1993-03-30

[Stage Direction]
1991-92 ANNUAL REVIEW
Hon. Thomas Siddon (Minister of Indian Affairs and Northern Development):: Mr. Speaker, under the provisions of Standing Order 32(2), I have the honour to table, in both official languages, copies of the 1991-92 annual review of the Western Arctic Inuvialuit Claim Implementation Report.


GOVERNMENT RESPONSE TO PETITIONS
Mr. Peter L. McCreath (Parliamentary Secretary to Minister for International Tbade):: Mr. Speaker, pursuant to Standing Order 36(8), I have the honour to table, in both official languages, the government's response to eight petitions.
[Editor's Note: See today's Votes and Proceedings.]


Mr. Bill Attewell (Markham-Whitchurch-Stouff-ville):: Mr. Speaker, I have the honour to present, in both official languages, the report of the legislative committee on Bill C-102, an act to amend the Customs Tariff,
the Excise Act, the Excise Tax Act, the Customs Act, the Criminal Code and a related act, with amendments.
[Editor's Note: See today's Votes and Proceedings.]


PETITIONS
Mrs. Shirley Maheu (Saint-Laurent-Cartierville):: Mr. Speaker, I have the pleasure of presenting several petitions pursuant to Standing Order 36.
Taking into account that Canadian universal medicare is a principle of our Canadian identity, recent cutbacks to health care have undermined the principle of universality in Canada.
Consequently the petitioners request that Parliament take all necessary measures to enshrine in the Constitution the obligation to provide universal publicly funded hospital and medical care to all citizens.


Mr. Ronald J. Duhamel (St. Boniface):: Mr. Speaker, petitioners from my riding in Manitoba say that today's pensions do not adequately meet the needs of the elderly. They say that the present system is inadequate and that a distressing number of seniors are living at or below the poverty line. They therefore call upon the government to review its policies in this area.


Ron J. Duhamel: Mr. Speaker, in this second petition, your petitioners humbly pray and call upon Parliament to ensure that steps are taken by the CRTC to reduce and even eliminate inappropriate language and violence on radio and television.
They say that these acts of violence are often in direct contradiction to what our families are trying to do. They also point out that it is unnecessary to use inappropriate language or show acts of violence to inform people.

March 30, 1993

Routine Proceedings


[Stage Direction]
They call upon the House to reject the North American free trade agreement and to terminate the U.S.-Canada Free Trade Agreement.
Ron J. Duhamel: Mr. Speaker, I have as well a petition from individuals who ask that the GST be removed from books and reading materials. They point out that there has never been such a tax since Confederation and they underline that it goes against certain government objectives of increased productivity and competitiveness.
They believe this is counter to a fundamental principle in a democracy, and that is to have an informed citizenry.


Mr. Jack Whittaker (Okanagan -Similkameen-Merritt):: Mr. Speaker, it is my pleasure pursuant to Standing Order 36 to present petitions on behalf of a number of people throughout the province of British Columbia, mostly in mainland British Columbia.
These people suggest that the proposed North American free trade agreement has resulted in even greater trade concessions being demanded of Canada and, if implemented, 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 in conserving Canadian natural resources for Canadian benefit and advancing native social programs.
They call upon the House of Commons to reject the proposed North American free trade agreement and to recommend to the government that it use the termination clause to end the U.S.-Canada Free Trade Agreement.


Mr. Jim Karpoff (Surrey North):: Mr. Speaker, I too have the privilege pursuant to Standing Order 36 to file two groups of petitions.
One points out that the proposed North American free trade agreement will result in greater trade concessions being demanded of Canada. It particularly points out that future Canadian governments will not be able to reinstitute a generic drug program in this country.


James Capsey (Jim) Karpoff: Mr. Speaker, the second petition I have is signed by a large number of residents within my riding of North Surrey.
It points out that the closure of the Surrey and New Westminster immigration offices will mean that people will have to travel to Vancouver in order to secure service. It also points out that there will be a loss of jobs in New Westminster and Surrey and that there will be a reduction in service in spite of the fact that this office made $4 million last year.
It calls upon the minister and this government to reverse this policy decision and keep the offices open.


QUESTIONS ON THE ORDER PAPER
Peter L. McCreath: Mr. Speaker, I ask that all questions be allowed to stand.


Ron J. Duhamel: Mr. Speaker, I rise to get some direction if possible with respect to my question on the Order Paper dated December 10, 1992 wherein I request totals for procurement by the federal government from the province of Manitoba as well as from the United States for the last number of years.
I want to remind the House that this is the 100th day. The House will perhaps recall that I had another question on the Order Paper that took it well over a year to respond to. That was on the goods and services tax.
I am very anxious to receive the information as quickly as possible on procurement from Manitoba by year and from the United States by year.


Mr. Speaker:: The hon. member has made his point. I am sure it will be duly noted by those who will be following the matter. I thank the hon. member.
Shall all questions stand?


Some hon. members:: Agreed.

March 30, 1993

Government Orders



GOVERNMENT ORDERS

[Stage Direction]


Thomas Edward Siddon: Mr. Speaker, I move, pursuant to Standing Order 78(3):
That, in relation to Bill C-92, an act to amend the Income Thx Act, the Canada Pension Plan, the Income Tax Conventions Interpretation Act, the Tax Rebate Discounting Act, the Unemployment Insurance Act and certain related acts, not more than one further sitting day shall be allotted to the consideration of report stage and one sitting day to the consideration of the third reading stage of the bill; and
That, fifteen minutes before of the expiry of the time provided for Government Orders on the day allotted to the report stage consideration and on the day allotted to the third reading stage consideration of the said bill, any proceedings before the House shall be interrupted, if required, for the purpose of this order and, in turn, every question necessary to dispose of the stage of the bill then under consideration shall be put forthwith and successively, without further debate or amendment.


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


Some hon. members:: Agreed.


Some hon. members:: No.


Mr. Speaker:: All those in favour of the motion will please say yea.


Some hon. members:: Yea.


Mr. Speaker:: All those opposed will please say nay.


Some hon. members:: Nay.


Mr. Speaker:: In my opinion the yeas have it.
And more than five members having risen:


Mr. Speaker:: Call in the members.


PAIRED MEMBERS
[Stage Direction]
nil/aucun
The Acting Speaker (Mr. DeBlois):: I declare the motion carried.


MEASURE TO AMEND
[Stage Direction]
The House resumed from Monday, March 29, consideration of Bill C-92, an act to amend the Income Tkx Act, the Canada Pension Plan, the Income Tax Conventions Interpretation Act, the Thx Rebate Discounting Act, the Unemployment Insurance Act and certain related acts, as reported (with amendment) from the Standing Committee on Finance; and Motion No. 1.
James Capsey (Jim) Karpoff: Mr. Speaker, I am pleased to be able to speak on this legislation today.
There is growing concern right across Canada that we are having a problem with the fairness of our tax system. Over the last number of years Liberal and Tory governments have introduced a series of tax loopholes and tax measures that have made it inequitable for people across Canada.
Many of the tax policies that have been brought in over the last 15 years to 20 years have resulted in a dramatic shift of taxation from corporate structure to personal structure. At one time the tax bill in Canada was shared equally between corporations and people, about 50 per cent. Over the last number of years through successive tax measures by Liberal and Tory governments this has now shifted so that the income tax burden is being paid approximately 80 per cent by individuals and only 20 per cent by corporations.
Thx policy has also been largely responsible for the increase in the shifting of financial resources from the middle income people to the very wealthy. This has accelerated particularly since the mid-seventies where increasingly there is a group of rich people at the top, a shrinking middle income group in the middle, and a growing poor at the bottom.
The most recent information shows that the top 10 per cent of earners in the country increased their share of the total income from about 23 per cent to 26 per cent over the last two or three years. The share of total income of the bottom 40 per cent has been steadily declining.
The GST was one tax mechanism that Canadians know is blatantly unfair. It is particularly unfair for working families. A big bite has been taken out of their income to pay for the unfair GST. Now we have the government again stepping forward with a tax measure that will help only a few wealthy families in Canada by extending the 21-year rule on family trusts.
It is very difficult to get exact information on family trusts in Canada because of the privacy provisions of the Income Tax Act. Therefore we do not know a great deal, either on a cumulative basis or on an individual basis, about what is involved in family trusts and what kinds of funds are being held within family trusts.
However there are some people within the industry who have made some very good and solid calculations. It is now estimated that there is over $70 billion held in these kinds of trusts. This is not a large amount as a percentage of the total assets held by persons and unincorporated businesses in Canada, which amounts to about $2.4 trillion. The family trusts are only a small percentage, about 3 per cent.
We do not know very much about individuals but there are examples that have come out through court records. One example is the family trust established by Samuel Bronfman for his daughter in 1969. At that time court documents showed that it was valued at $70 million. It has been exempt from the capital gains tax since 1969. Today it is estimated that the trust is worth in excess of $600 million.
It seems to me when we are asking single parents who earn less than $20,000 a year to pay taxes and when we are asking old age pensioners with incomes of less than $1,000 a month to pay taxes, we could ask wealthy families who hold assets in the area of $600 million to pay their fair share of taxes and not give them any further extensions or exemptions.
This exemption or extension costs the average Canadian money because we have to increase taxes on working families in order to make up for the loss of revenue. As a result of the fact that we do not have
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details on family trusts the loss of revenue can only be estimated. A conservative estimate is that if only 1 per cent of the $70 billion in trust was subject to tax in a year at a marginal tax rate of 30 per cent it would raise over $200 million.
To make up $200 million we have to increase the taxes on working families or forgo vital programs in this country, programs that would create jobs or benefit people, such as day care. This $200 million would pay for half of the estimated cost of a universal day care program in Canada. We are all paying for this kind of tax policy.
This is not only the opinion of people in the New Democratic Party. There are also a number of tax professionals who share this view. Sidney Goldstein of Goldstein, Goldstein and Goldstein in Ottawa has said:
There is no question that it represents a massive windfall for existing trusts.
Kathryn Bush of Blake Cassels has said:
A cynical person might suggest that pressure from influential political supporters also should be listed as a reason for the draft legislation.
That is influential political supporters who have large assets. Neil Brooks, associate dean of Osgoode Hall Law School, has said:
The government has given Canada's wealthiest families notice that it intends to give them a gift worth several billion dollars.
I am pleased to be able to support this amendment but I find myself smiling a little because the 21-year rule was introduced by the Liberals. It is obvious from reading Hansard of February 23, 1993 that even in the last two months the Liberals have done a flip-flop.
At that point the member for Sudbury made it quite clear that the Liberals supported the government's extension of the family trust beyond the 21-year period and was quite critical of the fact that the NDP would oppose it.
Now the same member is the one who has made a motion to delete this section. I am sure it is like many other policies that the Liberals expound in that if they really sat down and looked at it they would understand that the NDP position is the correct position.
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Mr. George S. Baker (Gander-Grand Falls):: Mr. Speaker, it is truly amazing that we are sitting today in the House of Commons and we have a government that puts closure on a bill just a day after it was introduced. The closure it has put on the bill is very significant.
This bill amends the Income Tax Act. According to the experts, a couple of deans of law schools in Canada, from the University of Victoria and the associate dean of Osgoode Hall, tax experts who appeared before the committee, this piece of legislation will give the biggest tax break to billionaires and multimillionaires that some of them can think of in our entire history. This bill that is going through the House would give the biggest tax break to multimillionaires and billionaires.
The government stands today and puts closure on it. In other words, we have one day, today, for report stage and one more day on third reading. Why would the government do that? If any Canadians who are today filling out their income tax returns knew what we are doing in this Chamber they would be so shocked that if they could only organize themselves, 14.7 million ordinary Canadian taxpayers, they would march on this place.


Mr. Allmand:: It is going through too fast.


George Baker: That is right. It is going through and nobody knows, but if they only knew what the Government of Canada was doing they would march on this place. This is the same Parliament which sat down just recently, and what did we do? We changed the Income Tax Act so that if the income tax department owes people money after April 30 the interest does not accumulate until 45 days after the date they file or April 30, whichever is later. However, if people owe the department money their interest comes due on April 30. This Parliament did that. This sitting of Parliament did that.
If people do not put their social insurance number down or supply it to somebody making out an information slip they are liable to a $100 fine these days. If they do not have one they have 15 days to apply and 15 days to produce it. As a result of a law passed by this Parliament if people file and have it postmarked May 1 they are given a penalty of 5 per cent on top of the taxes they owe, plus 1 per cent for every month after that up to 12 months.

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This is the same Parliament that sat down and is today giving this incredible tax break to the wealthiest people in Canada. This is the same Parliament that approved a rule just recently affecting people who owe money to the Unemployment Insurance Commission. Every week now the unemployment insurance offices are sending a list of names over to the Department of National Revenue. Any rebates owed by the revenue department to those individuals who owe money to the Unemployment Insurance Commission beyond two years, if they are not drawing unemployment insurance and in the past year if they are drawing unemployment insurance, is deducted from what they have due to them from the tax department.
That would all be fine if the system that judges whether people owe money to the Unemployment Insurance Commission was fair, but it is not fair. The Parliament that is today giving this incredible tax break to billionaires in Canada is the same Parliament that changed the rules this year so that if people owed money or the student loans people claimed they owed money from 1960 or 1970, it is now automatically deducted from any rebates that they have coming back to them from the income tax department.
All those measures we have dealt with in this Chamber changed the Income Tax Act to really sock it to ordinary people, to add on as much interest as we can, to get to ordinary taxpayers and really slam it to them, without telling them what is available under the Income Tax Act, without suggesting to the students in Canada who are working, who went to work for the summer, that they can actually get moving expenses claimed on their income tax returns. There is no mention of that.
This year, on April 1, old age pensions, guaranteed income supplements and spousal allowances will be decided on the basis of last year's income. A lot of people are going to get a shock because of what we did in this Chamber, in that we approved a government measure to make payments to people; for example, in the fishing industry to buy back their salmon licences. We approved a measure for $8,000 to buy back people's licences, and now they are going to discover that it is going to be taken off the spousal allowance and the guaranteed income supplement this month. The government has done all those things to save money.
The government has introduced the GST. It has done whatever it could to cut back, to grab more money and to tax people more. The rich are getting richer; the poor are getting poorer; and the middle class is getting the shaft. Here it is today in this House passing a bill and putting closure on it. In other words it is saying we are not allowed to debate it any more today or tomorrow.
This is a bill that according to the experts in Canada is a big giveaway. It is not according to the politicians and we have to make that distinction. The standing committee had its meetings and they were a total embarrassment. The Standing Committee on Finance of this House of Commons had hearings that were to most Canadians a total embarrassment. The headlines in The Gazette of Montreal said: "Officials rush to committee meeting because experts say big giveaway to billionaires". That was on the business page last Friday. The story explained that some of the experts in Canada appearing before the committee said that this is the biggest giveaway to the biggest corporations, all those multimultimillionaires and 20 or so billionaires.
It is mentioned many times in many documents that we are very fortunate in Canada to have one of the highest numbers of billionaires per capita in the industrialized nations and we have a system in which it is possible to make a lot of money. These witnesses were saying that this is the biggest giveaway to them.
Then we had the revenue department and the finance department rush into the committee to try to contradict what was being said. That is what was in the newspapers. That is what is true. Do we know what they said to the committee? The finance officials of this government and Revenue Canada had to turn around and say that they did not know how much money was involved in this bill. They do not even know.
Members of Parliament standing on the government side do not know how much money is involved in this bill. All we can do is take the word of the experts that this is the biggest tax giveaway probably in our history, putting off the paying of taxes for another 30 years for a select group of people in our society.
This bill is putting off the payment while we bring people into the Tax Court of Canada, sock it to them and then we try to develop a defence for some of these
March 30, 1993

people while this is going on in the Elouse of Commons. This is a total embarrassment. I would like government members to stand and explain why they are changing the law.


