prescription drugs, functional equipment and accessories, family help services, auxiliary services and nursing care. If implemented, the proposals described in Bill C-405 would clearly overlap benefits provided by these programs and might result in a reduction in the benefits they offer.
I believe that existing measures constitute a better response to the needs of senior citizens and the disabled than the proposal described in Bill C-405. We are, of course, open to suggestions and new ideas for improving our response to the needs of these people and helping them, but I may remind the hon. member that we are not starting from scratch. Any new proposal should, of course, allow for existing measures and for what the government has already done to meet the needs of its citizens.
In concluding, I must say that because of serious practical problems associated with the measures proposed in Bill C-405, I find it hard to support them. Consequently, my only option is to ask hon. members to reject this bill.


Mr. Dennis Mills (Broadview-Greenwood):: Mr. Speaker, I would like to begin by congratulating my colleague from Burin-St. George's who, like many Liberal leaders before him, has shown a consistent attitude when it comes to looking after and being sensitive to the needs of senior citizens.
Canadians forget but it was in 1927 that Liberal Prime Minister Mackenzie King introduced the old age pension. It was in 1957 that Louis St. Laurent developed Canada's first RRSP program. In 1966 Pearson changed the age of eligibility to 65. As well in 1966 Pearson introduced the Canada Pension Plan, medicare and the guaranteed income. In 1969 John Thmer, then Minister
of Consumer and Corporate Affairs, amended the Patent Act to allow the sale of low cost, no name drugs to seniors. We all know that in 1972 Pierre Trudeau indexed the old age pension an'd eventually brought in quarterly indexing.
The member for Burin-St. George's is following in the Liberal tradition of making sure seniors are looked after.
What amazed me today when listening to the Conservative Party was the member saying: "We have concerns with this bill because it does not deal with the disabled people who are under 65". This is something we can deal with in committee. I cannot believe we should not give the same approach to disabled people in all walks of life. This is one of the many inequities of our tax system.
Three weeks ago we passed a bill in the House that extended our ability to do any kind of taxing of private family pensions, family trusts and private trusts to the tune of billions of dollars. We have extended indefinitely the period where we have access to them in terms of revenue. One of the reasons the government gave was that these families might have disabled children who would have to be looked after. That is one of the reasons it brought in the bill to continue the family trust.
Twenty-one years ago it was a Liberal initiative. We stood in this House this year and said it was time to review this. Times have changed, and here is the government using children from disabled families as a reason to extend it.
Today we are talking about a condition in our country where we want to look after seniors who may need to deduct from their income expenses relating to their disability and the government is walking away from allowing this to go to committee for refinement and enhancement. I find this absolutely unbelievable. On the eve of an election the government has declared war once again, declaring to the senior citizens of Canada that it is not going to discuss it.
There is another reason. We now have the GST. We now have four million people out of work. The litany goes on and on. Now we find the government will not allow this bill to go to committee. Who are we talking about? We are talking about disabled senior citizens who will incur expenses beyond $1,000. My colleague from Burin-St. George's is asking whether it is fair for a senior citizen who incurs an additional $1,000, $2,000,
May 10, 1993

$3,000 or maybe even $5,000 and wants to deduct this from his or her income. It is beyond my imagination that this Conservative government is not allowing it to go to committee. I cannot believe there is a person in Canada who would be so insensitive to discussing this matter. The cost today for some of the new services and items that we have to help look after our disabled people is well beyond $1,000.
Is the government really serious? One-fifth of our senior citizens cannot afford a wheelchair. My colleague from Burin-St. George's says we have to look after that one-fifth and the government is saying it does not want to discuss it. One-third cannot afford hearing aids and the government does not want to discuss it. It does not make sense.
Governance is not for the advantaged. We are here to look out for those in our community who are disadvantaged. My colleague from Burin-St. George's stood in this House today and put forward a constructive bill which would help look after disadvantaged senior citizens in our community.
We are not talking about senior citizens who have millions and billions of dollars in family trusts. We are talking about disabled senior citizens, asking whether a way can be organized so they can get a tax deduction for the extra expenses they incur because of their disabilities. The Conservative government is saying it does not want to discuss it. It does not think it is a good idea.
We are in opposition right now and there is not a lot we can do about it. The government in the last two to three years has allowed all kinds of tax expenditures for foreign multinationals or has allowed tax expenditures to sit on the books of major corporations. It is not that I have any disrespect for the contributions that corporations make in terms of job creation. Two years ago there were 2,200 corporations in this country with retained earnings in excess of $25 million, not counting companies with losses carried forward. These 2,200 companies did not pay a nickel's worth of taxes because of the tax expenditures buried in our inefficient, unfair, complicated tax act. The government did not do anything about it.
Private Members' Business
My colleague from Burin-St. George's is calling upon the government today and bringing to the attention of the House that among our senior citizens are many who are disabled, who cannot afford to have hearing aids. They cannot afford wheelchairs. They need help in terms of their transportation. Let us get this bill to committee so that we can discuss it and maybe develop a tax expenditure. This would be a cost to the Treasury of Canada, but I challenge any Canadian who is listening to this debate to pick up the phone and say the Conservative government is right, that we should not be looking after those disabled people whose expenses because of their disability are beyond $2,000. If there are any Canadians who are like that they are certainly not in my community. If they are in my community they are certainly not Liberals.
I sit here in total bewilderment. Once again I am dumbfounded the Conservative government, on the eve of an election, is so unco-operative with seniors.


Ms. Beth Phinney (Hamilton Mountain):: Mr. Speaker, I am very pleased to rise today to speak in support of Bill C-405 which the hon. member for Burin-St. George's has put forward. This is an incredibly good bill.
It would not be necessary if the present government had concern. The government of the last eight years made nothing but little piecemeal token gestures to the disabled community and almost none to those in the senior community who have disabilities. It is very necessary.
The points covered here, such as the cost of transportation for seniors and the cost of home care for seniors, can be just absolutely unmanageable for most Canadian families. It is really too bad we have to bring this bill forward, but it is long overdue. Things we have not been able to get to in the disability committee are included in here. I certainly hope the Conservative government will change its mind and at least see fit to let this go to committee so it can be studied further.
I want to make a few comments about persons in Canada with disabilities. We know now there are over four million Canadians living with some kind of disability. That is well over 16 per cent of our total population.

May 10,1993
Private Members' Business
It is not a small group of people we are talking about. Many of these disabled persons are seniors.
We can all think of a senior we know who has difficulty seeing, hearing or walking, maybe a parent, grandmother, friend or neighbour. We all know, and some of us are closer to it than others, we are all going to be in that position shortly. As the population ages there are going to be more and more people in this area. As we get older we develop more disabilities and we need help from the government. As Liberals we feel that is what the government is for, to help those who cannot help themselves. If this segment of the population needs help then we should be helping them.
As an example of how the Liberals are always concerned about people who cannot look after themselves and making sure that they are well looked after, in 1981 the Standing Committee on Human Rights and the Status of Disabled chaired by the Hon. David Smith, a fine Liberal who brought in the Obstacles report, really covered every area that needed to be covered for the disabled, including seniors. There were 130 recommendations in that report. That was in 1981. Twelve years later very few of these recommendations have been acted upon. I have to give credit to the committee. The committee has been trying and trying to put forward suggestions but this Conservative government has just not followed through on them.
In 1990 the committee put forward a report A Consensus of Action. It had a lot of suggestions for the government with regard to economic integration and helping the seniors community. The government rejected five of the six recommendations in the report. This Conservative government is really not concerned about helping those who cannot help themselves.
The standing committee took probably an unprecedented action and wrote another report to the government saying it did not like its answer to the first report. The government then came forward and said it would put out $158 million for the disabled. This is to be spread over a five-year period to 10 different departments. This is for over four million disabled Canadians. It worked out to $1 a year for each disabled person. That is not veiy much money to help a disabled person with their transportation and home care costs. It was $1 a person for the disabled community.
The government made a big fanfare and a lot of noise about all the money it was putting out. It is over 16 per cent of our population and they get $1 a year for their special problems. This shows how much the government is concerned about it.
The government did bring out an omnibus bill but the disabled communities across the country were very disappointed in it. It may have been too much of a build-up. It had been working on it for quite a number of years. There was very little in the report and there was nothing in particular for senior citizens.
I spent two years travelling across the country with this report, which is available to the public, called Recommendations for Change. We discussed right across Canada the problems of the disabled. It is not just that they need a little bit here and a little bit there and help with some other problem there. The whole system has to be changed so the disabled are covered, no matter what their age. This bill is fantastic because it specifically says the seniors need special help in special areas. Let us give it to them.
It would be fantastic if the government were to suggest that instead of this bill discussing things that can be done for disabled senior citizens it should apply to all disabled citizens in Canada. The government would defray their transportation expenses for weekly shopping trips or visits to the doctor. Home care costs should also be defrayed. Therefore it would be equal for all Canadians with disabilities. However there is no chance the government is going to do anything for all disabled people in Canada.


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


Roger Simmons: I rise on a point of order, Mr. Speaker. My first of two points of order is that the House did not begin consideration of this matter until about 11.10 a.m. We were assuming that we had the hour, that the clock started when we began consideration. We were hoping the Chair would take that matter into account. That was the assumption on which we operated and have done so in the past.
I have another point of order when that one is dispensed with.

May 10, 1993

Government Orders


The Acting Speaker (Mr. DeBIois):: The hon. member is too experienced a parliamentarian not to know that the time provided for this consideration always ends at noon, unless there is unanimous consent. We sometimes start at 11.05, 11.10 or 11.15, but the time provided for the consideration of Private Members' Business always ends at noon, unless there is unanimous consent. Since no one rose on this point before noon, I followed the custom of ending the debate and proceeding immediately to the next item on the agenda.


Roger Simmons: Mr. Speaker, in view of the misunderstanding about the timeframe maybe my friend who has supported the principle of the bill will give unanimous consent to its going forward to a committee for some scrutiny.


The Acting Speaker (Mr. DeBIois):: Orders of the day.



GOVERNMENT ORDERS


[Stage Direction]
The House proceeded to the consideration of Bill C-112, an act to amend the Excise Tax Act, the Access to Information Act, the Canada Pension Plan, the Customs Act, the Federal Court Act, the Income Tax Act, the Tax Court of Canada Act, the Tax Rebate Discounting Act, the Unemployment Insurance Act and a related act as reported (with amendments) from a legislative committee.

The Acting Speaker (Mr. DeBIois):: There are two motions in amendment standing on the Notice Paper in the name of the hon. member for Moncton for the report stage of Bill C-112, an act to amend the Excise Tax Act, the Access to Information Act, the Canada Pension Plan, the Custom Act, the Federal Court Act, the Income Tax Act, the Tax Court of Canada Act, the Tax Rebate Discounting Act, the Unemployment Insurance Act and a related act.

Motion No. 1 will be debated and voted on separately.
Motion No. 2 goes beyond the scope of Bill C-112 since it would introduce a new concept. The Chair must rule it out of order, according to paragraph 698(1) of the sixth edition of Beauchesne. Therefore it will not be selected.

I shall now propose Motion No. 1 to the House.


MEASURE TO AMEND
Mr. George S. Rideout (Moncton) moved:: Motion No. 1.
That Bill C-112 be amended in Clause 12 by adding immediately
after line 15 at page 28 the following:
"(1.1) Section 128 of the said Act is further amended by adding immediately after subsection (1) thereof the following:
(1.1) For the purposes of paragraph (l)(b), a co-operative corporation which is a registrant resident in Canada is a prescribed corporation in relation to a co-operative corporation which is a shareholder of it, where
(a)	not less than 90% of its shares are owned by co-operative corporations, and
(b)	not less than 50% of supplies made by it are made to co-operative corporations that are shareholders of it."
He said: Mr. Speaker, this is a very specific amendment. This bill smoothes out all the bumps and wrinkles that have been associated with the administration of the GST.
This amendment deals with a situation involving cooperatives. Co-operatives are experiencing a unique situation setting them outside what was contemplated by the legislation. Hopefully the government will adopt this amendment in order to correct the anomaly.
It is difficult to describe. Let me explain it using the example of a major chain store or grocery store that has a number of stores across the country. If the head office does things for its branches throughout the country, if it provides services such as accounting, advertising and other types of head office functions, it is an expense of the company.
What happens with co-ops, however, is that when the head office, the regional or provincial general offices do work for its member co-ops it attracts GST. Each thing done by the central co-op for its member co-ops will require the central co-op to charge GST. The member co-op will be required to pay the GST and then apply to

May 10, 1993
Government Orders
the government for a refund. The end result is that the accountants do well. All the professionals do well. Computer people do well trying to design a program to administer it. The net effect is that the government does not get any more money because the money has to be remitted back to the member co-ops. Therefore all that is created is bureaucracy.
The minister shakes his head saying that this is crazy, that this legislation is crazy. This amendment will do something to address the idiotic position in which this government has put co-ops.


Mr. McDermid:: How would your GST work?


George Saunders Rideout: Wait till you see. It is going to be an exciting moment for you fellows when you see how well we can administer it.
I will tell them this much. We will certainly not have the bureaucracy and the mess that have been created. Look at the size of this bill and the amendments. Is this performance? I do not think so.
In essence the purpose of this amendment is to put some fairness into an unfair tax system called the GST. It will at least be fair to the co-ops so they are not competing on an unlevel playing field. Clearly that is the circumstance now. They have to hire extra people just to collect the tax, remit it and then get it back.
The purpose of this amendment is very simple. It is easy to understand and one's eyes will not even get tired while reading it. When it is all done it will do something for the co-op movement. I take great pleasure in putting forward this amendment. I am sure that at least rural Conservative government members will see their way clear to support the co-op movement and support co-ops throughout-


Mr. Gauthier:: And the urban ones too.


George Saunders Rideout: The urban ones as well, but with this government we never know for sure. I hope at least the rural members will see the benefit of supporting the co-op movement. Maybe some of the urban members do not understand that there are urban co-ops as well and that they make a contribution to our business community-
Without further ado, that is the purpose of the amendment. It is something that is needed and something which I hope will get support all around.


Marcel R. Tremblay: Mr. Speaker, the government recognizes the contribution of co-operatives to our economy and society. It believes this form of enterprise plays an important role in Canada's economic and social growth.
The government has recognized some of the unique characteristics of the co-operative sector in the design of the GST. Under the GST special treatment has been afforded financial co-operatives and co-operative shares. I would like to say a few words on Motion No. 1 relating to co-op sales. I will divide my comments into five different topics.
First I would like to say that in addition to the special treatment co-operatives have already been given under the GST, the co-operative movement is asking that sales between co-ops be zero rated. When the GST was first introduced there were numerous similar requests from various groups of businesses. However, paying tax on purchases and claiming input tax credits is fundamental to the way that a value added tax works. As with any exception, making an exception to the rules increases compliance and administration costs for registrants and the government.
The only exception made to the general rule was in the case of sales between a parent corporation and its wholly owned subsidiary. This recognized that the subsidiary was really like a division of one company.
Abandoning that criteria as in the case of co-ops would in effect be abandoning the basic structure of the GST. It would throw open the door to countless other requests for the same exceptional treatment for any group of companies which in some manner were related to one another.
This motion will open the door to a variety of requests. We have made just one exception up to now for companies and their wholly owned subsidiaries. This motion will open that door and the results will be costly when considering the administrative costs in dealing with the various requests.
May 10, 1993


The Acting Speaker (Mr. DeBlois):: Is the House ready for the question?


Some hon. members:: Question.


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


Some hon. members:: Agreed.


Some hon. members:: No.


The Acting Speaker (Mr. DeBlois):: All those in favour of the motion will please say yea.


Some hon. members:: Yea.


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


Some hon. members:: Nay.


The Acting Speaker (Mr. DeBlois):: In my opinion the nays have it.
Motion No. 1 negatived.


John Horton McDermid: that Bill C-112, as amended, be concurred in.


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


Some hon. members:: On division.


The Acting Speaker (Mr. DeBlois):: I declare the motion carried.


[Stage Direction]
Motion agreed to.
Marcel R. Tremblay: Mr. Speaker, I believe that you will obtain unanimous consent to proceed with third reading of Bill C-112 now.


The Acting Speaker (Mr. DeBlois):: Is there unanimous consent to proceed immediately with third reading of Bill C-112?


Some hon. members:: Agreed.


John Horton McDermid: that the bill be read the third time and passed.


Marcel R. Tremblay: Mr. Speaker, I rise to move third reading of Bill C-112.
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Bill C-112 contains several important refinements to the GST. These refinements will help to ensure the continued smooth and efficient operation of the tax.
I would like to briefly address some of the amendments contained in this bill and how they improve the operation of the GST. To begin, let me note that with a major tax reform such as the replacement of the federal sales tax with the GST, there will occasionally be a need to fine tune the system. The proposed amendments before us today are based on the practical experience of seeing the tax at work in the marketplace. They have been developed through extensive consultations with businesses, organizations, tax professionals and individuals.
That being said, this legislation will not significantly alter the general operation of the GST. Rather, the bill proposes important technical amendments to simplify GST compliance for particular sectors of the Canadian economy. As a result, these industries can turn their efforts to the important business of creating economic growth.
Bill C-112's measures relating to the Canadian taxicab industry are a prime example of the practical nature of the proposals contained in the bill. The operation of the GST would be amended to enable the taxicab industry to operate nationwide under a consistent pricing structure. A uniform price structure will entail significant administrative savings for this industry.
Along similar lines, the government received constructive representations from direct selling organizations. As a result of these discussions, the government is proposing new rules under which tens of thousands of independent sales contractors of direct sellers will not have to register and file GST returns.
On this last point, I would like to note that, during the legislative committee debate on this bill, amendments were proposed to further simplify the operation of the tax for direct sellers. I am pleased to report that these amendments were approved by the committee and are included in Bill C-112 for consideration by hon. members today.
Bill C-112 also contains benefits for retailers. The amendments would simplify the operation of the tax for a wide variety of special types of transactions, ranging from the treatment of discount coupons to the treatment fo returnable beverage containers. Moreover, simplified rules have been designed specifically for retailers who make purchases through buying groups. The new rules, which are supported by associations representing man-

May 10, 1993
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ufacturers and distributors of grocery products, will significantly reduce the required paperwork.
Simplifying the GST for business is an important objective of the government. That is why Bill C-112 contains measures that would allow for greater flexibility with respect to reporting requirements for up to one million businesses. In particular, Bill C-112 would make it easier for these businesses to file GST returns only once a year. As a result, they can devote more time to earning profits and less time to paperwork.
Bill C-112 also introduces changes that will simplify the operation of the GST in areas where activities are often undertaken by joint ventures. This is particularly relevant for the oil and gas industry, which has voiced its support for the legislation.
Another group that will benefit from this legislation is auctioneers. Bill C-112 will allow auctioneers to follow a consistent accounting procedure for all of their transactions. This is what associations representing auctioneers across the contry told us that their members needed and this is what the government has proposed.
The government has also worked to improve the competitive position of service exporters by allowing them to import certain goods for servicing without having to pay tax on the importation. Similarly, Canadian international competitiveness will also be strengthened by refinements to the GST treatment of sales of goods and services by Canadian companies to foreign customers.
As we heard in committee, many of these new rules are of particular benefit to auto parts manufacturers in southern Ontario centres such as Windsor and Oshawa.
I would also note that the treatment of exports-in particular, legal services provided to foreign companies-was an issue on which the legislative committee reviewing this bill heard representations. The committee recommended refinements that are reflected in the bill before hon. members today.
In addition, the bill provides broader relief under the tourist and foreign convention rebate program. Let me remind my hon. colleagues that Canada's program is already unequalled among other countries that have similar tax systems. By helping to maintain the attractiveness of Canada as a destination for foreign visitors and convention organizers, this change would further enhance the competitiveness of our tourism and convention industry.
The bill also contains provisions that will benefit Canadian farmers. To that end, the government has consulted with farmers and is now proposing a relieving amendment that will bring the GST treatment of livestock feedlots into line with that of feed mills and other suppliers of tax free livestock feed. As well, farmers will be provided with broader cash flow relief on their purchases of bagged fertilizer. This is particularly beneficial to farmers in remote areas.
On a broader level, Bill C-112 would make the GST fairer for all businesses. The legislation provides for discretion on the part of the Minister of National Revenue to waive penalty and interest in cases where a person is unable to file a return or make a remittance on time due to extraoardinary circumstances beyond the person's control.
The legislation also contains proposals that would yield direct benefit to Canadian consumers, particularly those in need. For example, the bill contains proposed additions to the list of tax free medical devices and prescription drugs. In addition, it provides that Canadians living year-round in travel trailers would be allowed to rent their sites in trailer parks on a tax exempt basis. This ensures that these Canadians are treated the same as other residential tenants. The bill also provides a simpler, more generous GST housing rebate to individuals who build their own homes.
Finally, the government is proposing a special credit for certified institutions that employ mentally or physically disabled individuals in the manufacturing of goods. This credit was designed in recognition of the unusually high costs faced by these institutions during the transition to the GST.
In closing, let me reiterate that this bill will improve, simplify and increase the fairness of the GST. This legislation is the result of extensive consultations with businesses, organizations, individual Canadians and their professional advisors. The government has worked together with them to identify specific problems in particular areas of the GST, and has proposed workable solutions that are tailored to the realities of today's marketplace.
May 10, 1993

Tax professionals have studied and applauded this legislation. They have urged its speedy passage in order to reduce uncertainty in the application of the tax.
Mr. Speaker, I echo their counsel and ask all members to give their full support to this bill.


George Saunders Rideout: Mr. Speaker, it certainly sounds from the government's perspective that this bill is a cure-all for all things that ail the tax system in Canada. I do not think we on this side can go quite so far.
As everyone knows we are fundamentally opposed to the GST and the system that is in place. We are looking at ways to improve the tax system and make it fairer for Canadians. At the same time we are faced with some amendments that on their face, if we accept the GST, are satisfactory and in order, although a lot of them do not go far enough and do not do the job properly. We are faced with the conundrum of having to deal with amendments that are improving a bad piece of legislation called the GST. We do not have any choice at this particular stage but to try to work within the system which the government has created and see if there are ways we can make it better.
During committee and throughout much of the discussion with respect to this particular bill we heard from a number of groups, but the government had closed its mind to any amendments or changes which would have been of any benefit. We saw that attitude again this morning with its position on co-operatives.
The co-operative situation is very simple and straightforward. I find it really unique that lawyers came to our committee and wanted an exemption for lawyers who are hearing foreign arbitrations. This government bent over backward to accommodate the lawyers to make sure they did not have a hard time and that foreign arbitrations would not attract GST. When it comes to helping out Canadians and co-operatives the government has a closed mind. It is not prepared to do anything to support co-operatives.
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The simple amendment which was proposed and voted down this morning would have just added fairness to the system. The other amendment which was ruled out of order was another simple matter that would have put a level playing-field between direct selling co-operatives and other grocery store operations.
Direct selling co-ops charge a service fee every week of approximately $3.50. There is no question it is not a major item, but the government requires the members to pay GST on the $3.50 each week. That is manifestly unfair. A large portion of the purchases are food purchases that do not attract GST. Therefore Loblaws, Sobey's or any of the other facilities have a benefit to the detriment of the co-op movement and the direct selling co-operative store.
The minister says to get serious. We have been trying to get serious with this legislation and help people who are in need. His attitude is to close the door and make it more difficult for co-operatives and the people who are at the base level trying to help other people. The minister should take another look at his government's position rather than support it in this particular fashion.
Another serious aspect to this bill that one has to take a look at is its retroactivity. This is tax legislation and the government is going to make it retroactive to January 1991, which was quite some time ago. Small businesses are now going to have to figure out whether they are caught within this retroactivity or not, how it is going to work, and what they will have to do. They will have to fill out forms and deal with the bureaucracy to handle the retroactivity outlined in clause 210 of the bill.
At committee we urged the government to take another look at it. We said there was something fundamentally wrong with the approach it was taking. It was putting the small business community at jeopardy because of the retroactivity of the particular legislation. The government has a closed mind about things that come from the opposite side and refused to even entertain a change in the retroactive aspects of the bill.
The government is prepared to look after the lawyers who happen to be doing some foreign arbitration, but it is not prepared to look after small business. It is not prepared to make life a little easier for the small business community which is the backbone of our economy.

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There is another dangerous trend in the bill as well. It is with respect to access to information. I refer specifically to clauses 128 and 211. The commissioner wrote asking us not to enact the legislation as it presently exists but to make changes to allow for more freedom of access to information. Again the government had a closed mind and said it was not prepared to look at it. It was not prepared to make those changes, and so again another opportunity to add a little more fairness to the situation and have a little more information available for all concerned was lost.
It is an interesting situation. If one looks at the bill one sees that these are amendments. This is not GST legislation per se but amendments to legislation. If one looks at the explanatory notes they indicate clearly it is like a novel, except it is very dull reading. It might replace Sominex or something like that. The documentation is massive.
Small businesses are trying to figure out what they are supposed to do with the GST. I would like to read one section I find fascinating because if you can figure it out, Mr. Speaker, maybe there is another career opportunity for you.
I am referring to clause 46(2). It goes on a great length and then says:
(f) where the particular person is a registrant who was entitled to claim an input tax credit, or a rebate under Division VI, in respect of the acquisition of the property or service, the particular person shall be deemed, for the purposes of this Part, to have made a taxable supply and to have collected, at that time, tax in respect of the supply equal to the amount determined by the formula A times B over C times D -
That part is easy. It goes on and says:
-where
A is the tax fraction,
B is the input tax credit or rebate under Division VT that the particular person was entitled to claim in respect of the acquisition of the property or service,
C is the tax payable by the particular person in respect of the acquisition of the property or service, and
D is the amount of the rebate paid to the particular person by the registrant.
I am sure you are excited, Mr. Speaker, about hearing this type of easy to understand, easy to read legislation that this government is putting forward to help small business function in our economy today.
As much as I like accountants I think all we have done is draft about 400 pages of legislation to make accountants richer with no real benefit, no value added, to the economy or the business community at all. In fact it is a major detriment.
These types of examples are sprinkled throughout all the legislation. This government has made a very complex piece of legislation even more complex. It has made it harder for Canadians to understand. Businesses think they are going to have some improvements with this legislation and they are going to be surprised when they actually see how it comes into effect.
The bill deals with a number of things, but as a general statement I will say that we all now know the GST was the wrong tax. The government was committed to it and it cannot go back. One reason we should change governments is so we can rectify this problem.


John Horton McDermid: What are you going to do? Tell us what you are going to do.


George Saunders Rideout: What are we going to do? We are going to get rid of the GST.
The GST collected $30 billion in revenue. Thirty billion dollars came into the coffers of the government. As a result of all the administrative costs and the rebate the government netted $15 billion. Fifty cents on every tax dollar that comes into the coffers through the GST go out in the way of rebates or expenses. They look at that, try to justify it and say the tax is working, but the simple fact of the matter is that if we did not have the rebates and all the administration we could probably lower the GST to 3 per cent. Instead this government hangs on with all the nonsense of amendment upon amendment, changes and an increase in the bureaucracy. No wonder we have to spend as much money as we do.
Then the government forces GST down people's throats when the provinces have systems in place that could have avoided the redundancy of the federal GST administration. However this government does not want to work with the provinces. It forces through this legislation and now these amendments which are further complications to an already complicated circumstance.
May 10, 1993

We all know this piece of legislation called the GST has not generated what it was intended to generate. There has been a huge shortfall. The government was anticipating this would be a great windfall and, as it has turned out, it has generated about $7 billion less than what it expected.


John Horton McDermid: We never said that.


George Saunders Rideout: I can remember all the arguments indicating that it was going to generate at least $18 billion, if not $22 billion a year net, and it came in at $15 billion. The minister is using the same system the Minister of Finance uses when he does his budgets. They do not even come close to the numbers.


John Horton McDermid: Get the facts right.