Mr. Marcel R. TVemblay (Parliamentary Secretary to Deputy Prime Minister and Minister of Finance):: Mr. Speaker, the changes in Bill C-92 to the 21-year rule for trusts are intended to ensure that the original purpose for the rule is in fact achieved. The purpose is to ensure that the wealth accumulated during an individual's lifetime cannot be transferred from one generation to another without first being taxed.
With your permission, Mr. Speaker, let us talk a little bit about the purpose of the 21-year rule. The 21-year rule was introduced in 1972 as part of the capital gains regime. It is a necessary part of the income tax rules which tax accrued gains on death, intended to ensure that wealth accumulated during an individual's lifetime cannot be transferred from one generation to another without first being taxed.
As the Minister of Finance indicated at the time the rule was introduced, the 21-year rule was necessary to prevent the indefinite postponement of capital gains tax through the use of long-term trusts. The postponement of such tax would otherwise be possible using trusts under which individual beneficiaries have the right to trust income during their lifetimes but no interest in trust capital. No gains on death would arise in respect of such life interests since they have no value after the holder dies.
Why are changes needed? On February 11, 1991 draft legislation was released proposing changes to the 21-year rule. These changes, together with minor revisions resulting from subsequent consultations, are contained in Bill C-92. They address two serious problems with the existing legislation while ensuring that the original purpose underlying the rule is met and the related tax revenues are secured.
First, for many trusts it is possible to defeat the intent of the 21-year rule by transferring property from one trust to a newly created trust with a new 21-year period. Second, the existing 21-year rule penalizes those trusts which cannot because of their particular terms distribute their assets before 1993. This is particularly the case with trusts which were settled before the rule was introduced.
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I would like to say a few words on what are the changes. The proposed changes will ensure that the 21-year period cannot be refreshed by transferring trust assets to new trusts. They will also allow a trust which has been settled for an individual's children to elect to defer the deemed disposition that would otherwise occur under the 21-year rule until the death of the last such child.
Where a trust elects under the new rules gains which have accrued on assets it holds at that time, as well as gains which subsequently accrue on all trust assets, it will become taxable on the death of the last beneficiary who is not more than one generation removed from the trust settlor, or on the earlier sale of such assets. A trust that elects will not thereafter be permitted to distribute trust assets on a rollover basis, as described, to beneficiaries who are more than one generation removed from the trust settlor.
With this election the capital gains tax consequences will be the same whether an individual makes a gift of property directly to his or her child or makes the gift to a trust for the benefits of such child. In either case there will be a recognition for tax purposes on any accrued gains on the property at the time of the gift, and there will be a recognition of future gains with respect to the growth in value of the property gifted no later than the death of the child. This is consistent with the principle that wealth accumulation should be taxed in the hands of each generation.
I will say a few words on how the rule operates. The 21-year rule requires that the value of trust assets be determined every 21 years, beginning in 1993. Any accrued capital gains in excess of accrued capital losses on assets which are in a trust at that time are subject to income tax in the year in the same way as realized capital gains and losses. As a result the 21-year rule subjects to capital gains tax only those gains which have accrued after 1971.
It is important to note that the 21-year rule was not intended to prevent the distribution of trust assets to the beneficiaries of the trust before the 21-year period expires. Such distributions are consistent with the objective of the rule itself. Specific income tax rules provide for a rollover of trust property to the beneficiaries in accordance with the terms of the trust. These rollover

March 30, 1993
Government Orders
rules recognize that because trust assets are simply being held for trust beneficiaries, their subsequent distribution to beneficiaries should not be a taxable event.
Later, when a beneficiary dies or actually sells the assets, any gains which have accumulated while the assets were held in the trust, as well as in the beneficiary's hands, are taxable at that time.


Mr. Ron MacDonald (Dartmouth):: Mr. Speaker, I am pleased I am back today to speak on this clause of the bill.
It is one that has caused most Canadians who understand what is going on in this omnibus legislation dealing with taxation a great deal of concern. As usual, when the government is trying to do some favours for its friends, who normally are not the poor or the destitute or those who have to rely on food banks to feed their children because of this government's policy, it tries to hide it. That is exactly what the government has done in this legislation.
It came in with a paper about two years ago and in the paper was a press release. It was pretty innocuous and hardly anybody picked it up at the time. The government said in the release that basically by regulation and now by law it was going to exempt some of Canada's wealthiest families from paying taxes on assets that have been in trust for 21 years. What does that mean to the average Canadian?
Most people did not understand. Most people were worried at that point, as I said, about trying to feed their kids. They were worrying about whether or not they were going to have a job next week because of the recession. During that period the government tried to sneak in a regulation, a change in the law which was not going to put them back to work, which was not going to shorten the lines at the food banks, which was not going to address the whole range of structural problems in the economy caused by Tory economics. They were simply interested in helping their friends, not just the friends who have a few thousands of dollars, not the friends who have a few hundreds of thousands of dollars-they had already looked after them-not their friends that had a few million dollars, but their friends in some cases who have billions of dollars in assets which are shielded effectively from taxation by regulation in the tax law.
.(1135)
It is a regulation that expired. The provision expired. The 21-year rule expired. The growth in value of the assets that were in family trusts were supposed to be taxable. As my friend from Gander just said, that was not good enough for the government. It has done this at a time when it is going around cutting and slashing every program of which it can possibly think.
Let us look at what the government has done in the last few years. It says there is no money out there. It has had over 40 tax increases, most of them affecting disproportionately the middle classes. There have been over 40 tax increases since this bunch opposite came into power. The average Canadian family in constant dollars is paying more than $2,000 in additional taxes because of all the changes this bunch opposite has made.
The government has assaulted the middle income, lower middle income and low income groups. The middle income group to which most Canadians watching this belong, the working class that tries to keep one step ahead of the sheriff, that tries to keep the kids clothed and fed in a modest home somewhere, the people who work hard for a modest living, count for about 37 per cent of the wealth in Canada. Under this bunch opposite, the government has increased the tax burden on this particular group, the average Canadian, so that the group which has control of 37 per cent of the wealth in the country pays 52 per cent of the taxes.
The government says that everybody has to suffer because there is no money out there. This is the same group which has told us it will no longer be participating 50 cents on every dollar for health care.
What does that mean? It means the impact of four successive Tory budgets on my province of Nova Scotia has been tremendous. The federal government has withdrawn, just this year past, health care expenditures of $111 million from a province of 885,000 people.
It has cut back on its cost sharing on post-secondary education in the province of Nova Scotia by $47 million. It says it does not have money. It has increased taxes. It has hiked them. It has decreased its level of participation in programs because it does not have the money and generally it has been going around telling everybody that

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we have to do more with less but we have to give them more to do it with.
When it comes to the wealthiest of Canadians, individuals that have established family trusts, they are given another tax holiday. The government is giving a tax holiday on billions and billions of dollars that are in family trusts. As my colleague said, there are up to 30 years of additional tax holidays. I was outraged when this issue first came up, as were people in my constituency.
There was an article by Neil Brooks about a year and a half ago. One of the problems we have is that the government, which has information about the value of these trusts that would allow us as members of Parliament to figure out how much taxes would be owed if it had allowed the 21-year rule to expire and had not tried to replace it with this new law, does not want to tell us the information. In this article by Neil Brooks it is indicated that one of the items that was removed in 1972 was the federal inheritance tax. That action resulted in a lump sum gift of about $12.5 billion to Canada's richest families. That is according to a calculation by John Bossons, University of Toronto economist. That was back in 1972.
These trusts are now probably worth $50 billion, maybe more. The government says: "Sorry, if you are on social assistance in British Columbia, Alberta or Ontario which used to be have provinces but not any more that is too bad".
The federal government has frozen its rate of participation on social assistance. It has capped CAP. So if you are out there, sorry. The poor are going to have to do with less. If you need health care in Nova Scotia you may not be able to find a hospital bed because these guys have cut back. If you are a university student in Newfoundland your tuition will be higher because the federal government has cut back by about $32 million on its cost sharing of post-secondary educational institutions in that province.
However, if you are one of Canada's richest Canadians you are going to have another 30-year tax holiday. Just keep rolling that money around within the trust, taking all the benefits from it and we are going to keep away from it. At this very time that the government talks
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about the need for restraint and the need to increase revenues it is allowing billions of dollars, not thousands, not millions, in tax revenue to be legally avoided by Canada's richest families. This is an affront.
It is an affront to the senior citizen who might be living on an income of $18,000 a year. I had somebody say to me the other day: "I am mad as hell. I make $18,000 per year. I put some money away. I get a little annuity. And the government tells me that I have to pay the government quarterly instalments on income tax. When I tell them I do not have the money to pay at the end of the year they charge me interest on the quarterly instalments that I did not make. Mr. MacDonald, I do not have enough money to live. What in the name of goodness, this government does not just want my money at the end of the year. It is taxing me all through the year for the money as it comes in. I have worked hard to build this country. I have put a little money aside; I salted some money away. Why are they coming after me?"
That is a good question. About six months ago a lady came to see me. Her husband had died. She had never been in the work force. She had a small pension. She never had to look after the bills, never had to do the books. She did not file her deceased husband's Revenue Canada forms on time. When she did she was billed $750 for the fine and interest. She did not know what to do with it. She was making $972 a month to live on, to pay for her mortgage, food, heat and lights. However, an order was put against her pension. The government took $200 a month from her $900-plus pension. Is that the type of fairness this government thinks Canadians want in their tax system?
I think Canadians are outraged that the government has this particular clause in this legislation. I hope the government is taken to the cleaners when it goes to the electorate for this type of activity, this type of legislated unfairness which is for those who have at the expense of those who have not. We will not be supporting this bill because of it.


Mr. John R. Rodriguez (Nickel Belt):: Mr. Speaker, I listened attentively to my hon. friend from Dartmouth and he accused the government of doing things. He says the government is doing things for its friends with this bill. That is what he said.

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The friends of the government are the same friends of the Liberal Party. Who initiated this trust fund in 1972? The Pierre Elliott Trudeau government of 1972. The Eatons, the Molsons, the Bronfmans, the Seagrams and the Irvings from down east all put the pressure on the Liberals when they were the government. Now suddenly they are going to vote against the bill. They are going to vote against the Frankenstein which they created. Mary Shelley would be appalled. At least you do not destroy your own creation. This was their own creation in 1972.
What do we have? Twenty-one years. For 21 years the wealthiest families in this country were able to put aside in trust accounts what we now estimate to be somewhere in the vicinity of $70 billion.
We hear it every day from across the way: "We are in tough times. We have to put our economic house in order. We have to watch our credit rating. We are living beyond our means. We have to cut back services. The people have to pay more because we have to reduce this deficit''.
The member for Halton-Peel who is running now for the Tory leadership even had the little newspaper delivery boys put in their $2.40 a week toward debt reduction. Is that not the most ridiculous thing? There is a clock showing the debt and deficit reduction and this little boy has finished his paper route and is bringing his offerings up to the altar of the privileged. He is offering his $2.40 to reduce the deficit.
Then we have people who have money. Why is the government always taxing people who do not have money? There is a trust fund with approximately $70 billion in it and we cannot get one plug nickel out of it to help pay the costs of running this country and to help reduce the deficit. That is a phoney argument.
Let us draw a contrast with how the government treats another trust fund. With respect to family trusts, it will exempt them for another 21 years, probably another 38 years. How does it treat another trust fund? I will talk about another trust fund.
It is called the funeral trusts. Older Canadians in particular in making arrangements to pay for their burial put money into a funeral trust fund. It is usually run by
the funeral parlour. What is this government proposing to do? It is proposing to reach right into the funeral trusts and tax the interest accrued on the funds in the funeral trust fund. It is financial necrophilia. That is what it is.


Mr. Nystrom:: It is what?


John R. Rodriguez: Financial necrophilia. I know there is the common saying that you cannot take it with you, but this government every day is proving that it is going to take it off you before you go into the next world.
Here we have the prospect of one family trust with a considerable amount of money in it, $70 billion. Approximately $400 million is in the accumulated funeral trust in the province of Ontario. The government is going to reach into this trust fund and tax the interest accruing on the funeral trusts. This is money set aside by individuals so that they will not be a burden on their families when they die. Their funerals will be paid for. The interest that accrues in that fund is to offset inflation and to pay for their burial costs. How tough this government is with the ordinary folk, but how soft it is with the rich and the powerful and the famous.
What has been said about this family trust? What do the trust tax professionals say? After all, we in this House are not necessarily tax professionals.
Here is what Sydney Goldstein of Goldstein, Goldstein and Goldstein in Ottawa said:
There is no question that it represents a massive windfall for existing trusts.
Here is what Kathryn Bush of Blake Cassels said:
A cynical person might suggest that pressure from influential political supporters also should be listed as a reason for the draft legislation.
Those are the kinds of people who would normally support the Tory government. Here is what Neil Brooks, an associate dean at Osgoode Hall Law School said:
The government has given Canada's wealthiest families notice that it intends to give them a gift worth several billion dollars.
Here is what Arthur Drache of Fraser and Beatty said:
If legislation now before Parliament is not passed before the end of the year, thousands of trusts would be hit with massive tax bills.
Does that not just make your heart burn? Does it not really hurt the old heart-strings?
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An hon. member:: Poor old Conrad Black.


John R. Rodriguez: Gosh we have to bleed for Conrad Black. We have to bleed for all those very wealthy Canadians who have not paid their taxes since they have put them into these trust funds.
Mr. Speaker, you should see how tough Revenue Canada is on the people in my riding who earn maybe $15,000 or $16,000 a year and owe a couple of hundred dollars. You should see how tough Revenue Canada is. It has to collect every penny of tax. Revenue Canada phones them and writes them and is pretty effective in collecting taxes from poor people. But boy does it curl up and purr when it comes to the wealthy as in the case of the family trust. Now what has the Department of Finance said?
The question is: Why can we not stop that? Why can we not say that they have had 21 years? They have had 21 years to make arrangements to pay the taxes. That is what bums my toes. They have had 21 years. That was the purpose for the 21 years, to work out arrangements to pay the taxes.
Well they did squat about all that because they know and they knew then that they would have a friendly government. It did not matter whether it was Liberal or Tory; they had a friendly ear on the other side and they always have friendly ears collectively.
What are the arguments? Can we believe this? One of the arguments used as to why we could not do this was because of what would happen with the trust established by parents for the benefit of their disabled children. Oh my. Oh my. The very wealthy that have disabled children.
I have never heard exploitation of disabled children by a government such as we are hearing in this particular case. To use provisions for disabled children to avoid paying taxes on a fund that was set up by a Liberal government in 1972 so that they can avoid paying taxes, surely that argument holds no water. Surely there is a better way to make provisions for disabled children than to put a tax loophole like this in place which would rob the Treasury of billions of dollars in tax revenues. This is at a time when every Canadian has to pay their fair share of taxes if we are to get ourselves out of the economic mess we are in.
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I see you are giving me the sign of the hook, Mr. Speaker. One last point is that if we ask them to pay the taxes on this they would somehow or other have to sell off their assets to pay the taxes. Well is that not hunky-dory. They have had 21 years to make provisions to pay what they owe, and if they have not taken steps to do that then so be it. That is the way it rolls. That is what the folks in my riding who owe a couple of hundred dollars in taxes are told. They are taxed on a daily interest rate and it accumulates and runs and there are penalties attached.
In closing I want to say it is not fair what this government is doing. It is not fair. Everyone has to pay their fair share of the taxes and when the government does this it calls into question every other tax measure it proposes.


Lorne Edmund Nystrom: Mr. Speaker, I too want to say a few words about the bill before the House today regarding tax changes in our country and in particular the question of family trusts in Bill C-92.
As my friend from Nickel Belt has said, the whole question of family trusts began back in 1972 when we dealt with estate taxes and capital gains taxes in this House. The Liberal Party was in power with then Prime Minister Pierre Trudeau.
There was a tremendous lobby at that time from some of the wealthiest families in this country to set up a tax loophole for them and for their families. It was to give them 21 years of protection during which they did not have to pay taxes.
Over the years billions and billions of dollars have been put into these family trusts. We have privacy laws in this country so we are not sure how much money has accumulated. Of course we need those privacy laws. The estimate we have from people in the field is that around $70 billion has now been accumulated in family trusts by higher income families and is tax exempt under present law for 21 years. After 21 years arrangements were to be made where taxes would be paid in the appropriate manner on the money by some of the wealthiest families in this country.
The 21 years are up. It is now 1993 and what has happened? Lobbyists have gone to the government across the way and said: "These poor families in this country are going to have to pay some taxes. We need an

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extension of the 21 years". The government has now tabled Bill C-92 before the House to extend that 21-year period until the last exempt beneficiary of that trust passes away.
What does that mean? It means now that instead of 21 years those trusts may run for 30, 40, 75 or even 80 years or more if a young child has been made part of that trust. That child may not pass away until age 80, 90 or even older. Now the wealthy in this country are being given hundreds of millions of dollars by the government across the way because of extension of this exemption on family trusts.
It is not fair, just or proper that the wealthiest families shall now be paying hundreds of millions of dollars less in taxes than they would be if we kept the law in place with the 21-year limitation. Even the 21-year limitation is something I certainly fundamentally disagreed with. It was established by our friends in the Liberal Party back in 1972 as they tried to cater to the rich.
I am sure my friend from Gander-Grand Falls, being a populist progressive Liberal from Newfoundland, is embarrassed that former Prime Minister Pierre Trudeau and former Minister of Finance Allan MacEachen had the audacity to present this law to Parliament and to use their majority to force this law through Parliament back in 1972.1 am sure the member for Gander-Grand Falls would like to get up in this House and differentiate himself from what the Liberals did in 1972. Now it is being made even worse by dropping the 21-year limitation and allowing the exemption to the wealthiest people to continue until the last exempt beneficiary shall pass away.
If we did not have the family trust we would be collecting literally billions of dollars more over the years in taxes from the wealthier people. Why do we let the wealthy people get away with an exemption when the ordinary people have to pay more taxes all the time? The ordinary person who makes a few dollars an hour, a few dollars a week or a few thousand dollars a year, is expected to pay his fair share on the national debt. Yet wealthy people will be left with another loophole.
How will this be done? My Liberal friend from Ottawa South is very much in support of this kind of loophole for the wealthy, it appears, and asked how it should be done.
Some experts appeared before the finance committee a few days ago. Neil Brooks, an associate dean of law at Osgoode Hall, Toronto, talked about how this was a transfer of more money to the wealthy. I am sure my friend from Ottawa South has a great deal of respect for Mr. Brooks who said:
The government has given Canada's wealthiest families notice that it intends to give them a gift worth several billion dollars.
It is giving several billion dollars to the wealthiest people while ordinary citizens in many cases are lining up at food banks because they do not have enough money to pay for food for themselves and their children. The government across the way, supported by some of our Liberal friends, is giving millions and billions of dollars to the wealthiest people.
There is another interesting quote from Sidney Goldstein. In his testimony he said he had been a supporter of the Conservative Party in the past and had served on the Conservative task force. He was therefore sympathetic with its general direction and thrust. Despite that, this is what he had to say:
There is no question that it represents a massive windfall for existing trusts.
This was from Sidney Goldstein of Goldstein, Goldstein and Goldstein in Ottawa who has been involved in the past with the Conservative Party.
Kathryn Bush, another tax expert, said:
A cynical person might suggest that pressure from influential political supporters should also be listed as a reason for the draft legislation.
Arthur Drache of Fraser and Beatty said:
If legislation now before Parliament is not passed before the end of the year, thousands of trusts would be hit with massive tax bills.
If we do not pass this legislation to extend the 21-year period many wealthy people will finally be paying a few million dollars more in taxes. About $70 billion is sitting in these trust funds escaping taxes today. If we do not pass this bill a lot of that money will be collected. If we collect that money from the wealthy people, from the Eatons, the Bronfmans, the Seagrams and people of that sort, then the ordinary people in my riding of Saskatchewan might get a bit of a break in their tax bill. Perhaps medicare would be better protected for the ordinary
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people or the family allowance program would not have had to be abolished. The old age pensions could be adjusted to give our senior citizens a better income to live their last few years in our land.
There are many ways we could use the money from the trust funds. We now have a debt of about $450 billion. It was about $200 billion when the Conservatives took office some eight or nine years ago. It is now $450 billion and we are at the point where about 30 cents on the dollar that we pay in taxes now go to pay the interest on the national debt.
One of the many reasons our national debt is so high is that the wealthy have not been paying their fair share of taxes for too many years. If people make $1 million a year or more why should they not pay their fair share of taxes? Why all the loopholes for the wealthy?
I suggest if one looks at the income tax returns year after year one finds that many of these wealthy Canadians and big corporations are very generous contributors to the Conservative Party of Canada in terms of their electoral funds and funds for the ongoing operations of the Conservative Party. It comes right down to the old saying: "He who pays the piper calls the tune".
These people are now saying that 21 years is over when they have been exempt from taxes and they want it extended. They lobby the government. It is an election year and of course the government brings in Bill C-92, part of which is to extend the 21-year limit of tax exempt status to family trusts. If this bill passes which it will because of the Conservative majority, it will abolish the 21-year limitation and allow these family trusts to sit on tax until the last exempt beneficiary dies. In many of these cases that will be 30, 40, 50, 80 or even 90 years.
The time has come when this government should start taxing the wealthy and giving some tax breaks to the ordinary citizens. If it did that, we would have a much stronger Canada for each and every one of us.


Mr. Murray W. Dorin (Edmonton Northwest):: Mr. Speaker, I would like to add a few comments to this debate because a lot of comment from the other side of the House has distorted some of the elements of the question of trusts and what they do.
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I am not here to speak in support of trusts or say who should or should not be taxed. However, I think we should try to put this in perspective and understand what we are dealing with. We should not allow too much misinformation so people think trusts are something they are not.
It is important to recognize that trusts are created for a variety of reasons and in some cases have tax consequences. Putting assets in a trust does not mean that all of a sudden no tax is paid. Income from those trusts is taxed every year just like other taxpayers. If there is income from regular sources or capital gains trusts are treated the same as any other taxpayer and, for that matter, are taxed at the top rate of income tax every year.
They do not necessarily get the benefits of an individual taxpayer who would have other benefits which would reduce that top rate of income tax. We are talking about assets that have been put into a trust for one reason or another and when they should be taxed just simply because they have been accumulating wealth for an individual during his lifetime.
Prior to 1972 there was an estate tax. When people died they were taxed based on the value of their estates or the assets they had at that time. In 1972 a capital gains tax system was implemented. That means when people sell or dispose of assets those gains are taxed. They are taxed when the person transfers those assets to the trust. It could be said that the person has chosen to have died earlier because by transferring those assets to the trust those assets are then subject to tax at that time. Otherwise those assets would have remained not subject to tax and not taxed until the death of the taxpayer.
Setting up a trust advances the time of the tax and the tax applies when the trust is set up. The change in this rule allows those trusts to continue to be reinvigorated and transferred from one trust to another without tax being paid. In some cases it prevents this.
In the case of beneficiaries this change deems that where the assets are in a trust they will not be taxable or can be chosen not to be taxable until the last beneficiary of the person who set up the trust dies. In other words the treatment becomes the same as if the person distributed his or her assets directly to the beneficiary.

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We are not saying tax is never paid. First, tax is paid when the trust is set up as if the taxpayer setting up the trust had disposed of those assets at that time. Second, trusts are taxed on an annual basis just like any other taxpayer. Finally we are saying they will be taxed when they are either distributed to the beneficiary or the last beneficiary of the trust dies.
It has been suggested that billions of dollars are involved here. That is simply not true. Most of the trusts affected by this rule in the absence of these changes would simply distribute their assets in any event. Income taxes will be paid by the beneficiaries when the assets are sold or when the beneficiary dies. In such cases the new rules do not change either the amount or the timing of the tax paid.
We could revert to a system of inheritance tax on death and eliminate the capital gains tax where in many cases we tax people in advance of dying. That was the objective of the Benson tax reform at that time. As has been pointed out, the Liberal government of the day did not want to allow capital gains to build up for years and years. It decided to tax them on an interim basis such as when people sold them. If they did not sell them they would become taxable on death, or in the case of transferring them to a trust they would become taxable at that time. We chose to collect taxes sooner than the pre-1972 system. That is the result of some of these changes. What we do not do or seek to do, however, is tax them twice, tax them both on the distribution to the beneficiary and on an annual basis or every time the gain is realized. We could choose to do that. We could double tax them but I do not think anybody here is suggesting we do that.
What is being suggested is that somehow these trusts avoid taxes and no one ever pays any tax on them. That is simply not true. What it does in most cases is it advances certain taxes that are paid to a time prior to when they would otherwise be paid.
We should try to determine whether these rules are appropriate or whether we should change to some other form such as an inheritance tax. If that is what is being suggested by the opposition parties then I think it is a fair suggestion. In my view it is probably a good idea and one we should examine.
I do not think we should allow the misunderstanding to be perpetuated, that somehow trusts simply are vehicles
by which wealthy people avoid tax and never pay any tax. They are part of the over-all tax regime. In a number of cases, including the changes in these rules, trusts are forced to pay taxes every 21 years rather than only when the person setting up the trust dies. In other words, in many cases with the 21-year rule trusts will be taxed every 21 years. We will be taxing those benefits or those accrued gains sooner rather than later. When later comes there will be less tax payable because they will have been taxed on an ongoing basis.


Mr. John Manley (Ottawa South):: Mr. Speaker, I too would like to engage in this debate, not so much as a matter of the rhetoric of tax reform and the partisan differences but to try to get a few concepts clear.
Perhaps because of my background I find it very offensive when some speakers, such as the last speaker from the NDP, the second to last speaker in the House, stands and flagrantly misrepresents the nature of the taxation regime that exists and the changes that were introduced in the reform of 1971-72.
I understand that some of these issues are complex and difficult but a few points should be made. First, and the speaker who spoke previously mentioned this, trusts are a fundamental part of our system of law, not just tax law but private law.
When I practised law most of the wills I prepared for people with children contained trust provisions, not because they were rich, not because they were some kind of an elite wealthy group, but because they did not want their children to inherit, usually life insurance proceeds, before they were old enough to manage the money. So a trust was set up in the will. Veiy often it required that the child reach age 25, sometimes older, before he or she received the capital assets of the trust. They could be quite considerable, even for somebody of modest means who invested heavily in life insurance in the event of their death.
These trusts exist in many cases. They are carrying on, they are continuous, and they are taxed just as all trusts are taxed. When the NDP member from Saskatchewan gets up and says that the Liberals brought in a law whereby trusts were not taxed for 21 years, he is simply not stating what is true. It is not correct.
I am sure it is difficult for people to understand the difference between taxing income and taxing capital. But if we do not have some understanding of what that
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means, we cannot understand what the provision is that we are debating here.
Income is the amount that we earn on a continuing basis. If a person has a Canada Savings Bond, the bond itself represents capital and the interest received on it is income. The income of trusts is and always has been taxed. It was taxed prior to 1972. It is taxed subsequent to 1972. If the trust is set up between people who were alive that income is not taxed the same way an individual's income is taxed. It is taxed at a higher rate. It is taxed from the first dollar at the maximum rate of tax for individuals.
If the trust is one such as I referred to in my example in a will, the income is taxed every year just as an individual's income is taxed. The difference is the trust does not get the personal and dependent exemptions that an individual has to rely on. Either way, income earned on an annual basis is and has been taxed.
What about capital gains? What is a capital gain? Perhaps a person owns a piece of land, a small apartment building, a duplex or shares in a corporation that can be sold on the stock exchange. Any time one of these is disposed of and there is a profit over and above what was paid for the asset, there is a capital gain. It is taxed as income in Canada, subject to the fact that we reduce the total gain to 75 per cent for the purposes of determining taxable income. The lower rate reflects the fact that we do not take inflation into account. If a property was bought in 1971 and sold this year, 22 years later, there is a gain on it. We do not take into account inflation. We only require the person to include 75 per cent of the gain in income.
There are debates about whether it is fair, whether it is the right number, whether it should apply to all gains or whether it should be long-term gains as opposed to short-term gains. I will not get into that today. The principle is this, gains are taxed.
When my friend from the NDP says that the Liberals introduced a loophole in 1971, what he is failing to mention is that prior to 1972 capital gains were not taxed at all. Zero per cent of the gain was included in income, not just for trusts but for individuals and corporations as
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well. Capital gains were not taxed. In 1971 under the tax reform of that year, for the first time capital gains were included in income for taxation purposes. This was a major reform, arguably the most important reform in our income tax law since income tax was introduced in 1917.
What do we do with trusts? It is very easy with individuals. We determine the capital gain either when they dispose of the property, when they give it away to somebody or when they die. That is easy, no problem. What do we do with trusts? A trust is a legal concept which has permanence in our British system of law. It has some correlations in the French civil code but it is not exactly the same. It is an ancient concept. Trusts do not die. Trusts do not die, so how do we determine their capital gains?
If the property is sold that is when they realize a capital gain. It is taxed. There is no difference there between a trust and an individual. The problem is this. Some trusts, depending on their terms, can literally go on forever. What is the answer? The answer that was proposed in 1971 is to say 21 years is a long enough trust and every 21 years whether the property is disposed of or not it will be deemed to have been sold even if it has not and capital gains tax will have to be paid.
It did not seem unduly harsh at the time and I have to say it does not seem unduly harsh to me today. That is why I oppose the amendment that the government is proposing. People need to understand what the concept was that this rule was trying to get at. NDP members like to say it is a big loophole. The fact that there is a 21-year delay they allege is a loophole.
I asked the member from Saskatchewan earlier what he would do. He did not have an answer. Are they proposing that all capital gains realized or unrealized in trusts be taxed on an annual basis? Is that what they are proposing? If so, why do they not say so? Why do they not say that they want all those little trusts out there- many of them are not very big-which are established for the benefit of children, to hire appraisers every year, to hire expensive accountants every year to figure out a complicated tax return every year for these trusts that are really only going to be set up for five to ten years?