George Saunders Rideout: I have the facts right. I remember exactly what the Minister of Finance said when he implemented this tax. He said this would generate large sums of money and it has fallen short by billions. Now the government says that really was not what was intended.
It sounds exactly like the Minister of Finance with his budget estimates when he said they would reduce the deficit. It was to go down to $27 billion but it turned out that it went up by $1.1 billion to $35 billion. That is the kind of mathematics the government functions with.
What is serious about the GST is that in addition to everything else it has driven the economy underground. There is a huge economy flourishing underground. If the government wants to understand why it has not been able to achieve the revenues it expected, the reason in large measure is that it has driven the economy underground. It is still flourishing there but we are not collecting any revenues.
There was a recent article in The Globe and Mail talking about the number of cheaters within the GST system. We all know that is going on. We try to put our heads in the sand and say, as the minister just said, that it is not true; but it is true.
We have a system of taxation that is driving the economy underground. It drove us into a far deeper recession than we had anticipated. Now the government is going to add more complexity and more complications to an already overburdened system. The main focus is
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against small business. It will create another handicap for small business that is not faced by small business in any other country.
The amendments are probably in large measure acceptable because they improve on a very bad tax, but the improvement on the bad tax does not improve the bad tax. It is the system that has to be changed and it will be changed in a few months.


Mr. Bill Blaikie (Winnipeg TVanscona):: Mr. Speaker, I am pleased to be able to join the debate this morning. I found it curious my Liberal colleague did not answer the questions posed to him by the member opposite, the minister of state for finance, as to what the Liberals would do in the event that they actually kept their promise of getting rid of the GST. They have been very vague on that particular point.


Jean-Robert Gauthier: No, no. You have been very vague.


William Alexander (Bill) Blaikie: No, I think we have been very clear about how we think we could replace the GST. We would do so mostly by closing Liberal tax loopholes the Conservatives have yet to close.
It seemed the Liberals were almost ready to make a policy statement at one point, I forget how many months ago, about a new tax that would have included food. The word got out and a great blanket of silence fell over the land. That rumour was only out for a few days.


Jean-Robert Gauthier: Tell that to Bob Rae in Ontario.


William Alexander (Bill) Blaikie: We got them going. They are obviously very sensitive on this point. The truth hurts because the truth is that the Liberals plan to go parading around the country saying that they intend to get rid of the GST. What they intend to replace it with will remain a secret, a very well-kept secret, until that allegedly happy day comes when they are, as they hope, elected. Then the Canadian people will find out what they intend to replace the GST with.
Unfortunately for the Liberals the blanket of silence came a few days too late, and it is not the most well-kept secret in the country. We know they are contemplating some kind of tax that might be even more heinous than the GST, if one could imagine such a tax, in so far as it would include food.

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Perhaps the next Liberal who rises, if there is to be one, could elaborate on the question asked by the minister of state for finance as to just what the Liberals would do. The Liberal member who was just heckling me suggested we had not said what we would do. We have.
I have put out a document, as the NDP tax critic, explaining how we feel we could get rid of the GST. I will admit there are many things in there that some people might object to, but it is an alternative policy. I know the minister of state for finance would object to some of the things we have in our alternatives to the GST, but at least we have something we can debate. He could then get up and say that he thinks we are wrong on the business and entertainment tax deduction and that eliminating it would hurt the restaurant industry.
I could say that I do not think it would, that where it has been eliminated in other places the restaurant industry has not been hurt in the way it thought it might. However the minister of state for finance and myself have something to argue about. There are a number of other tax measures that we could talk about and that I may even talk about today.
When it comes to the Liberals what are we to talk about? What are we to debate? All we have is the rhetoric of opposition to the GST, but no real suggestion as to what the Liberals would do. It is certainly not going to be closing tax loopholes because many times last year I raised the whole question of the bill that the government introduced to extend the capital gains tax exemption on private trusts. Was that ever raised in the House of Commons by the Liberals prior to the bill being introduced, or for that matter even after the bill was introduced?
It was not even until committee that the Liberals finally cottoned on that maybe there was something here on which they should get on side with the NDP and oppose. Previous to that there had been no mention of it in the House, no questions asked in Question Period. Indeed, when the bill was debated at second reading the Liberals were still very much in favour of that particular part of the bill. Their critic actually got up and thanked the Minister of Finance for clarifying the matter in a way that would permit them to continue to support the government measure. They later changed their minds but it was a little late.
One of the things that has already been mentioned but merits repetition with respect to the bill is the way in which the government seemed to go out of its way to be helpful to lawyers and accountants who appeared before the committee but resisted every attempt to try to change the rules with respect to co-operatives. I heard
the minister of state for finance say something. Maybe when he gets up he could explain why the government has not been willing to meet the needs of the co-ops in this regard and create a level playing-field between themselves and other retail stores.
On the face of it this would be a fair thing to do. I do not understand why the government would continue to stonewall the co-op movement on this issue unless-and this is entirely possible-it has a philosophical objection to co-operatives because they do not operate in that purely entrepreneurial, rugged, individualistic and private enterprise way that the Conservatives idolize. Maybe this is the objection. Maybe it is an attempt to penalize the co-op movement for not conforming to the dominant ideology. I am not sure. Maybe the minister of state could clear that up. I would just like to reiterate the question of co-operatives and the fact that the government refused to consider amendments which would have helped in that regard.
The whole question of access to information has been mentioned and the fact that the government has moved to further exempt the Excise Tax Act from the Access to Information Act. Again we see that even the commissioner, Mr. Grace, is concerned about this particular provision. This is the second time in not so short a period where the government has been caught out by its own commissioners who have particular concerns. Here the information commissioner is concerned about something the government is doing.
It was not so long ago, with Bill C-921 believe, where the privacy commissioner was concerned about a measure that the government was bringing in with respect to the ability to access the tax files of Revenue Canada employees. One would think the government would be more sensitive to this kind of criticism, and that if a commissioner indicated a concern the matter would either be postponed or some way would be found to deal with it. In the case of Bill C-92 it looked as if it was going to be dealt with, as the offending clause was withdrawn from the bill in committee but reinserted later at report stage exactly as it had been.
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In the meantime the government has been able to persuade the privacy commissioner that its regulations would somehow deal with this problem. We hope that is right, but I have to confess I am sceptical. This is another example of the government going against the advice of people who have the specific responsibility of concerning themselves with particular matters, in this case the Access to Information Act.
Curiously enough the provisions with respect to the Access to Information Act are going to be retroactive. I am not sure how that is going to work. What about the information which has already been accessed? Does the government have a plan for somehow rolling back time and recovering the information which has already become public? This would seem to be a new dimension of arrogance on the part of the government. In any event it raises the larger question of the retroactivity of the other measures in the bill, and that is a matter that has also been mentioned as a concern.
I was speaking earlier about the whole question of the GST and the commitment of the NDP to getting rid of it. We feel it could be done. First it has to be considered that the GST itself costs money. It is not a question of recovering that which the GST brings in. It is a question of recovering what the GST brings in over and above what would be saved by not having the GST in the first place. It costs money to collect the GST. The GST has an effect on inflation. Inflation has an effect on other government programs. It is a more complicated scenario than people tend to give it credit for when they are thinking about how difficult it might be to replace the GST. Certainly it would not be easy, but we did have a GST-free Canada until a few years ago.
I am certain if there were the political will we could have a GST-free Canada again. It might take some real political will to make the tax system more fair and more progressive, to collect some of the money out there that is not being collected as a result of various tax expenditures, loopholes, shelters, whatever, making the system more progressive as a whole. There are ways in which this could be done but they would have to be comprehensive. I will admit to the government there is no single alternative tax measure that could be adopted which would replace the GST. It would have to be a package of measures. We think that package could be constructed.
We might end up, if we were doing it, with people angry with us. We would have the people who benefit from these various Liberal tax loopholes which were put in there in the 1970s angry with us. However the people of Canada would not be angry with us because they would be glad to be rid of this particular tax.
I will tell members who would be most glad this moment. It would be the housing industry. The front page of the Winnipeg Free Press today is full of stories about how the new housing industry is being sorely curtailed by the GST because people are much more wont than they used to be to buy an older home or just a home which has already been built. It does not have to be particularly old in order to avoid paying the GST. That may be true with respect to car sales as well. I am not sure. I have not seen any statistics on it.
The way the GST is applied it is certainly a great incentive to not buy a new house. The construction industry estimates that the job losses in Winnipeg alone have been quite significant as a result of the GST.
I also see in the paper this morning an ad about GST cheating costs. It is costing the government $2.3 billion a year, says an Ontario report. What have we done? If there is that kind of cheating going on across the board, we have moved from a system in which there was a considerable degree of things working on the honour of Canadians to a system which is now discredited to the point where we have more of an underground economy. We have more cheating as this article states. It is very much to be regretted that both the substance of the tax and the way in which it was brought in have done a lot to discredit the entire tax system.
Elements of that tax system deserve to be discredited. I am speaking of elements which existed before the GST. The fact is that regardless of what we think about particular tax measures this country and other democratic and civilized countries, so to speak, depend on a certain degree of willing compliance on the part of citizens with the tax system. Otherwise we would need either an outlaw tax system or a police state in order to supervise it all.

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Anything which undermines and erodes people's commitment to dealing with the tax system fairly, honestly and in a mood of willing compliance is something that ought to concern the government. I hope it does concern the government. Maybe the minister of state for finance will want to comment on that as well.
It will be an awful legacy on the part of the current government if we are able to look back some years from now and say it was this point in time when people's confidence in the tax system as a result of the GST began to erode and eventually led to a situation of massive tax avoidance of an ordinary nature by a great many Canadians.
For all these reasons we continue to oppose the GST. We continue to oppose bills like the one we have before us which merely tinker with that tax instead of eliminate altogether.


Marcel R. Tremblay: Mr. Speaker, the legislative review committee put forward, as the hon. member mentioned, an amendment dealing with litigation services. This was in response to representations made by the Canadian Bar Association to the committee explaining that certain charges could undermine the process that Canada has made as being recognized as a preferred place for resolving certain international disputes.
As I said to the hon. member, the amendment made at committee improved the bill by ensuring that Canada's competitiveness in this area is not threatened. I am surprised my hon. colleague disagrees with enhancing Canada's competitiveness in that way.
He also made reference to access to information on the GST. Nothing in this bill restrains the access of any interested person to general information about the GST. Indeed the government has made every effort and will continue to make every effort to inform the public about the tax from the release of the first white paper in 1987.
Subsequent technical papers and numerous technical information bulletins were released by the government to make as much information available as possible. The bill ensures information on specific taxpayers is protected as taxpayers rightly expect their privacy to be protected. However, general information about the tax
will continue to be open to the public. An amendment to this bill will clarify that only taxpayers' specific information is protected.


William Alexander (Bill) Blaikie: Mr. Speaker, I will deal with the last point first. I presume the member is aware that confidential and personal information with respect to the excise tax is already exempt. It seemed to us that the government had not given good enough reasons for going beyond that. Maybe he might want to explain just what it is the government is trying to exempt.
Second, with respect to the representations of the Canadian Bar Association, I was not so much opposing what the government did as contrasting what the government did in that respect with the representations that have been made to the government repeatedly by the co-op movement to have a level playing-field so that it can stay competitive with its retail competitor.
The government is very interested in creating a level playing-field for lawyers doing foreign litigation, but when it comes to something like the co-op movement wanting a level playing-field with respect to its competitors, the government has a deaf ear. As I say, it was a matter of contrast rather than comment on the particular amendment.


Mr. Rey Pagtakhan (Winnipeg North):: Mr. Speaker, I would like to ask the member for Winnipeg Transcona why if his party is obviously opposed to the GST his leader indicated that it would take their party five years to abolish the GST, whereas the Liberal Party has indicated that it would do away with it within one year.
If the GST in the eyes of the NDP is like a malignancy, why would it be five years? This defies common understanding. If in fact the GST is truly as bad as we believe in the Liberal Party and we would do away with it in a year, why would it take the NDP five years?


William Alexander (Bill) Blaikie: Mr. Speaker, the difference is that we actually intend to get rid of the GST. People who do not intend to get rid of the GST can say anything they like. They obviously do not intend to get rid of it, and that is why they say the things they do.
In our jobs plan, which many Canadians are reading with approval, we outline how we can get rid of the GST and replace the revenue it now raises through a series of improvements in the tax system, many of which I spoke about earlier.
May 10, 1993


Jean-Robert Gauthier: Mr. Speaker, Bill C-112 contains the changes proposed in the notice of Ways and Means Motion of December 9, 1992. Much of it concerns changes to the goods and services , tax but there are also some rather technical measures. Since my colleagues mentioned it earlier, I would like to point out two of our concerns.

I am concerned about certain measures in Bill C-112 that would exempt information on the goods and services tax from access to information.
The information commissioner, Mr. John Grace, raised concern about clauses 128 and 211 of the bill. He is concerned that the government is giving itself total control over release of any GST information. He referred specifically to a complaint being investigated by his office that Revenue Canada tried to block release of the list of GST registrants.
Revenue Canada, in fairness and in response to that concern, said that these amendments would not prevent individuals from determining whether a vendor was registered for GST purposes. Revenue Canada says that these changes are intended to restrict the disclosure of taxpayer specific information in a way that parallels section 241 of the Income Tax Act.
The government assures us that we will still have access to information on the administration of the GST. I among others will hold it to this assurance. The information commissioner is also concerned, and this is the main point, that these amendments could restrict his office's ability to investigate complaints.
The government has not responded to the information commissioner's specific concerns. We do not know yet if the changes the information commissioner suggested in his submission to the finance committee will be adopted. If they are not then I submit there is a serious concern on the part of the information commissioner, shared by many Canadians. It will remain to be seen whether we can put to rest this concern as soon as possible.
On a more specific measure in Bill C-112 affecting section 167 of the Excise Tax Act, I would like to highlight something which is a little closer to home in my
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case, having been a practising chiropractor for some 35 years.
Under the existing act, the sale of business assets of all chiropractic practices would attract GST including that portion which we call goodwill that is in the name and reputation of the practice. The change in Bill C-112 to section 167 will mean that the portion which is goodwill will not be GST taxable when the business is primarily involved in making exempt supplies. The supply of chiropractic services is exempt when rendered to an individual.
Furthermore the amount charged for the supply of goodwill will not be considered in determining whether a business is a small supplier or required to register for the GST. This is minor but of importance to some of my colleagues in the profession.

Mr. Speaker, on listening to the government-and I would like to return to the whole of Bill C-112-one might believe that these changes to the GST would make this tax, which is hated in Canada, function better and more efficiently.
Here we are, three years later, with 350 pages of simplifications to the GST. Just months before an election, the government proposes a 350-page bill to simplify one of the most hated taxes in Canada. As I will try to prove, it is a complex tax which is costly to administer and which imposes a heavy paperwork burden on small business.
The parliamentary secretary and member for Terrebonne, in his speech on second reading, said on page 16901 of Hansard:
- these measures represent a rigorous fine-tuning of the details of
the tax. They simplify GST compliance across many sectors of the
economy.
Mr. Speaker, let us see if the GST is easy to administer. The Auditor General, Denis Desautels, and the minister of revenue disagree on the annual costs of administering the GST. It is an honest disagreement. They do not agree on the figures, even on those which should be quoted.
The Public Accounts of Canada contain some gems. Mr. Speaker, you need only consult these accounts and you will find all these figures that I am giving you for

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1991-92. The gross revenue forecast for 1991-92 was $29,495,478,000, while net revenue, as we said earlier, was about $15.2 billion. If we deduct the administrative costs of about $486.1 million, which we have not yet done, we are left with a net balance of $14,682,361,000. As the member for Moncton said before, we thus lose nearly 50 per cent of the gross revenue from the GST in administering it and giving refunds.
I could compare the tax with the old federal sales tax, but time is short and if I get a question, I will tiy to enlighten the member who asks me about it. This situation is different, but it is still good to look at it and useful to compare with past experiences.
Let us return to the concern with efficiency and effectiveness. It is quite difficult even for a well-informed person involved with the issue to find or obtain information on the administration of the GST. It is hard to reconcile the details in the public accounts and the departmental expenditure bulletins. Nevertheless, the departments, especially the department of revenue, have the information. For example, I will give you a classic case that happened recently.
According to documents given to the public accounts committee recently by Revenue Canada, the revenue department alone spent $339.6 million administering the GST in 1991-92. The public accounts for the same year contain the same figure of $339.6 million, but that is to administer all taxes, including the GST, the goods and services tax.
Why the confusion? The parliamentary secretary told us in his speech that the government wanted to make the GST simpler and fairer. They should also make it clearer and make the information easier to understand.
I take a classic example: coding industries. For example, we would like to know how much the GST brings in on clothes or books or all sorts of other goods or services.
The information on industries was not requested on the registration forms. Industrial classification began in mid-1991. Detailed revenue information on the GST is essential for Canadians. If we want to assess the program, we must ask if this assessment planned for 1994 will be available if the coding itself is not complete until 1994.
If we want to know if the tax is equitable, we should know how it is applied, to whom and on what it applies.

A great number of amendments to the GST, as demonstrated by Bill C-112, show there are an awful lot of things to be corrected if this tax is to work at all. Over the last several months I and others have learned a certain amount about the GST. This learning has left me with many questions and doubts about the administration of this tax.
It has been said that a little learning is a dangerous thing. If the government would only provide us with the information we seek, look for and ask for, perhaps we could remedy my thirst for knowledge on the GST.
The best thing to do with the GST as far as I am concerned, and this I share with my Liberal colleagues on this side, is for the next government, and I hope it will be a Liberal government, to replace this tax with a fairer tax. A fairer tax would be one that applies in an equitable manner, one that is efficient and effective.


An hon. member:: Tell us how.


Jean-Robert Gauthier: I hear the government minister over there saying: "Tell us how".


An hon. member:: That is rhetoric.


Jean-Robert Gauthier: It is not rhetoric. It is a question you just put to me: "Tell us how". Listen attentively, Mr. Minister, about dismantling.
In the first session of the new Parliament Liberals will mandate the Commons finance committee to consult Canadians and provincial governments on all the options to the current GST. The current Minister of Transport is mouthing something. If he wants to ask me a question I would be more than happy to answer him after I have finished my speech. If he wants to know what we are going to do he should listen.
I will repeat. In the first session of Parliament we will mandate the Standing Committee on Finance to consult Canadians and provincial governments on all the options to the current GST and to report within 12 months.
May 10, 1993

Our objective is clear, to replace the GST in a way that generates equivalent revenues, is fair to consumers, easier to administer for small business and promotes federal-provincial co-operation.
The government put in the GST without any consultation. I hear the minister over there saying why should Canadians not say they like the GST. He either has not been with it or he has been somewhere else. If he goes across the country he will find out that the GST is the most hated tax Canadians were ever asked to pay. The best thing to do as far as my party and I are concerned is to replace the GST.
We learn not surprisingly that apparently there is a great deal of GST cheating going on. In The Ottawa Citizen dated April 21, 1993 is an article about a leaked International Monetary Fund report on the Canadian economy. According to this report the Minister of Finance and his colleagues who were appearing before the board told the IMF that compliance with the GST had been surprisingly poor. This is one reason why revenues are less than forecast and why federal finances are in the bad shape they are today.
A few minutes ago the minister of privatization said that somebody on this side did not tell him how much the government had anticipated raising in revenues from the GST. I will tell him because it is all public. It is all in the budget documents. The minister did not know so I will tell him.

The revenue forecast for 1991 was $16,350 million dollars; the expected revenue according to the budget of February 25, 1992 was $16,400 million and actual revenue according to the Public Accounts for 1991-92 was $15.2 billion.
Mr. Speaker, they were off. None of their predictions turned out correct. They are unable to count.

I believe we are dealing with a serious matter when we talk about the hidden economy. I believe there is an underground economy in Canada which is mining revenues. It has been estimated the size of this underground economy ranges between 5 per cent and 20 per cent of Canada's economy. It is a huge figure. In 1985 the current Minister of Communications who was then Minister of National Revenue-it was not me who said
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it; I see the minister for privatization and the Minister of Transport laughing-estimated the size of the underground economy to be $40 billion, with a resulting loss of tax revenue to the government of $9 billion a year.
The Tories' answer-and again I hear the ministers over there laughing-has been to spend more money. The average cost per GST registrant with 1.9 million registered right now went up to $179.64 in 1992-93 from $150.92 in 1991-92. Is it because of enforcement or collection difficulties? Why did the price go up?
This means the government spent $60 million more last year to administer the GST than the year before. Is that a fair and efficient tax? Is it reaching its effective goals? Rather than fixing the problem to make the tax fairer and more acceptable to Canadians, the Tory government threw money at cracking down on cheaters.
The GST has undermined Canadians' confidence in the fairness of our tax system. It is understandable. It prolonged and deepened the severe recession we are experiencing and encouraged Canadians to stop spending, which caused our economy to grind to a halt. In the recent budget we learned the Tories were again penalizing the poor by reducing GST payments to twice a year from four times a year just to improve their balance sheet.
In January 1994 a payment of $625 million will be due to people who paid GST and will be entitled to a credit. The government put it off until April 1, 1994, thereby reducing its 1993-94 deficit by $625 million. However the 1994-95 budget will be increased by an account payable of $625 million. That is what we call playing with the books. Anybody in the private sector with an account payable would declare it and in this case pay it, but not this government.
The GST in general is a burden on Canadians, but it is also a burden on small business. I want to address that question. It is costly to administer, expensive and time consuming for small businesses. The Canadian Federation of Independent Business, a renowned and respected organization, conducted a survey of 25,362 businesses. It found that on average a small business had to spend almost $4,000 in one-time costs to implement the GST into its operations. Complying with the GST cost each small business on average $5,158 in 1991. On to this we

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can add the government's cost of about $180 per registrant for a total of $5,338.
The federation says the cost of compliance for small business appears to have dropped 30 per cent in 1992 from a total cost of $6.6 billion in 1991 compared to $4.6 billion in 1992. However we slice it, this is still a heavy burden on small businesses which are the engines of growth for an economy like ours.
Furthermore many public servants are required to administer the GST. Revenue Canada says-and this is official-it took 3,960 persons at a cost of $486.1 million for 1991-92 to administer and collect the GST. Of this amount $330.6 million was spent by Revenue Canada, $54.9 million for the administration of the GST credit and $91.6 million by other departments.
I could go on to compare the GST with its predecessor, but I will avoid that because I do not think it is too constructive. The federal sales tax of the day caused some problems. It was replaced but the GST is a bad tax. It was badly set up. It was put in at the wrong time. This government should know that Canadians are going to throw it out, not only for the GST but for all the other things it did to Canadians. There have been 34 increases in taxes since it took power.
I could go on and talk about the projected net revenues of the government and the budget it cannot get straight. These people cannot shoot straight, let alone count. We have proposed that at the next Parliament to get rid of the GST. That is a promise we will keep. I hope Canadians will remember the harm the government has caused this country with the GST.


John Horton McDermid: Mr. Speaker, I listened with great interest to the comments of my hon. friend from Ottawa- Vanier on the GST. We could debate this at some length.
As I understand it, the Liberal's program is called trust us. It says: "We are going to wipe out the GST within a year. We are going to send the Standing Committee on Finance across the country to get the ideas of people on what the tax should be instead of the GST and we will implement it within a year". That is what I understand my hon. friend to say.
It is my understanding, and you can correct me if I am wrong, Mr. Speaker, that the Liberals did this four times. They had a wonderful opportunity with two royal commissions on the economy. Two standing committees went across this country and did that. Every one of them suggested they wipe out the manufacturers' sales tax, which the Liberals did not do although they had that advice for 40 years running. The recommendations on most of them was to bring in a value added tax which the goods and services tax is.
I want to ask my hon. friend a direct question. If he does go across the country with members of the standing committee and finds that the GST is the fairest value added tax we can have in this country, would the Liberals change their minds and not wipe out the GST?


Jean-Robert Gauthier: Mr. Speaker, we are all laughing at that question. The hypothetical question to be asked is: Does the minister go out into the country and find out from Canadians what they think about the GST? That is the question to be asked.


Mr. Corbeil:: How do you do that?


Jean-Robert Gauthier: What do they think about the GST? They think it is a lousy tax.


Some hon. members:: Oh, oh.


Jean-Robert Gauthier: Let me finish. Our goal is clear. I will say this slowly so it will not be misunderstood. We must replace the GST with something that generates equivalent revenues, is fairer to consumers, easier to administer for small business and others, and promotes federal-provincial co-operation by replacing the present system.
I will just read an editorial from today's The Ottawa Citizen:
Canadians who believe their national finances are in the hands of competent, private enterprise trained Tory managers should examine their records more closely.
Consider, for instance, the goods and services tax. Part of the sale pitch of the GST was that it would leave a paper trail, making it much more difficult for people to cheat on their taxes.
But when Finance Minister Don Mazankowski delivered his budget last month, the numbers indicated GST revenue was $1.2 billion less than projected in February 1991. The government blames the recession for the shortfall.
May 10, 1993

Canadians are fed up with the government, fed up with its approach, fed up with the way it keeps the books and cooks them sometimes, fed up-


Some hon. members:: Oh, oh.


Jean-Robert Gauthier: Yes, yes, I will repeat it: cooks them sometimes.


Some hon. members:: Oh, oh.


Jean-Robert Gauthier: It is not oh, oh; it is the truth. Last year the Auditor General for the first time had three reservations on the government dealing with the way it dealt with pensions, with the federal-provincial payments and the Petro-Canada deal. It had three reservations. It was a record of complaints by the Auditor General against the incumbent government.
This government should be booted out, not only for its incompetence but for its cuteness in trying to make Canadians believe this year's change of the rebate in January does not mean very much. It just going to be included in April. It has decreased its deficit next year by some $625 million and that should be repeated to Canadians. They are a bunch of incompetents.


John Horton McDermid: Mr. Speaker, again we listen to the blustering from the Liberals. When they do not have a good point we notice the volume of their voices goes up. They yell, rant and rave about mismanagement and so on and so forth.
My hon. friend still did not answer my very direct question whether the Standing Committee on Finance found that the GST was the fairest tax. I might remind the hon. member that these amendments are being brought in to help small business with the GST. I might also remind him it is the largest tax change the country has seen since the Liberals brought income tax in on a temporary basis.
The Liberals brought income tax into this country on a temporary basis just to pay for the First World War. Then they were to wipe it out and we have had it ever since. I mean their track record on taxes is not that great either.
I want to ask the hon. member this direct question. I want him to answer me. If the Standing Committee on Finance finds that the goods and services tax is the proper tax and the fairest tax we can have on a value
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added basis, will the Liberals then back off on their promise to wipe out the goods and services tax and replace it with something "we are not sure of yet but Canadian people trust us because we Liberals can really be trusted"?


Jean-Robert Gauthier: Mr. Speaker, the only reason I raise my voice is because when the transport minister and the minister of privatization both yell at the same time it is difficult to be heard in this place. I want the microphone to hear me and not them. That is the reason I have to raise my voice sometimes.
The minister has asked me a hypothetical question. I have only been here 20 years but my experience taught me something some time ago. A former leader of my party, Mr. Trudeau, who was a good Prime Minister said hypothetical questions should be compared with the following analogy: If my grandmother had wheels we would call her a bus. It does not make any sense to answer a hypothetical question. If the spirit of today prevails across the land Canadians will throw out the government and the GST. I will bet the minister a private lunch that if a committee travels across the country it will come back and say to get rid of the GST.


George Saunders Rideout: Mr. Speaker, I just wanted to compliment the member for Ottawa-Vanier on an excellent address. He noted the key problems.
I know government members keep asking us what we will replace the GST with. We have been telling them all along that it is very simple. We are going to consult Canadians rather than ram it down their throats the way the government has done over the last number of years.
I wonder whether the member for Ottawa-Vanier would like to talk about the fact the information that came out of the committee hearings is that the GST generated revenue of $30 billion but only netted $15 billion to the Treasury. When we look at those numbers and see the amount of money going out in rebates, administration costs and all those things, we have to start rethinking this tax. It clearly shows that it does not work.


Jean-Robert Gauthier: Mr. Speaker, these are excellent questions. The Public Accounts of Canada show that Canadians contributed $29.45 billion to the GST in 1991-92. After rebates and credits the net was $15.2 billion. I do not know of any ship or railway that operates without administration. Salaries have to be paid. There is rent, equipment and supplies. After deducting $486 million

May 10, 1993
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for administration $14.5 billion is left. We collected $29.5 billion. This is very inefficient.


An hon. member:: No, no.


Jean-Robert Gauthier: I hear the minister saying no, no. I dare him to find in the Public Accounts of Canada anything different. I happen to know those figures by heart. I am not twisting anything. I am giving the truth. That is the
government's game.
I dare the minister to contradict my figures right now. The GST is a 50 per cent efficient tax. It is absolutely no good. It is inefficient and heavy. In one simple word it is bad.