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Why do they not admit that is what they want to do? Why do they not admit that they want to bring a system of market value assessment on an annual basis into our income tax law so that every year we are having to appraise all of our assets? That is the kind of intermeddling stupidity that the NDP has become famous for in the province of Ontario. They are not honest enough to admit that is what they want to do.
The proposal put forward in 1971 made sense. It gave the trusts a lot of time to make their arrangements. To plan 21 years is a long time in anyone's lifetime. I do not understand why the government feels that at the last minute it has to say it is going to grant a reprieve. I simply do not understand.
I do not agree the numbers that have been spouted by some members on how much is out there are valid. I do not think there is any way of knowing how much tax might be generated with the 21-year realization. I think it is fair to say it is a considerable amount of money.
With the current fiscal situation the government is in and the reasonableness of the test passed in 1972,1 fail to see why this amendment has been brought forward by the government.


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


Some hon. members:: Question.


The Acting Speaker (Mr. DeBIois):: The question is on Motion No. 1 standing in the name of the hon. member for Sudbury. Is it the pleasure of the House to adopt the motion?


Some hon. members:: Agreed.


Some hon. members:: No.


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


Some hon. members:: Yea.


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


Some hon. members:: Nay.


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


The Acting Speaker (Mr. DeBIois):: Pursuant to standing Order 76(8), a recorded division on the proposed motion stands deferred.
That Bill C-92 be amended in Clause 47 by striking out lines 3 to 41 at page 111, lines 1 to 48 at page 112, lines 1 and 2 at page 113, lines 13 to 38 at page 115, lines 1 to 48 at page 116, lines 1 to 51 at page 117, lines 1 to 37 at page 118, lines 1 to 39 at page 119, lines 1 to 48 at page 120, lines 1 and 2 at page 121, lines 12 to 48 at page 123 and lines 1 to 21 at page 124.
She said: Mr. Speaker, this motion deals with the clause which would force all holders of passive real estate not to have a capital gains exemption.
In 1985 the Conservatives brought in capital gains exemptions. In essence they were very much a gift to the Canadian people in that they were a very nice tax loophole. There was the $500,000 capital gains exemption for small business. There was the $100,000 capital gains investment on any kind of share profits or real estate profits Canadians might have.
As a result many Canadians did cash in and paid no taxes on that $500,000 capital gains or the first $100,000 capital gains on the profit from the sale of shares or the profit from the sale of properties.
Bill C-92 says in its provisions that from February 1992 the capital gains exemption for $100,000 on passive property will no longer be in place, that the only people who will qualify for the $100,000 capital gains exemption will be those who are operating what they call active businesses.
In committee I asked what was an active business. I wanted to know about a Canadian who had invested in an apartment building. Many Canadians may build a house, a duplex or a triplex. They may live in one part of the house or rent the whole thing. They might have three or four apartments that they rent. Generally they build them, work at them, collect the rents and do most of the maintenance work. This, for many Canadians, is a way of putting aside money for the future.
I was very much interested whether this particular kind of individual would still qualify for the $100,000 capital gains exemption. I was told no, this particular individual


Mrs. Diane Marleau (Sudbury) moved:: Motion No. 3

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would no longer qualify for the $100,000 capital gains investment because he did not pass the test of an active small business. The test is that it would be a business employing a minimum of five persons.
I fail to recognize why this government would choose to single out the owners of small apartment buildings and deny them something that they are allowing other members of the Canadian community, namely to realize a capital gains of $100,000 tax-free.
I often wondered whether the government was doing this on purpose. Was it really aware it was doing this? It was very much aware that all these ordinary Canadians would now be fully taxed on any gains on their small apartment building. However, if someone wished to invest in a race horse in Kentucky and sold that horse at a profit, the first $100,000 could be used as their $100,000 capital gains exemption. Is it not wonderful? If they played penny stocks and made any kind of gains, they could use that first $100,000 and not pay any tax on it.
I thought to myself there is something wrong here. We have just been through the discussion on extending the 21-year rule for trusts. Why would the government on the one hand take away the 21 years and allow Canadians in some instances to defer taxation indefinitely on assets in these trusts and then turn around and apply a rule which would penalize ordinary Canadians and which would take away something that they might benefit from if it were left in place?
I had a great deal of difficulty coming up with any real answers except that it is looking for revenues. We know that there is a debt-deficit crisis or at least there is a serious problem in our country, but I say we have to treat all Canadians the same. If we are going to have capital gains exemptions then we should have them for all Canadians. We should not pick and choose: "Well, because you choose to work hard, build an apartment or fix up your own apartment, when you sell your apartment you cannot have the tax-free $100,000 exemption on your capital gains, but if you want to buy a horse somewhere you can have it".
It just did not make sense to me. That is one of the reasons I oppose this particular measure. If the government wishes to say that there will be no more capital
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gains exemptions because it can no longer afford this gift to people, that is fine.
If that is what it would like to do then do it. However it should not pretend that it is just being fiscally responsible and say: "We want to channel the moneys in investments versus having it sitting there doing nothing". When people invest in a small piece of property or apartment building, they are doing something to help themselves.
These same property owners have been dealt some very serious blows in our economy. Rent controls have caused them extremely serious problems. Most people now would not buy an investment property because it just is not worth while.
The NDP in Ontario has made it extremely difficult for the ordinary apartment owner to function and make any kind of a profit. If he can sell his building at any kind of a gain, he certainly deserves that $100,000 exemption. This says no. This will not happen with those people.
What I want this government to do is to come clean, not pretend any more. If it does not want capital gains exemptions then it should say so and have absolutely no exemptions for anybody. Otherwise it should treat the average Canadian fairly. That is not happening here.
It is a case of representing the people of Canada, being up front about it and saying to them: "I believe that what you are doing is worth while. I can afford to give you a tax break" or "I cannot afford to give you a tax break". I say to this government that it should make up its mind which way it wants it. Then it should come forth with some proper laws which will treat all Canadians fairly.


George Baker: Mr. Speaker, I would like to say a few words in support of my hon. friend, the hon. member for Sudbury, and the amendment put forward by her.
The member put it quite well. On one hand the government says it is going to give a capital gains break to somebody who buys a race horse in Kentucky, Texas, or in any of the other states in the United States where they are in the business of breeding race horses. They buy the race horse. If there is a gain realized from the race horse, the government says: "That is fine. We will give you a tax break". On the other hand, there is a

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different type of capital gain, namely something that pertains to property in Canada, on which it will not allow that same exemption.
A moment ago members of the NDP were making reference to me, saying that I was embarrassed about this entire question of capital gains that was brought in by the Liberals. I want to thank the hon. member for Ottawa South for explaining what happened in 1972.
As we know, Canada did away with the inheritance tax, the estate tax as it was called at the time, in 1971. We had an inheritance tax just like they do in the United States today.
If one dies in the United States today and one has any amount of property, by law it all has to be assessed. If it is found that the market value of the property is worth more than $600,000, it is taxed. I do not know what the rate is now. It used to be 55 per cent of the value of property that was judged to be in excess of $600,000. It is called the inheritance tax.
We had such a tax in Canada prior to 1972. The tax kicked in at somewhere around $150,000. If the value of all property was judged to be in excess of that, it kicked in at a rate of 15 per cent or 10 cent and went up progressively from there.
That was the situation prior to 1972. The law was changed in 1971, taking effect in 1972, to replace the inheritance tax.
Canada does not have an inheritance tax any more. It was replaced by the capital gains tax, which in 1972 when it was brought in was 50 per cent of the normal rate of taxation.
When the Canadian government brought in that law instituting the capital gains tax and doing away with the inheritance tax, it did not create loopholes; it tried to plug the loopholes. The 21-year rule was in my humble opinion an effort to plug a loophole. As the previous speaker from Ottawa South pointed out, a trust does not die. An individual dies but a trust just does not die.
The problem was what to do when somebody had their assets in a trust and the deemed value of those assets would normally become taxable upon death. What if it is
put into a trust prior to that moment in time and of course the trust cannot die?
One must lay down a law so that at the end of every 21 years all the assets in that trust and the accrued value of the capital gains on the assets would come due. One would say that the trust would have been deemed to have died at that moment in time at 21 years.
That was not a loophole created by the Liberals. That was a plugging of a loophole by the Liberals that would have seen, according to the testimony before the committee, vast sums of money now coming into the public Treasury because of that capital gains provision in 1993.
This would have been very handy for the Government of Canada at this moment in time when it is trying to get money here and trying to get money there. That is why quite frankly we are puzzled as to why the Government of Canada would forgo that kind of revenue at this moment in time.
I wish to raise on this particular amendment proposed by my hon. friend a serious problem relating to capital gains and the capital gains exemption. The Government of Canada has throughout the past two years given certain payments to individuals in Canada that have been judged to be capital gains and that qualify for the capital gains exemption under the $100,000 exemption.
A lot of these payments have been given in our agricultural industry, farming industry and fishing industry. They are the primary industries. The payments have been for people to get out of the business they are doing.
In other words the Government of Canada has come along and said: "Look, we are going to give you a payment". In my particular case on my coastline of Newfoundland it says: "We are going to give you money for selling your licences back to us so we can get you out of the fishery". In this case it was in particular salmon licences. However, it says that it qualifies for the capital gains exemption that we are talking about today because it says it is property. That is what it was judged to be.
However, in offering the money to Canadians and saying to Canadians: "Look, we will judge this to be a capital gain to qualify under the capital gains exemption", they forgot to tell those Canadians 60 years of age or older that the Department of National Health and Welfare has a rule. It says that if one receives money in
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the previous year as a capital gain that has to be subtracted from the guaranteed income supplement and the spousal allowance in the following year.
This means that right now under the capital gains and the capital gains exemption which was granted last year, hundreds and hundreds and hundreds of people over 60 years of age are receiving notification this week and next week that their spousal allowance has now been cancelled because of the capital gain and the capital gains exemption last year and that the guaranteed income supplement has been reduced accordingly.
I raise the point in discussion today about this capital gains exemption and the subject of the capital gains and the capital gains exemption as it relates to this particular bill. Hopefully somebody in the ministry will see the light and pass a minute of cabinet that says persons who received this money and who had an income that normally gave them the spousal allowance and the guaranteed income supplement would be exempt as far as capital gains and the capital gains exemption of last year is concerned in their guaranteed income supplement and in their spousal allowance, both of which are about to change in April.
I will get back for the minute that I have left to the proposal put forward by the representative of the Liberal Party. Why would one bring in a change in one's capital gains exemption that would say that one is not going to encourage people to build buildings, homes or apartment buildings, but one is going to encourage people to buy race horses in Kentucky? That is the essence of the amendment we are talking about today.
On that basis I would have to strongly support the proposal put forward by my hon. friend.


John Paul Manley: Mr. Speaker, the amendment, just to put it in context, proposed by the Liberal member for Sudbury would retain the $100,000 capital gains exemption for people who invest in real estate.
In a way this amendment gives me some problem because I personally feel that the $100,000 capital gains exemption should be abolished altogether. I support the capital gains exemption for farmers and for small busi-
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ness people who dispose of the shares of their small business because this is one of the key ways in which people in those categories are able to provide for then-own retirement.
With respect to the $100,000 capital gains exemption this has been in operation since 1985 at a lower rate and then was gradually built up to where it is now. I think the minister of the day proposed to bring it up to $500,000, but it was finally stopped at $100,000. The evidence is that this benefit accrues only to those who are in a high income category and therefore have lots of cash available to put into investments. I do not think the government has been able to produce any evidence whatsoever that it has stimulated investment or, in other words, that it has caused people who would otherwise have consumed their savings to have instead directed it into an investment which would go to create jobs in Canada.
In the absence of that evidence I do not understand really the rationale for having the $100,000 capital gains exemption at all. However, if we are going to have it, is it not peculiar that the government has decided to exempt investment real estate from it?
Let us make another thing clear. This proposal from the Liberal member for Sudbury does not suggest including real estate in the exemption that is not investment related. In other words, this is not a way of reopening it for second family homes to get into the exempt category. It is a proposal for people who want to invest in a duplex, a triplex, a little apartment building or a little commercial property, to give them the same benefit as the government is permitting to continue to accrue to those who go to their local broker and buy shares in a company.
With respect, I do not understand that rationale. Very often it is the small real estate investor, often a firsttime home buyer who buys a duplex and rents out the other half, a small business person or a comer store operator who rents out an adjacent apartment or has some investment in real estate involved in their assets. They are not usually incorporated. They are usually small, low end and unincorporated.
The NDP in Ontario has done everything it can to destroy the real estate investment market in the province of Ontario. If one wants to find commercial real

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estate for a bargain price, I suggest Ontario and especially Toronto.
What the NDP has done cannot be offset by permitting a $100,000 capital gains exemption for investors in real estate because frankly there are no capital gains in real estate at the present time in Ontario any way. Perhaps times will change and things will improve.
However, to put it in the most cynical way possible, it seems to me that the government in bringing in this amendment is favouring the brokerage industry by permitting people to get the capital gains exemption if they invest through a broker in listed stock but not if they buy a small piece of real estate and try to make a little bit of a gain on it by renting it out and hoping that it increases in value over time.
If I had my way I would get rid of the exemption altogether, but if we are going to keep it for some kind of investment why target it for the blue chip stock and not for the little investment in a real estate property that so many small investors look to for the way of building a little bit of savings for their future?