Rey D. Pagtakhan: Mr. Speaker, I would like to join this debate as well on Bill C-112, an act to amend the Excise Tax Act, the Access to Information Act, the Canada Pension Plan, the Customs Act, the Federal Court Act, the Income 'lax Act, the Tax Court of Canada Act, the Thx Rebate Discounting Act, the Unemployment Insurance Act and a related act.
After just reading the title it is really a bill filled with complexities and one that will need thorough study. For the government to introduce the concept of secrecy in part of the bill certainly raises immediate concerns in the eyes of many Canadians.
I would like to focus my debate on three points: the specific concerns about the bill itself, some of the evils of the GST and perhaps a word about deficit reduction strategy.
First on the bill itself, I would like to indicate that the absence of a level playing field for the co-operatives to operate within this proposed Bill C-112 certainly is unfair to the co-operatives in the country. Why this government is allowing it to happen remains difficult for me to understand. Why an amendment by the Liberal Party to correct this obvious deficiency was not accepted by this government to me only reflects the continuing insensitivity of this government to co-operatives in the country.
Second, the cloak of secrecy that can insulate vital economic and monetary information and data from closer scrutiny by the Canadian public certainly is a
weakness in this bill because it is a truism that information is critical when we ask Canadians to participate in the democratic processes and to allow them to participate meaningfully and to criticize the policies of this government.
When one hears that this government is introducing the cloak of secrecy and the barrier to access to information by the Canadian public one can only sort of guess that the government is afraid to be fully scrutinized by Canadians.
There is the complexity of the bill itself. It is known that the backbone of the economy of this country rests with small businesses. Small businesses have felt that the GST is a very complex tax measure and yet here is again a bill thousands of pages long that they have to read through again. Even the provision on retroactivity to 1991 definitely would be very harmful. Again that relates to the insensitivity of this government.
If we have a bill like this that would need a team of lawyers and tax consultants to help businesses then obviously the cost to businesses will increase. What will happen to the owners of the corner-stores around the country? What will happen to them? I ask this government to reflect on the financial burden that will be imposed upon them.
I would say again that with respect to the retroactivity provision that certainly it is becoming a habit of this government to always have a retroactive provision as it did with the bill on the pharmaceuticals.
There is the GST and how small businesses and the economy are harmed. My colleagues have already articulated during debate that following the accumulation of some $30 billion in revenue, the end result is a net of about $15 billion in revenue. To have 50 cents of every dollar collected as the net revenue for the country truly does not speak well of the efficiency of the system. This government prides itself that this is one of its strengths but this certainly is a serious indictment of its claim.
Second, the GST has not enhanced at all federal and provincial relations. At the same time the GST has not helped reduce the national financial deficit. No wonder this tax has been the most hated one in the country.
May 10, 1993

During debate I heard one spokesperson for the NDP indicate that there is no single tax measure that could replace the GST. I agree with that. Yet what we heard in debate from that NDP spokesperson is only one small component of the package he is trying to sell.
I would like to make a simple comparison of this bill for Canadians in so far as the stand of this Tory government, of the NDP and of the Liberal Party. First, it is clear that a Tory government will continue the GST. It is a commitment on its part. I would call it stubbornness on its part despite the obvious harm that it has created for Canadian businesses and many Canadian consumers.
In contrast the New Democratic Party has indicated through its leader that it will phase it out over five years. The maximum term of any government under our Constitution is five years. In fact by tradition the election has to be called within four years.
This Tory government has already exceeded that parliamentary tradition and the election should have been called already. Yet the New Democratic Party is telling Canadians that it would phase out the GST in five years, in other words beyond the usual traditional life of a Parliament.
If the GST is as bad as the NDP claims and as we believe it is in the Liberal Party then why should it take the NDP five years? Imagine a patient with cancer and one says that it is a serious disease: "Oh, but it will take me five years to apply all my treatment approaches". That is not the way to treat a malignant and serious problem. That is not the way to treat a malignant and serious public policy issue in the country.
The Liberal Party, in contrast, is committed to changing and abolishing the GST within 12 months. During that time, we would consult with Canadians again contrasting with the other party that would not even like to consult with Canadians or the provinces. It would not like to consult with the provinces. It is inherent in taxation that we should have the full consent of the governed, including that of the provincial governments.
I have a word about deficit reduction strategy and about fiscal responsibility. The Tory government would
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like deficit reduction at all cost with cuts to all programs.
I would like to submit that the Liberal Party is equally committed to deficit reduction but with an approach with a social conscience and a Canadian sense of values.
What do I mean by that? We are committed to maintaining funding appropriately for health care, education and employment strategy. We want to help those severely dislocated from their jobs with the unemployment insurance social safety net.
I would like to add that one approach to fiscal responsibility is this aspect of government streamlining. How many departments of government are there today that duplicate their efforts and therefore the cost to the Canadian taxpayers. One can only imagine one issue that I addressed earlier in this Chamber. That is the provision for example of immigrant and settlement services.
The employment department of this country, the immigration department as well as the Department of Multiculturalism are involved in this process. Why is it not one department of government? This is only one glaring example of government administrative inefficiency that we can attack and thereby save tax money for the Canadian taxpayers.
Last, I would like to indicate that in terms of an approach to governance we have to instil and re-instil in our governments the principle of public ethics and trust. No more shall there be contracts that the Auditor General will tell us report after report have been granted by government presumably illegally.
I can recall some 20 contracts given by the health department that were under RCMP investigation. We have yet to see the report by the RCMP on this issue. I would like the government to table this report as soon as it is out. That is where we could save money. There are other sources of revenue. We could maximize the utilization of revenues that are collected.
I am really delighted to speak briefly on this bill during debate and to indicate to the House that this bill as it is now contains flaws and ought to be rectified. I challenge the government to do so and listen to the Liberal view. As well we would like to just reiterate to this Chamber that the Liberal Party is committed to abolish the GST,

May 10, 1993
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not over five years as the NDP would like us to believe, but truly within the first year of government.


John Horton McDermid: Mr. Speaker, may I congratulate you on your promotion to such a lofty position.
We heard it again that the Liberals are going to wipe out the goods and services tax and replace it within one year.
In 1986 the government of the day, after listening to the recommendations of royal commissions and standing committees in this House, decided to take away a very detrimental manufacturers' sales tax which everybody agreed was a bad tax. That recommendation had been around for 40 years. The Conservatives were the first ones to move on it.


Mr. Skelly (Comox-Alberni):: Why did you raise it to 13 per cent then?


Dennis Joseph Mills: It was a bad tax.


John Horton McDermid: That's right and that is why it was a bad tax. It was a terrible tax. We raised it. Absolutely we raised it.


An hon. member:: Three times.


John Horton McDermid: That is right. The government did raise it three times. It was a bad tax. We said that and we said that we were going to replace it. We said it in 1986. At that time there were three options presented to the Canadian people. There were countless hearings across the country on the goods and services tax. The government chose the type of tax system that we have here after consultation with Canadians between 1986 and 1988 when we made our decision.
Then in 1988 we had an election. At that time the Canadian people knew that the Conservative government was bringing in a goods and services tax.


Dennis Joseph Mills: Did you hear what the member for Mississauga South said?


John Horton McDermid: I campaigned on it. I remember the Minister of Finance at the time making a commitment that there would be no additional taxes on new housing and that it would be the same as the manufacturers' sales tax. I also remember making a commitment that there would be no taxes on food at the time. I remember saying
that during the campaign. We campaigned on it. Ib say that we did not campaign on it is entirely erroneous.
I want to ask my hon. friend his opinion. He says that he is going to replace the sales tax within a year and replace it with something. We are not sure what yet but the Liberals are asking the Canadian people to trust them: "We will bring you something different that is going to raise the same amount of revenue but we do not know what it is yet. We are going to eliminate this tax and we are going to do it within a year".
I am going to ask him again. If he goes across this country and finds out that there are no alternatives but that they remain with the goods and services tax, will the Liberals stick with the goods and services tax if that is what the standing committee on finance finds?


Rey D. Pagtakhan: Mr. Speaker, I am delighted to respond to the comments and questions posed by the hon. minister.
It is certainly true that this government consulted with the finance committee and with Canadians. It is true and I should give the government credit about that. However, there is a fundamental difference between hearing and listening. When this government heard the concerns of Canadians the vast majority of Canadians-85 per cent-were opposed to the GST but it insisted stubbornly to introduce the tax. Therefore this government did not listen to the wishes of Canadians.
We are more confident of the intelligence of the ordinary Canadian. When we consult with them I am confident that we will hear a proposal that is sensitive, simple, efficient and effective. When we hear that we will have the new tax approach to this country that is fair for all. Because I am confident of Canadians I decline, with all respect, to answer a hypothetical question that is premised on a faulty basis and that is that Canadians will tell us that they like the GST. It is not a fact. The truth is that Canadians do not like the GST. Therefore to even answer the question, which is hypothetical, will be insulting to many Canadians and prejudging that consultation process.


John Horton McDermid: Mr. Speaker-


Mr. Voipe:: Give the rest of us a chance, John.
May 10, 1993


John Horton McDermid: The hon. member is in caucus with him and can ask him these questions in caucus. I do not have that chance.


Giuseppe (Joseph) Volpe: He has made some good points.


John Horton McDermid: Then let me give him an opportunity to make some more. How is that, okay?
I want to ask my hon. friend this question that is not hypothetical but a direct question that I am sure he can answer. If the Liberals are going into a campaign with this campaign promise on the goods and services tax and they are going to consult with the Canadian people then might I ask my friend why the Liberals have not consulted with the people before the election?.


Dennis Joseph Mills: We are.


John Horton McDermid: Why have the Liberals not come up with a concrete proposal so that during the election they will in fact have something to compare it to rather than a pig in a poke? That is like saying: "Trust us. We will wipe out in a year and we will bring something else in that you want". Why do they not consult the Canadian people now and give us a concrete proposal as their alternative to the goods and services tax?


Rey D. Pagtakhan: Mr. Speaker, Canadians have told us and have told this government that they do not like the GST. So we have made a definitive conclusion that we will abolish the GST.


John Horton McDermid: What are you going to replace it with? Income tax?


Rey D. Pagtakhan: The second piart of the question, which he really did not make clear, is what specific proposals we will introduce. The minister is telling us that we will have a document very high in technicalities and that we will run it through during the election debate. That is not the way to consult with Canadians. That is not the way to consult with the provinces. This government is so stubborn about the GST that it is not even willing to listen to common sense logic.


Mr. Howard McCurdy (Windsor-St. Clair):: Mr. Speaker, I heard the hon. member say that he trusts the intelligence of Canadians. I think that the Liberals had better fear the intelligence of Canadians. We just heard a sudden, late moment development from the hon.
Government Orders
member. The Liberals are going to abolish the GST. I just do not know what their means of communication might be but I wonder if that word has gone to their leader who seems to be far behind this hon. member. He does not know what they are going to do.
I heard the hon. member's analogy about the New Democrats where he said that the GST is going to be phased out over five years: "What ill patient would want to wait that long?" I wonder how many ill patients are going to have their diseases treated by committee. This is an absurdity.
My simple question is this. I would like to see the coherent tax policy document that commits the Liberals to the abolition of the GST and which will provide the basis on which this committee will discuss the issue of taxation with Canadians and arrive at its conclusion. Where is the specific declaration that there will be no GST or value-added tax imposed upon Canadians by the Liberals? A clear concrete answer will do and then maybe the intelligence of the Canadian people can be trusted rather than feared.


Rey D. Pagtakhan: Mr. Speaker, the member indicated that the Liberals have not made a specific declaration. I would truly refer the hon. member to all the clippings in the country and to all the television clips that are there. He should research the Library of Parliament and he will see very clearly that the Liberals have made a specific declaration and commitment to abolish the GST. That way of perpetuating falsehoods has to be put to rest.


Howard Douglas McCurdy: Your leader had better catch up with the rest of you then.


Rey D. Pagtakhan: The NDP prides itself in consulting with Canadians and now is telling us that it would not like to consult them any more. I leave that judgment to Canadians out there in the country.


Mr. Ross Harvey (Edmonton East):: Mr. Speaker, the temptation is great to explore further this fascinating new concept of mandate that the Liberal Party of Canada is proposing to carry into the next election. I hope in fact before my remarks are concluded that I might have the opportunity to come back to this. Again, I

May 10,1993
Government Orders
must say that this is a fascinating new concept of mandate.


Jean-Robert Gauthier: You have 20 minutes. Tell us about you. Tell us about what you will do.


Ross Harvey: Let me instead turn to some matters more substantively dealt with in the bill before us. I refer specifically to the provisions of the bill as they will impact on the co-op sector in Canada.
I am a member of a the Delton Co-Operative Association Ltd. I have been member number 152618 for several years and intend to remain so for as long as I draw breath. I am a big supporter of co-ops because they perform many worth-while functions in the communities in which they do business, not least of which is keeping the profits from their operations, when there are profits, within those communities.
Canada's co-ops do not shift billions of dollars a year out of our economy. They keep the money within the economy and in the community to help it grow and meet its own needs. That is very valuable. Any prudent government would do what it could to ensure that co-ops have every possible benefit in their work.
Unfortunately the bill before us provides the exact opposite. Current GST regulations put retail co-ops at a competitive disadvantage vis-a-vis their vertically integrated corporate competitors because the tiered structure of co-op wholesale and ownership functions is such that at each step of the way within the co-op network the GST must be passed through. I will start again for example in my own home co-op with materials purchased or manufactured by Federated Co-operatives out of Saskatchewan and then marketed to my local co-op, Delton Co-Operative Association Ltd.
The government does not derive any revenue from this exercise. The passing through of GST costs within the co-op structure generates not a single penny for the federal government in net GST revenue. It does increase vastly the administrative costs incurred by the co-ops.
This is not the case for the vertically integrated private sector major retail chains which perform all of these functions within one corporate entity. They do not have those administrative overheads at each step of the retail process that the co-ops do. These overhead costs for
co-ops amount to hundreds of thousands of dollars, for example, in the Atlantic region alone. I know that in western Canada, in Manitoba, Saskatchewan and Alberta, that figure would run quite probably into the millions of dollars. Co-ops are a huge concern in western Canada. This cost to the co-ops and only to the co-ops generates not a penny for the federal government.
The GST structure also discriminates against so-called direct charge retail co-ops, which charge weekly operating fees to members. Some of these are sometimes as well called pre-buy co-ops. This fee covers both the overhead of the store and the members' equity in the co-operative.
Remember, no GST is charged on any other form of investment. The government has recognized the fact that this GST charge on member's equity and direct charge co-ops is inequitable and ought not to be there.
This was recognized as early as June 1991 when it removed the GST charged on other forms of co-operative equity, but that charge still remains on the member's equity in direct charge retail co-ops. The government thus far has been unwilling to treat direct charge equity fairly.
Direct charge co-ops are a significant and growing concern in Canada with large numbers located in Atlantic Canada and British Columbia.
There is a direct charge co-op in Yellowknife which at times has a two-year waiting list. That is the measure of the popularity of that direct charge co-op in Yellowknife, and it is not uncharacteristic. This is a very popular way for Canadians to do business because it is a relatively inexpensive way and the profits, the surpluses generated by this economic activity, remain in the communities where the activity is undertaken.
Co-ops provide an alternative for communities, especially places like Yellowknife, elsewhere in the isolated north, remote and lower income communities, that would otherwise be at the mercy of monopoly grocery chains.
Consumer co-ops in Canada have an awful lot of members. There are 1,655,000 co-op members in Canada.
May 10, 1993

In total, co-ops do a volume of business of over $3.2 billion a year and employ 16,000 people across the country. Co-ops are a crucial part of the Canadian economy, both in rural and urban areas. That is why New Democrats not only recognize that co-ops are a vital ingredient in the Canadian economy but in our strategy for a full employment economy we propose to foster the further development of co-ops.
This policy includes a firm commitment to the equality of treatment for co-operatives by the federal government which means, among other considerations, that the GST currently charged on administrative transactions within the co-op structure should be eliminated. It is one of the major flaws of the bill before us that this is not done.
Unfortunately it would seem that at this third reading stage that flaw will remain. It is unfortunate because there is no fiscal reason for the federal government to maintain that charge and the economic arguments against it are significant.
The co-op movement in Canada is one of the potential bright spots in what is otherwise still, as it has been for several years now, a fairly bleak picture.
Co-ops in Canada have the capacity to serve virtually all consumer needs where they are located and they have the potential to constitute an entirely new form of productive economic enterprise in this country: enterprises owned by the people who work in them and who rely on them for goods and services, that are dedicated to the communities in which they are located, and that in the long run hold far greater potential for good in this country than does the standard, classic, free enterprise, privately owned model.
That being the case, any prudent government would be vitally interested in fostering the well-being of co-ops. This bill does not do that. It works against the well-being of co-ops and on those grounds alone ought to be defeated. I see that our time has run into Question Period so I will resume later.


Mr. Speaker:: It being two o'clock p.m., the House will now proceed to statements by members pursuant to Standing Order 31.


STATEMENTS PURSUANT TO S. O. 31
Mr. Guy Saint-Julien (Abitibi):: Mr. Speaker, members of the Association des prospecteurs du Quebec and I have been trying to convince federal officials and the Minister of Finance to help the recovery of mining exploration in Canada through low-cost tax measures.
We have made representations to officials at the Department of Finance and the Department of Energy, Mines and Resources.
The deputy ministers are not interested in our resource regions and do not understand the situation in the mining exploration sector in Abitibi.


LANGUAGE MINORITIES
Jean-Robert Gauthier: Mr. Speaker, the fate of language minorities often rests with the provinces. We know the problems caused by Bill 178 in Quebec, which restricted the right to bilingual signage. We also know how provinces with an anglophone majority reacted to this bill.
Quebec's Bill 178 has often been used by the other provinces as an excuse to suppress the basic rights of francophone minorities. The Quebec government has taken a major step toward eliminating an irritant that is unfair to its own language minority and has now allowed bilingual signage in Quebec.
It is high time provinces with an anglophone majority, including Ontario, my own province, were as positive in their treatment of their francophone minorities. Whether we are talking about constitutional rights, school management or the survival of minorities, Canada must survive.


AGRICULTURE
Mr. Ken Hughes (Macleod):: Mr. Speaker, on behalf of barley producers in the riding of Macleod I call upon the government to implement the dual continental barley market proposal.

May 10, 1993
A dual continental market offers our producers the freedom to choose, to market their product either independently and privately or through the Canadian Wheat Board. This small measure would help liberate the most productive, efficient and effective farmers in the world.
Canada is only a small player in the U.S. feed grain market. Our barley exports into the U.S. represent only 1.25 per cent of the Canadian Wheat Board's total sales, yet there would be gains in a continental barley market.
This injection of cash into the pockets of hard-working barley producers will reduce the need for taxpayer support and continue to promote self-reliance.
A dual continental market is one more step in helping our producers get the returns from the market and not from the taxpayer. I urge the government to endorse this concept.


OFFICIAL LANGUAGES
Hon. Warren Allmand (Notre-Dame-de-Grace):: Mr. Speaker, I want to congratulate Gordon McIntyre of Huntingdon, Quebec for his successful battle to protect his language rights. It was Mr. McIntyre's case which went to the UN human rights committee and which resulted in its April ruling that Quebec's sign law was a denial of freedom. I am pleased to say that I have supported Mr. McIntyre's case since 1989.
As a result of the UN ruling and other political action the Quebec government has now introduced Bill 86 to allow English on commercial signs and relax other restrictions. While this is not a perfect bill it is a definite step forward in recognizing minority language rights and will help resolve similar issues throughout the country.
While I fully support measures to protect and enhance the French language in Canada this can and must be done without suppressing English.
We are fortunate to have French and English as our official languages and we should rejoice in the opportunity to use both to our political and economic advantage in Canada and throughout the world.


AMHERST CANADA EMPLOYMENT CENTRE
Mr. Bill Casey (Cumberland-Colchester):: Mr. Speaker, I would like to bring to the attention of the Minister of Employment and Immigration and the general public the generous actions of the staff at the Amherst Canada Employment Centre.
When a fellow member of the CEC, Mrs. Margaret McMaster, was diagnosed with a serious illness requiring a heart-lung transplant her fellow workers responded immediately by establishing a fund raising campaign to help her with the tremendous costs of the operation. By working nights and weekends the entire staff and management, led by claims clerk Dan Hill, have raised close to $10,000 through car washes, bake sales, casino nights and a major raffle. As well, they contacted other CEC offices and the business community and have had excellent results.
The staff at Amherst CEC deserve a tremendous amount of credit for their outstanding effort to aid one of their co-workers. It is also quite a compliment to Mrs. McMaster that her colleagues would come to her assistance in such a meaningful way. Then again, Mr. Speaker, if you knew Margaret McMaster you would understand their eagerness to help.


WHALING
Mr. John Brewin (Victoria):: Mr. Speaker, I rise today to bring the attention of the House to the plight of one of the world's greatest treasures, our marine wildlife.
Today in Japan some members of the International Whaling Commission are fighting hard to maintain the commission's 10-year moratorium on the commercial killing of whales. These countries understand the precarious position of our threatened whale populations and at least want more time for scientific research into the seriousness of the problem.
France is lobbying for a whale sanctuary in the Antarctic south of 40 degrees latitude. Such a sanctuary could begin the process of conserving one of the world's most amazing but misunderstood species.
The actions of countries like Norway and Japan contradict all those seemingly sincere commitments made at the earth summit in Rio last year. Canada
May 10, 1993

should bring its influence to bear on these countries and demonstrate its support for both a continued moratorium on commercial whaling and the creation of a whale sanctuary south of the 40.


MEMBERS OF PARLIAMENT
Mr. Scott Thorkelson (Edmonton-Strathcona):: Mr. Speaker, in February I sent surveys to all the households in my riding. The purpose of this exercise was to get feedback about the issues Canadians face each day. Here are a few things some constituents said on the subject of MPs and their role in the House of Commons. One comment was:
An MP should be aware of the opinions of constituents but also should be aware of the global results of any decisions. In other words, they should be much more informed than the general populace. Then they are in a position to make valid decisions.
Another comment was:
Clean up the way business is handled in the House of Commons. The current in-house bickering is an embarrassment to all Canadians.
Another comment:
Thke time to stand back from the established norm. Identify with the locals, not with fellow politicians.
A final one was:
MPs are elected to exercise leadership and judgment and not to take a narrow view.
These are just a few of the hundreds of comments that were made. We have a very serious responsibility here in the House of Commons. I am honoured to be here and to serve my constituents in Edmonton-Strathcona.
He *	*


RACIAL DISCRIMINATION
Mrs. Beryl Gaffney (Nepean):: Mr. Speaker, I am outraged by reports that the Heritage Front, an extremist right wing organization which sees itself as an umbrella organization for a host of smaller white supremacist groups, including Ku Klux Klan cells and skinhead gangs, has indicated its intention to commence an active recruitment process in the Ottawa area. Residents of the nation's capital have declared that it is not welcome here.
The Heritage Front reflects a disturbing trend in Canadian society. This past year has seen a significant increase in both hate crimes and hate propaganda. Some of the most vile and repulsive hate propaganda imaginable is now flooding into Canada, and in some cases being produced in Canada, in far greater volume than at any time in the recent past.
I commend the more than 100 anti-racist high school students who recently strode through downtown Ottawa to add their voices to fight against racism. The time has come for all of us to step up the battle against racism in Canada.


AGRICULTURE
Mrs. Louise Feltham (Wild Rose):: Mr. Speaker, my riding of Wild Rose is in the heart of barley growing country in Alberta.
Over the past few days, I have received faxes and phone calls from literally hundreds of farmers. Their message to me is simple. They want a choice in the way they market their own barley to the United States.
These producers say there are significant opportunities for barley sales to the U.S., opportunities that producers themselves are better able to access than the Canadian Wheat Board. With these opportunities will come higher returns for their crops.
At a time of low farm incomes the government should support any measure which will mean higher revenue for farmers. I urge the minister and the government to move quickly on this issue and to give fanners a choice.


WESTRAY MINE DISASTER
Mr. David Dingwall (Cape Breton-East Richmond):: Mr. Speaker, yesterday marked the first anniversary of the Westray mine disaster which claimed the lives of 26 coal miners in Nova Scotia.
I wish to extend my sincere sympathies to the families of the victims who have had to endure not only the pain and suffering from losing a loved one but also the bewilderment and frustration of having many important questions remain unanswered.

May 10, 1993
Tragedy can be defined in many ways and has been used to describe many terrible events. Am entire community was devastated. A community of good, hard-working and honest people was literally crushed by an occurrence beyond its control.
Words can never fully express the magnitude of the disaster that befell the Westray coal mine on that day. They seem inadequate for the task but words, at the end of the day, are all that we have.
With words we pledge to work tirelessly as long as it takes to find justice for those families and truth for all.


FISHERIES
Mr. Peter L. McCreath (South Shore):: Mr. Speaker, last Saturday I attended a public meeting hosted by the South West Nova Long Line Fishermen's Association. These fishermen are gravely concerned about how they are going to pay their bills when the 4X haddock quota expires.
Some people do not have a lot of sympathy for fishermen who in good years have been known to make a very handsome living. However, no matter how much money a fisherman takes in it is only meaningful in the context of how much it costs to maintain his operation, a situation that is not unlike that of a highly capitalized prairie farm. With or without quota, boat payments, wharfage charges, equipment costs and other expenses must be met.
If the government wishes to avoid large numbers of bankruptcies among our fishermen this year then either the means must be found to provide financial support to Nova Scotia's fishermen in southern and western Nova Scotia or else the means must be found to keep them fishing.


AGRICULTURE
Mr. David D. Stupich (Nanaimo-Cowichan):: Mr. Speaker, once again we have Liberals making promises, this time to the agricultural community.
Promises of income stabilization come from a Liberal Party which when in government never followed through
when it had the opportunity to bring forward a comprehensive income stabilization program.
Promises of a national food security plan come from a Liberal Party which when in government supported an interest rate policy which forced hundreds of farmers into bankruptcy and off the land, which when in government introduced rail line abandonment across the country.
Promises of assurance that food production is seen as an important sovereignty issue come from a Liberal Party which has failed to tell Canadians what it would do in response to the catastrophe of the free trade agreement and now the North American free trade deal.
The Liberal agriculture policy is one to be funded by cutting other programs without telling Canadians the precise program cuts to be made. Liberals cannot continue making announcements about what they will do for Canadians in the expectation that Canadians will forget what Liberal governments have done to Canadians.


CANADIAN NATIONAL RAIL TUNNEL
Mr. Ken  Janies@Sarnia-Lambton: Mr. Speaker, I rise today to decry the last minute appeal by the cities of Detroit and Windsor to block the construction of the proposed CN rail tunnel between Sarnia, Ontario and Port Huron, Michigan.
The proposed tunnel will accommodate doublestacked trains that cannot travel through the existing tunnels. It will help CN become more competitive and deliver more traffic more efficiency.
In particular I regret that the mayor of Windsor has seen fit to join in the desperate effort to block a project that is so vital to the future and the economic development of our community of Sarnia-Lambton. This $150 million investment will have considerable spin-offs for our entire area. One vital fact that these two mayors seem to have forgotten is that if CN cannot build this tunnel under the St. Clair River, it will not substitute one under the Detroit River between Detroit and Windsor.
In a highly competitive North American freight business it is regrettable that political posturing and self-interest is muddying the waters for an important business
May 10, 1993

Oral Questions
decision made by CN which has been based upon economic and environmental considerations.


THE PRIME MINISTER
Roger Simmons: Mr. Speaker, a picture is worth a thousand words.
Thke the wonderful photo of the two once wild, now deceased boars, Boris Yeltsin and our very own Prime Minister. There he is grinning from ear to ear, extremely pleased by his latest coup on the international scene. Why should he not be pleased?
Then the photo showed up in Canadian newspapers and the Prime Minister stopped smiling, or so we are told, but why? Why should Canadians not have the satisfaction of knowing that our very own Prime Minister is getting full value out of the million dollars we are spending on his hunting trip. Surely the man who brought us the GST, the free trade agreement and record unemployment deserves that much. Canadians are a grateful people.
A picture is worth a thousand words, sometimes even more.


REGIONAL DEVELOPMENT
Mr. Gabriel Desjardins (Temiscamingue):: Mr. Speaker, on April 30 this year, in the presence of Bill Caine of Commonwealth Plywood, Mayor Carmelle Nantel and members of the community, I turned the first sod in Belleterre to signal the start of construction on a sawmill to replace the mill which burnt down in 1989.
This project, worth $7 million, will create 70 new jobs in Belleterre and help maintain 35 jobs at the veneer plant.
I am very pleased with the contribution by the federal office of regional development for Quebec, because without that contribution of more than $1,400,000, the project would never have materialized.
This is good news for a community that has suffered severe setbacks in recent years. I say three cheers for the people of Belleterre and good luck to the present and future workers at the sawmill.