Mr. Joe Fontana (London East):: Mr. Speaker, I too would like to speak on the proposed amendment of my colleague in our party from Sudbury with respect to the capital gains exemption.
I would like to touch on two areas that I think my colleague from Ottawa South pointed out. It was the philosophical issue as to whether or not one needs capital gains exemptions at all. However, I think one ought to look at the fairness of the tax system and the removal of this capital gains exemption as proposed by the government in this Bill C-92. Of course the Liberal amendment is to change that and to allow those exemptions to occur.
I guess I want to deal with two aspects. One aspect is with regard to the fairness of the government's move to eliminate the capital gains exemption from real estate. I think my colleague from Ottawa South touched on the reason why the government would only want to look at real estate and not at other opportunities where the capital gains exemption would remain.
I am in favour of the capital gains exemption at all levels. I believe there is a purpose to those capital gains exemption, that is to allow citizens no matter what
income stream they are in to invest in various opportunities such as business, stocks, real estate, farming or a number of other areas. I think that is an important policy matter for any government, but I believe we ought to encourage people to invest in their country in an indirect way by investing in business, real estate, farming or in other ways.
The incentive of capital gains exemption to the tune of $100,000 allows people to directly invest in their future and the country's future in opportunities not only for themselves but for their families and again their communities and their country. Therefore I think philosophically we ought to look at why one should have a capital gains exemption at all. I believe that those capital gains exemptions are there for a purpose, that is to stimulate investment, savings, activity, growth and job creation. One could make a very good case for those capital gains exemptions.
Therefore I believe it is punitive and unfair for the government to essentially say that capital gains exemptions are all right except for real estate. It is looking at one class of business and saying it will no longer be considered for the capital gains exemption. That should be taken into consideration. Our amendment tries to put everybody on the same footing in the same class.
Unlike the member for Ottawa South who might say for instance that we should get rid of all capital gains exemption, I come at it the other way and say that I believe in capital gains exemptions as an opportunity for job creation as well as wealth creation. That is fair. We approach the situation differently.
With respect to the specific benefits of this capital gains exemption, as the housing critic for my party I think it is fair to say that looking at the profile of the average person who invests in a duplex or triplex or a small apartment building the country and communities achieve a social benefit by those people investing in those kinds of properties.
We get a supply of housing stock which becomes affordable housing. If it is only left to the big guys, the big developers and contractors, the ones with the land to develop the apartments and so on, and not allow anybody else into the real estate market, I suggest we will not get affordable housing but the market will essentially be driven by very few people.
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Members of the middle income group for a great many years have primarily been investing in these duplexes and triplexes. They want to provide for their own pensions, their own futures and those of their children, and do so by investing in real estate. They have also provided this country with a great supply of affordable housing. I believe the Canadian Real Estate Association and others have indicated that if this opportunity for people to invest in real estate is taken away, this country and its communities will be worse off in terms of affordable housing.
Before we go about trashing this capital gains exemption just because we want to get to the speculator, the person who in better times in an overheated inflationary market was able to take advantage of buying and selling, we can put in place certain safeguards to make sure that kind of speculation does not occur. But let us not take away a fantastic financial incentive mechanism for the average person to be able to invest in real estate.
Just like they will continue to be able to invest in stocks or businesses, let them continue to invest in real estate. The side benefit to the country and the community will be the great supply of affordable housing. We know how tragic it is that a lot of people are finding it very difficult to afford shelter. In fact, over 1.5 million people are putting over 30 per cent of their income toward housing. There are 500,000 people who are paying at least 50 per cent of their income toward housing.
There is an opportunity in having the average individual invest in rental income, be it another house, duplex or triplex. At the end of the day this country benefits by that investment. Yes, they do benefit themselves because of the tax write-offs and tax advantages, but they are also investing in their future, the creation of wealth and the future of their children.
I suggest this particular capital gains exemption which this government now wants to take away will be negative for the economy. It will not do anything in terms of creation of jobs or the creation of wealth in this country.
I support the amendment put forward by my colleague, the Liberal member for Sudbury. We should try to convince this government that if it wants to take away the speculative aspects of this particular exemption because it feels it may have been abused in the past, there are other ways of doing that other than trying to take away this exemption totally.
Again on the fairness aspect, why pick on the real estate or property end when in fact stocks, bonds and business investments are allowed to remain intact?
I believe in the whole concept of capital gains exemption. It is a great opportunity for people to invest for themselves, for their future, for their children's future and for this country in providing the prosperity and jobs the country needs.


Mr. Don Blenkarn (Mississauga South):: Mr. Speaker, the particular provision in the statute has caused me considerable problems, but I think on balance there is some good rationale for the provision and the amendment ought to be defeated.
It is fair to say that of the capital gains claimed tax-free by the $100,000 exemption, over half of the gains for filing purposes have been claimed on small amounts of real estate. By and large, those items of real estate have been vacant land and property which is non-income producing.
The whole purpose of the exemption or allowance of $100,000 for capital gains was to direct investment into something that would spin the economy along. Investing in a vacant lot or investing in a cottage site, or just having an extra family home is not something that spins the economy along. The real question is: Should that kind of investment somehow be tax-free to the extent of $100,000?
It is the government's view if we are going to have allowances that reduce people's taxable income made by capital gains provisions it at least ought to be income derived from investment that is of a go-go nature. Therefore if one buys and invests in a mine or a business or buys shares that have some input into the job creation activity of Canada and there has been a risk taken, then there is some justification. My friend from Bird's Hill will agree there is some justification for giving a bit of a break.
But surely if one just buys a piece of land and it goes up in value, that is a different matter. There is no gain. No jobs are created. There is nothing done there. There might possibly be a job for the lawyer handling the purchase, possibly a job for the lawyer handling the sale and possibly a job for the real estate agent, but there is really nothing that makes Canada grow. It is a static investment.

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My friend from London though is speaking of the small investment like the duplex or the store, something of that nature. He will know that under the other provisions of the Income Tax Act capital cost allowances, mortgages and all the rest of it are deductible from the earnings of those businesses to the extent that an income can be made, losses can be claimed and tax is not paid on the losses. There is a profit in that business, albeit small, but it is a profitable business.
That type of business is a business purchased for that reason and when the assets are sold gains tax should be paid on it. If it is incorporated, gains tax is paid. If it is held as an unincorporated amount then the $100,000 has previously been allowed. But surely that $100,000 exemption ought not to be allowed here because the property only goes up in value by the speculative increase in the market, not by anything that is done to the property to make it go up in value.
Real estate is different from investing in stocks or shares in a market oriented company. In a market oriented company shares can go up in value because the company produces profits. It moves ahead. The company retains growth because it does not distribute its earnings to its shareholders but retains those earnings. The company ploughs those earnings back in and it makes things grow.
Real estate is not like that. You buy a duplex and you rent it out. You maintain it presumably, but it does not grow in value. It may increase in value because of the general inflation in the area, but it does not grow in value by the work, the effort, the energy of the company like a stock does. It grows in value only for one reason. That is because of inflation and that is because the location may be more desirable.


The Acting Speaker (Mr. DeBIois):: I am sorry to interrupt the hon. member, but it being one o'clock p.m., pursuant to order made Monday, March 29, the House will now proceed to resuming the adjourned debate on the motion of the Prime Minister for the second reading and reference to a legislative committee in the Departmental envelope of Bill C-116, an act to provide for greater certainty in the reconciliation of the personal interests and duties of office of public office holders, to establish a Conflict of Interests Commission, to amend
the Parliament of Canada Act and to make consequential amendments to other acts.


CONFLICT OF INTERESTS OF PUBLIC OFFICE HOLDERS ACT
[Stage Direction]
The House resumed from Monday, March 29, consideration of the motion of Mr. Mulroney that Bill C-116, an act to provide for greater certainty in the reconciliation of the personal interests and duties of office of public office holders, to establish a Conflict of Interests Commission, to amend the Parliament of Canada Act and to make consequential amendments to other acts, be read the second time and referred to a legislative committee in the Departmental envelope.
John R. Rodriguez: Mr. Speaker, I want to say a few things about Bill C-116.1 served on the joint committee that looked at Bill C-43, which was the previous bill introduced by the government to deal with conflicts of interest as it applies to members of Parliament and ministers.
Let me start by saying that the House of Commons represents the people of Canada. Those who are elected to the House of Commons do so through a process which involves their political parties. In the case of independent members, the independent will go directly to the constituents.
I want to stress that at no time has it been my experience that the people in any riding across this country have ever put a gun to the head of an individual and said: "You must run''. I have never known of anyone, and it is not in the historical experience of this House that any individual was ever forced to be a cabinet minister.
No one is forced to seek office in the House of Commons. In fact, in order to come here candidates actually court the electorate in elections. Therefore it is at the disposition of the electorate that we sit in this House. It is at the behest of the people of Canada that we are elected. It is a privilege for us to be here representing the people of our country and, in my case, the people of Nickel Belt.
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I want to say that because when we deal with conflict of interest we have to recognize there is a tendency and temptation to suddenly become very righteous once we become members of Parliament.
When we are running for office it is not unknown to have a family portrait and to include the dog in the family picture. They say every politician should have a dog. They try to portray themselves as wonderful family persons.
Candidates do that. They are very open when they are running for office. They will tell anything about themselves. They will tell how many times they smoked paper and inhaled it. One of them said: "I smoked paper, but I did not inhale it". The other one said: "I did. I cannot tell a lie. I enjoyed it". They are very open, want to disclose everything. Nobody asked them to and they are willing to disclose.
It is positively indecent. Some of them should be arrested and charged with exposing all these things that one would consider before they sought office as private. Sorry, it is a family show.
They are elected to the House of Commons and suddenly the curtain of secrecy descends. No more willingness to disclose. The prevailing principle is for me to know and for the public to find out. That is the prevailing principle once elected to the House, and when they get into the cabinet do they ever do things.
We had one fellow here. He put all his holdings into a blind trust. The only problem was the blind trust was his wife. That was permissible. I know love is blind, but how can a blind trust be blind when you sleep with the same person who holds your blind trust.


Donald Alex Blenkarn: As long as the lights are out.


John R. Rodriguez: No, I am sorry, that is not true. No, it is not true. The hon. member said that we are all a bunch of crooks. No, it is not to say that. How was it when we were running for office we were so willing to disclose. Now we are elected and suddenly a curtain of secrecy has descended.
I want to put the Prime Minister on the record. In 1987 the Prime Minister warned would-be MPs, those who would be MPs: "You had better be ready to open your life and books to the public. We are going to be as
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clear-cut and brutal as we can". That was the Prime Minister. He established a very high standard. Then we got Bill C-46 and before it we got Bill C-114. Then we got Bill C-43 and now we have Bill C-116.
There is no doubt being in the House of Commons, being a minister of the Crown, being a parliamentary secretary, that on occasions conflicts will arise. We recognize that, but the question then has to be asked: How do we deal with situations (a) to avoid the perception of conflict and (b) when there is a conflict how do we deal with it? It is where the private interests of the member interfaces with the public interest. When there is a conflict it must be resolved in the public interest. It means that we must put in place a regime to avoid as much as possible the possibility of conflicts arising.
The government once again in the dying days of a Parliament introduced Bill C-43. A joint committee was struck to look at that bill and it was lead by the member for Mississauga South as one of its co-chairpersons.
When we started out it was very interesting. There were members on the committee who subscribed to Mitchell Sharp's position that we should return to the era of C. D. Howe. It was a kinder, gentler era. Nobody accused C. D. Howe of having a potential or possible conflict when every day while he was a minister of the Crown he would take out his stocks and bonds and see how they were doing on the market at the same time he was minister for everything in the government.
There are members sitting in the House who subscribed to that, but to give them credit and to salute them I want to say that as we proceeded through the witnesses there was a very perceptible change. There was agreement that we could do better than Bill C-43. We came to an agreement and submitted our report to the government which was in effect a rewriting of the bill.
To start we did not see two regimes in the House of Commons. We did not see two regimes for resolving conflicts of interest. We did not see two regimes for reporting assets and liabilities of members. We saw what? We recommended a jurisconsult and that all members be subject to the jurisconsult. We would have one set of rules that applied to all members, parliamentary secretaries and ministers. We felt that was the way to provide some uniformity in the rules.

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What have we discovered in the creation of Bill C-116? We see the creation of two bureaucracies, a bureaucracy called the commission with a commissioner for ministers, parliamentary secretaries and public servants, and for the ordinary garden-type member of Parliament, a jurisconsult.
There is a problem here. This is the Siamese twins of conflict of interest except they are not joined at the head. They are joined at some other part of the anatomy because from time to time there is an overlap. From time to time a minister would have to consult with the jurisconsult, not with the commission or the commissioner.
This would be creating a conflict of jurisdiction. The bill as we know it is riddled with terminological conflicts and definitions that do not mean the same thing to the two bureaucracies. For example, we had the minister check to see if he had a possible conflict of interest when an issue comes up in cabinet or within his jurisdiction. He then comes to the jurisconsult. He does not go to the commission.
How would the jurisconsult know if the minister has a conflict when the minister did not declare his assets and liabilities to the jurisconsult? He declared them to the commission. He has a problem.
The committee did not recommend that. We also have a problem with the question of recusal. The committee recognized that we should create the atmosphere in which the public has the assurance that we are acting in the spirit of the legislation which is the avoidance of a conflict or of the appearance of a conflict.
I will use these interchangeably because when Justice Parker looked at the Sinclair Stevens case he said even if there is an appearance of conflict there is conflict. In other words, if there is smoke there has to be fire.
Therefore on the question of recusal it is very important to honour the spirit of any conflict of interest law, the spirit of trying, attempting and satisfying the public that the public office holder has attempted to avoid the appearance of conflict.
Recusal means that if an issue comes up in committee, in the House or in the cabinet, a member may have a
conflict because for example we are dealing with the Bank Act and he owns more than one-third or 10 per cent of a bank. He then has to declare the interest. He has to declare the conflict. He has to remove himself or herself from the discussion of that particular change to the Bank Act and avoid voting on the issue.
It is not difficult. When I was a municipal councillor I did it. It is incumbent upon municipal councillors all across this country when an issue comes up to declare a conflict and remove themselves from debate and voting on that issue.
We recommended recusal for members and for ministers. We do not know what is going to happen behind the curtains of secrecy that shroud the class of ministers, public servants and parliamentary secretaries. We know for ordinary members there is no requirement for recusal.
It is interesting to note that in the conflict of interest laws in the United States, Ontario, Manitoba, la belle province and in many other jurisdictions, there is requirement for recusal. When a matter comes up where there is a conflict between a minister and the issue, between the member and the issue, that minister, that member, that parliamentary secretary, that public servant must recuse, must declare the interest and remove themselves. We do not have that in Bill C-116.
When we drafted our recommendations for the government we were even-handed in the way we treated those who held cabinet positions and those who were ordinary garden-fry type MPs. In this bill, it seems to be tougher for the MPs than the ministers, the parliamentary secretaries and the public servants. Let me explain what I am talking about. It is the question of disclosure.
Justice Parker said in his report on the Sinclair Stevens affair that full disclosure is the cornerstone on which any modern conflict of interest bill is built.
When we did our report on Bill C-43, the member for Mississauga South will remember we wanted disclosure and everybody treated the same. In Bill C-116 ministers, parliamentary secretaries and public servants will report to the commission. We do not know what they will report. It is not spelled out in the bill. Then the commission will draw up a summary and it may or may not be available for public scrutiny.
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On the other hand, it specifies what the disclosure is going to be for the members. Certainly we never envisaged anything other than those assets that are purely personal. Justice Parker recommended that personal things such as your mortgage, RRSP funds and car loan ought to be excluded from disclosure. That is in line with what Justice Parker recommended with respect to the Sinclair Stevens affair.
When it came to spouses, there was a co-extensive disclosure for spouses of MPs.