STEEL INDUSTRY
Mr. Steve Butland (Sault Ste. Marie):: Mr. Speaker, we were not surprised when the free trade agreement failed the Canadian steel industry. We were not surprised when the U.S. rejected our blue ribbon panel which suggested a sectoral agreement. But we were surprised when our own Canadian International Trade Tribunal decided that other countries are dumping steel plate into our market but the Americans are not.
This ruling was rendered despite Revenue Canada's preliminary decision to apply duties in all of the countries including the United States.
How can we accept rulings that allow the Americans to apply a 69 per cent duty on our exports and we apply zero per cent to their imports into our market? I guess one of the hidden conditions of free trade is that the Americans have total access to our market and we are shut out of theirs.
This trade war will benefit neither side, but if we are to fight the battle on a level playing field we require new generals, new strategies, and some armaments such as a trade law with some teeth with which to fight.



ORAL QUESTION PERIOD


Hon. Jean Chretien (Leader of the Opposition):: Mr. Speaker, my question is directed to the Acting Prime Minister. While the Prime Minister was away on a fabulous hunting and fishing expedition in Russia, in Canada the unemployment rate rose to 11.4 per cent. This increase was not caused by the fact that more people were looking for work, and Statistics Canada made it clear that it was because of the number of people who lost their jobs last month.
If this government's economic policies are so good, why are Canadian workers still losing their jobs in this country?

May 10, 1993
Oral Questions


John Horton McDermid: Mr. Speaker, we did not take any delight whatsoever in the employment statistics that came out on Friday.
I remind the hon. Leader of Her Majesty's Official Opposition that one month of statistics does not a trend make. If he looks at what has happened over the last 12 months he will see there has been an increase in employment in 10 of the last 12 months. As a matter of fact 151,000 full-time jobs have been created in that period of time. In April the manufacturing jobs which the opposition is always harping about increased by 28,000. That is a gain of 70,000 since last October.
There are some good signs in the economy and employment in certain sectors is improving. We believe as the economy improves so will the job prospects for Canadians.


Joseph Jacques Jean Chrétien: In the
month of April we lost 43,000 jobs, more than 1,400 a day. For the minister to get up and say that the situation is improving is very difficult for unemployed Canadians to accept.
The Prime Minister is off hunting in Russia, but when will he stop targeting wild boar and start targeting the Canadian economy and creating jobs for Canadians?


John Horton McDermid: Speaking of bores, Mr. Speaker, there are good signs in the economy which the leader of the Liberal Party never points out.
He never talks about the increase in the growth of the economy, the gross domestic product growing over the last quarter by 3.5 per cent. Today we saw a dramatic increase in housing starts of some 22,000 bringing the annualized rate to some 170,000. I might add this was in April, a month when builders told me they had to hold back somewhat because of the weather conditions. There are lots of good signs out there.
Day after day the hon. leader gets up in the House and says how terrible things are in Canada which really does not do much to promote confidence in this country. He should have more confidence in Canada. He should stand up here and praise Canada not denigrate-


Mr. Speaker:: The hon. Leader of the Opposition.


Joseph Jacques Jean Chrétien: Mr. Speaker, it is very difficult to talk about good things with this government. The average Canadian's income in constant dollars was better when this government came into power than after nine years of Tory administration. Not only that, when his colleague, the Minister of Finance, introduced his budget a few days ago he said that this year and next there would still be more than 11 per cent unemployment in Canada.
When will the government wake up to reality and start creating real jobs for Canadians who would love nothing better than to work?


John Horton McDermid: Mr. Speaker, that is exactly what the government is doing. It is allowing the private sector to create real jobs. It is not throwing money at problems like the Leader of the Opposition wants to do in make-work projects and temporary jobs for about 30,000 people. That is not the way to solve the problem. The way to solve it is to get the basics in place and allow the private sector to create the jobs. That is what is going to happen with our policies.


Mr. Alfonso Gagliano (Saint-Leonard):: Mr. Speaker, my question is directed to the Acting Prime Minister.
The number of unemployed workers in Quebec rose by 16,000 last month. This means that daily, 533 workers lost their jobs, every day for 30 days. Why did the minister refuse to include a job creation program in its last budget that would put one-half million unemployed workers in Quebec back to work and put a stop to the pauperization of Canadians?


John Horton McDermid: Mr. Speaker, that is coming from the party that voted against every single proposal brought forward by this government to help the province of Quebec, including research and development in the drug industry. That has been very important to the economic increases in Montreal.
The hon. member might also be interested in reading the reports from the IMF, the OECD and some of the financial organizations which are saying that the eco-
May 10, 1993

nomic growth in Quebec is going to be the best of all of the provinces in Canada this year.
We have put the basics in place. It is going to happen. The hon. member will not be happy when it has happened because he will have nothing to complain about.


Alfonso Gagliano: Mr. Speaker, if the government's proposal is as good as the minister says it is, why is Montreal now the poverty capital of this country? Why have families lost an average of $2,000 since this government came to power?
Since the last nine budgets have created a disastrous situation, will this government, as it nears the end of its term, at least and at last introduce a concrete proposal for creating jobs and give Canadians new hope?


John Horton McDermid: Mr. Speaker, the only proposal the Liberals have brought forward is to throw money at make-work projects on a short-term basis. That is the only proposal they have.
With respect to the other two proposals recommended by the Canadian Association of Realtors and the Canadian Home Builders' Association, this government implemented them and it is paying dividends today.
I want to ask the hon. member whether he thinks his make-work project is going to create the required number of jobs in Quebec. The answer of course is no. It is a phoney make-work project that lasts for a very short period of time.
What we want is for the private sector to create full-time meaningful employment, exactly what we saw last month when 28,000 jobs were created in the manufacturing industry. Real full-time jobs. That is what we want.


HEALTH CARE
James Capsey (Jim) Karpoff: Mr. Speaker, I have a question for the minister of health.
Oral Questions
When the minister announced that he was leaving public life he said he would support no candidate for the Conservative leadership, but added that he would leap in if he saw any of them challenging our social safety net. Since that time we have had direct challenges to universal health care through proposals for user fees made by both the Minister of National Defence and the Minister of the Environment.
I want to ask the minister of health whether he stands by the principles of the Canada Health Act which penalizes user fees. Will he repudiate the proposals to allow user fees made by his fellow cabinet ministers?


Hon. Benoit Bouchard (Minister of National Health and Welfare):: Mr. Speaker, I have always said that I stand by the principles of the health care system. I repeat that again today.
However, I am amazed that members of the House are worried about the questioning of this country's social policies. The provinces of Newfoundland, Quebec and Alberta have all raised the question of user fees. They did this in the perspective that the future of this country's social policies have to be considered today.
The questions are a reflection of the social policies. It does not mean user fees will be implemented tomorrow. It is a straight responsibility by a government. It is what my colleagues, the Minister of National Defence and the Minister of the Environment, referred to. They did not say that they would implement user fees. They said that they would re-examine the social policy. We heard that day after day from the opposition. I wonder why when it is done by the government, which is once again a responsible action, it is seen as unacceptable.


James Capsey (Jim) Karpoff: Mr. Speaker, my supplementary is for the same minister. The primary reason we are having this controversy over user fees is that the provinces have seen a swift decline in the federal share of medicare funding from almost 50 per cent in 1979 to 33 per cent in 1993 to a projected 23 per cent by the year 2000. The provinces do not endorse these unilateral cuts. As Glen Clark, the B.C. minister of finance, has said: "Shifting financial burdens on the provinces is inappropriate and counterproductive".

May 10, 1993
Oral Questions
Will the minister deal with the financial squeeze that is promoting user fees by lifting the five-year freeze on health care financing?


Benoît Bouchard: Mr. Speaker, I hope that the B.C. minister of finance has consulted the minister of health and welfare who has said publicly that there was enough money in the system. It is not a question of pulling the 5 per cent cap on the transfer to the provinces.
Many times the hon. member has made wrong affirmations in this House. He is wrong when he said that we froze the increase of support to the provinces on the health care system. That increase has been constant since 1984 and will continue to be. Members of the NDP as usual say to put money, put money and put money. They should consult the provinces of Saskatchewan, B.C. and Ontario. They will tell them exactly what they want to do, cut their spending maybe because of what they said in Ontario recently.


James Capsey (Jim) Karpoff: My supplementary is for the same minister.
There are warning signs everywhere that the health of medicare is going downhill with the proposals for private clinics, private hospitals and user fees. Soon we will no longer have a Canadian health care system. Instead we will have 12 separate U.S.-style systems.
Will the minister take this opportunity to say no to user fees and no to any Conservative leadership candidate who is seeking to bring a U.S.-style health care system to Canada?
Hon. Benoit Bouchard (Minister of National Health
and Welfare): Mr. Speaker, as usual, this is fear-monger-ing by the NDP. The hon. member is talking about user fees, private clinics and so on. He knows veiy well that the system in Canada has to be one of public management. That is within the law. He knows that very well. Once again he puts out strong ideas publicly and thinks that people will believe them.
It is normal that Canadians raise questions about the health care system and social policies today as has always been done in many countries in the world. The fact of the matter is that for nine years this government has respected the principle of the health care system. I have listened to what the Prime Minister and the Minister of Finance said last week and I am repeating that today.
The principles are there. The government is committed to that and there is no reason to believe we will change that policy.


INTERNATIONAL TRADE
Mr. Paul Martin (LaSalle-Emard):: Mr. Speaker, my question is directed to the Minister for International Trade.
Thousands of jobs in Canada's steel industry have been put at risk by a recent decision made by the Canadian International Trade Tribunal. The problem is that when Americans export to Canada they do so under conditions that are far more advantageous than the conditions Canadians face when they export to the United States.
Why didn't this government act before the dispute, to make our rules as strict as those imposed by the Americans? Mr. Speaker, Canadians want to export steel, not jobs.


Hon. Michael Wilson (Minister of Industry, Science and Technology and Minister for International TYade):: Mr. Speaker, by and large the trade remedy laws of the United States and Canada are very much the same. There is very little difference between them. Timing is one difference, the timing for changes to be made. There are some changes in the finer points of how the trade remedy laws are implemented.
I appreciate the concern my hon. friend is raising. It is a concern we have on the government side as well, but it is something we are looking at in view of the decision the CITT has taken recently. I appreciate my hon. friend's interest in it.


Paul Edgar Philippe Martin: Mr. Speaker, only a puppet government whose strings were pulled in Washington could think that we are talking about the finer points. This is a hole you can drive a truck through.
Thousands of jobs in the Canadian steel industry are at stake and the reason is very clear. It is because after the free trade agreement, the government failed to make our trade rules as tough as those of the Americans.
May 10, 1993

Will the government commit now to changing our trade rules on dumping and injury so that, first, the U.S. faces the same burden of proof when it exports to Canada as we do when we export to the United States?
Second, will the government ensure that if the United States will not exempt Canada from the scope of its world-wide trading actions, then we will not exempt it when it comes here?


Michael Holcombe Wilson: Mr. Speaker, I suggest my hon. friend stick to questions on the environment because he is demonstrating his lack of knowledge on this particular issue.
If my hon. friend knew what he was talking about, he would not have used the outlandish rhetoric that he has just used to describe what has happened.
My hon. friend is correct. We have been trying in negotiations with the United States, with its industry, with the government, with the unions, to get support in the United States for some type of arrangement which reflects the integrated nature of the steel industry in the two countries. We have not been able to get that.
If my hon. friend has any responsible suggestions as to how we might achieve that, I would welcome them.


EMPLOYMENT
Mr. Jesse Flis (Parkdale-High Park):: Mr. Speaker, my question is for the Minister of Employment and Immigration. It concerns the thousands of people in my riding who are still looking for work in Toronto.
Companies with traditional plant jobs are closing, particularly in the Parkdale area of my riding. Now employers are demanding highly skilled workers with the latest training in computers and new technologies.
I would like to know why the government has done practically nothing over the past eight and one-half years to help retrain for these higher skilled jobs. Why have unemployed Canadians been completely abandoned in the midst of our nation's worst recession?
Oral Questions


Hon. Bernard Valcourt (Minister of Employment and Immigration):: Mr. Speaker, I want to give credit to the hon. member. I realize he was reading from a prepared question because he knows better than what he has just said.
Since 1990, this government through the amendment to the Unemployment Insurance Act has increased the training for unemployed Canadians by more than 400 per cent. There are $3.8 billion targeted for Canadians so that they can retrain, train and access the new jobs in this new economy.
All of these measures to help the unemployed were opposed by the hon. member.


Jesse Philip Flis: Mr. Speaker, the minister knows that we on this side supported every measure that created jobs or retraining.


Some hon. members:: Oh, oh.


Jesse Philip Flis: The minister should open his eyes and see the dismal state of affairs that he and his government have created. For example, if you are collecting UI today in the Toronto south management area, it takes six months just to make an appointment to see an employment counsellor. Six months, Mr. Speaker. By the time my constituents see an employment counsellor about retraining, their UI runs out and they are on welfare.
Will the minister promise to put people first and make job retraining the highest priority by providing, one, more counsellors and two, programs in the high skill areas?


Bernard Valcourt: Mr. Speaker, the hon. member is interested in scoring cheap political points. That is all he is trying to do.


Some hon. members:: Order.


Bernard Valcourt: If he cares so much about the people, if he cares so much about the unemployed, if he cares so much about creating high wage, high skill jobs, why did the Liberals vote against Bill C-91? Why have they opposed every measure to try and improve the lot of unemployed Canadians? The record is clear. The Liberals were against it.

May 10, 1993
Oral Questions


Mr. Chris Axworthy (Saskatoon -Clark's Crossing):: Mr. Speaker, my question is for the Minister for International Trade.
The minister will know that since 1988, 390,000 manufacturing jobs have been lost throughout Canada, and in Saskatchewan alone 6,500 fewer people are working than in 1988. One in nine manufacturing jobs have been lost, and even in the service industry jobs are down.
I want to ask the minister when will he admit that his government's economic policies and its commitment to the free trade agreement have failed Saskatchewan? When will he change direction? When will he start putting Canada first?


Michael Holcombe Wilson: Mr. Speaker, for the past eight and a half years this government has been putting Canada first.
If my hon. friend would reflect on what happened last week under the free trade agreement he would see the benefits of the policies of the government. With the softwood lumber panel decision we have been able to remand back to the Department of Commerce a decision which clearly the panel found unacceptable.
When there was a previous decision by the Department of Commerce of the U.S. government in 1986, we did not have that opportunity. The only thing different between now and then is the fact that we have a U.S.-Canada Free Trade Agreement with a dispute settlement panel which provides for the types of decisions that we heard last Thursday or Friday on the softwood lumber decision.


Chris Axworthy: Mr. Speaker, I do not know quite what that has to do with Saskatchewan and the jobs lost in Saskatchewan, nor do I know what it has to do with the 390,000 manufacturing workers who are not working any longer. That will not fly with the workers who are now unemployed.
I want to carry on and ask the government why, when Canada has lost three times per capita the number of manufacturing jobs that the United States has lost, why
when the United States is re-thinking NAFTA, why when the Clinton administration is putting Americans first, why will not government not put Canadians first? Why will this government not put job creation at the top of its list of priorities?


Michael Holcombe Wilson: Mr. Speaker, there is a difference in the approach to job creation between the New Democratic Party and the Conservative government. The New Democratic Party would like to force-feed the economy with lots of money, money that it does not have, money it would like to borrow. What we have been doing on the government side is putting in place policies which are generating economic activity.
I would draw his attention to the free trade agreement once again. We had a 13.6 per cent increase in exports to the United States last year in a period of slow growth in the U.S. economy. How did that happen? Canadian industry now has a substantial margin of preference as our tariffs into the United States have gone toward zero. In 70 per cent of the cases, I believe, they are already at zero and no change with other countries. As we have that margin of preference, we have been able to increase our exports to the United States by 13.6 per cent.
If my hon. friend needs a little bit of a lesson here, a 13.6 per cent increase in exports creates jobs.


HOUSING
Mr. Joe Fontana (London East):: Mr. Speaker, despite the low mortgage interest rates, the 5 per cent down payment plan, the RRSP program for home buyers, the home building industry is still in recession. This indicates a general and pervasive lack of confidence not only in this government but in its policies. Thousands and thousands of construction workers are waiting at home for the government's so-called recovery to arrive and this budget did nothing for the home building industry.
I want to ask the Acting Prime Minister a question. If the government is truly interested in long-term recovery, why will it not invest in that future by forming public-private partnerships with the housing industry and get people back to work?
May 10, 1993


John Horton McDermid: Mr. Speaker, I mentioned earlier in Question Period the latest statistics that came out on housing starts for April. They are up 22,300 units for an annualized rate of about 170,200 units. That is then-highest level in quite some time so we are encouraged by that.
Spending on new construction is expected to increase this year up to about $78.8 billion. It will be about a 3.5 to 4 per cent increase in building this year.
My hon. friend has lectured the government week after week, as I remember, that the answer to the housing problems was to allow a 5 per cent down payment. That has been accomplished. He also said to allow RRSP money to be used for first-time home buyers. That has been accomplished.
The hon. member is now up again saying it has not worked. Well it has worked. People have taken advantage of it. Housing starts were up in April and we are expecting them to increase throughout the year.


Joseph Frank (Joe) Fontana: Mr. Speaker, the government just does not get it. People are not buying its economic policies. They have no confidence and are not buying.
The minister points to some monthly statistics. He should realize that the first quarter housing starts are down 13.6 per cent and CMHC says that only 145,000 units will be built this year which is worse than it was during the recession.
Again I ask the minister, how can the government pretend to Canadians that the economy is back on track when in fact things are actually worse than they were? Construction workers want to work. Home builders want to build homes. Canadians want to buy those homes. Why will the government not get an economic plan that will make sure people can buy and build?


John Horton McDermid: Mr. Speaker, housing affordability in Canada today is at its best point in 30 years. We have the lowest interest rates we have had in 30 years, the lowest mortgage rates we have had in years.
We are allowing people to use their RRSP money to buy homes and a 5 per cent down payment. Everything is in place. Housing starts were up 22,000 in April. Why can
Oral Questions
the hon. member not take some good news now and then?


FORESTRY
Mr. Lawrence MacAulay (Cardigan):: Mr. Speaker, my question is for the Acting Minister of Finance.
The budget decision to eliminate forestry development agreements will have a devastating impact on Prince Edward Island. The forest industry employs over 1,000 on the Island and has great growth potential.
Will the minister reconsider his decision to eliminate the program and support the forest industry on Prince Edward Island?


John Horton McDermid: Mr. Speaker, I was in the House earlier today for a debate and one of the Liberal members was up talking about duplication and the overlapping of
services.
The forestry industry is the responsibility of the provinces, as is the mining industry. The Minister of Finance gave ample notice to the provinces that these two ERDAs would not be renewed in years ahead because of the duplication and overlap. Both mining and forestry are provincial responsibilities. The Liberals cannot have it both ways.


Lawrence MacAulay: Mr. Speaker, my supplementary question is for the same minister.
Prince Edward Island is the only province that will not have a forestry agreement this year. One-third of the forestry jobs in P.E.I. will be lost. This is equivalent to 28,000 jobs disappearing in Ontario.
Why does the minister refuse as a matter of good public policy to put in place at the very minimum an assistance package to ease the pain of this move?


John Horton McDermid: Mr. Speaker, as I have mentioned it is two or three years down the road when these ERDAs come due so there is plenty of notice to the provinces to allow them to do this.
I might also inform the hon. member that his question is hypothetical. It may, it could, it might. Look, it is not going to happen. The hon. member knows that. The forestry industry will go on. We are streamlining the

May 10, 1993
Oral Questions
operations of government to spend the taxpayers' dollars more wisely.
I know the Liberals oppose that. I understand that. We on this side of the Elouse believe we have the responsibility to streamline the services of government and that is what we are doing.


MINING EXPLORATION
Guy St-Julien: Mr. Speaker, my question is for the Minister of Energy, Mines and Resources.
With the Quebec prospectors' association, I made representations to officials in the Department of Finance and Energy, Mines and Resources Canada to stimulate mining exploration in Canada with fiscal measures. I would say that these deputy ministers understand nothing about mining exploration in remote areas.
Can the minister tell us today whether these deputy ministers will take seriously the demands of those involved in the mining sector? Do they care about the recovery of mining exploration in Canada? If so, will they submit a proper proposal? Do they understand the Quebec prospectors? If not, tell them to come to Abitibi.


Mr. Michel Champagne (Parliamentary Secretary to Minister of Energy, Mines and Resources):: Mr. Speaker, I would just like to remind my hon. colleague that the government does pay a great deal of attention to this sensitive issue. There is the Whitehorse initiative, which I discussed with the member recently. In this initiative, the federal government, the provinces, the industry and the unions got together to make the mining industry even more competitive.
I would also remind my hon. colleague that the 100 per cent exemption called "incentive taxes" still exists. I think that is something very good for the mining industry in Quebec.


WESTRAY MINE
Mr. Rod Murphy (Churchill):: Mr. Speaker, my question is for the Acting Prime Minister.
A month ago, Curragh Resources indicated its intention to walk away from the Westray mine in Nova Scotia. At that time, the Minister of Public Works said that this cleared the way for Devco or another operator to become involved.
Can the government explain who owns the mine and the mineral rights, especially after the federal government spent $80 million on loan guarantees on behalf of Curragh Resources?


Hon. Harvie Andre (Minister of State and Leader of the Government in the House of Commons):: Mr. Speaker, the mine still belongs to Curragh Resources which is seeking protection before the courts under the Commercial Creditors Arrangements Act.
Canada is involved simply as a creditor. We have no further role than that.


Rodney Edward Murphy: Mr. Speaker, my supplementary is for the same minister. That is not very reassuring to the people in that community who want to have some action by either the Government of Canada, Curragh Resources or the provincial government.
Yesterday was the anniversary of the death of the 26 miners. The bodies of 11 miners are still underground. The families of those miners are taking independent action to try to recover the bodies. Will the federal government assist in that operation?


Harvie Andre: Mr. Speaker, as the hon. member knows the provincial government appointed an inquiry to look into all aspects of it.
That inquiry has been put on hold pending criminal prosecutions initiated by the RCMP. In terms of any further action, I think that would require further progress on these legal proceedings that are under way. At the end of the day, the jurisdiction for this lies solely within provincial government constitutional authority.
May 10, 1993


FISHERIES
William D. (Bill) Casey: Mr. Speaker, my question is for the minister of clams and lobsters.
I would like to compliment the minister for responding quickly to a clam issue and protecting the clam resource in my riding though we now have a lobster problem.
We would ask the minister to divide zone 26A in half and accept a higher carapace size for lobsters in the interests of conservation. The lobstermen have asked for this and they are agreeing to it. Would the minister consider dividing 26A in half and establishing that higher size in the interest of conservation, please?


Hon. John C. Crosbie (Minister of Fisheries and Oceans and Minister for the Atlantic Canada Opportunities Agency):: Mr. Speaker, this is the first reasonable question I have heard during this Question Period.
With respect to the request, there has been a report called the Gardiner Pinfold Study done on the lobster carapace. A big issue, by the way, in Prince Edward Island and parts of New Brunswick and Nova Scotia is what size we should allow the carapace on the lobster to grow. Hon. gentlemen opposite have hard shells so they will understand the problem. It is quite controversial.
We just received this report in March and we are studying it. We will be consulting with all those interested and next year we will make a decision on the carapace size. We cannot divide a zone as the hon. member requests but the fishermen in his area ought to be congratulated for the position they are taking. I think they are moving in the right direction.


HARASSMENT
Mrs. Marlene Catterall (Ottawa West):: Mr. Speaker, my question is for the Acting Prime Minister.
The report released last week on harassment in the Canadian forces told us clearly that most victims of harassment do not complain. They keep quiet because they think they will be blamed and labelled as trouble makers and nothing will be done about the harassment in any case.
Oral Questions
What personal responsibility has the minister taken to make sure that action is effective and fast against harassers and those who protect harassers?


Harvie Andre: Mr. Speaker, as the minister of defence said last week upon release of the study on harassment, the policy of the Armed Forces is zero incidents.
To ensure that occurs, there is a three-pronged approach. There is education and training. There is a reporting system so people can be assured that any complaints are dealt with properly. There is a change in the provision of advocates or harassment advisers in terms of knowing so that people can consult and see what their rights are and how they need to proceed.
I am sure along with the hon. member, knowing the professionalism of our Canadian Armed Forces and the fact that when they do put rules in place these rules are obeyed and followed, that she should have every confidence that any problems that exist will certainly be cured and to the extent you can recognize you are dealing with human beings the situation will be as good as it possibly can be.


Marlene Catterall: Mr. Speaker, my question is for the same minister. That is virtually the identical answer I got from the then defence minister four years ago when I raised this issue.
Elizabeth Lafay complained of harassment and she was released from the Armed Forces. Patricia Tondreau was harassed and suffered four years of humiliation. She is about to be discharged while those who ignored her complaint continue to rise in the ranks.
Why are the victims punished and the harassers and those who protect them rewarded? Why this discrimination?


Harvie Andre: Mr. Speaker, the hon. member is not accurate in stating that nothing has changed. In fact there was a study, initiated by the Minister of National Defence, and a report came out last week. As a result of that report, procedures have been put in place which I just articulated to the hon. member. How she can stand in her place and make the

May 10, 1993
Oral Questions
fallacious claim that nothing has changed in four years is beyond me.
I would ask the hon. member to give more than four days for the policy to work. It was announced last Wednesday. The proper action has been taken. Unlike the hon. member, I have confidence in our Armed Forces.


FLIGHT INSPECTION SERVICES
Mr. John Manley (Ottawa South):: Mr. Speaker, my question is for the Minister of Transport.
The minister is in possession of a consultant's report that recommends against the privatization of flight inspection services for reasons of safety. In flagrant disregard for this report the budget proposes privatizing this important responsibility.
Is the minister prepared to tell the House why the safety concerns outlined in the THA-Monenco report have been rejected? Why will he not make public both the consultant's report and the government's reasons for disregarding it?


Jean Corbeil: Mr. Speaker, perhaps we are reading different budgets.
The answer today will be the same as I gave to the same question last week from the same member and that is that we have different opinions from different people on this. Safety of Transport Canada aviation is of the utmost importance. We are trying to achieve the same result in safety by looking at different alternatives. The alternative of privatizing part of the aviation inspection service is being looked into. No decisions have yet been taken.


John Paul Manley: Mr. Speaker, I think it is of vital importance that the public be given the reports and the reasons for the government's actions. The THA-Monenco report says there are too many risks involved in an out-sourcing proposal for flight inspection services.
Why would the Minister of Transport, given his responsibility for the protection of public safety, allow this measure to proceed in the face of safety concerns? Is this another case of someone other than the Minister of Transport making transportation policy for Canada?


Jean Corbeil: Mr. Speaker, I repeat that no decision was made and that we are examining this issue, keeping in mind that safety is first and foremost. Everything we do will be done with safety in mind and we will examine every possible way of providing the same service to the public, with the same level of safety, if we can save Canadian taxpayers money.


EDUCATION
Scott Jon Thorkelson: Mr. Speaker, my question is for the Minister of Employment and Immigration.
A few weeks ago it was reported that a federal learning strategy had been prepared by five departments for cabinet. This strategy would increase the role of the federal government in education in part by giving Ottawa the lead to set national standards. As I have said several times in this House, the federal government should play a leadership role in this area and respond to the concerns that Canadians have about our education system.
I ask the minister: At what stage is this proposal and when will it be made public?


Bernard Valcourt: Mr. Speaker, the federal government will soon outline its plan to respond to the prosperity action plan which was completed by the private sector. It is important that at the federal level we respect fully the role and the responsibilities of the provinces in matters of education. This federal government wants to support all Canadians so we can meet the learning challenge that we all face as a nation. The plan we are working on will take that into account.


MEMBERS OF PARLIAMENT PENSIONS
Louise Feltham: Mr. Speaker, the question of what to do about the pensions of members of Parliament has been brought up repeatedly over the last few years. With the latest developments in Alberta and possibly other provinces, taxpayers are anxious to see changes in the House of Commons.
May 10, 1993

My question is for the President of the Treasury Board. Will changes to the pension plan be introduced during this session of Parliament?


Hon. Gilles Loiselle (President of the Treasury Board and Minister of State (Finance)):: Mr. Speaker, I thank the hon. member for her question.
As members know, some months ago the government initiated a very extensive review of all of the federal Public Service pension system. We made excellent progress. We had in this House Bill C-55 which achieved good progress particularly with respect to a fairer deal for part-time workers, mostly women, and a fairer deal for correctional service employees.
We had royal assent toward the end of the year. We have been implementing these measures. I said at that time that in the second phase we would look at the remuneration of members of Parliament. We are now there. I have asked officials from Treasury Board to come forward with proposals and they have. In the next few days I should be in a position to announce the next step.


THE PRIME MINISTER
Mr. Nelson A. Riis (Kamloops):: Mr. Speaker, I would just as soon not have to ask this question but I feel compelled to ask it of the Acting Prime Minister.
While Canadians are struggling out of the recession from coast to coast to coast, with disposable incomes dropping and levels of employment increasing, all of the Conservative leadership candidates indicate that it is important that the Prime Minister lead by example.
Over the weekend we were all subjected to the picture of the Prime Minister with Boris and the boars. I want to ask the Acting Prime Minister: What kind of example does he think it is setting for the people of Canada when the Prime Minister of our country during these very difficult times is off on a hunting and fishing trip?


Right Hon. Joe Clark (President of the Queen's Privy Council for Canada and Minister Responsible for Constitutional Affairs):: Mr. Speaker, there is a fairly sensible rule in this House that if you have the instinct that a
Oral Questions
question you want to put should not be put, you should probably follow your instincts. It is too bad the hon. member did not do that.
One thing I think is quite clear is that that particular sport is Mr. Yeltsin's. The Prime Minister accepted the invitation of a host. If the issue is whether any Prime Minister of Canada should be seeking to establish relations that will be effective for Canada, I think it would be well for the House to remember that it was precisely this kind of relation that allowed the Prime Minister of Canada to cause the summit between Russia and the United States to be held in Vancouver.
I can say, as someone who was involved in these international questions for some time, that it was precisely that kind of ability, that ability to work with other people, that allowed Canada-


Some hon. members:: Oh, oh.


Mr. Axworthy (Winnipeg South Centre):: Come on, Joe.


Mr. Peterson:: Boring.


Mr. Speaker:: If the hon. member has a supplementary he might put it directly keeping in mind the time.


Nelson Andrew Riis: Mr. Speaker, I must say to my hon. friend that was a valiant effort at explaining-


Mr. Speaker:: Just a moment. We are running short of time. There is some doubt whether the question is even acceptable. I would ask the hon. member to put his question as quickly as possible.


Nelson Andrew Riis: The answer was a bore indeed.
My question for the Acting Prime Minister is simply this. Is it at this very important time in Canadian history when Canadians are struggling out of the recession that this kind of symbolism is helpful?
We have asked the Prime Minister and the Conservative leadership candidates to lead by example. Surely the Prime Minister had the right to say, not a board-


Mr. Speaker:: I think the hon. member has put his question and the minister may wish to respond.

May 10, 1993
Routine Proceedings


Charles Joseph Clark: Mr. Speaker, this excites some laughter on the other side too.
I take very seriously not only the international reputation of Canada-


Some hon. members:: Oh, oh.


Charles Joseph Clark: -but also the reality that we won that international reputation, whoever our Prime Minister was, by being prepared to find ways in which co-operation could be achieved between Canada and other countries.
I do not know what it is about this country that causes people to seek ways to demean it. I do not know why the House leader of the New Democratic Party wants to try to find ways to demean Canada. I regret that tendency. I prefer the approach that has been taken by the Prime Minister consistently throughout his career in which he has sought to use the good reputation of Canada to advance international issues and international interests.


NATIONAL DEFENCE
David Charles Dingwall: Mr. Speaker, various regulations issued by the Department of National Defence are very clear.
In section 4 of one such regulation concerning political activities the department states: "No employee of DND shall engage in work for, on behalf of, or against a political party or be a candidate for election".
In light of these very clear words I ask the minister responsible, why is it against regulations to work for the Tories, the Liberals or the NDP, but it is fine, as the government House leader and the minister responsible said last week for a person to be a member of the Ku Klux Klan and the Armed Forces at the same.


Harvie Andre: Mr. Speaker, I regret that the House leader of the Liberal Party should again imply that somehow the Canadian Armed Forces is supportive of the Ku Klux Klan. It is beneath him to suggest anything like that.
It is very clear involvement in partisan political activity is improper for members of the Canadian Armed Forces. What is not against the law in this country, and I hope
the hon. member recognizes and supports it, is attending meetings or thinking.


Ms. Copps:: To think, oh.


Harvie Andre: But it is against DND policy for its members to conduct themselves in a way that would cause them to be in disrepute. Racist behaviour, racist attitudes expressed are not permitted, not allowed, not accepted in the Canadian Armed Forces and Queen's Regulations and Orders, 1914, make that very clear. I wish the hon. member would get off the tack of trying the malign the Canadian Armed Forces. That is beneath him.


POINT OF ORDER
David Charles Dingwall: Mr. Speaker, I wonder whether you would review the "blues" of the comments made by the government House leader.
I think you will find that the provisions of the Standing Order make it abundantly and unequivocally clear that members on both sides of the House are not to impute the motives of members across the aisle. I think you will find clearly and unequivocally that the government House leader did just that. I would ask the Chair if the Chair would take a look at the "blues" and report to the House as soon as possible.


The Acting Speaker (Mr. DeBlois):: I will make the Speaker aware of what the opposition House leader has just said. I give the floor now to the hon. parliamentary secretary.



ROUTINE PROCEEDINGS


Mr. Charles A. Langlois (Parliamentary Secretary to Leader of the Government in the House of Commons and to Minister of National Defence):: Mr. Speaker, pursuant to Standing Order 36(8), I have the honour to
May 10, 1993

table, in both official languages, the government's response to nine petitions.
[Editor's Note: See today's Votes and Proceedings.]



HOUSE MANAGEMENT


Charles A. Langlois: Mr. Speaker, I have the honour to present the 92nd and 93rd reports of the committee on House Management, concerning the list of members to sit on the legislative committees on Bills C-90 and C-85. Pursuant to Standing Order 113(1), these reports are deemed adopted when laid upon the table.
[Editor's Note: See today's Votes and Proceedings.]
*e *	*



CORRECTIONS AND CONDITIONAL RELEASE ACT


Mr. David Kilgour (Edmonton Southeast) moved: for leave to introduce Bill C-434, an act to amend the Corrections and Conditional Release Act, the Criminal Code and the Customs Tariff in consequence thereof.


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


David Kilgour: Mr. Speaker, briefly this bill would achieve a number of reforms in respect of pre-release for convicted violent offenders. It would for example prohibit a convicted offender with a history of violating conditions of pre-release from being eligible for early release.
It would also define the term obscene in the Criminal Code to include material that portrays explicit sex coupled with violence, undue exploitation of sex that degrades or dehumanizes a person or explicit sex employing a person who is under the age of 18 years of age. A defence to certain charges here would exist if the material had artistic merit or certain other legitimate purposes.
Routine Proceedings
It would ensure that proceeds of property forfeited under section 462 of the Criminal Code be shared with local police forces and other organizations involved in the investigation and seizure of that property.
Finally, it would recognize in law for once that victims of crime should be informed of their rights, properly treated by law enforcement officials and have prompt access to any programs and services they need. A crime victim must be kept abreast for example of all proceedings in respect of an accused assailant.


The Acting Speaker (Mr. DeBlois):: Mr. Kilgour 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.



NATIONAL LITERACY STANDARDS ACT


Mr. Mac Harb (Ottawa Centre) moved: for leave to introduce Bill C-435, an act to establish national literary standards across Canada.


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


Mac Harb: Mr. Speaker, this bill would call for the establishment of national literacy standards. The purpose of this bill is to provide for a process that will be a catalyst for the establishment of national standards for literacy through consultation.
Nothing in this act would abrogate or derogate from the jurisdiction of a province or a territory. After this act is passed the minister shall during the 12-month period following the commencement of this act consult with (a) the ministers and heads of departments responsible for education and literacy in a province or a territory; (b) consult with experts in education and literacy; (c) consult with representatives of the business and labour communities; (d) consult with representatives of the media; and finally (e) consult with those who are receiving literacy courses, such as students.
After that this bill will call on the minister to make a report on the causes of illiteracy as well as to propose national literacy goals, national literacy standards and

May 10, 1993
Routine Proceedings
propose a policy by which the goals and standards may be achieved.
This has been endorsed by my colleague from Winnipeg who is the spokesperson for the Liberal Party of Canada, the eloquent member for St. Boniface.


The Acting Speaker (Mr. DeBlois):: Mr. Harb 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.


BUSINESS OF THE HOUSE
Charles A. Langlois: Mr. Speaker, I think you will find consent for the following motion. I move:
That the order adopted on Friday, May 7, 1993 to refer Bill C-125 to a legislative committee in the Departmental envelope be discharged and that the said bill stand referred to the Standing Committee on Justice and the Solicitor General.


David Charles Dingwall: Mr. Speaker, I think it important that I make the following point for the parliamentary secretary to the government House leader.
The Official Opposition will grant consent for the motion which he has brought forward. I want the parliamentary secretary to understand that there was an understanding as a result of last week's House leader's meeting as well as subsequent to the business question which was put on Thursday that we would proceed on Friday of last week with Bill C-123 and commence the debate on Bill C-90.
There was no discussion at that time that we would proceed with Bill C-125. The parliamentary secretary should know that. I want him to reflect upon the breaking of the understanding. If this is the way in which the government intends to proceed with the ordering of government business, it will not be very productive nor will it be a very co-operative journey in the next number of days and weeks that the House has remaining.
I give judicial notice through you, Mr. Speaker, to my friend and to my colleague who I am certain would not want to break understandings which we have reached after debate and after sharing information among the various House leaders in the future. I would hope not.


Nelson Andrew Riis: Mr. Speaker, I want to support what my hon. colleague has just raised.
If anyone had watched the proceedings on Friday or listened to the debates they would have known that at least one of the debates was less eloquent than it would normally have been since I was required to speak to the legislation as the critic was out of town. The critic was not aware that this legislation was coming up and consequently we could not give it the level of debate and treatment we would normally have done.
I want to say that in order to make the House of Commons into a productive place where legislation can move appropriately and expeditiously where that is appropriate, it is important that all the parties work together in a co-operative way. I think it is a slight rap on the knuckles of the parliamentary secretary to the government House leader to have to accept this on behalf of the government.
I want to echo the words of my colleague, the House leader for the Official Opposition, that we must make more of an effort to work co-operatively and that leadership will come from the government of course. We look forward to that in the future.


Charles A. Langlois: Mr. Speaker, I listened with great care to the comments made by the House Leader of the Official Opposition and the House leader of the New Democratic Party.
I would like to mention that on Friday it was understood that we would proceed with Bill C-123 and Bill C-90 and at the pace that the debate was going and with the time available in the House, it was agreed that we would try to table, discuss and debate Bill C-125 which is a non-controversial bill. It is strictly a routine matter which is done normally in a matter of two or three minutes. It is done on a regular basis.
I find it surprising that both House leaders would object today to the government proceeding. We, as government, would certainly not have proceeded with any other type of bill that we know would have required a long debate. It was strictly routine and it was done that way.
May 10, 1993

Routine Proceedings PETITIONS
There was consultation with the two parties before we decided to proceed with the bill. Even though we were not able to proceed as early as we had hoped, we certainly co-operated with the opposition. We tabled the bill and proceeded with it when we were convinced that we were not infringing on any agreement we had in the past.
I have taken note of my colleague's comments and I will certainly be pleased to discuss this matter further with both of them.


Nelson Andrew Riis: Mr. Speaker, my hon. friend, the parliamentary secretary to the government House leader will also recall we were informed last Thursday that we would receive the agenda up to this coming Friday so people could plan accordingly. We have not seen that yet. I wonder if perhaps he would take that under advisement and get back to the House leaders of the opposition parties at least so we can plan our agenda for the remainder of this week.


Alfonso Gagliano: Mr. Speaker, I listened carefully to what the hon. parliamentary secretary to the leader of the government in the House said. There were consultations on Friday but no agreement. I think that the opposition House leader has already indicated that we would give our consent to the motion which the hon. parliamentary secretary just proposed, but with the hope that this situation will not recur in future.


The Acting Speaker (Mr. DeBlois):: The Chair can only hope that these intense negotiations will be conducted harmoniously and cordially.

Does the hon. parliamentary secretary have the unanimous consent of the House to move the motion?


Some hon. members:: Agreed.


The Acting Speaker (Mr. DeBlois):: The House has heard the terms of the motion. Is it the pleasure of the House to adopt the motion?


Some hon. members:: Agreed.


[Stage Direction]
Motion agreed to.

Marlene Catterall: Mr. Speaker, it is indeed a special privilege today to present a petition of over 5,000 names on behalf of grandparents across Canada. They request that the government give serious attention and amend the Divorce Act to recognize that grandparents have a right to have contact with and information about their grandchildren unless there is some very good reason why they should not be allowed that right. This is a provision in the Quebec civil code. From Sydney, Vancouver, Smiths Falls, Stittsville, Buckingham, Gloucester, Bramalea and certainly Ottawa we have these 5,035 names to present in support of changes to the Divorce Act to recognize in the national laws of Canada that grandparents do have rights and that a family relationship with grandchildren is important to the children and the grandparents and the families of Canada.
I present these petitions and will soon be presenting 3,000 more that were delivered just today.


GOODS AND SERVICES TAX
Mr. Ronald J. Duhamel (St. Boniface):: Mr. Speaker, these petitioners have a suggestion for government. They ask the government to help the artists, writers, publishers, students; help create jobs, increase productivity and competitiveness.
Their solution is to eliminate the GST on books and reading materials. I know that everyone will endorse this petition.


VIOLENCE
Ron J. Duhamel: My second petition is from petitioners who want the government to take a very serious look at violence on television and radio. Whether it is in the form or use of inappropriate language or acts of violence themselves, they believe that violence over-all needs to be reduced and preferably eliminated.

These petitioners want violence eliminated because it often goes against what they are doing as families to raise their children.

May 10, 1993
Routine Proceedings


Nelson Andrew Riis: Mr. Speaker, it is an honour to present a petition on behalf of a number of residents of Blue River and Telkwa, British Columbia; Clearwater, Kamloops, Banff, Alberta and Okotoks, Alberta, who signed a petition in opposition to the Mexico-U.S.-Canada trade deal. Their main concern is that it facilitates the sale of fresh water from Canada to the United States and Mexico. In other words, once the free trade agreement with the three countries is put into effect it will be virtually impossible to ensure that Canadian rivers and lakes will be for Canadians only.


JUSTICE
Robert Evans Skelly: Mr. Speaker, I have a petition from several hundred people who live in the province of British Columbia. The petition is submitted in memory of Dawn Shaw, the little girl who was sexually assaulted and murdered in the Comox valley several months ago.
They note that the present justice system fails to protect the children of our communities who are increasingly becoming victims of sexual assault. They propose a number of measures which Parliament can take to increase the protection of our children including permitting police to take DNA samples from persons suspected of sexual assault; the registration of paedophiles and sex offenders in a national police data base and also increased monitoring of sex offenders who are released from jail even after they have served their sentences.
The measures they propose are a change to the justice system to provide greater protection for children from sexual assault and to assure the conviction of offenders.


NORTH AMERICAN FREE TRADE AGREEMENT
Ross Harvey: Mr. Speaker, I have the pleasure today to present a petition signed by several residents of Alberta most of them in the Medicine Hat area. Among many other things, they wish to draw to the attention of the House that if implemented the North American free trade agreement will result in further restrictions being placed on the ability of Canada's federal, provincial and territorial governments now
and in the future to assist Canadian industry, conserve Canadian natural resources for Canadian benefit and advance needed social programs.
For these reasons they call on the House of Commons to reject the proposed North American free trade agreement and recommend to the government that it use the termination clause to end the U.S.-Canada Free Trade Agreement.


IMMIGRATION
James Capsey (Jim) Karpoff: Mr. Speaker, I have the privilege to present two petitions today. The first petition is signed by a number of residents of Surrey and points out that the pending closure of the immigration offices in New Westminster and Surrey will result in people having to travel to Vancouver for service.
It points out that replacing them with immigration offices in Vancouver will cost $325,000 more. It therefore calls upon the minister to continue to operate the offices in New Westminster and Surrey.


NORTH AMERICAN FREE TRADE AGREEMENT
James Capsey (Jim) Karpoff: Mr. Speaker, my second petition is signed by hundreds of Canadians, mainly from British Columbia. It points out that the proposed North American free trade agreement will make it impossible for us to bring back generic drugs as it will guarantee patent protection to the American and multinational drug companies for 20 years. This will result in higher drug costs to Canadian consumers and pharmacare programs.
The petition therefore calls upon this House to reject the North American free trade agreement.


David Stupich: Mr. Speaker, I have a petition certified correct as to form and content pursuant to Standing Order 36.
The petitioners propose that the North American free trade agreement has resulted in even greater trade concessions being demanded of Canada; it will cause Canadians to lose more good jobs; if implemented this trade agreement will result in further restrictions being placed on the ability of Canada's federal, provincial and territorial governments now and in the future to assist Canadian industry, conserve Canadian natural resources for Canadian benefit and advance needed social programs.
May 10, 1993

The petitioners call upon the House to reject the proposed North American free trade agreement and recommend to the government that it use the termination clause to end the U.S.-Canada Free Trade Agreement.


QUESTIONS ON THE ORDER PAPER
[Stage Direction]
(Questions answered orally are indicated by an asterisk.)
Charles A. Langlois: Mr. Speaker, the government is answering Question No. 486 today.


Mr. Mifflin: For the fiscal years 1991-92, 1992-93 and 1993-94 what moneys were spent, allocated or estimated by the Department of Fisheries and Oceans for small crafts and harbours infrastructure in each of the seven federal ridings in the province of Newfoundland?


John Carnell Crosbie: Mr. Speaker, the program funding spent by riding in 1991-92 and the estimates for 1992-93 are listed below. The total budget for 1993-94 has not yet been approved.
Newfoundland (000's)
B onavista-Trinity-Conception Burin-St. Georges's Gander-Grand Falls Humber-St. Barbe-Baie Verte Labrador St. John's East St. John's West


Charles A. Langlois: Mr. Speaker, I ask that the remaining questions be allowed to stand.
Routine Proceedings


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


Some hon. members:: Agreed.

[English\


Lloyd Axworthy: Mr. Speaker, under Standing Order 52, I request leave to propose a motion to adjourn the House for the purpose of discussing the specific and important matter requiring urgent consideration, namely the precarious position of Canadian troops in Bosnia as a consequence of the failure of the peace plan and the call for increased military action. This is a matter of enormous and deep abiding interest for many Canadians.
There has not been an opportunity in the House of Commons to have any considered debate or discussion. A set of proposals has not been put forward by the government to describe the situation and give members of Parliament who represent a wide variety of concerns and interests across Canada the opportunity to speak and represent those interests and concerns.
It is especially urgent because in the next week there will be decisions under way to engage in a higher level of force. There are discussions being undertaken in terms of the safety and security of the UN troops. The Security Council is considering many of these matters and I believe it is absolutely essential and important that before cabinet makes any further decisions about how our own troops are deployed and the kind of positions we take, there be an opportunity for the people of Canada through their representatives in Parliament to be heard in a proper debate.
Therefore, Mr. Speaker, I request that you consider this emergency debate to give Canadians the opportunity I think they deserve.


The Acting Speaker (Mr. DeBlois):: The question raised by the hon. member remains a concern for all members of this House, but given the very strict provisions of our Standing Orders on emergency debates, it is not appro-
1991-92	1992-93
Spent	Estimated
3,304.3	3,976.8
3,634.1	2,069.6
1,497.8	1,935.8
3,180.1	2,659.1
487.0	205.7
1,617.7	1,396.1
3,915.5	2,567.6

May 10, 1993
Government Orders
priate at this time, unfortunately, to grant the request of the hon. member for Winnipeg South Centre.



GOVERNMENT ORDERS


[Stage Direction]
The House resumed consideration of the motion of Mr. Mazankowski that Bill C-112, an act to amend the Excise Tax Act, the Access to Information Act, the Canada Pension Plan, the Customs Act, the Federal Court Act, the Income Tax Act, the Tax Court of Canada Act, the Thx Rebate Discounting Act, the Unemployment Insurance Act and a related act, be read the third time and passed.
The Acting Speaker (Mr. DeBlois):: The hon. member for Edmonton East has 10 minutes maximum remaining in the debate.


Ross Harvey: Mr. Speaker, I am glad you specified that the 10-minute maximum remaining was in the debate.
I spent the first 10 minutes allowed before Question Period dealing with the matter of co-ops, how the GST has been a particularly onerous burden on them and how the bill before us simply does not address that problem.
I would now like to turn to the general aspects of the GST and briefly set out the reasons why the NDP caucus remains irrevocably opposed to the GST.
First of all it is a regressive tax. There can be no doubt about that. When Peter Pocklington goes into a Pizza Hut in Edmonton and orders a pizza he pays exactly the same GST on that pizza as the poorest resident of inner city Edmonton does. It can be argued that the poorest resident of inner city Edmonton gets GST rebates that take that into account.
The problem with that retort is two-fold. In the first instance there is ample evidence that the rebates being paid out simply do not cover the GST expenses, especially of those with larger families who wind up paying GST on most of the non-food products they purchase. Second, the poorest of the poor do not get the GST rebates because they do not stay at any one mailing address long enough. They do not file sufficient numbers of tax returns and other tax information to give the government the first clue where to find these people. It is the poorest of the poor, the most wretched, who are most heavily penalized by this tax.
Second, the way the GST functions creates a new and vastly increased underground economy and in consequence creates thousands, perhaps millions of tax cheats. The GST is turning a huge segment of the Canadian population into-I was going to say felons, but that is putting it a bit strongly-people who are flouting the tax law. This does nobody any good.
Today's Quorum contains a story reprinted from The Toronto Star of two days ago entitled, "GST cheating costs $2.3 billion a year Ontario report says". That is phenomenal and is there only because the GST is there. By continuing to levy the GST we are in a sense compelling a huge proportion of Canadians to become criminals.
Last, and this is the most telling point, the overwhelming majority of the Canadian people are still opposed to the GST. This was an unpopular tax when first it was proposed, it remained an unpopular tax throughout the entire process of its implementation and is to this day an unpopular tax.
The question becomes, if you accept these three arguments as I clearly do, as the NDP caucus clearly does, what do you do about it? Clearly you find yourself compelled to do away with the GST, but the question is with what is it replaced?
We in the New Democratic Party take that question seriously. Unlike our fanciful friends further up the aisle in the Liberal Party who believe that the best policy is no policy at all, never make a commitment you cannot keep and in Liberal Party policy never make a commitment at all. Honesty may not be the best policy. It may be that no policy is the best policy as far as Liberals are concerned.
In any event, we in the New Democratic Party have taken this challenge seriously, which is why we have incorporated into our jobs plan a thorough recitation of what we propose to do to get rid of and replace the GST.
May 10, 1993

I will go through these highlights very briefly to give the House some idea of what it is we are proposing.
First of all, it is a phased approach because to act in other than a phased approach would be to invite either fiscal chaos in the federal government or severe dislocation in the Canadian economy. We cannot suddenly turn around an $18 billion to $25 billion tax overnight. We have got to be careful in how we go about implementing the changes.
Therefore, in the first year we will eliminate the GST on a basket of products targeted to produce new jobs quickly. This basket includes new homes, books, children's clothing, furniture and the like. We estimate that this will reduce GST receipts by about $2 billion over a full year and by this measure alone we would generate 40,000 new jobs.
In the second year we would reduce the GST rate to 5 per cent which will put another $4 billion into the hands of Canadian consumers.
In the third year the reduction in the rate would take it down to 4 per cent and in the fourth year the reduction would take it down to 3 per cent. In the fifth year the elimination would be achieved and the tax would be gone altogether.
What do we replace it with? Clearly there is going to be no one simple answer to that question. The answer therefore comprises a number of different proposals including, but not limited to, such elements as removing the special tax reduction for manufacturers which now sees manufacturers paying 5 per cent less tax than non-manufacturing firms.
This subsidy to manufacturers costs about $1 billion a year. It was implemented originally in response to a U.S. subsidy for exporters. The U.S. repealed its subsidy in 1986 but at that point the Tories changed tack and decided that our 5 per cent reduction in the tax rate for manufacturers was because it was necessary for firms paying the manufacturers' sales tax.
The manufacturers' sales tax has been removed, so the raison d'etre for the maintenance of this special reduced tax rate for manufacturers has quite evaporated. Therefore the reduced rate ought to evaporate. That is $1 billion a year right there.
Government Orders
We then move to the fact that the present tax system allows businesses to deduct the cost of meals, entertainments and even escort services, deductions which alone cost the federal government about $1 billion a year. We would eliminate that deduction. There is another billion dollars.
Over half the $1 billion in revenue lost each year through the $100,000 capital gains exemption goes to the 1 per cent of Canadians with incomes over $100,000 a year. We will retain this deduction for primary residences, small businesses and farmers, but otherwise it will be gone. The $100,000 capital gains deduction for everyone else will be gone.
The tax system also allows only 75 per cent of capital gains to be included as taxable income. We will eliminate this reduced rate and instead will allow investors a reduction to compensate for the effects of inflation.
Tax laws still allow corporations to deduct the cost of borrowing money to finance investments overseas and to finance mergers and acquisitions. We will restrict this deduction and eliminate completely it as it applies to foreign investment by Canadian firms.
There is the minimum corporate tax. When you have a system in which over 90,000 companies with combined profits of over $27 billion avoid paying any tax whatsoever every year, you have a system that is out of whack. Nine billion dollars in corporate profits avoid any tax simply because of tax preferences.
A corporate minimum tax set at 14 per cent, half the statutory rate, would raise about $1 billion a year.
Further, we propose to re-jig the income tax system to restore a degree of progressivity in the system that has been utterly gutted by the current Conservative administration. This means, among other things, adding a 35 per cent tax bracket for net personal taxable earnings in excess of $88,770 and a 40 per cent tax bracket for net personal taxable earnings in excess of $118,360.
Any hon. member wishing further to investigate these proposals is invited to contact my or any other New Democrat member's office for a copy of the "Strategy for a Full-Employment Economy". We can get Canadians back to work. We can get rid of the GST. We can get rid of free trade and we can do it all without adding a penny to the deficit.