An hon. member:: You would treat them as chattels, would you?


John R. Rodriguez: No. Once again, nobody twists your arm when you want to get into the cabinet. You have to know the rules of the game. We recommended that the spouses of the MPs and ministers would be required to declare what their holdings were and those of their dependent children.
What does this bill say? It does not require-


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


Hon. Marcel Prud'homme (Saint-Denis):: In all fairness to my friend and colleague, I will make sure I do not use all my time so one of the senior members can participate in the debate. I am referring to the hon. member for Annapolis Valley-Hants, a good friend.
It is a conflict of interest because I have known his father for so many years that I owe it to him to give him some time during the debate. I do not want to make any comments. I would just like to participate in the debate.

I sat on that committee, which I consider to be a very important one. For the sake of our listeners, perhaps I should explain what we mean by committee. It is a place where members can work in peace and quiet, or at least in as much peace and quiet as they can muster, on very important legislation. For instance, I am now on the electoral reform committee, which has been sitting for hundreds of hours so far. This kind of thing does not make the headlines. It is a serious business and it is the same kind of work we did when a government bill, Bill
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C-43, was submitted to us on December 12, 1991. In any case our first meeting was held on that date.
We met 26 times. We examined the bill and called experts who appeared before the committee for long hours at a time. We met witnesses, dozens of them, and I may add that one of the members of our committee who did excellent work was the newly elected Premier of Prince Edward Island. Yes, Ms. Callbeck, my colleague, was a member of this joint committee of the Senate and the House of Commons.
Perhaps I should explain as well that in French comite mixte does not mean a committee consisting of men and women, but of senators and members of the House of Commons. There are several senators and several members of the House of Commons, and one of those members was Ms. Callbeck who finished her work on the committee and who yesterday was elected Premier of Prince Edward Island. I am sure all my colleagues will want to congratulate her.

As I was saying, Ms. Callbeck, a lady of great experience was elected premier of Prince Edward Island yesterday. I am sure the co-chair, the hon. member for Mississauga South and the hon. Senator Stanbury will join with me in giving her our best wishes.

I explained more or less what a joint committee is and what a committee does, which is serious business, unlike the circus we often see in the House, which tends to give Canadians a poor impression of the kind of work federal members of Parliament do, five days a week and almost ten months a year. Now our sitting days have been shortened, but we are still sitting five days a week. That compares very favourably with the schedule of provincial legislatures.
We sat on this committee because we felt it was not any easier to legislate the honesty of parliamentarians than to legislate morality. Since some people, as soon as they see members in a position of strength-and even more so in the case of senators, ministers and parliamentary secretaries-imagine that all these people are there to get rich. We had to restore public confidence through legislation. These bills will not eliminate the problem

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altogether, however, and the public has a responsibility to remain vigilant.
As I have always said, the national media have a watchdog role. They must ensure that parliamentarians do what they were elected to do: pass good bills for the people of this country, although occasionally they maybe tough, and that they do not in any way take advantage of their position to increase their personal wealth or that of their spouse or dependents.
I have seen quite a bit in the course of my political career, and I must say I feel uncomfortable, as a member of this committee, drafting a bill that says that from now on there will be fewer temptations. The temptations will always be there. But who often puts us in that kind of position? The people who hope that we can use our position to fill their pockets.
This bill is not perfect. I must make that clear. It is our fourth try. The hon. member for Sudbury and the hon. member for Nickel Belt, from northern Ontario have pointed out there had been another bill before. For those who are interested in that sort of thing, we had Bill C-46, Bill C-114 and Bill C-43, which we examined and scrutinized and on which we made some major recommendations to the House. The government based Bill C-116, the bill we are considering today, on this report by the parliamentary committee of the Senate and the House of Commons.
I support this bill. Whenever I travel abroad on official duties and have a few hours of free time I take advantage of that time to study, for instance, the question we are talking about today, the conflict of interest legislation. On another occasion it might be the Canada Elections Act, since my whip appointed me to that committee as well and I have a special interest in the matter. There is also the matter of parliamentary associations, because I am a firm believer in the principle that parliamentarians should know what is going on in the world. So at no cost to the state I use my free time, rather than for shopping or sightseeing, to visit different legislatures in the world where my duty calls me and to study them.
In Australia, I discovered a simple bill. I am one of those who want this bill to be clear, simple and straightforward, so that people can understand it on first
reading, take it in and say, "I am satisified; it is reasonably acceptable."
That is why Australia, for example, has a bill requiring all parliamentarians to own up. After they have confessed in private, the official in charge, called a jurisconsult or commissioner, tables in Parliament in the usual way the potential conflicts of interest that parliamentarians may have so that the public and the press can be aware of them.
I have never believed and never will believe that we shoul qualitatively describe any fortune parliamentarians might have or put figures on it that would unduly excite people who might make comparisons like "my MP is richer than another" or "my senator is richer than someone else". I do not think that is what the people want to know. People want to know about any apparent conflicts of interest.
What we are doing is distinguishing between the quantitative and qualitative aspects. It is unnecessary for the public to know the exact figures, but it is very important for the commissioner and the jurisconsult to know exactly what a member might have and what he or she might owe, because debts are always dangerous; they can lead to conflicts of interest.
In an ideal world, it would be better not to have such legislation, and I am very conservative on this subject. Unfortunate incidents have occurred, but in spite of everything, I still say how proud I am to be a parliamentarian. When people ask what I do, I do not hide that I am a member of Parliament. I do not have to apologize. I am not ashamed because some Canadians these days are annoyed with us. They have to take it out on somebody and they go after the most important institution, in my opinion, the parliamentary system. That is bad. Just because unemployment is too high or people are unhappy about inflation, the sales tax, some government policies or certain leaders, does not mean that they have to take it out on the system which governs us. It is still a good system. I often regret that people get it all confused and destroy the credibility of the parliamentary system.
I urge my colleagues, in a non-partisan way, to read yesterday's Hansard because I find that it summarizes our thinking very well. For members and other people who want to read it, it is Issue No. 229 of Hansard for Monday, March 29. I would like them to read the excellent presentation made by our committee chairman, the member for Mississauga South, and the statement of
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my friend and colleague, the member for Glengarry- Prescott-Russell, who was very generous to me in mentioning my work on the committee. Of course the press does not know about it because we sit quietly without making a noise. As you know, making noise does not always do the most good. Those who shout the loudest are not necessarily right. I also suggest that they read the remarkable presentation of the hon. member for Oshawa. I think that those three speeches yesterday summarize very well the work that was done.
We have concerns, we hope and believe the time will come to consider in committee.

I hope the House will accept the recommendation of our able chairman, the member for Mississauga South, and create a special committee of both Houses, the Senate and the House of Commons. We worked together for a long time and produced a report. The report gave birth to Bill C-116. It has a long title. I am told it could be shorter by saying it is a bill that will try to avoid conflict of interest of ministers, parliamentary secretaries and hon. senators in one group and elected members of Parliament who are not in responsible positions in another.
I hope the government will still be open to polishing it up at the committee level. I see our chairman, the hon. member for Mississauga South and hon. Senator Stanbu-ry, the co-chair. It is not always easy to work with the chairman but it is very exciting to be a member of any committee he chairs. He is a tough man but some of us are equally tough and can endure it. I wish to thank him for the good job he did. He sometimes tried to stampede us, but those who like to be stampeded are just stampeded and those who can resist do resist. I hope to qualify in the last category.
I would like to take two more minutes to make something clear in the minds of the press and the people. The press is the intermediary in our parliamentary system, the power of the people. You have to understand that my colleague and I do not want to put the members of Parliament above the law. It has nothing to do with that.

As the member for Oshawa said so well yesterday, and you should read what he said, members of Parliament must not be above the law for anything of a criminal nature. I would never support a bill that would treat us differently from the rest of the population in criminal matters. If any of us commits a crime, the law is there to come down as hard, not necessarily harder, but as hard as for any crime someone might commit.
This is a special situation here, because we are elected members of Parliament or senators. Some members, because of their position as a minister or parliamentary secretary, might hear some things or see some documents or be able to use confidential information that they obtained through their position here in Parliament. This bill is to ensure that these people do not profit unduly to enrich themselves or their family and friends. Naturally it is called the Conflict of Interests Act.
I am very serious when I say that I do not like to hear about all those wonderful laws in the United States, as my committee chairman knows. I get annoyed every time I hear about them. I say: "Please do not talk to me about a system that may not be the best example in the world to follow". If anyone has conflicts of interest it is our southern neighbours. I do not like comparisons about the Elections Act, campaign spending limits and especially the famous conflict of interests legislation. I have the feeling that they always have conflicts of interest, so I do not like the comparison. I want something that is essentially Canadian and draws on the best of other political systems in the world. Then I think we can honestly come back to the House and say that we have done our duty in an honest way and produced a bill that will be revised over the years.
I admit that what we will produce is better than what exists. I admit that what we will produce will not be as good as what our successors can do. But it is a start in the right direction and I hope that people will stop being cynical about politicians because, after all, we were all elected from various political parties by the people and the time is coming when you will again be able to choose your representatives. I would like this bill to be implemented and I hope that we do not give up this work.

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I hope the chairman will be tough if he is chairman again and he should be chairman again. He should be tough to make sure this law becomes law before the end of this Parliament.

In conclusion, we have an excellent system in Quebec to deal with conflicts of interest.
Again, I say in all modesty that what we are proposing is a good imitation of what the provinces are doing. We are suggesting a jurisconsult, just as the Quebec National Assembly has, and a commissioner, like Mr. Evans in Ontario. I want to pay tribute to him and to Mr. Justice Mayrand as well. They are above suspicion. I think that is the key to success in applying this law. The first jurisconsult to be chosen, who will become an officer of the House of Commons, should be above suspicion and earn the immediate confidence of the public. That will be a good beginning.
In the parliamentary committee and in my first speech I suggested having someone with the reputation of Mr. Justice Mayrand or Malouf or former senior officials of the Department of Justice who, once they are appointed, will inspire the confidence that the public is asking or seeking from Parliament.
I hope that the commissioner who will be chosen-and I will have some suggestions to make about that-will be above suspicion. I hope that the system will be administered impartially, in the same way for all. I am not too fond of the dichotomy which seems to come out of this bill, but I really hope that when we review it we can make improvements and the government will agree to receive amendments.


Mr. Pat Nowlan (Annapolis Valley-Hants):: Mr. Speaker, I too want to share in some of the thoughts expressed here earlier. Certainly I can relieve the anxiety of the hon. member for Saint-Denis, who is one of the more venerable members and certainly second to the dean of the House. I was interested in his comments.
I think part of my problem with this bill is that my colleague and I have been here a few years and came in under totally different regimes when there was certainly a different reflection of the public will on the thoughts of members. I will come to that later. The hon. member complimented the co-chair of the joint committee that produced a unanimous report earlier on Bill C-43. Then the government came up with this bill which is a blend of aspects of Bill C-43 dealing with public office holders and another part in Bill C-116, which we are now dealing with, which affects members of Parliament.
The hon. member for Saint-Denis was hoping the chairman and government would not move so quickly. I know the issue of conflict of interest has been around for a long time. The public feels there is a fundamental flaw in the whole system because somehow members and/or ministers have got in trouble, as they have historically since Confederation in this jurisdiction and other jurisdictions across the way. As members have said before me "you cannot legislate all the time to cover the sometimes innate sin and guilt of mankind" although churches preach about it often on Sundays across the nation. But that does not mean we do not need a conflict of interest law in terms of public office holders.
It has not been mentioned here today that the Parliament of Canada Act has a section which deals with members of Parliament who may not vote on matters where they are personally going to benefit. They have to declare their interest and/or abstain. This comes from the British mother of Parliament system. That seems to work over there and it works pretty darned well. There is a character and integrity involved that somehow we as a younger country have not quite inherited.
The member for Mississauga South showed very interesting parliamentary diligence when he had the House agree unanimously yesterday to a motion on Bill C-116, which just came on the floor of the House yesterday afternoon at 4.10 p.m. and the House adjourned at 5.28, that between 1 and 1.55 today all debate and matters are to be disposed of in terms of Bill C-116, which affects every member of Parliament and every senator. The Senate will have its time, of course, to debate it.
In effect, as I compute the matter in old-fashioned arithmetic and not the computer, that is one hour and
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eighteen minutes yesterday and 55 minutes today for a total of just two hours and a few minutes on a bill that affects us all.
I agree with the member for Saint-Denis. I hope all members and/or the secretaries who may be tuned in to this television look at the debate yesterday on the generalities developed by the hon. member for Mississauga South and the spokespersons for the opposition, the member for Glengarry-Prescott-Russell and the spokesperson for the NDP, the member for Oshawa, who taunt the generalities.
I hope members will go further so when this matter gets to a committee, be it a joint or whatever, they look at a document I got out of the library prepared by Margaret Young of the Law and Government Division of the Research Branch of the Parliament of Canada. It is a legislative summary of this bill and she covers the generalities well. There are many good works done in the Research Branch of Parliament. I commend this 31-page document that reviews the general problems of this issue of balancing public duty with the privacy of the person when you are in the public domain.
I know the potential co-chair of the committee touched on the issues in a very general way in his comments yesterday, but this document deals with many specifics, some of which put a higher onus on the member than the office holder. The old C-43 was drafted onto the new 116, and there are some elements in there which I think all members would be concerned about. I certainly hope the committee knows that the member from Mississauga South shows interest in this and he has been at this for some time. He will look closely at this legislative review done by our impartial library and hopefully redress some problems there that I think even he may be unaware of at the present time.
I know the member for Mississauga South, under the rule, has a motion to help move this along. All members want this moved along, but quite frankly there can be a delusion in this conflict of interest bill. Fundamental good work is not developed in members if there is some cancer in their moral id that is going to permeate their public business. You can have all the rules and regulations you want.
I have been in this Chamber for over 25 years and you can pervert or prostitute any rule of procedure and/or
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almost any rule or regulation that is not in the criminal domain unless you have some character, integrity or common good sense. I have heard what the members have said here and I know the members spent a lot of time on this in the committee, but we are developing two parallel bureaucracies that the member for Saint-Denis touched upon, to try to define the ethics and morals that members are supposed to follow. We are doing this in reaction to the public and/or media negative element that has cast a cloud over members of this House.
I am not going to get political, but in my 25 plus years as a member of Parliament, I honestly do not know where I have run into a potential conflict of interest. I would like to know from the member for Nickel Belt, as a member of Parliament, what conflict he has run into in discharging his duty. The member for Mississauga South is a lawyer and has business interests. I still would venture that he has not run into potential conflicts but one is never to ask a question unless one knows the answer so I am only asking rhetorically at the present time.
The point is that the tone and the climate of the House of Commons and how members and the government discharge their duties is really set by the Prime Minister and/or the cabinet and there is a world of difference between a member of Parliament and a cabinet minister or a parliamentary secretary. Something that is not even covered in this bill is deputy ministers or heads of some of the important government agencies. These individuals along with deputy ministers and/or ministers and parliamentary secretaries do have information and do come across facts that could further their private interests.
I know this is perhaps not the politically correct thing and the member for Nickel Belt cast aspersions on this on another day when the Hon. Mitchell Sharp gave evidence before the committee. I was in this House of Commons when the Hon. Mitchell Sharp was not only the then Liberal government House leader but he was the Minister of Finance. To me he was one of the more-and he still is because he is still very much alive and with it-honourable ones in the days when I used to believe that the Liberal government was infallible. The days of infallible Grit rule were forever because they had not been beaten for 20 or 30 years.