May 10, 1993
Government Orders


Giuseppe (Joseph) Volpe: Mr. Speaker, I see there is some consternation on the part of my colleague from the NDP who is concerned that nobody is taking him up on his offer.
We know the reasons why. The government is not interested in anything, especially that which emanates from the NDP, nor is it interested in hearing anything that is backed up by statistical data. Those who might normally be taking the lead on legislation such as this have been silent both by their words and by their presence.
It is important for Canadians to appreciate the implications and the impact of the GST. Just a few moments ago the clerk of the House read the intention of this bill and how it encompasses many pieces of legislations that are included in the amendments under Bill C-112.
The most important thing to keep in mind and that all Canadians will certainly address is the implication of the GST on the Canadian economy. First and foremost, the one most damming suggestion that all Canadians keep hearing over and over is why the government imposed the GST when there was an array of other options available to it when considering tax reform.
That condemnation reverberated everywhere over the last couple of weeks and most particularly in the last couple of days as both the IMF and the Government of Ontario have pointed out to the public and to the Government of Canada that the imposition of the GST has had a deleterious effect on revenues to both levels of government. A very conservative estimate of the negative impact of the GST is that the governments of Ontario and Canada have lost something like $2.3 billion in net revenues as a result of its imposition.
Any government that is interested in increasing its revenues and looks at this kind of negative impact cannot possibly try to defend the imposition of such a tax when it stares a loss in revenue in the face.
We tried to get information for about a year. Until the public accounts came for the first year of the imposition of the GST, we had to rely on the statements of ministers, by government members and by some of the monthly statements that came from the department itself. Finally there was the acknowledgement that we raise approximately $30 billion from the GST. We draw from the marketplace, from the consumer, we tax the typical taxpayer something like $30 billion annually.
What does that translate to in net revenues, revenues that go to pay for some of the expenditures the government is so fond of saying it has put in place over the wishes of the opposition.
Those $30 billion have netted us barely $15 billion. Let me see if we can all understand what that means. The government puts its hand in your pocket and mine, takes out $1 and says it can only use 50 cents of this to pay bills. The other 50 cents it is going to give back. However, the taxpayer does not get 50 cents back because at least $800 million goes into the government's effort of sticking its hand in your pocket to take out that dollar. Tremendous.
Why did it not just leave us alone in the first place? Why not develop a tax system that is more efficient and one that would not cost the government 50 cents to get 50 cents, one that would not cost 50 cents out of every taxpayers' hard-earned dollar to get another 50 cents. From the point of view of efficiency, this has got to be one of the worst conceptions ever.
Two and one-half years ago in the debate that proceeded the imposition of the GST, when members opposite where asked what the options were that the government put aside in order to impose the GST, we received nary an answer. We got the same kind of flippant, almost semi-idiotic response we are getting today. They are asking us what is our replacement? What is our suggestion? We listed at least seven at the time. But it is not the obligation of opposition members to provide the government with options. It is the responsibility of every party in government to tell the Canadian public what are the options it discarded in order to impose the one that has been accepted.
After all, it has the resources in manpower, expertise and dollars. Canadians have been very trusting. We wanted to know what it was the government said was not appropriate in terms of tax reform that made GST so appropriate, why it was that the government could not consider or would not tell Canadians what options were available to it that would not involve hiring an additional 4,400 people in order to administer this new tax. Think about it. We had to hire an additional 4,400 individuals to impose this tax.
May 10, 1993

That is 50 per cent efficient when we add the approximately 1,600 already in place. But we are talking about why we would not be told what the costs were from the provincial side as a result of the imposition of the GST, the tax that is only 50 per cent efficient.
Worse is the condemnation by the International Monetary Fund. It is not a provincial government but the International Monetary Fund that says that it is concerned about the way the Canadians are responding to the GST. What do we have? The minister for revenue and department officials dismiss it as: "What happened is that the Canadian public reacted rather negatively to the imposition of the GST and compliance has not been as good as we had expected".
What did they expect? Opposition members told them in debates when the government imposed the GST on the Canadian taxpayers that compliance would not be very good. In fact, we pointed out that we would have a growing underground economy. Studies have been produced over the course of the last year which indicate that the growth of the underground economy has reached such staggering proportions that, on a very very conservative estimate, now includes a minimum of 15 per cent of the Canadian economy and most likely approaches 25 per cent.
Without objecting, when we listen to the arguments of the party opposite in government when it says that this is a good tax to impose, we are condoning a legislative initiative that turns Canadians into criminals. The incentive for evading taxation is such that the rest of the public says this kind of legislation is insane and therefore deserves to be ignored. We produce a very negative climate psychologically among Canadian taxpayers that says: "Why should I pay something that is so inane and so oppressive as this?"
The Canadian public takes a look at that 50 per cent inefficiency and says: "If I have to pay 7 per cent on everything I buy and on all the services that heretofore were not taxable and we are getting 50 per cent efficiency then why not at least reduce it to 3.5 per cent?" At the very least this would save an enormous amount of psychological aggravation. We would have had a Canadian public that would have been a lot more receptive to
Government Orders
spending on Canadian-made products and on manufacturing that would have been absolutely crucial to the maintenance of the welfare of the Canadian economy.
However, no, we did not hear any of those arguments. The government always washed its hands of any responsibility to demonstrate to the Canadian public the options available to the GST.
The minister responsible for privatization kept going on just prior to Question Period with a whole litany- perhaps the minister is in another world-of the legislative items that the opposition members on this side of the House opposed. We opposed them. That is our job. We tried to point out the flaws in the system. I wish we had been wrong but we were not wrong.
What the minister forgot to tell all Canadian taxpayers is that those legislative items went through despite the opposition. So the government opposite must bear full responsibility for the impact of those legislative initiatives, every single one of them. Some of those legislative initiatives, especially the GST, have nearly ruined the Canadian economy.
I know my colleagues opposite understand the economic impacts of their decisions as well as the next person. They will tell us if they still have the decency to recognize truth that about the only things that still earn money for Canadians in trade come from primary products: agriculture, energy, mines, forestry and fishing until it decided to go all out to ruin the fishery of Canada. However, manufacturing is in a deficit situation with respect to trade balances.
The GST has just about destroyed the retail sales industry in major centres like Toronto. It has just about destroyed the manufacturing sector in southern Ontario. It has come close to obliterating any consumerism that would have lifted us out of this recession.
I just want to give some indication of some of the impacts of the government's initiatives of which the GST is but one. We should know this because government members opposite often crow-pardon the pun-about what great managers they have been and how they turned everything over to the free marketplace.
We acknowledged on this side of the House that despite those government members the economy has grown something like 54 per cent since they came into

May 10, 1993
Government Orders
power. It is not necessarily thanks to them. We want to give them credit when they say they have nothing to do with the marketplace.
One might say that these are great figures. In that time, because of these initiatives-so the members say but we never look at the statistics-exports for example increased in absolute dollars something like 42 per cent over nine years while imports have increased 60 per cent.
One has to wonder why it is that we have initiatives from that side of the House that favour the consumption of import items. What is worse is that over that period where we have had enormous growth in the economy we have seen from the revenue side or the tax side a 123 per cent increase in income taxes in absolute dollars. At the same time, income tax as a percentage of total direct taxes has increased by 18 per cent.
At the same time, corporate taxes are only 66 per cent of what they were when this government took office.


An hon. member:: Looking after their buddies.
It draws something like $15 billion unnecessarily from the economy to replace a tax it says was ruining the manufacturing sector. This tax at 9 per cent gave the Canadian government $18.5 billion net. It replaced that with a tax that in the last year netted us $15 billion but cost us an additional $15 billion to collect.
That is just incredible mismanagement. It has the temerity and the gall to ask members on this side of the House what their options are. Two and a half years ago we listed seven of them and stopped there because the list could go on and on and on. However, it refused to accept its responsibility that it exercised by ramming through this House legislation like the GST and the free trade agreement. There was legislation that saw an increase in income tax by 123 per cent over the course of the last nine years. There was legislation that saw the reduction of the capacity of the Canadian economy to generate jobs to the point that we saw 350,000 of them lost last year. There was legislation that saw the destruction of the manufacturing sector in southern Ontario and most particularly in the city of Toronto. There was legislation that saw the appearance of 240,000 unemployed people in the city of Toronto alone.


Giuseppe (Joseph) Volpe: Incredible. What happens now? They come before us and say that we have to have a fairer tax system that would more appropriately distribute the onus. At a time of growth income taxes rose 123 per cent, which is 18 per cent as a total of all direct taxes imposed by the government while corporate taxes actually dropped 66 per cent of what they were nine years ago. Energy taxes as a percentage of all indirect taxes have dropped from 43 per cent of the total that they represented in 1984.
When one looks at figures like this, one wonders about having a fairer taxation system. It would be one that would provide our governments with appropriate revenues to meet expenditures for the purposes of deficit reduction, encouraging the manufacturing sector and encouraging the growth of jobs so that each and every Canadian citizen can aspire to a better lifestyle than he or she currently enjoys or that his or her parents enjoyed before them. When one sees those figures one asks what possesses a government to come forward with regressive legislation that imposes a tax system that is only 50 per cent efficient.
Should any member from the government side again have the effrontery to ask members on this side of the House why we voted against their initiatives then, Mr. Speaker, I hope you will stand up for the Canadian public and say as we say on this side: "Because all of your policies have brought ruination to the nation-they stink-you should be kicked out soon".


Mr. Pat Sobeski (Cambridge):: Mr. Speaker, I would like to ask a question of the member for Eglinton-Lawrence who basically has shown his illiteracy with the GST.
First, I guess the party wants to go back to the old manufacturers' sales tax. Basically, with that old tax that was replaced, companies would go out and hire legal beagles rather than find ways to become more efficient.

May 10, 1993

Government Orders
For example, say that one was making facial tissue. It was considered a cosmetic product and that attracted the old manufacturers' sales tax. If one took one's crew of lawyers and could convince the tax officials that it was a health care product then one would have been exempt from the manufacturers' sales tax.
Say that one made batteries. Because electricity was exempt from the manufacturers' sales tax one would hire one's legal beagles who would go before the tax courts and try and get batteries claimed as boxed electricity and become exempt from the manufacturers' sales tax. This is the manufacturers' sales tax that the Liberal Party wanted to defend. That is what they are trying to defend instead of accepting a value-added tax.
He talks about $30 billion and he knows that there are things called business input tax credits. Let me explain quickly how they work. If I, as an individual, go into a Canadian Tire store and buy a $500 set of tools, I would be charged the GST just like the businessman would be charged the GST. However, the businessman because he is registered can apply to get the GST back. We did not want to leave it to that cashier standing in the Canadian Tire store to try and make the judgment of who pays the GST and who does not pay the GST.
The hon. member could ask why we did not do it like provincial sales tax and issue an exemption certificate. The hon. member talks about a black market. There is a black market with Ontario exemption certificates. What one has is, believe it or not, mechanics going in and buying one set of tools one week, another set of tools the next week for his neighbour and another set of tools and therefore avoiding paying the tax.
He talks about $30 billion. Everybody knew it including all the members of the Liberal Party who sat in on the GST committee some three or four years ago. It is unfortunate that the member for Eglinton-Lawrence was not on that committee.


Giuseppe (Joseph) Volpe: Mr. Speaker, I would probably spend a lot of time giving the member opposite an education but I think that he has proved incapable of understanding the issues and the impacts of everything that he has done so far. One would develop the impression that we would be beating our heads against the wall.
The kind of logic that the member opposite has demonstrated is evidenced in the rationale that they have given for virtually everything they have done. There is always an excuse but very rarely do we hear a reason.
Let me address a couple of the issues though. First of all, the manufacturers' sales tax had become a source of self-interest for our manufacturers. It is a very legitimate exercise. Eveiyone who can avoid paying taxes can and should avoid paying taxes. There is a big industry involved in that. Accountants and tax lawyers have developed a great client system in order to give everybody all the advantages they can afford to pay for in order to avoid paying taxes.
That clientele grew exponentially when the member opposite and his party increased the manufacturers' sales tax from 9 per cent to 13 per cent in four short years. When there is virtually a 50 per cent increase in taxes payable on the products that people produce the incentive for getting what the member calls legal beagles or accounting experts to find ways to avoid paying that kind of a tax increase is immense.
The government cannot have it both ways. It cannot create an environment for tax avoidance and then say that it has to implement another tax so that it can prevent these people from avoiding the paying of taxes. That is the kind of logic that says that what we have to do now is hire more tax inspectors because it seems that the black market, which the member opposite acknowledges not only exists but is growing, is depriving Revenue Canada of what we anticipated would be its revenue. We have to spend many more billions of dollars and many more thousands of employee person-years in order to recover that amount of money.
When we impose a 7 per cent tax on service which had up to that point not been taxed at all we invite a climate for tax avoidance. Someone who sees his costs immediately go up by 7 per cent is not interested in the statements of the members opposite about the proper academic discussions about their relative values. That individual is interested in maintaining lower costs. Whether it is a consumer or a manufacturer the bottom line is important. The bottom line to the consumer is that they pay as little as possible for an item, and a 7 per cent increase in that cost is an inducement to tax avoidance.

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Mr. Greg Thompson (Carleton-Charlotte):: Mr. they do not come out of the rose-coloured environment Speaker, I would like to clarify a number of points of the Conservative caucus meetings, mentioned by the member. He is ignoring the rest of the
world because he is talking about the decimation of the it might come as a surprise to him that our main Canadian economy. I am not sure what he is reading for marketplace down to the south, with which we do about information. I guess it is coming out of the backrooms of 80 per cent of all our international trade, does not have a the Liberal Party because obviously he is not reading any GST. Yet he and his party would suggest that a GST of our national business magazines or newspapers, or would make us more competitive in that environment, anything international for that matter.	That is just insane.
The fact is that the Canadian economy is going to lead the rest of the world in growth. That clearly indicates that not everything we have done has been wrong. It tells me that we are doing a great many things right. I think he has to acknowledge that because he is flying in the face of reality. It was nothing more than a political speech that he made.
In regard to the GST, I would love for the member to recognize and get up and tell us what they are proposing in terms of an alternative. I will suggest what they are suggesting, which they do not want to make public, is what they call a business transfer tax. The member will acknowledge that it is that secret document that his leader is sitting on because he does not want to acknowledge what a business transfer tax does to the public.
I will suggest this and then I will sit down. What that business transfer tax does, which he is fully aware of, is tax every single item in society, including food and prescription drugs. Why does he not mention that one?


Giuseppe (Joseph) Volpe: Mr. Speaker, I cannot believe some of the arguments opposite. I know the Canadian public is fed up with them too because they are just dying for an election.
I do not know when he last went into a McDonald's hamburger joint and found out how much it cost him and what happened to the GST and the applications of the GST.
As for where I get my statistics, they come out of Revenue Canada's statistics and Statistics Canada but
As for us leading the rest of the world, would that it were so because I would be able to stand up here like all other patriotic Canadians and thump my chest. For example, the People's Republic of China experienced growth of 12 per cent last year, anticipated 13 per cent growth this year, and an average of 12 per cent growth is projected for the course of the rest of this decade.
Here is what has happened with us, just so the member opposite understands what his party is responsible for. I will only go back to 1989 when we saw our growth rate drop to 2.3 per cent.
In 1990 it dropped to negative one-half of 1 per cent. In 1991 it dropped to negative 1.7 per cent and this last year we only had .9 per cent growth. Who has been smoking what? What kind of glasses do they wear when they read their own statistics? The kind of logic that comes out of that side of the House can only be branded as perverse and illogical.


Mr. Mark Assad (Gatineau-La Lievre):: Mr. Speaker, after listening to the various speeches, I thought the comments made by the hon. member for Eglinton- Lawrence were particularly relevant.
Many government members have said in the past that the manufacturers' sales tax was a burden for manufacturers. In fact, manufacturers pressured the government to get rid of this 12 or 13 per cent tax.
When the government introduced the GST, it announced triumphantly that it would help manufacturers increase their exports by reducing their tax burden.
Since the former tax was a burden on manufacturers, why did the government shift the burden to the consumer and why, in spite of the fact that it was a tax reduction,
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was the tax a disaster for the manufacturing sector in this country? Why, after getting rid of a tax the government felt was too high for the manufacturers, did we lose so many manufacturers in only two years? How do we explain that?
In any case, consider the sheer magnitude of this bill, especially as far as the tax system is concerned. It contains an incredible number of clauses and formulas. This is one more argument in favour of a thorough reform of our tax system.
Today, consumer taxes are already very high. They are twice what they are in the United States, or more. In fact, the GST has had a negative impact on the economy. Government members keep asking what we suggest as an alternative. During the debate on the GST and during committee hearings, we did make a number of suggestions that were either rejected or ignored.
Even before this government was re-elected in 1988, did it offer us any alternatives? Did we know it would impose a change as dramatic and far reaching as the GST? Not at all. Then, out of the blue, it tabled a bill in the House and we were stuck with a value-added tax, the GST.
We all know what the GST has done to Canada. Some members in my family work in the retail sector. Need I say this tax is a disaster? Do you really think that after two years Canadians feel this tax is fair and equitable?
Consumer taxes are already very high. There were alternatives, and there will be more, but at the time a number of alternatives were suggested.
Instead of eliminating the manufacturers' sales tax just like that, we could have had a period of transition. The government could have gradually reduced the manufacturers' sales tax, pending a thorough tax reform, a genuine reform, and we have not had one in 25 years. This reform would have provided the basis for alternatives. A value-added tax would have been a possibility, but introduced on a gradual basis.
Let me explain. In New Zealand, which is a democratic member of the Commonwealth, economists, the experts-although people are starting to realize their profession is far 1'rom scientific-explained there was a major problem. The deficit was going up, revenue was going down and there was a cumulative debt. In New
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Zealand, they proceeded with a genuine and thorough reform of their entire tax system.
They said they wanted to have a value-added tax on all products, without any exceptions. That was their choice, except they took one year to show the public that even if they did come in with a new tax like the GST or a value-added tax, they would substantially reduce income tax. That was fair and equitable. They would raise the value-added tax but income tax would be reduced accordingly. It was a great success. Of course they were re-elected, because people had a year to see how much they had to pay in value-added tax and then realized that with what they saved on income tax, the system was fair and equitable.
In Canada, especially from 1984 to 1988-89, tax revenues were up as much as $75 billion over previous years. It was impressive. The economy was expanding. However, despite the expanding economy and the additional revenue, the government felt it was necessary to raise taxes very substantially. The wealthiest in this country, the big corporations and the multinationals, were given an unfair advantage and benefited handsomely. A glance at the statistics for the world's seven industrialized countries shows that transnationals and multinationals enjoy far greater advantages in Canada than anywhere else.
Mr. Speaker, we have an advantage in Canada because 25 years ago, the Government of Canada decided to proceed with a genuine tax reform and set up a royal commission, known as the Carter commission. After five years of consultations and study, in 1967 the commission published its recommendations. This report was literally a revolutionary document. It argued that an industrialized country like ours should have a balanced and fair tax system and explained how to go about it. Unfortunately, the wealthiest in our country who belong to the financial elite objected strongly, and these recommendations went up in smoke.
This report contained the basics of a system that would have met the requirements of all Canadians. All levels of society would have had a fair and equitable tax system. To have a healthy social climate, people must know that they are not penalized so that others can benefit. Today we are faced with a situation where year after year, many debates go on in the House in which we are presented with bills containing many pages of explanations. You have to be a laywer or expert in tax law revision to

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understand exactly what is going on. It proves again that we need to simplify, amend and thoroughly correct our tax system.
When the Income Tax Act was brought in during the First World War, the reaction from the wealthiest citizens in our country was incredible. This was a progressive tax measure and at the time, they thought it would literally mean the end of the capitalist system as they knew it. They said it would be a disaster, that the nation's whole economy would collapse, that there would be no investment, that those with money would go elsewhere. Of course, none of that happened. On the contrary, we had years of prosperity unprecedented in human history.
So we have an opportunity again today to study these reforms. People study these issues and we could find a way, but something is lacking: political will. You can have the finest proposed legislation, the best recommendations from commission of inquiry or royal commissions, but if you do not have political will, nothing comes of it.
We saw that with the Carter commission, which produced quite a revolutionary report. Even the principles of that study still apply today. However, there is not the political will to face the issues and say that we are here to legislate for the whole of Canadian society, regardless of class. We lack that ingredient. The middle class in our country will have to face this situation and ask members of Parliament and candidates for office to find solutions. Middle class citizens should ask the following question: Will you go to Parliament to find solutions for all Canadians or for the wealthiest ones? That is the question they should ask.
Since I have been here, I have noticed very little concern for the middle class in this House. That is really scandalous. When will the middle class get together and say, "Enough is enough. We want a real tax system that favours no one and in which everyone pays their share"? That is not what we have now, whatever government may have been in power here. The time has come, because we will have to make reforms; otherwise we will have a revolt. Is that clear? Is it an exaggeration to say that Canadians no longer trust their politicians?

They have nothing but contempt for us.

Do we have to walk the streets and speak to our fellow citizens to realize how frustrated and disgusted they are with what is going on? Where is the political will? There are alternatives. Nothing makes us say it is impossible. Everything is possible when you have the will.


Giuseppe (Joseph) Volpe: If you want to, you can.


Mark Joseph Assad: That is right. Thank you, dear colleague. You said it.
That is what we have here. Can we keep introducing such extensive bills? Our system has become so complex, we are lost in it. Our colleague from Toronto offers us a single-tax alternative that he tabled and has been defending for several months, if not years. I read his paper and I find it has great merit. It certainly deserves to be looked at. It is no more revolutionary than establishing income tax was. I am sure that my colleague will explain it to us and that we will understand the merits of this system. I submit that it contains elements that could be useful to make the system more efficient and fairer.
In the meantime, we must first realize that we have a serious problem on our hands. The economy fares best when the middle class, which is the backbone of our economy, has a certain level of income. Let me give you a simple statistic. In the early 1970s, the disposable income of an average family with two children, after tax, mortgage and car payments, was between 17 and 22 per cent. This money was spent on new furniture for the house, a trip or clothing. But over the years, the percentage of disposable income dwindled, and tax increases, both direct and indirect, are mainly responsible for this loss of wealth. Today, the same family has a mere 5 to 7 per cent disposable income.
That is no mystery. You do not have to be a brilliant economist or hold a university degree to realize that our economy is recovering with great difficulty. That is what we call a recession, although I am tempted to call it a depression. Some would have us believe that it is over,
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but the very next day we hear that the unemployment rate is up. We must recognize that we are dealing with a real problem and are in a recession. There are very important aspects in our tax system that we can look at. But I tend to believe that most aspects of our tax system need to be totally changed or simply removed.
Of course, we could talk about it for a long time. Based on comments made by many people, on various views and many documents on the Canadian taxation system, it is clear that changes are needed. First, we must recognize that we have a serious problem on our hands. Second, the political will must be there to face the situation and solve the problem. It can be solved, with political will that is, and the source of this will is of course the people. The people will tell us in an election which direction the country has to take in the future.
[English)


Dennis Joseph Mills: Mr. Speaker, I share many of my colleague's views. I want to deal with something specifically related to small business and the banking community in this country.
I have been listening to many small business people from across the country. They claim that the GST has tremendously affected retail sales. People have backed off in their purchasing, not just in retail, but in the tourism industry and the food service and hospitality industry. There has been a resistance by consumers to spend. The GST has been given as one of the reasons this resistance is there.
When a small retail business loses its sales and shows its business plan to its local bank manager, that in turn affects the credit it receives.
The next thing we know this country's small business community is in a real credit crunch. If the financial statements of small businesses show that their sales are off by anywhere from 15 to 40 per cent, their bankers get nervous. The result is an incredible chain reaction. We know that today most of our small businesses really cannot function without the support of the banking institutions or their specific banker.
Does my colleague share the view that the impact of the GST has had an effect not only in terms of suppress-
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ing consumer confidence but also in triggering a relationship between the banker and the small business, which we know is in its most disastrous state of all time?


Mark Joseph Assad: Mr. Speaker, I come from a family that has been in business since my father came to this country and it is obvious that the GST has had a tremendous impact.
Let us take for instance the fact that we were in Quebec and on January 1, 1991 we ended up with the GST and the Quebec GST. From day one we went from zero to 15 per cent. Needless to say that had a detrimental effect on the retail trade.
Then when we go to our banker and our sales have dropped to the point-


John Carnell Crosbie: I have been here all afternoon and I haven't heard one constructive suggestion.
[Translation\


Mark Joseph Assad: Mr. Speaker, I will carry on. My colleague asked me whether the GST had an effect on retailers. It is obvious-


Mr. Robitaille:: Talk about the bill.


Mark Joseph Assad: Mr. Speaker, I hear voices in the desert but the end is near for them. I go back to the GST, which has had a dramatic effect on retailers. We have witnessed a record number of bankruptcies in many cases. This means something. This could not go on. Many businesses shut down and their relations with the banks were harmful to them, no question about it.


The Acting Speaker (Mr. DeBlois):: Before resuming debate it is my duty pursuant to Standing Order 38 to inform the House that the questions to be raised tonight at the time of adjournment are as follows: the hon. member for Notre-Dame-de-Grace-Immigration; the hon. member for Parkdale-High Park-Peacekeeping; the hon. member for Moncton-National defence; and the hon. member for Restigouche-Chaleur-Indian affairs.


Gregory Francis Thompson: Mr. Speaker, I just want to bring it to the attention of the House that we are debating Bill C-112 today. We are talking about changes to the basic structure of the GST, to clarify the operation of the GST. We are not debating the tax itself. We debated that time and time again in this

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House. We are debating technical changes within the act and I want to remind some of the members of that.
The debate has carried us today in a direction which I am not sure is entirely useful, as the minister of fisheries just pointed out. Not once in this House today have they suggested an alternative. That is the point that I hope to make in the next few minutes.
I want to bring to the attention of the House a letter written to the Leader of the Opposition by the Minister of Finance dated February 12, 1993. I want to read this letter into the record because I think it pretty well outlines our position versus their position or their lack of position. The letter reads:
Dear Mr. Chretien:
I was astonished to note that in your speech to the Empire Club yesterday, you again failed to outline a clear alternative to the GST which you have repeatedly promised to scrap.
This is a total and absolute cop-out. To tell Canadians you will scrap the tax and then simply propose to refer the subject matter to a parliamentary committee for review, consultation and recommendation is a clear abrogation of responsibility on your part as Leader of Her Majesty's Loyal Opposition.
It goes on:
You claim to have reasons to scrap the tax! You obviously should have a clear idea of what you consider to be a more effective alternative.
You know there have been at least 10 different studies, Royal Commissions and committee reports on the subject of a National Sales Thx to replace the destructive Manufacturers' Thx. Many of these were undertaken by Liberal Governments. Collectively they cover the subject thoroughly. A list is attached.
I will read that list later.
If you would like to review them, I have the entire set in my office.
You have to remember that this is the Minister of Finance writing to the Leader of the Opposition.
With all due respect, Mr. Chretien, it's time for you and the Liberal Party to come clean. What are you offering as an alternative to the GST?
As suggested by the fisheries minister just a minute ago.
Is it a Business Transfer Tax which would be hidden, which would tax food, which would tax prescription drugs and medical devices, and which has never been implemented by any other industrialized country?
Is it one of those? The finance minister goes on:
Or is it some kind of other kind of buried, sneaky tax-


Some hon. members:: No.


Gregory Francis Thompson: Mr. Speaker, they are finally responding to this which I was hoping they would.
The finance minister hit a sensitive nerve on this one. He said:
Or is it some kind of other buried, sneaky tax that could be raised with a stroke of a pen?
That is the type they prefer.
Or are you proposing the equivalent of another National Energy Program with a myriad of taxes like:
And he outlines them.


Michael Holcombe Wilson: We know what it isn't, but we don't know what it is.


Gregory Francis Thompson: That is true, Michael.
- the Petroleum Gas and Revenue fhx, the Incremental Oil Revenue Thx, the Natural Gas and Gas Liquids Thx, the Petroleum Compensation Charge, the Canadian Ownership Special Charge; and the Oil Export Thx?
They are experts in taxation. I think the finance minister laid it out here pretty accurately.
This little package was a present to Canadians from the previous Liberal Government, of which you were an integral part. It crippled the oil industry and was unloaded quickly by our government. Do you plan to dust off some of these old policies?
It sounds like they are. The finance minister concludes:
One of your advisers noted recently in The Globe and Mail, "You don't win on substance, Governments defeat themselves." That may have been true of yesterday's political generation, but today Canadians want substance. One thing is certain Canadians will not support a Platform based on mere generalities, distortions, contradictions and cop-outs.
Yours sincerely, Don Mazankowski.
They are clearly playing with the GST issue. I think the Minister of Fisheries will get a kick out of this one. In my constituency, they refer to the GST as Greg's single term because they are determined that they can defeat me on this tax.


Mr. Crawford:: And we will, Greg.


Gregory Francis Thompson: We never know what is going to happen when we enter an election because politicians are defeated from time to time. The Canadian people will never defeat a government or member of Parliament
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on the vagueness that is associated with that party across the hall.
If we examine the past and go through the past two elections, the Liberals actually won as a national party. We know how they did it, by deceiving the Canadian public with regard to taxation. 'They did it in 1974. In 1980 it was the 18 cents a gallon tax. They avoided that one. We do not want to go back into history but in 1980 they did it and in 1974 they did with regard to price and wage controls.
What I want to put on the record again with regard to taxation in relation to the GST is an outline of the studies recommending changes to the old federal sales tax, the manufacturers' sales tax.
Those studies go back believe it or not to 1940. The truth is we are the only government that had enough backbone to stand up in this House and actually bite the bullet. We knew the old tax was not working. Canadian manufacturers have been telling us that over the past number of years.
What we did was to take a look at this. Anyone that was aware of what was going on knew that we had a problem. It was just a question of when you actually come to grips with it or do you just pass it off to a future government?
We are going back a long way but in 1940 the first recommendation came from the Royal Commission on Dominion-Provincial Relations, the Rowell-Sirois commission. Any history student will remember that one. Back in 1940 they called for fundamental changes to the tax but no one acted on it.
In 1956 another committee, a small group called the sales tax committee, was established by the then minister of finance. It recommended that the basis of the tax be changed to the level at which retailers purchase goods wholesale. Again in 1956 changes were recommended.
The same thing occurred 10 years later in 1966 when the royal commission on taxation, the Carter commission, called for replacement of the tax at the retail level.
In 1975 another recommendation came down from the Department of Finance in a Department of Finance discussion paper on federal sales and excise taxation
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recommending reform of the structure of the federal sales tax system and identified alternatives.
In 1977 the same thing, the report of the commodity tax review group. Officials of the Department of Finance and Revenue reviewed the discussion paper and suggested uniform application of the federal sales tax at the wholesale level as a practical and effective solution to the problems of the current FST.
In 1983 the same thing, the report on the federal sales tax review committee, the Goodman committee appointed by the Minister of Finance, recommended further study of shifting the federal sales tax to the consumer level. Obviously that is what we did.
In 1987 the white paper on sales tax reform indicated the government would implement a multi-stage sales tax as part of the comprehensive tax reform. In 1987 in the 20th report of the standing Senate committee on banking, trade and commerce, tax reform in Canada called for replacing the federal sales tax with a broad based multi-stage tax like the GST.
In 1989 the goods and services tax technical papers pointed out the benefits of the proposed GST over the FST. In 1989 the report of the House of Commons finance committee recommended replacing the FST with the GST.
There we have it, a litany, a history of proposed changes to the old federal sales tax, the manufacturers' sales tax. Most of us on this side of the House will admit that it has not been easy because to effect change is never easy. It is always politically risky but we did it. We did it based on recommendations going back to 1940. We faced up to that reality. They do not understand that the old tax was broken. It was hurting us in terms of export and the international capacity to compete. They do not understand that.
They do understand the politics of it, I will tell you that. It is something that obviously you can make some political ground with because nobody likes taxes and nobody likes change. We did, if you wish, bite the bullet.
I want to point out some of the inaccuracies that have been suggested on the other side of the House in regard to the efficiency of the tax. The GST is an efficient tax. One of the things that we promised, because it was new,

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was that if changes were needed and they would streamline the administration of the tax, we would bring them in. If the suggestions would work and proved to be effective, we would implement them.
That is what Bill C-112 does. Those are recommendations that we have received from many sectors in all parts of Canada and we responded to them in an attempt to make the tax easier to administer. As we discuss these changes to streamline the implementation or the ease of administering the GST, the folks across the hall are basically saying: "Hold it, there are some politics to be made still on this issue".
Their logic is something like this: "If we promise to bring something in we will probably be forced to clarify it, so would we actually try to do this before an election or tell them what it would be before an election? I don't think we can. Can we hedge on it a little bit? I think we probably can". That is what the opposition is saying.
I will give the NDP credit. At least they are intellectually honest about the issue. They say they are going to scrap it, completely eliminate it.
The Liberals are making ground with it in the sense that they are going to change it but they are not really going to tell us what the changes are going to be. Obviously the changes are going to be just as distasteful as the GST itself. All it means is that we are going to go through that much more turmoil in attempting to bring in a new tax, which it would be, because they have at least acknowledged that they cannot afford to forego the $15 billion to $20 billion in revenue. They have at least acknowledged that. For a time they did not acknowledge the revenue that the GST generates, but they are acknowledging that.
Take it one step further and sort out what they are saying. They are saying those changes are going to bring more complications into the tax system and it is going to be a total disruption of Canadian business as usual, if you wish, because there is no possible way that you can bring in a new tax to replace $15 billion or $20 billion in revenue without disruption.
I want to point out the sorry record of the individuals across the aisle in regard to taxation and deficits. This is absolutely accurate. I want to point out how for years
they just disregarded or ignored the sense of responsibility that you have to exercise when you are in power.
I want to point out something here very clearly. They do not want to hear this, but in 1968 when the leader that they are so fond of embracing took office in 1968 he took office with an annual deficit of $1 billion. In fact, between 1967 and 1968 it grew to $1 billion because when Lester Pearson left office and handed the reins over to Mr. Trudeau it was a break-even government. It did not have a deficit. In fact, our gross national debt at that time was only $32 billion.
They took that deficit in the period 1968 to 1984 from $1 billion to $34 billion.


Michael Holcombe Wilson: Thirty-eight.


Gregory Francis Thompson: Our Minister for International Trade just said $38 billion. I think his figures are probably more accurate than theirs. They took it from $1 billion to $38 billion. That is a 3,800 per cent increase.
The interesting thing to note with regard to taxation is this one, because when we are talking about the GST in all fairness we are talking about tax. In 1984 when the Liberals left office they were spending $1.33 for every dollar in revenue that they brought through the front door. Total revenue in 1984 only amounted to $71 billion but spending was $103 billion in an economy worth just slightly over $400 billion in 1984. That is irresponsibility.
That is one of the problems this government has had to deal with. Now what did we do? Did we simply maintain the status quo, not address the debt side? We did address it. What we have done since then is keep the deficit as a percentage of the gross domestic product well below their average. In fact we halved it. Today the annual deficit as measured against the gross domestic product is at exactly half of where they left it in 1984.
One of the reasons for that is because we have not shirked our responsibilities. When it comes to taxation and managing the economy we have done what had to be done and will continue to do that. The folks across the hall do not like it but it is clearly on the record for them to look at.
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If we want to refer to the international think-tanks or the IMF or look at what some of the Canadian banking economists are saying about the Canadian economy, they will say that we are doing very, very well in a western world that has been plagued in the last number of years by a very deep recession. We are moving out of it, but we are not going to move out of it by going back to the old ways of doing business.
We have laid our cards on the table and they are there to examine, but the important thing is that the Canadian people know exactly what they are. We cannot say that about the other side of the House.


The Acting Speaker (Mr. DeBlois):: The hon. member for Eglinton-Lawrence.


Dennis Joseph Mills: Be gentle.


Giuseppe (Joseph) Volpe: Mr. Speaker, my colleague from Broadview-Greenwood says to be gentle. With regard to the invitation of the member who just finished, who said that having laid all of the cards on the table perhaps we ought to read them, if he will forgive me for a moment or two I will read them.
I am going to cite, just as a preamble, a letter by his own colleague from Mississauga South who during the goods and services tax debate sent out a letter to all of his constituents to demonstrate to them what the significance of the GST was. I am a little bit embarrassed to engage in such language but I do it only in an academic sense. In his words the GST was the gouge and screw tax. That comes from somebody from the Tory backbenches.
However I want to take a look at the record, since the member went to 1968 and took great pains to establish an historical precedent. I want to just look at the last few years. I said a few moments ago that I wanted to give some credit. The credit is that there was growth in the Canadian economy. It has increased by about 54 per cent since 1954. I say that because it is important for all members to understand the context in which some tax legislation can be implemented and government initiatives can be put into effect.
In that kind of a context it is important to note that the member's government opposite caused, allowed, permitted, witnessed or encouraged an increase in the public debt of 150 per cent. At the same time, we have to remember that there was an increase in the GDP but
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there was also a 123 per cent increase in personal income taxes. So the government was getting some revenues to pay off its debts but obviously did not do it. There was a 57 per cent decrease in energy taxes at the same time. There was a further 33 per cent decrease in corporate income tax.
I do not want to overly discourage the member opposite but the trade balance dropped last year to 47 per cent of where it stood in 1984. Through all of that, because this is an example of good management, in 1988 and 1989 his government found $832 million in cash to give to oil exploration companies at a time when the oil business was booming. His very responsible members found $832 million, not including subsidies and other incentives, to give to oil companies for exploration purposes.
This member wants to compare statistics. I dare say he would pale if we kept this up.


Gregory Francis Thompson: Mr. Speaker, the statistics do speak for themselves. When the member talks about the deficit going from approximately $215 billion or $220 billion to $415 billion or $420 billion he is absolutely correct. If he wants to put numbers on it we acknowledge those.
What he has to acknowledge at the same time is that it is simply interest on the debt. Compound interest over nine years took it from approximately $200 billion to approximately $400 billion. One does not have to be a mathematical wizard to measure that.
Between 1968 and 1984, and I know they do not want to be reminded of this but I will, they allowed the deficit to go from zero, and we could argue whether it was zero or $1 billion depending on what part of 1968 we measured, to $38 billion. In my books that is a 3,800 per cent increase. In terms of the combined deficits for the total debt load, that increased slightly over 1,000 per cent.
I do not think they have too much to be proud of, but that is past history. We cannot go back to 1968 or 1984 and fight that election all over again. I suppose it would be fun to do it. We are dealing with the here and now and that is what the Canadian people will measure us on.
We will admit that we have not done everything perfectly because if we were perfect human beings there would be no need for Parliament. The nation could run

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without us, and one could argue that it might run better without us anyway.
We will have to run on our record and we will. It is one that I think we can be proud of after close examination.


Dennis Joseph Mills: Mr. Speaker, I would like to ask a question of the member and I would like to deal with the here and now. I would like to deal with an issue on which the member and I both agree. It concerns the Small Businesses Loans Act.
Both of us have stood in this House several times and agreed on the fact that the Government of Canada should be communicating to small business that the Small Businesses Loans Act is out there. If we can get small business going then that is where our jobs are going to be and that is going to ultimately help the government in the record it will be putting forward to the Canadian people in the next four months.
We have two senior ministers of the Crown here today. What is causing this government to not honour its word and communicate the Small Businesses Loans Act progressively and actively? It is something that all parties in this House agree on and the government made that undertaking four months ago.


Gregory Francis Thompson: Mr. Speaker, we did make some significant changes to the Small Businesses Loans Act and it is one measure that the member opposite did support. They are major changes and we are very optimistic that they will work and they will be honoured by the banks. The minister for small businesses has had some talks and discussions and has applied pressure on the banks to respond, and they are.
As evidence of that, I want to point out that back home in New Brunswick our unemployment rate is almost below that of the national average. It is approximately 11.3 per cent as I speak, which is remarkably low for a poor province like New Brunswick. I think we have had a hand in that.
Last Lriday it was my pleasure to open Utopia Labri-cating Ltd. It is a small company back in Charlotte county in New Brunswick that is employing 50 people. It looks like it is going to expand to close to 100 employees this year. It has developed a process for recycling used motor oil. It is an environmentally friendly company and
it is competing internationally. They are also friendly people.
The evidence is clearly on the record that it has used some initiatives by this government to do exactly what it has done, which is to expand and compete internationally. It is doing so much to the benefit of every worker in the province of New Brunswick.
What I am saying in a rambling manner is that our policies are working. The Small Businesses Loans Act is working. The numbers in New Brunswick clearly indicate that it is working.


James Capsey (Jim) Karpoff: Mr. Speaker, I am pleased to be able to speak on this legislation, Bill C-112.
I find all the discussion about the GST and the manufacturers' sales tax very interesting. It is as if these were the only two choices that this country had. I will grant that the Tories are right about one thing, which is that the manufacturers' sales tax was a flawed tax. It was not a particularly beneficial tax to Canadian manufacturers.
To say that the GST was the only alternative is absolute hog-wash. The government has removed one flawed tax and introduced a second flawed tax that is probably even worse than the manufacturers' sales tax. Now it is trying to play with it, to massage it and see if it can improve it.
Before I was elected I was involved in helping a number of non-profit associations develop various types of residential facilities. We would often go out in the community and purchase a building and then bring it up to standard. We might have had to put in some heavy duty wiring. We might have had to put in smoke alarm systems and even improve sprinklers. However the fundamental thing we had to look for initially was whether the structure of the building was sound. Could we make the improvements on it? Or were we simply making improvements on a building that was about to collapse or be abandoned or that was not worth the effort to improve.
That is what we have with the GST. We have an unsound tax that is rotten to its core. The government may put in all of the little improvements it wants to try to say that it is going to improve that tax, make it easier to understand, make the collection of it easier, make it less complicated, exempt this good or exempt that good, or
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play around but it is left with the simple fact that the GST is an unsound rotten tax that is not supported by the Canadian public.


John Carnell Crosbie: What is your alternative?


James Capsey (Jim) Karpoff: We have set out many alternatives and we continue to do so. If the hon. member would just sit down and listen I will set them out again in a few minutes. I know it is necessary to spell it out repeatedly for the Tories, as we have done. Unlike the Liberals we have actually set out in writing how we would do away with the tax. I will get to that and I am sure the hon. member will be in his seat listening attentively and maybe even taking notes for his cabinet colleagues.
This GST has been devastating to our economy. I come from a border community. The GST coupled with this government's high interest rate and high dollar policy has caused cross-border shopping that has devastated our retail trade. Our retail industry has suffered greatly because of the GST. People have gone down across the border particularly when our dollar was higher. As our dollar sinks lower, of course, it gets less and less attractive to go down across the border with the United States.
It has been a very inefficient tax. It costs as much to collect as the tax that is collected. That is exceptionally inefficient. The cost is not only directly to the government in a big bureaucracy. The bureaucracy is probably going to grow because now we are starting to hear about the people who are avoiding or evading or cheating on the GST. The government's solution to that will be to bring in more tax inspectors and get more people out there in the field to try to see if it can hunt down those people who are using the informal economy to avoid paying GST.
The cost of collecting the GST is enormous and it is a non-productive cost. This government is always talking about cutting down the size of government. Here is an area in which one can cut down the size of government and do away with the whole GST bureaucracy. Just get rid of all those positions and collect the tax through much more efficient areas.
Thlk to small businesses and one hears about the hassles they have had in keeping track of the GST to know what they have to pay. People talk about inputs.
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They keep track of inputs they had so they can deduct those inputs from the GST they charge their customers. Large corporations with tax lawyers and accountants can retool the cash registers, computers and all those things. It is very nice. However, small businesses earning over the $30,000 or $35,000 exemption level have increased difficulty in keeping track of the GST. There are many other things that the government refuses to acknowledge. There are businesses and organizations that cannot collect back their GST.
I will give an example. All sorts of day care services have to go out and buy equipment, materials and supplies and pay the GST on all of it. However, they are not able to pass that on because day care is a GST exempt service. All they had to do was to eat the increase costs that they had from the GST. They could not even pass it on as a business or an organization.
I do not know why the Conservatives do not understand this. What do these places do if they increase their expenditures on all goods and supplies to 7 per cent and they cannot pass it on? The business becomes less profitable. They have to reduce wages or they have to increase the charges for day care.


An hon. member:: Pass it along.


James Capsey (Jim) Karpoff: Yes, that is right, they pass it along to working mothers and to the working poor. That is right. They pass it along. Has that been helpful to single parents who have been trying to get out and find employment to have to all of a sudden pay increased day care costs? This is a fundamentally flawed tax. It is rotten to the core. It is like a house with dry rot in it. It is going to collapse because it is not sound.
Yes, one can spend all sorts of time and energy trying to improve it. One can put in new wiring, a sprinkler system or smoke detectors but the house is still rotten. One is better off demolishing the house and starting over again. Instead of trying to improve a rotten tax this government should be abolishing it and starting over with a fair taxation system.
I am going to talk in a minute about some of the alternatives to the GST that we as a party have outlined. However, there are other little things that I find interesting in this bill that makes one scratch one's head and wonder why the government is going ahead in trying to

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make sure that there is not adequate information available to the public about the GST.
This bill makes it more difficult to get information because it gives an exemption under access to information. The information commissioner stated veiy clearly that he does not see the need for special GST exemption. It is simply being used by the Conservatives to make sure they have some power to hide the reality about how rotten the GST is, how cumbersome it is to collect, how much money is being spent on its collection, how many people may be avoiding the GST and how many people may be using the alternate economy or the underground economy to avoid paying the GST.
We heard the Liberals talking about the GST. I must say I am like the government in that I find it very interesting that they condemn the tax but do not have the fortitude to get up and say what they will replace it with. They talk about having a service and goods tax. It sounds like a GST but only it is an SGT. Perhaps they will have a business transfer tax which is the same as the GST only it is hidden. It is even more insidious than the Conservative one because it would be hidden from the taxpayers who could not even find out what they are paying. It would apply to a wider range of goods that would include food. It would possibly even apply to health care products and prescription drugs if we have a business transfer tax.
The Liberals waffled and said: "We will get rid of the GST. No, we are going to keep the GST. No, we are going to modify the GST. No, we are going to come in with a different tax proposal of a business transfer tax or a valued added tax or an SGT tax". Now they have the gall to say to Canadians: "We are not going to tell you what we are going to do until after the next election". They think they are going to form the government.
I have news for them. I go out into my community and talk about the terrible economic mess that the Conservatives and Liberals have left this country in and about the goods and services tax and the stand that the Liberals take. They are not going to form a government.
This afternoon again I see them having this little love-in among themselves with a new tax thing that they all support called a flat tax. This is where people who are earning $100,000 a year get their taxes reduced and those
people earning $15,000 a year get their taxes raised and we call it flat. It is like a flat earth and that is about as far as it is going to go in this country. We have already had 15 or 20 years of the Liberals trying to make a flat tax by reducing the tax for the wealthy and the corporations and increasing the tax for the poor and the working and middle classes. They started to move toward a flat tax but I think there is no-


An hon. member:: It is a single tax.


James Capsey (Jim) Karpoff: It is a flat tax or a single rate. They have all sorts of little gimmicks in talking about it but they want to reduce the taxes further for the corporations and their wealthy friends and make the poor and the working person pay even more. This is the Liberal approach that they carried on when they were in government and then has been carried on in spades by the Tories.
Let us take a look at some of the things we said we would do to replace the GST and make it a fairer tax. I am going to just start off with two or three things.
We said let us restore some of the progressive income tax rates. How does one justify that for the wealthy tax rates in this country have gone from 44 to 34 to 29 per cent? How does one justify something like that to the person who is earning $35,000 and $40,000 a year and trying to pay for his home, feed his family and maintain some type of education fund so his kids can go to school?
Let us bring back and restore some of the progressive tax nature and let us make corporations pay their fair share. We have thousands of profitable corporations in this country that make huge profits and pay no taxes. I was looking over a list the other day and I was surprised that such outstanding corporations as Coca-Cola in 1990 earned a $28 million profit and paid no taxes. In fact it got a $1 million tax credit. People will say that if one taxes them that they are going to go across the border. I think if Coca-Cola decided they were going to stop selling coke in Canada then they will go back across the border.


An hon. member:: Get a Pepsi.


James Capsey (Jim) Karpoff: Get a Pepsi. Certainly they can afford to pay taxes just as others can. The whole thrust of the reduction of corporate taxes in this country since the
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early 60s has meant that corporations have paid less and less and the individuals have paid more and more.
However, there are many other things that we said we could do to make our tax system much fairer. There is the capital gains tax. Well over 50 per cent of the capital gains tax exemptions in this country go to the richest 1 per cent of the population. We say that there should be no exemption for capital gains other than for family farms and small businesses and private residences that are lived in. This would bring in considerable amounts of money and would allow for fairer taxation and doing away with the GST.
There are the business entertainment tax and meal tax exemptions. Businessmen can write off their lunches, escort services and boxes in SkyDome. The Vancouver Canucks I know will win the world series. The world series of hockey is called the Stanley Cup. One of the things that they are in the process of doing is building a new stadium in downtown Vancouver. I would bet a substantial chunk of that money is going to be raised through tax loopholes of selling boxes to the multinational corporations.


An hon. member:: What have you got against tourism?


James Capsey (Jim) Karpoff: This is tourism financed by me, the pockets of the single working parent and tax loopholes to the wealthy. That is the Liberal way of doing it. That is not the way I would do it.
We have all sorts of others. We had the Liberals set up family trusts for the most wealthy families in this country. They were exempt from paying taxes on the capital gains portion for 21 years and when they were about to have to pay that tax what did we have? The Conservations came along and bailed out their friends. Other things such as the business advertising subsidies and the whole dividend tax credit are among many areas in which there have been tax loopholes built in for the rich and the powerful.
Take RRSPs. The government two years ago came along and said to the man who is struggling on less than $45,000 a year, you are going to be able to contribute and get a tax write-off on the RRSR Your rate will go from 20 per cent to 18 per cent, but you, the person over there that is earning $86,000 a year, we are going to increase
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the amount that you can contribute. Of all of the unfair tax loopholes, the RRSP, the person earning $86,000 gets $500 back from his tax. The person earning $20,000 gets $220 back.
I just want to finish by pointing out that the way the government must deal with fair taxation and the deficit is to get employment under control.


Jean-Marc Robitaille: Mr. Speaker, I listened with great interest to the comments made by my colleague from the New Democratic Party


Marcel R. Tremblay: That is not true.


Jean-Marc Robitaille: The hon. member from Quebec-Est says it is not true.
In the end, it is unfortunate that the hon. member from the New Democratic Party made a 20 minute speech without referring to the fundamental aspect of Bill C-112 which, following extensive consultations with retailers and several activity sectors in Canada, proposes to improve, at the administrative level as well as in other respects, the goods and services tax. Whether it is the members of the tourism industry, taxi drivers, exporters, housing and building promoters, farmers or auctioneers, this bill will simplify the whole operation of the goods and services tax. It is unfortunate that the hon. member did not refer directly to the provisions of this legislation. Indeed, all he did was to wax eloquently on the fact that, from an ideological or philosophical point of view, he is opposed to the GST.
The hon. member says that the Liberal Party wants to replace the GST, but he does not know what would replace it. He also refers to a double language and a new taxation system. During the member's speech, we heard a lot of rambling that had neither head nor tail, but we never heard a word about the significant improvements which Bill C-112 will bring and how beneficial it will be for all those in the activity sectors which are affected.
My question to the hon. member is very simple. Does he agree that Bill C-112 will simplify the administration and the management of the GST for retailers, for cab drivers, and for a whole slew of people in other sectors? As regards the provisions of Bill C-112, does he agree that, based on a taxation system, namely the GST, we are

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proposing today a bill which will simplify that system and help those who must operate within the present tax system? The hon. member certainly has the right to disagree with the GST, but today we are discussing a bill which improves the situation and which will be helpful. Will the member oppose or support those improvements to the GST which will be helpful to a large number of sectors in Canada?


James Capsey (Jim) Karpoff: Mr. Speaker, I am pleased that the member asked the question because I thought I had explained that at the beginning of my speech. Basically what we have here is an attempt to improve a rotten house.
I knew when I went out to purchase a house for a non-profit society or an organization I had to make certain improvements. I could call in consultants or whoever I want. The government says it consulted with this person and that person and these are administrative improvements. You could call in all the consultants you wanted and they would say: "We should put in a sprinkler system", or "We should upgrade the electrical wiring", or "We have to improve the fire exits," but if the house was rotten what they would normally tell you to do is bulldoze it. You cannot improve something that bad.
What the government is trying to say is: "We have a rotten tax, a tax that is universally hated, that has been detrimental to the economy and we are going to make a couple of improvements in its efficiency", or as he said, in administrative detail. "We will consult with people but we will not listen to them if the consultants come back and tell us to bulldoze the house".
My area of Surrey North is one of the fastest growing municipalities in this country. It has more housing starts than almost anywhere except possibly Mississauga. It is booming. However one of the things that the builders and contractors tell me all the time is that they do not like the GST on new home construction. They do not come to me and say: "Look we want you to make it administratively simpler". They want to be able to tell the new owners that there is no GST on the new building, which some of them have been doing, but they
then get them to sign a form so that the contractor collects the rebate on the GST that he has added into the price. They do not tell me that at all. They say to tell the government to scrap the GST, not to tinker around with it and make it administratively easier, not to try to fiddle with it and pretend it is something else.
They say: "This government and this country must deal with the deficit and it must deal with the growing debt". Everybody knows that. But they also know there is only one way to deal with it and that is to create full employment.
Every person who is unemployed costs the federal and provincial governments $17,500 in income assistance, UIC and lost taxes. Even the Tories must be able to do enough mathematics to say: "If we could reduce unemployment by one million at $17,500 a crack we would go a long way to dealing with the deficit".


Dennis Joseph Mills: Mr. Speaker, I want to begin by dealing with specifics related to the bill. This is a bill where we are attempting to streamline and simplify the GST.
The amendments are in the area of retailer issues in regard to discount coupons, returnable containers and buying groups. Part of the bill deals with direct sellers. There are simplified rules to allow consistent pricing and smooth operation of tax in the taxi industry. There are simplified rules to allow more consistent operation of tax for auctioneers. There are also some areas related to farmers. Rules are changed to allow feed lots to be treated the same as other vendors of feed.
Three years ago the government received many of the recommendations that are now part of the GST process. In other words, when hundreds and hundreds of groups from all across Canada came to the finance committee to make recommendations, many were ignored. But we see here with about three or four months to go before the election that the government is attempting to streamline the GST.
It is no secret that we as Liberals if we are given-and I say it humbly-the trust of the people in the fall, the GST will be scrapped.
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I cannot figure out where this government is coming from. The member for Carleton-Charlotte in New Brunswick is here today. I want to read two short sections of the bill to him. I want to be very specific because we are talking about simplicity. This is section 235 and it defines the net tax for a passenger vehicle lease. This is the simplified GST and I put it on the floor for all Canadians to judge its simplicity. Section 235.(1):
Where, in a taxation year of a registrant, tax becomes payable, or is paid without having become payable, by the registrant in respect of a supply by way of lease of a passenger vehicle and
(a)	the total of the consideration for the supply that would be deductible in computing the registrant's income for the year for the purposes of the Income Tax Act, if the registrant were a taxpayer under that Act and that Act were read without reference to section 67.3 thereof,
exceeds
(b)	the amount in respect of that consideration that is, or would be if the registrant were a taxpayer under the Income Thx Act, deductible in computing the registrant's income for the year for the purposes of that Act,
there shall be added in determining the net tax for the appropriate reporting period of the registrant an amount determined by the formula A times B times C
where
A is the ratio obtained by dividing that excess by that consideration,
B is the tax paid or payable in respect of that consideration (other than tax that, by reason of section 170, may not be included in determining an input tax credit of the registrant), and
C is the proportion of the total use of the vehicle that is used in commercial activities of the registrant.
That is simplicity?
Let us talk about instalments on the food and beverage industry, section 237:
Where the reporting period of a registrant is a fiscal year or a period determined under subsection 248(3), the registrant shall, within one month after the end of each fiscal quarter of the registrant ending in the reporting period, pay to the Receiver General an instalment equal to 1/4 of the registrant's instalment base for that reporting period.
(2) A registrant's instalment base for a particular reporting period of the registrant is the lesser of
(a) an amount equal to
(i) in the case of a reporting period determined under subsection 248(3), the amount determined by the formula A times 365 over B
where
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A is the net tax for the particular reporting period, and
B is the number of days in the particular reporting period, and
(ii) in any other case, the net tax for the particular reporting period, and
(b) the amount determined by the formula C times 365 over D where
C is the total of all amounts each of which is the net tax for a reporting period of the registrant ending in the twelve month period immediately preceding the particular reporting period, and
D is the number of days in the period commencing on the first day of the first of those preceding reporting periods and ending on the last day of the last of those preceding reporting periods.
The government defends this as simplicity? Does it not understand what small business is crying out for?
Small business in this country is crying out for less red tape. It is ciying out for an efficient tax system. It is crying out for a fair tax system. It is ciying out for something that works.
I say to you, and I am sticking with the bill, there is no way. I defy you. I will tell you right now that we will go door to door and store to store. I will go in any riding in this country. You show me how you defend that in the name of simplicity, efficiency and fairness. That is the whole problem. You people have lost connection with what is happening out there. It is this type of red tape that is just driving people crazy.
The member from Cambridge talks about the manufacturers' sales tax. I agree with him that the manufacturers' sales tax was not the best tax. Do you know that the manufacturers' sales tax was only applicable to 76,000 businesses in Canada?
What the Tories did was take the manufacturers' sales tax which they increased, by the way, four times since they came into power. If they were so upset with it they should have scrapped it right off the bat.
Do they know what boggles my mind and boggles Canadians' minds? They had 76,000 people involved in the manufacturers' sales tax and what did they do? They scrapped it and put in a GST where there are 1.9 million registrants they have turned into bureaucrats.
Do you know what a small business person has to do in order to get through the GST? He now has to hire an accountant. I have to tell you something. Do you understand what I just read? I will tell you if you