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When I first came here as a young pup there they all were, not C. D. Howe, but Mr. Pearson, Mr. Sharp, Mr. Winters and many others. They were all fine Canadians. I do not know what happened then but the element of conflict of interest did not seem to make all the headlines because the Prime Minister of the day and the cabinet of the day stayed out of trouble. Even then there is a world of difference between cabinet members and their responsibility and their potential power of advancing themselves with confidential information over the rest of this House.
I will read in effect what Mr. Sharp said among other things before the committee: "I was a senior civil servant for 16 years and privy to inside information from which I could have benefited if I had put my private interests ahead of my public responsibility. For another 13 years, I was a minister of the Crown. Again I was an insider making decisions and aware of decisions being made collectively by the cabinet from which I could have benefited if I had put my private interests ahead of my public responsibilities. For a couple of years after I left cabinet in 1976, and before I resigned my seat in 1978,1 was generally regarded as an ordinary MP. I was no longer an insider. I did not have access to any information on future government decisions from which I could have profited that was not publicly available."
I will just conclude this part of what I want to say. What Mr. Sharp said before the committee with his vast experience both as a distinguished public servant, a very distinguished minister of the Crown and then in effect a backbencher before he got out of the whole business was that there was in effect a world of difference. What we know here we find out almost the same way as when he says one reads it in the paper or hears it over the news.
That is one of the philosophical problems I have with equating this even in the one bill. I know there are two regimes. Perhaps there should be two bills, one to look after ministers, parliamentary secretaries and public office holders, including deputy ministers and heads of government organizations, and then one for the members and senators who do not have the same access to information to in effect have the conflict.
The other element of the bill that I really seriously hope the committee takes a very close look at in the closing two minutes I have is the whole question of the spousal declaration of her or his interests. I know they
have wrestled with this. I am still unsatisfied with the way this bill is. It just boggles the mind on this International Day of the Woman or International Year of the Woman and all this advancement quite properly of the woman to make that person equal in society in every which way, that we are going to put into a bill a part that says that in effect a member can do what he wants to do but if the member is a man then his wife must disclose whatever interests she may or may not have.
Mr. Speaker, as you well know, there is a reverse side to this that organizers getting ready for the next election might run into. We all know that there are a lot more women who should be in this House. You are going to have the interesting situation in effect of campaign organizers going to the woman of very eminent Canadians who may have business interests to ask them to run.
Some parties have quotas. They want 25 per cent or 50 per cent as women. They go to that lady and they say: "Mrs. Brown you have to run for us". She talks to her husband over supper that night and Mr. Brown says: "Well, Matilda, I would like you to be a member of Parliament but there is no way. You do not know what I do. You know I am a big business man. You have not seen my books. You do not know what my finances are. You do not know that I may be in a state of personal bankruptcy that I do not really want to tell my competitors about. I would rather that you would not run. I do not understand why as a member your declaration that you are not going to commit any crime or have a conflict of interest should affect me".
I seriously hope that the committee gets to this. I could give many chapters and verses of how this is a complete negative reaction to what we have tried to do here to make the genders equal. Here we are putting them right back in the Dark Ages with this type of regime.


Donald Alex Blenkarn: Mr. Speaker, I rise on a point of order. I think you might find there is consent for the following motion:
That, a special joint committee of the Senate and the House of Commons be appointed for the committee stage consideration of Bill C-116, an act to provide for greater certainty in the reconciliation of the personal interests and duties of office of public office holders to establish a Conflict of Interests Commission, to amend the Parliament of Canada Act and to make consequential amendments to other acts;
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That the Order for resuming second reading of Bill C-116 be amended by having the bill referred to the Special Joint Committee rather than a Legislative Committee in the Departmental envelope;
That the said Special Joint Committee be composed of 14 members of the House of Commons, and 7 members of the Senate;
That the Standing Committee on House Management appoint the membership of this House of the Special Committee and present its report no later than five sitting days after the adoption of this order, which report shall be deemed concurred in upon presentation to the House of Commons;
That changes in membership of the said Special Committee be effective immediately after notification signed by the Member acting as the Chief Whip of any recognized party has been filed with the Clerk of the Committee;
That the said Committee have power to sit during sittings and adjournments of the House of Commons; to send for persons, papers and records and to examine witnesses; to print such papers and evidence from day to day as may be ordered by the Committee;
That a quorum of the Committee be a majority of members, whenever a vote, resolution, or other decision is taken, so long as both Houses are represented; and
That a message be sent to the Senate requesting that House to unite with this House for the above purpose, and to select, if the Senate deems it advisable, some of its members to act on the proposed Special Joint Committee.


Mr. Rocheleau:: Mr. Speaker, I just have a question for the hon. member. Will independent members be able to put questions to this committee? Will they be allowed a certain period of time or will that apply only to the Official Opposition and to government members?


Donald Alex Blenkarn: Mr. Speaker, there is no particular problem. I suspect that the committee suggested will be the same joint committee that sat on the original study of Bill C-43.
I would hope the hon. member will come to that committee and be part of that committee. There is certainly no limitation on members coming to a committee.
Indeed, I personally believe it would be helpful if the member from his group in this House, while not a recognized party, will come and be part of that committee meeting. I think it is important that we represent
well in this committee the whole House and the Senate because we are all going to be affected by this resolution.


Mr. Angus:: Mr. Speaker, I rise on a point of order. I want to remind the House that every member of this House has the right to sit in on any committee meeting and participate in that meeting after the normal order of questioning. The member is quite free to participate.


The Acting Speaker (Mr. DeBlois):: Is there unanimous consent to adopt the motion?


Some hon. members:: Agreed.


[Stage Direction]
Motion agreed to.
The Acting Speaker (Mr. DeBlois):: It being 1.55 p.m., pursuant to order made Monday, March 29,1993, it is my duty to interrupt the proceedings now before the House and put forthwith, without further debate or amendment, every question necessary to dispose of the second reading stage of Bill C-116.

Is it the pleasure of the House to adopt the motion?


Some hon. members:: Agreed.


[Stage Direction]
Motion agreed to, bill read the second time and referred to a special committee.
Mr. Speaker:: It being two o'clock p.m. we shall proceed to statements by members.


STATEMENTS PURSUANT TO S. O. 31
Bill Attewell: Mr. Speaker, in 1986 the Deschenes commission recommended the Criminal Code be amended to allow for the prosecution of war criminals.
I sat on the committee for Bill C-71, which led to the establishment of the war crimes investigation unit, and I looked forward to justice finally being served.

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I am sorry to report more than six years later that although 300 people are under active investigation not one person has yet been convicted for crimes committed.
Today a delegation from the Jewish Students' Network is meeting here in Ottawa to discuss the government's commitment to pursuing war criminals and bringing them to justice. We would do well to emulate the dedication of these young people in their determination to ensure Canada is not a safe haven for war criminals. The wheels of justice must move faster.
We owe those who died in the Holocaust and the families and friends who survived to pursue the perpetrators of these heinous crimes. We must not forget.


LOBSTER INDUSTRY
Mrs. Coline Campbell (South West Nova):: Mr. Speaker, I rise on a matter of urgency. The lobster industry in southern Nova Scotia at the height of the season suffered the worst damage to gear since 1976 as a result of the storm of the century two weeks ago. As a result of the winter weather assessment of damage by the fishermen has been difficult.
I met with close to 50 fishermen in Yarmouth last Saturday. I have received 73 assessments of damages totalling $850,000 from Shelburne to Digby counties, and I am sure that there are many more.
The minister of fisheries has in the past provided assistance to fishermen: the weir fishermen in the Bay of Fundy, assistance for gearing up in the northern cod and lobster fishermen in P.E.I.
With more than two months to fish the lobster fishermen in southern Nova Scotia find themselves with reduced gear. These fishermen need help today. I call on the minister of fisheries to provide assistance so that they will not suffer more financial losses by not being able to go lobster fishing.


DUGALD COSTUME MUSEUM
Mr. David Bjornson (Selkirk-Red River):: Mr. Speaker, today I would like to commend the efforts of the Dugald Costume Museum, which is now celebrating its 10th anniversary.
The 10th anniversary is a little misleading in that this volunteer group actually started over 40 years ago. Its desire to preserve and display different types of clothing is unique and is also world leading in concept. The 15,000 volunteer hours annually demonstrate the depth and conviction of this community-based group.
I would like to invite all members of the House to visit the museum's 10th anniversary display, "Let's Dance". I know the time spent will be most enjoyable.


PUBLIC WORKS
Mr. Steve Rutland (Sault Ste. Marie):: Mr. Speaker, in 1870 the Americans prevented the Canadian ship Chico-ra from entering into Lake Superior through their lock system.
An 1871 article in the Toronto Globe stated: "It is quite plain-that the Dominion of Canada cannot allow the Americans to have exclusive control of the means of water communication between Lakes Huron and Superior".
Thus a $4 million Canadian Sault Canal was built in 1895. Owing to a structural failure the canal has been closed to navigation since 1987. Attempts at obtaining funds for its restoration have been difficult.
However I am optimistic that a $5.9 million commitment from the Ontario NDP government, a commitment from the city of Sault Ste. Marie to do landscaping and road work and continued expressions of support from the Minister of Public Works could lead to the restoration of the lock.
Public Works has selected a recreational lock costing $11.75 million as its first choice option.
I call upon the Minister of the Environment to respond positively to this most significant initiative in Sault Ste. Marie.


VANCOUVER INTERNATIONAL AIRPORT
Mr. Ross Belsher (Fraser Valley East):: Mr. Speaker, last Thursday I had the privilege of accompanying the Minister of Indian Affairs and the Minister of State for Transport to the launching ceremony of the $350,000 expansion of the Vancouver International Airport.
March 30,1993

The Vancouver International Airport Authority, a not for profit corporation which took over operations from the federal government last year, has developed plans to build a new international terminal building and a new runway, both to be completed by 1996.
Full consideration is being given to the environmental impact of construction and special efforts will be made on the issues of noise reduction, habitat preservation and the maintaining of green spaces.
In addition, the federal government, through Transport Canada, will complement these new facilities by constructing a new control tower and an instrument landing system at a cost of just over $20 million.
It should be noted that the airport authority has devised a method of paying for the runway and terminal building improvements without depending on government grants, subsidies or guarantees.
Congratulations to Chester Johnson, chairman of the airport authority; David Emerson, president and chief executive officer of the authority; and all of the other people who have contributed to these plans to prepare Vancouver International Airport for the 21st century.


FIGHT AGAINST RACISM
Shirley Maheu: Mr. Speaker, today I would like to congratulate members of Network Canada, an organization of Jewish young people who are here today to tell us about their fight against hate crimes and their concern about the growing number of groups that promote hate.

According to Klanwatch, an organization dedicated to monitoring racist groups, there are 46 known hate groups in our country. In fact their operations are so prevalent in Canada that Klanwatch dedicated an entire issue of its magazine to hate activities in our country.
Members of the network know that groups like White Aryan Resistance and the Klan are actively recruiting in our schools. We cannot sit back and do nothing.
It is about time that the new Minister of Justice and the Minister of Multiculturalism and Citizenship concentrate their efforts on finding an effective means of controlling hate groups and eliminating them from our society.


BUDGET OF MEMBER FOR ABITIBI
Mr. Guy Saint-Julien (Abitibi):: Mr. Speaker, on February 18, 1993 I asked the Speaker of the House of Commons to freeze my member's office budget. On February 22, 1993 I declared in Parliament that I had refused to accept the 3.16 per cent increase in my main budget for 1993-94.
Today, to my satisfaction, I received a reply from the House of Commons that should be welcomed by Canadian taxpayers. My budget has been frozen at its 1992-93 level. On behalf of my Abitibi constituents, I want to thank you, Mr. Speaker, for accepting my request, and I will maintain the same services.
In Bill C-113, the government decided to make cuts in a number of federal programs and freeze the salaries of certain groups.
Today, I urge my Conservative, Liberal, NDP and Bloc Quebecois colleagues to follow suit and help reduce government spending and the federal deficit.


MANOTICK LODGE 295
Mr. Eugene Bellemare (Carleton-Gloucester):: Mr. Speaker, on March 27, 1993 I had the distinct honour of celebrating the 100th anniversary of Manotick Lodge 295 with members of the Independent Order of Odd Fellows.
It is with pleasure that I salute the present and past Grand Nobles, as well as their brothers and sisters of the Manotick Lodge, for their continued devotion in assisting their fellow persons in need.