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understand what I just read, you are a heck of a lot better than most small business people.
Most small business people who I know would admit openly and honestly: "I do not understand". In fact most accountants are openly admitting today that the current tax act of Canada is so unintelligible that even many of them who have been trained to give counsel and advice are no longer sure what some of the interpretations of the law are.
Therefore, my leader stands up and says that in the first year we are going to get rid of the GST, unlike the NDP which says it will take five years. It is pretty presumptuous to think that even if it did form a government it would be around for five years. That is a bit of an insult.
Tradition shows that the normal mandate in this country is four years. This heading into the sixth year is a very unusual phenomenon. The point here is that we are in fact going to get rid of the GST.
I have to clarify some misstatements that have been put forward on the government side and by the New Democratic Party today. What the leader of my party has said and has said repeatedly and it is not always reported is that we are going to take the first year and listen not only to Canadians from coast to coast about alternative tax systems in this country, but we are also going to listen to the provinces.
This is another problem with this current GST. It is not a harmonized system. It is a two tiered tax system that has created bureaucrats out of everybody in this country. It is unlike the traditional Tory ideology as I knew it that wants to turn everybody into bureaucrats. It is beyond comprehension why they went ahead with this.
At any rate the point is we are going to listen to alternatives. I do not know of anyone in Canada who really wants to defend the status quo. The only people I run into who want to defend the status quo are the few people who are benefiting by the status quo.
Two years ago, there were 2,200 foreign multinationals whose retained earnings were in excess of $25 million which did not pay any income tax in this country. I am not talking about companies with losses carried forward. I am talking about companies that had tax preferences built into the tax act over a number of years.
Those companies resist change. They do not want the status quo changed. They want it to stay the same way it
is.	I believe that most members on that side of the House believe that all those tax grants worth about $40 billion to $50 billion given to major corporations in this country should be re-evaluated in terms of meeting a public policy objective. That is number one. That particular aspect of the tax act has to be re-examined.
What about the underground economy? The government's former minister of revenue, now the Minister of Communications, said in 1985 that the underground economy, the cash economy, the alternative economy during the period pre-GST, was approximately $45 billion with a loss to the treasury of about $9 billion. That was in 1985.
Some experts say today that it is in excess of $100 billion. When you have an underground economy like that, does it not say that the status quo is not working. Why do people go underground? They go underground because the system is so unfair and so complex. That is an issue that has to be addressed. We are going to have to address it. We cannot do it overnight. We are going to need the time.
What about fairness? Let us talk about fairness. Can you honestly tell me that the government supports the notion where two years ago about 7,900 people in this country whose incomes were in excess of $250,000 and some in excess of $1 million paid absolutely no income tax? They did this legally because of tax preferences that were in the system. I am not against people making money. I am not against people being rewarded for their achievement and making money. But you cannot in the name of fairness have a system where people are making that kind of money and not paying any tax at all.
Some people will say: "Well, what is the amount of tax that they would be paying?" It is not just the amount of tax that they would be paying; it is also the symbolism of
it.	If somebody is making $40,000 or $50,000 a year and feels that they are more than carrying their weight and somebody living five blocks away or next door is making $2 million and not paying any tax, the symbolism of that stinks. It hurts productivity.
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That is one of the problems we have in this country related to productivity. When people do not feel they are being treated fairly, they do not work as hard. I do not just mean physically but intellectually.
You have to address that tax act in a comprehensive way in the area of fairness. I know it was a Liberal initiative which was started in 1971 when we talked about the private family trusts.
It was absolutely sick that two weeks ago we passed that bill. It has an unlimited shelf life in terms of not being able to do an analysis or an accountability of the funds in those family trusts. I am not talking about confiscation here. We are talking about fairness and we are talking about people paying their share.
What are we going to do with efficiency? The courts are backlogged with tax cases where lawyers are able to say: "Well, the exceptions and the exceptions to the exceptions are going to allow us to take another two or three years to fight or appeal this particular tax case that we have in the courts right now because the act is so cumbersome and so complex". The Auditor General said just last year that the actual forms right now for the individual are not really serving the taxpayer. This was said by the Auditor General.
I know that the Minister of National Revenue is going to great pains and lengths to try and develop a form but the bottom line is that the status quo is just not working. I believe that tinkering with it, band-aiding it and altering it is just not going to do.
I make no bones about it. I have never hid the fact. This is not my party's position and I say that openly, but in an effort to advance the debate in a constructive way on the issue of tax reform, I say that it is time to go back to square one. It is time to take that 20,000 page tax act and just scrap it and have a single rate of taxation on the personal side and a single rate on the business side.
On the personal side, unlike the remark that the NDP made, where we are saying that we want somebody that is making $100,000 a year to pay 20 per cent and we want the person making $ 16,000 a year to pay 20 per cent. That shows a total lack of understanding of what the single tax
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is all about, not unlike the comment he made about not wanting a domed stadium. If I had the unemployment he has in Vancouver right now, I would be asking for a domed stadium because of the spin-offs it brings.
Getting back to the tax thing, with a single rate of tax we build in progressive credits: credits for senior citizens, credits for families with children, a line to make sure that charities are protected. We do not touch the registered retirement savings plan. After we put those lines in and a basic deduction, we have a single rate on a postcard size of 20 per cent. Everyone is in the loop. It does not matter whether one is making $30,000, $50,000, $100,000, $1 million. We are going to reward productivity under the single tax system. The harder one works and the more one makes, the more one has in one's jeans.
I believe personally the current system works against entrepreneurship. It punishes entrepreneurship. It punishes achievement. That is exactly what Allan Mclnnis says. He is totally behind the single tax.


Patrick (Pat) Anthony Sobeski: Not in the foreword of your book.


Dennis Joseph Mills: Allan Lymen Mclnnis, one of the best chartered accountants in Canada, is totally behind the single tax idea. Where he and I differ, he also likes a value-added tax. He likes the GST.
The hon. member brought him up, and he is a good Tory friend who happened to endorse my book. I want to tell the member for Cambridge that Allan Lymen Mclnnis, one of the best chartered accountants in Canada who supports the single tax said that this GST was the most poorly designed value added tax on the planet. We have tax on the salted peanuts, no tax on the unsalted peanuts, tax on the warm pizza, no tax on the cold pizza. There are 355 pages of amendments. Do not tell me, Mr. Speaker, that those guys understand what those amendments are all about. There is just no way.
I have one minute left. I want to do the small business side it, of the single rate on the business side which would be 20 per cent with a small business tax credit.


Gregory Francis Thompson: Mr. Speaker, this has been an entertaining speech. As the hon. member pointed out, this is not his party's position for a number of reasons but we do not have to get into that.

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Obviously the previous speaker recognizes the old manufacturers' sales tax. I know if we are talking about the GST in isolation I can buy into much of what he says, but we have to remember, and I know that he does and he is nodding in agreement, the old manufacturers' sales tax had 22,000 exemptions.
As the member next to me from Cambridge mentioned earlier today, under the old manufacturers' sales tax, avoidance of that tax often depended on how much money one had to spend to defend oneself in tax court. There were 22,000 special exemptions. I do want to point out-and he has acknowledged that, Mr. Speaker. He is also acknowledging that his party cannot tamper, fool or change. He is suggesting that if we are going to do something, ditch it completely.
I also want to point out that of the 1.7 million businesses that are registered to collect the GST, 80 per cent of those businesses are eligible to use the simplified accounting methods, which they do. Also, about 90 per cent can choose to file only one GST return per year.
In terms of the technicalities of Bill C-112, it is an attempt to simplify some of those areas, as pointed out. The difficulty is that society today unfortunately is more complicated than it should be and I guess we can blame all levels of governments for that. This is an attempt to simplify the act. I think it will go a long way in simplifying the act and hopefully the members can support it.


Dennis Joseph Mills: Mr. Speaker, I want to clarify my remarks when I talk about my party's position.
I should say that the young Liberals of Canada, at our last policy convention put forward the single tax as a priority resolution. It passed on the floor of the assembly with very little objection. It is at our platform committee right now and in a responsible way we are examining all the options.
A party does not just take a position on one idea because one or two members of Parliament support it. There has to be a period of debate. One of the great assets of being a Liberal is that it allows you to be creative without being stigmatized.
The notion of advancing debate and putting forward alternatives is a healthy exercise. I say this in all
seriousness. I have received many good ideas in refining the single tax from Conservative members. The member for Calgaiy North has come up with some fantastic ideas.
By the way, I see now that the leadership candidates, the Minister of National Defence, the Minister of the Environment and the member for Etobicoke-Lake-shore in their debate in Calgary are now starting to say that maybe the time has come to think about this notion of going back to basics and having a single tax. We know that the Minister of National Defence has a race on her hands now, which I think is healthy for Canada, but it will be interesting to see what happens when they get into the tight comers, when they talk about specific positions. The members on that side talk about specific positions here. Let us see in the next 30 days what specific positions the leadership candidates take.


Ross Harvey: Mr. Speaker, one of the main reasons, in fact the main reason, I am a democrat is that I have a great deal of respect for the expressed will of the people.
In fact it is axiomatic that in a democratic society the legitimacy of government rests on the consent of those governed. We have elaborated that in our parliamentary system to include the concept of the mandate, which simply put is that those competing for election in a general election place before the people their proposals for major government action in the coming parliamentary term.
This, with luck, elicits a series of alternatives, among which a voter may pick and choose. The constraints, of course, are that unfortunately you cannot choose something from the Conservative agenda and something from the Liberal agenda and something from the New Democrat agenda. Sooner or later you have to sort through your choices and come to one final decision.
However that is the nature of democracy in our country. I would submit it is crucial to the proper functioning of our democracy that the idea of mandate be grasped and maintained.
How can the hon. member possibly justify the apparent policy of his party as regards taxation, which is surely one of the fundamental elements of government and
May 10, 1993

which currently consists of the government saying elect it and it will establish a committee. God only knows what that committee will come up with, but whatever it is the government will implement it.
How in Heaven's name can the member square that with the fundamental democratic concept of an earned and implemented mandate?


Dennis Joseph Mills: Mr. Speaker, the member made a very good point in the sense that when I campaigned against the New Democrats in the last election I campaigned very specifically for amendments to Meech Lake, against the free trade deal, against the value added tax, and we had a pretty good environmental approach. I believe those were the reasons I was elected.
In this particular campaign all of those same feelings that I had then are still with me. In the area of taxation what I will be saying to the people in Broadview- Greenwood is that I, as their member in that particular area, have this idea that I have been working on with many of them and others from across Canada called the single tax. It is not my party's position but over the course of a year we are going to see if there are other people in the country who have alternatives, and I am sure there are. If they elect me I am going to be pushing within my party and across Canada for a comprehensive tax return, and I think that is a constructive way to go. My constituents do not mind it.


Giuseppe (Joseph) Volpe: Mr. Speaker, I want to compliment my colleague from Broadview- Greenwood for understanding the concept of Parliament, because a parliament is a location where we come to debate and advance issues. For him to legitimately, either as an individual or as a member of a party, advance tax reform is absolutely crucial to the maintenance of the health of this type of an institution.
On that basis I want to ask my colleague from Broadview-Greenwood how he would see the concept of tax reform and government concern, government intervention if it comes to that, in establishing a climate whereby small businesses-lespetite entreprises-and consumers could avail themselves of the kinds of generosity this Parliament gives to the banking system in order that it build up a critical mass financially, in order to lay out those loans that would make our businesses function.
Government Orders
We have not addressed that in these amendments but I wonder if my colleague could comment on how or why we should.


The Acting Speaker (Mr. DeBlois):: The hon. member
has 30 seconds.


Dennis Joseph Mills: Mr. Speaker, in 30 seconds I would do what the Minister of Finance has promised to do and what members behind him promised to do in the last few months. We have to call in the banks of this country and tell them they are not doing what they committed to do for small business. They are not supporting the Small Businesses Loans Act and until we get that working all of our small businesses are going to continue to feel the frustration and need of credit.


The Acting Speaker (Mr. DeBlois):: Is the House ready for the question?


Some hon. members:: Question.


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


Some hon. members:: Agreed.


Some hon. members:: On division.


[Stage Direction]
Motion agreed to, bill read the third time and passed.

Michael Holcombe Wilson: that Bill C-124, An Act to amend the Currency Act, be now read the second time and referred to a legislative committee of the Economics envelope.


Jean-Marc Robitaille: Mr. Speaker, I am pleased to participe in the debate on Bill C-124.1 would like to make a few comments on this bill which is now at second reading.

May 10, 1993
Adjournment Debate
This legislation is an act to amend the Currency Act. The proposed amendments have to do with part II of this act, which defines the investment powers of the Exchange Fund Account. This account is of course the main depository of currency reserves in Canada.
This is essentially an internal management bill which will have the effect of modernizing the powers of the Exchange Fund Account. It will update and clarify the investment power provided for in the law, in view of the new opportunities that have emerged and changes that have occurred on the financial market over the past few decades. It will also correct certain inconsistencies in the present wording of the Currency Act.
By broadening the range of investments in high quality reserve assets that can be made from the Exchange Fund Account, we will effectively increase its earning capacity. This increase will immediately translate into savings on foreign exchange, which will not only help make government management and administration more cost-efficient, but, more importantly, will help achieve the critical objective of reducing the deficit.
I want to tell all hon. members of this House that these changes will in no way affect the management philosophy of the Exchange Fund Account, which philosophy bears the stamp of caution and responsibility. Our foreign exchange reserves will continue to be invested in assets of the finest quality. No further risks will be involved for credit, because new investments will be subject to the same standards as those presently governing securities and deposits.
Under the amended act as under the present one, you will only be allowed to invest in a limited number of high quality assets consisting mainly of securities issued by governments or by government-related institutions and deposits in financial institutions. The specific assets that go in those general categories will be designated by the minister so that the highest investment standards can be maintained.
With regard to the specific changes proposed in Bill C-124,1 will try not to use terms that are too technical. Basically, this bill is designed to relax certain restrictions concerning the kind of securities that can be acquired by the Exchange Fund Account and the maturity date of those securities. According to the bill, the fund would be authorized to acquire securities issued or guaranteed by governments or by governmental agencies or institutions, and not only securities issued directly by eligible governments as is the case now under the present law.
Besides, the present legislation includes some restrictions with regard to the maturity of securities issued by governments other than the United States government and by international agencies. Those restrictions would be removed, with the result that securities issued by all the governments, international agencies and eligible government institutions and agencies would be treated the same way as securities issued by the United States government.
In that respect, I would point out that most of the investments made by the Exchange Fund Account are dominated in the currencies of the industrialized countries with the strongest economy such as the United States, Japan and Germany.


The Acting Speaker (Mr. DeBlois):: I am sorry to interrupt the hon. member, but it being 6 p.m., a motion to adjourn the House under Standing Order 38 is deemed to have been moved.



PROCEEDINGS ON ADJOURNMENT MOTION


William Warren Allmand: Mr. Speaker, on April 22 I asked the Minister of Finance when he said that he wanted to reduce the deficit, why the government was not renewing the work permits of refugees who had previously been granted work permits, had jobs and had satisfied employers. Why was the government putting these people on welfare and unemployment insurance rolls when they had been working and paying taxes and were ready to continue working and paying taxes?
It is very difficult to understand why the government would do this. However the situation is the result of the new immigration law, Bill C-86, which was put into operation on February 1. Under the previous law, refugees were given work permits once they passed the first stage hearing. At that time there were two stages of
May 10, 1993

hearings, a first stage and a second stage. Refugees were granted their work permits at the first stage hearing.
Under the new law there is only one hearing at the end of the process. At that hearing, if the individual is recognized as a refugee, he or she is then given a work permit. That is all right. We agree with the one stage hearing, but something should have been done to make sure that those who had work permits under the first stage hearing under the previous law would have their work permits continued or renewed. However, that was not done. We warned the government during the debate on C-86 that this would happen. We tabled amendments to take care of that matter, but the government would not listen. In its ordinary arrogant way it simply ignored us and rammed the bill through as it was.
Soon after the new law came into effect on February 1, the hens came home to roost. We immediately heard of cases where refugees had obtained permits under the old law, these permits had now expired and therefore they had to be laid off. Employers who were satisfied with good workers had to lay them off because the government had no process to renew the work permits.
We raised this matter in committee twice, on February 17 and March 24. Twice at the committee officials and the minister said that this result was not intended by the new law and would be corrected, they said, immediately.
On April 22 when I asked the question, two months after from having raised it in committee, it still was not corrected. Now it is three months later and still it is not corrected. The numbers of refugees affected by this new law have been growing larger and larger every day.
The government, through poor management, lack of planning and arrogance did not take care of this when it introduced this and passed the law. So on the one hand the government says it is concerned for the deficit and on the other hand by bungling it is forcing people on to welfare which contributes to the deficit.
So I ask again today: When will the government proclaim regulations necessary to correct this ridiculous situation? I want an exact date. When will the government restore these work permits so that people who were working can continue to work and pay taxes rather than collect welfare? When will this be done?
Adjournment Debate


Mr. Lee Clark (Parliamentary Secretary to Minister of the Environment):: Mr. Speaker, it was indicated to the hon. member when officials appeared before the standing committee last week, an amendment to the immigration regulations governing the issuance of employment authorizations came into effect on May 4, 1993. This amendment largely addresses the issue raised by the hon. member, according to my understanding.
It provides authority to issue employment authorizations to refugee claimants who were found to have a credible basis for their claims to refugee status prior to February 1, 1993 and who were consequently eligible to apply for employment authorizations without having to have their job offers validated.
The hon. member will recall officials indicated that where possible, measures were taken to issue employment authorizations to those claimants who were inadvertently affected by the previous regulations.


PEACEKEEPING
Jesse Philip Flis: Mr. Speaker, as far back as February 161 asked a question of the Minister of National Defence to clarify the mandate and the mission of our UN peacekeeping forces in Bosnia-Her-cegovina. It was crucial at that time because 25,000 people in eastern Bosnia were cut off in the town of Cerska while a UN convoy of food and medical supplies was parked by the side of the road just 20 miles away and was not able to get this humanitarian aid to the people, the children and women who were starving.
At the same time the mandate of our peacekeeping forces was very confusing. The Secretary of State for External Affairs was saying that Canadian peacekeepers should take a more active role in the region. The Minister of National Defence got an additional 1,200 troops but she did not know how she was going to use them. She did not know what their mandate was. She said in her reply that the second battalion of the Royal Canadian Regiment was being deployed on the basis of

May 10, 1993
Adjournment Debate
what we call a permissible environment. What does the minister mean by permissible environment? That to me is not a clear mandate nor a clear mission given to our troops.
As I speak today we know that U.S. President Bill Clinton reaffirmed his readiness to intervene militarily. What is Canada's position if that happens? As a country which has a reputation as a trusted peacekeeper wherever and whenever we should be asking ourselves what is the Canadian position if an American-led offensive action is taken in Bosnia-Hercegovina. Canadians want to know.
Should Canada preserve its position as a neutral peacekeeper? That is a role which some country must assume once all the shooting stops and it is time to rebuild. Or do we have a moral obligation to intervene now offensively or defensively? Canadians want to know if Canada joins a military alliance the question is as to how far and do we join such an alliance if it does not have UN sanction? Under whose command? NATO command? U.S. command? We have to have a debate in this House to clarify this. How many Canadian lives are we willing to risk and would it be worth it all?
It seems to me that this government, and I am tossing my partisan politics aside because of the seriousness of this matter, is responding to the crisis in Bosnia-Hercegovina without any game plan whatsoever.
How many times in this House have we in the opposition asked for the precise rules of engagement and to this date not received any? The government has provided absolutely no assurances to the families of Canadian servicemen as to the safety of our troops there.
This is a conflict that has affected more Canadians than any other in our history, especially since the Second World War. The government forgets that thousands of Canadians, be they of Croatian heritage, Muslim heritage, Serbian heritage, have members of their immediate families in Bosnia-Hercegovina.
It is not only members in this House, it is Canadians generally, it is the families of the peacekeeping troops and it is the friends and relatives who want a full debate so that we know where the government stands.


Mr. Rob Nicholson (Parliamentary Secretary to Minister of Justice and Attorney General of Canada):: Mr. Speaker, I am pleased to answer on behalf of the Minister of National Defence.
On August 13, 1992 the UN Security Council adopted resolution 770 authorizing the use of all emergency measures necessary to permit the delivery of needed humanitarian assistance in Bosnia-Hercegovina.
At the London peace conference on the former Yugoslavia the SSEA stated that given United Nations Security Council resolution 770 Canada was prepared to offer up to 1,200 additional Canadian forces personnel to the UN for an expanded UNPROFOR. On September 14, 1992, the UNSC endorsed the report on the situation and agreed to expand the UNPROFOR to protect humanitarian convoys in the areas. As a result 1,200 members based on the 2nd Battalion of the Royal Canadian Regiment were deployed in November to provide security for humanitarian aid convoys in the Banja Luka area of Bosnia-Hercegovina.
Unfortunately, the deployment in the area was refused by local authorities and the UNPROFOR was unable to negotiate a satisfactory solution. However, the battalion remained available for duty. It is in that regard that one company of the 2nd Battalion of the Royal Canadian Regiment was temporarily deployed to the former Yugoslav Republic of Macedonia upon a UN request to conduct observation and reporting duties on the borders.
The Canadian battalion's mandate is to increase the presence of the UN with a view to monitoring humanitarian aid in the safe area as agreed to by all parties. In order to save lives UNPROFOR is helping the parties fulfil their commitment to each other.
In conclusion, Canadian forces personnel serving in the area operate under United Nations PROFOR command and have always had a clear mandate and the foremost concern of our government is their safety.


NATIONAL DEFENCE
George Saunders Rideout: Mr. Speaker, I am rising on a question I asked back on February 18
May 10, 1993

concerning the closure of the Canadian Forces Base Moncton and the depot that is associated with the base.
As part of history, I think a headline in The Times Transcript tells it all: "From $100 million expansion to zilch". The article goes on:
Canadian Forces Base Moncton has gone from the verge of a $100 million modernization to extinction in a matter of weeks.
Community leaders expressed shock at the base closure so soon after the Mulroney government had promised a $100 million upgrade of the base beginning in 1991.
Former Defence Minister Perrin Beatty had announced the $100 million commitment to CFB Moncton at former MP Dennis Cochrane's nomination meeting last June. The commitment was repeated by government officials during the November election campaign.
My question is related to the second announcement which resulted in the closure of the depot as well. The result is that the military facility as well as the depot have both been closed. I point out in the question I ask and the quote that I just read from a newspaper article in 1989 that this gives an idea of how this government has played with the lives of the people at that base and depot.
On February 18, 1993 the minister of defence announced that she was going to have another review of this whole decision. There was an announced closure in 1989 and another in 1992. Now in 1993 she again is playing with the people of the depot by saying to them: "I will have another review".
I asked her some very straightforward questions. How long is the review going to take? How encompassing is the review going to be? In the meantime, has the government said to stop the closure of CFB Moncton and the depot so that we can await the outcome of her review and not allow that process to carry on?
The minister was not in the House at the time and so it was answered by another minister who said in effect that the process was still unfolding. Then this minister lines up a meeting with the base and community officials who are dealing with this closure. At the last minute the minister has to leave and cannot attend the meeting. This leaves the community leaders high and dry again. A general is sent down a week later to say that the process is still unfolding, the base is going to close and not to expect very much in the way of change from the government position.
Adjournment Debate
Again, when is this review by the minister going to be completed? Has she issued a stop-work order so that the closure is not a fait accompli by the time the review is completed? Will she allow the citizens and the citizens' committee in Moncton dealing with this issue to have input into the decision? Those are the answers I would like.


Rob Nicholson: Mr. Speaker, the concerns expressed here about the future of the Moncton depot and the jobs of many of the hon. member's constituents are clear and understandable as is his desire for answers.
Let us remember how the issues arose. First of all, following a lengthy review of depot rationalization, the previous minister decided to close the Canadian forces supply depot in Moncton. The Minister of National Defence is very much aware of the concerns that have been raised about the decision and has agreed to review the issue.
The results of the minister's review, I can tell the hon. member in the House, will be made public. Snap decisions will not be taken. Our rationalization of DND infrastructure is important. A recommendation under review is to reduce the number of supply depots to two, one for western Canada and one for eastern Canada.
I can point out that the number of depots in this country have been on the decline from 34 to 21 to five and now the proposal to further reduce to two. Times change. Technology, methods of transportation, inventory and communication have evolved allowing us to rethink depot locations. To rationalize in this sense is to seek to reduce the overheads involved in past methods of storage.
The minister brings a fresh pair of eyes to this issue. Her review will allow a thorough consideration of the various perspectives of the decision taken and the appreciation of the complexity of this issue precludes me at this point of suggesting when that decision will be made. However when the minister is certain that viable, broadly researched options have been presented and considered, a decision will be rendered.
As the minister has stated before, the best solutions will serve the Canadian forces' needs and make the best use of taxpayers' money.

May 10, 1993
Adjournment Debate
The hon. member who has raised this issue before will not be surprised by this. He will I know await the minister's decision with great interest.


INDIAN AFFAIRS
Mr. Guy H. Arseneault (Restigouche -Chaleur):: Mr. Speaker, on February 17, I had the honour and the privilege to put a question to the government concerning our native people.
As background information, I would like to quote the question I raised on February 17.
Mr. Speaker, recent events at Big Cove, at Davis Inlet and at numerous other communities across the country illustrate that aboriginal Candians are crying out for our help, yet this cry is falling on deaf ears.
In the case of Big Cove the federal government has yet to take any action on a coroner's inquest recommendation calling on the federal government to develop community-based mental health programs.
I now come to the question itself.
Will the Prime Minister give the residents of Big Cove his assurance today that he will personally take this file under his consideration and that the tragic crisis facing this community and others will receive his government's immediate action?

As we all know, the minister of health and welfare answered the question and, to tell you the truth, I appreciated the answer. It was a very sincere answer. I think he was above board with it.
I felt that in his answer there was an indication by the minister that there was a problem getting information to the proper ministry. In fact the recommendations that were made by the coroner and the request by the chief and council of Big Cove did not get to his department at the federal level. They were refused in the maritimes section.
I would like to point out at this time that in The Ottawa Citizen this past weekend there was a story that highlighted the deplorable facts that exist across Canada. It was entitled: Indian Youth Challenged. Here are some of the facts: Overcrowding in reserve homes is 16 times the national rate. Life expectancy for aboriginal peoples is more than eight years lower than for other Canadians. On reserve Indians have the lowest average personal income at one half the level of the Canadian average.
Approximately 51 per cent of all Indian children live in poverty with that level rising to 64 per cent in some provinces. Indian teens are five to six times more likely to die from self-inflicted injuries than other teenagers.
As we can see the situation as it exists in Canada is deplorable to say the least. What about the Conservative record? The hon. member will speak for the government later. If we look at the last nine years, we see that the answer to these problems has been a lot of cutbacks in various programs.
This evening I would hope that the hon. member representing the government would assure Canadians, and especially aboriginal Canadians, that these cuts will stop, that funding will be returned to former levels and that programs will be developed and implemented by aboriginal people for the aboriginal people.


Mrs. Barbara Sparrow (Parliamentary Secretary to Minister of National Health and Welfare):: Mr. Speaker, on behalf of the Minister of National Health and Welfare I am pleased to inform you, and of course my hon. colleague, that the Department of National Health and Welfare is funding a suicide prevention program in Big Cove and we will continue to provide psychological counselling to all those in need. The department is also going to be helping the community fund a community survey and study into the dreadful youth suicide.
The chief of Big Cove has established a Big Cove services co-ordinating committee to ensure a co-ordinated approach to implementation of a wide range of community based programs aimed at the various factors which underlie this recent wave of suicides. Membership includes representatives of the Department of National Health and Welfare, the Department of Indian Affairs and Northern Development, the province of New Brunswick and the Big Cove First Nation.
This comprehensive community based approach with government departments working in partnership with Big Cove First Nation is I believe the veiy best possible way to begin a solution to the tragedy of suicide in this community. The Big Cove services co-ordinating committee will also be reviewing the coroner's inquest recommendations.
To date Big Cove has accessed funds through the native component of the community mental health child development program under our Brighter Futures initiative to conduct a community-based mental health needs assessment. Future program support is available through this initiative based on described community needs.
May 10, 1993

There is $145 million available under the mental health child development component and $5 million for program parenting skills of the Brighter Futures initiative to assist communities to develop their own community-based mental health programs, using of course training of the band workers and assistance for planning and ongoing community support programs.
In conclusion I would like to say that we will monitor this particular situation very closely.
Adjournment Debate
[Translation\


The Acting Speaker (Mr. DeBlois):: The motion that the House do now adjourn is deemed adopted. The House therefore stands adjourned until tomorrow at 10 a.m., pursuant to Standing Order 24(1).


[Stage Direction]
The House adjourned at 6.22 p.m.
[Stage Direction]
Tuesday, May 11, 1993