March 30, 1993
The worthy causes they give aid to include the Os-goode Care Centre, the Canadian Guide Dog for the Blind, the Kars Fair Youth and the Arthritis Association, just to name a few.
I commend the Independent Order of Odd Fellows for giving its best efforts to the needy of the community. Odd Fellows of Manotick, thank you.


PUBLIC WORKS
Mr. Bill Casey (Cumberland-Colchester):: Mr. Speaker, if there is still any question about how the people of Prince Edward Island feel about the fixed link there was a very clear answer in yesterday's provincial election.
Ninety-five per cent of voters voted for parties in favour of the fixed link. Five per cent voted for the one party against the project. That is 95 to 5 in favour of the project.
Obviously, there were many other issues involved in the vote, but if there existed strong opposition yesterday was the opportunity for people to register their concerns or even stop the project.
During our legislative committee deliberations witnesses indicated that support for the link was growing. Yesterday's election seems to support that position.
With this clear message I again urge the government to make a determination under the recent court decision and proceed with the project.


CONSERVATIVE LEADERSHIP
John R. Rodriguez: Mr. Speaker, you will remember that two weeks ago I entered my horse Slip Chaser into the Tory leadership stakes to be run in June.
Last Friday at the London fairgrounds Slip Chaser held a press conference to declare that he has been eating grass since he was bom three years ago and he enjoys it, but he cannot understand why anyone would smoke it. He questioned his opponent's judgment about something so basic and suggested that delegates ought to seriously consider a candidate who knows what grass is for.
As for the GST, Slip Chaser declared it to be discrimi-natoiy on the grounds that it exempts medical services to humans but not horses. He would therefore abolish it.
In response to a question from reporters about his chances of winning the Tory leadership race Slip Chaser replied: "Given the opportunity to vote for the whole horse, I am confident that Tory delegates will elect me Prime Minister, the first whole horse to occupy the position".


CANADIAN NATIONAL INSTITUTE FOR THE BLIND
Mr. Ross Reid (St. John's East):: Mr. Speaker, I would like to join today with people from across Canada in commemoration of the 75th anniversary of the Canadian National Institute for the Blind.
Since 1918 the CNIB has been providing services to the blind and the visually impaired to ensure that they can be meaningful and contributing members of our society. Disability should be no limitation and the CNIB has led the way.
This morning in St. John's, Newfoundland some 400 people came together to celebrate the 75th anniversary of the CNIB. I know that all members of the House would want to join with them.


YUGOSLAVIA
Ronald MacDonald: Mr. Speaker, while the UN gambles on the possibility of a negotiated settlement in the former Yugoslavia more than 120,000 people have been murdered and 20,000 women have been raped, some as young as four years old.
The confession of a Serbian soldier describes one of the 20,000 rapes. He said: "What I remember about the first woman I raped was that she was pretty. I only remember some of their names. Fatima was a nice woman. After raping her, I took her at gunpoint to the mountains. I stopped by a small bridge and I told her to get out. She walked about three metres away from the car and I just shot her. My commander told me it was good for morale to rape and kill Bosnian women".
This account is horrific. As a leader in the international community the Canadian government has a moral obligation to do more than just condemn these barbaric
March 30,1993

acts, it must lead in forcing the United Nations to take all steps necessary to stop these atrocities.
Why does this Parliament justify its silence by pointing to sanctions which have been insufficient and a no-fly zone that goes unenforced? When women and children are being raped and murdered, why has Canada lost its courageous and leading voice on the international stage?
God and history will judge us all very harshly for inaction in this matter.



Mr. Jim Edwards (Edmonton Southwest):: Mr. Speaker, I would like to draw the attention of the House to the grave situation in war-tom former Yugoslavia.
For months now Bosnia-Hercegovina has been engaged in a bloody war, the details of which we are all unfortunately familiar with: the heinous ethnic cleansing, the rapes, the torture, the concentration camps, the famine and the wounded. The much vaunted sanctions seem to have no impact at all on the aggressor.
Canada has denounced the acts of violence and terror. We are providing peacekeeping troops and we are supplying emergency humanitarian relief.
Diplomatically, we have recognized the independence of Croatia, Slovenia and Bosnia-Hercegovina, and we believe that the people of the former republic of Macedonia have a legitimate claim to recognition.
At this time peace may be pending in Bosnia. The Muslim and Croat leaders have signed a UN-mediated peace plan, but the Bosnian Serb leader has not yet signed.
I suggest that the government's top priority should be to strengthen diplomatic relations with all peace-seeking parties and to further isolate the outstanding party in order to pressure the Bosnian Serb leader to sign.
Once peace has been achieved in the region then the Canadian government should establish diplomatic agencies in all recognized former republics.


FOOD AND DRUG REGULATIONS
James Capsey (Jim) Karpoff: Mr. Speaker, when members of Parliament read their mail they will be well aware that the health food community does not like what Health and Welfare Canada is doing.
Specifically, they do not like schedule 705 of the food and drug regulations which will arbitrarily remove 64 herbs and botanical foodstuffs from health food stores. They do not like the harmonization article of the Canada-U.S. Free Trade Agreement, article 708, restricting the availability of herbs they have used safely for many years.
They especially do not like restricting these foodstuffs to prescription use only as their availability and price will be taken over by the multinational drug companies.
Multinational drug companies have dictated that generic drugs be eliminated and now they are taking control of herbs and botanical foodstuffs.


Mr. Jim Peterson (Willowdale):: Mr. Speaker, leaders of Canada's Jewish community gather in Ottawa today to welcome Israel's Minister of Foreign Affairs, Shimon Perez, and to strengthen the ties between Israel and Canada.
Israel, a dream for over 2,000 years, became a reality only 45 years ago in the aftermath of the holocaust. Its transformation from an arid desert to an advanced nation, in spite of wars, non-recognition by neighbouring states and continuing hostilities, is testimony to the ingenuity and commitment of the Israeli people.
Canada must continue as an enthusiastic partner in Israel's future by expanding our ties of trade and investment, fostering human rights and development and condemning the Arab boycott of Israel. We must not tolerate hate literature, neo-Naziism or any form of racism, and continue to pursue and bring Nazi war criminals to justice in Canada.

March 30, 1993
Oral Questions
Above all else, a cornerstone of Canada's foreign policy must always be the security of Israel, the only democracy in the Middle East, and Canada's close ally and special friend.



ORAL QUESTION PERIOD


Ms. Albina Guarnieri (Mississauga East):: Mr. Speaker, last Sunday, the Minister of Finance again told the country there was one deficit and one taxpayer, thus continuing his alarmist comments about the size of provincial deficits.

The minister will know that the $5.8 billion he is planning to spend on helicopters is enough to clear the deficit of his home province of Alberta with enough money to spare to write off the combined deficits of Saskatchewan, Manitoba, Nova Scotia, New Brunswick, Newfoundland and P.E.I.
If there is one taxpayer and one debt, why is there still a big spender across the floor?


Hon. Don Mazankowski (Deputy Prime Minister and Minister of Finance):: Mr. Speaker, the hon. member is somewhat misleading in her assertions.
She is suggesting some $5 billion-and I correct her, it is $4.4 billion-is going to be spent in one year. That is not true. It is $4.4 billion spread over 13 or 14 years of which there are significant and positive economic spinoffs, benefits and jobs for Canadians. Most important, it will allow our Canadian servicemen and women the kind of equipment they deserve to carry out their important duties and missions.


Albina Guarnieri: Mr. Speaker, the government would rather borrow money to buy its choppers than chop its borrowing.

I have a supplementary question. Bill C-91, the drug patent bill, will increase costs for provincial health plans, making it even harder for the provinces to cut costs as required by the minister.
Will the minister cover the additional costs arising from the drug patent extensions he is imposing on the provinces so that Canada can maintain the universality of its health care programs? Will he end the universal indifference of this government to Canadians?
Hon. Benoit Bouchard (Minister of National Health
and Welfare): Mr. Speaker, we have answered this kind of question many times before in this House.
The hon. member raises the issue of universality of health care programs. The government has never considered challenging the universality of medicare. On the contrary, I have stated many times that the government was standing by its commitments in this respect.
As usual the party opposite is trying to raise doubts in the minds of Canadians. However, I do not think the provinces or Canadians in general are concerned. This has no connection with Bill C-91, which was warmly received by Canada's research community, because it will finally give Canadians the ability to develop research skills, especially in the medical field, that will make it possible to keep Canadian researchers in this country. I believe that when you consider this aspect, Bill C-91 is well received by the country as a whole.


Albina Guarnieri: Mr. Speaker, the minister must take his advice from Aunt Jemima because he sure loves to waffle.


Some hon. members:: Oh, oh.


EMPLOYMENT
Albina Guarnieri: Mr. Speaker, my question is directed to the Minister of Employment and Immigration.
Recently published Immigration Canada statistics reveal that in 1991 this government brought into Canada 56,000 immigrants who are listed as having no intention of working in this country. At the same time many highly educated and motivated young applicants are still being routinely rejected.
I ask the minister why he continues to claim that thousands of jobs are left unfilled for lack of skilled applicants when his policy is to import record high numbers of people who want no job at all.
March 30, 1993


Hon. Bernard Valcourt (Minister of Employment and Immigration):: Mr. Speaker, these are the very people who opposed the amendments we made to the Immigration Act in order to try to get into Canada the kind of people we need to help our economy. These people are talking about skills development yet they opposed Bill C-21, an act to amend the Unemployment Insurance Act, which has seen the activation of a massive amount of money to train people to get jobs.
I think we are on the right track. I take her question as an admission that they were wrong all along.


HELICOPTER PROGRAM
Mr. Don Boudria (Glengarry-Prescott-Russell):: Mr. Speaker, my question is for the Deputy Prime Minister.
This government is in the fifth year of what the Prime Minister has referred to on many occasions as a four-year mandate. Even before the tabling of the budget in the House of Commons the government says it has no money.
I want to ask the Deputy Prime Minister who is also the Minister of Finance why he is allowing his cabinet colleagues to hand out billions of dollars of contracts with the EH-101 helicopters, thereby committing future governments to these expenditures? Why is he doing that?


Donald Frank Mazankowski: Mr. Speaker, talk about inconsistencies and contradictions. Every day members across the way get up in the House and ask us what we are going to do about jobs and the creation of new economic activity and employment.
Here is a classic example where we are not only going to improve our defence capability, but we are going to create jobs and economic spin-offs, skills in high tech and a world product mandate. Why is the hon. member arguing about that?


Don Boudria: Mr. Speaker, I guess there will be lots of jobs for Tory lobbyists.

I have a supplementary question for the Minister of Finance. A number of leadership candidates in his own
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party want the EH-101 helicopter contract cancelled. I would like to ask the Minister of Finance whether today he is prepared to announce a moratorium on all new contracts for EH-101 helicopters, as requested by a number of his own colleagues.


Donald Frank Mazankowski: Mr. Speaker, I made my position abundantly clear in the House on Friday, yesterday, today, and I will make it again right now.


AGRICULTURE
Mr. Rod Laporte (Moose Jaw-Lake Centre):: Mr. Speaker, several groups representing rural Saskatchewan are in Ottawa today. They have brought concerns and frustrations that are reflected by all rural Canadians.
Despite the fact that the federal government has spent $12 billion to $15 billion in agriculture in the past eight years, 1,500 farmers are leaving the farm in Saskatchewan alone every year. The average farm income is expected to fall to about $5,000, a level not seen since the 1930s. Whether it be cuts to the Canadian Wheat Board or unilateral cuts to the Crow benefit, this government's programs have failed. Rural Canadians should be upset, urban Canadians should be upset and taxpayers should be upset.
I ask the agriculture minister: is the government planning to change its course? What plan does it have to bring about a new approach to developing programs that will bring hope instead of misery to Canadian farm families and to rural communities?


Hon. Charles Mayer (Minister of Agriculture):: Mr. Speaker, I had a chance to attend not all but most of the submissions this morning. There is no question that there is a serious problem in Saskatchewan. I was impressed with the tone and some of the substance of the submissions. People were saying that they want to solve their problem within their fiscal means. There was a willingness to work together and to take a look at improving farm programs that we have. We have always taken that position as a federal government.
People were suggesting that they needed more education and more real training. I think over all there is a general recognition that no one group, whether it be

March 30, 1993
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federal or provincial governments or the producers by themselves, can do it all by themselves. That is the tone and that is the approach we have taken in this government to try to address this problem. That is the approach that we will continue to take, to work with many of the groups that appeared this morning before the Standing Committee on Agriculture.


Rodney Edward Laporte: Mr. Speaker, one of the things that these groups all called for was co-operation. One of the things that groups from the western Canadian wheat growers to the National Farmers Union called upon was the need for a third line of defence payment. In fact this government once promised Canadian farmers that if a crisis developed in farming it would bring in a third line of defence payment to help farmers in crisis.
We need long-term programs to help farms and rural communities. We have to keep those farms and those rural communities around until such programs can be put in place.
I would like to ask the Minister of Agriculture if he plans to announce today whether he is planning to bring in a third line of defence payment for Canadian farmers now.


Charles James Mayer: Mr. Speaker, as I said, there is no question that there is a need. But we are not going to solve the problem, and I think it came out this morning in committee, simply by throwing money at it. Some of the witnesses made that almost as a direct observation.
I say again, we want to continue to work with people. I would suggest that he encourage the government of Saskatchewan, his province, to work with the federal government to see if we can develop better financial assistance for farmers, better over-all security programs for income.
I do not think it is useful in Saskatchewan simply to stand up as a provincial government and say that the GRIP program is flawed and withdraw from it without coming forward with some ideas on how we can make it better.
We are going to try very hard to work with the Government of Saskatchewan. In the meantime, we
should take some hints from what was said this morning at committee and realize that we have to work together and that there is a limit to the amount of money with which we have to work.


Mr. Vic Althouse (Mackenzie):: Mr. Speaker, since the minister is having great difficulty coming to grips with the third line of defence payment program, I wonder if he would reconsider some of the policies the government has announced recently. Would he agree to defer the 10 per cent cut to transport payments to railways, which means the farmer has to pay over $2 a tonne extra this coming year? Would he increase the initial prices, which was one of the proposals that was put in front of the meeting this morning? Also, will he promise to continue with interest-free cash advances, something that his government cancelled two or three years ago?


Charles James Mayer: Mr. Speaker, as a farmer the hon. member should know better than to make the last statement. Cash advances are still in effect for farmers. They were put in late. To listen to that member you would think that in fact they were cancelled, when in fact he knows better than that. He knows they were not.


Victor Fredrich (Vic) Althouse: They are not in legislation. One year at a time.


Charles James Mayer: He wants to yell from his seat, Mr. Speaker.
With regard to initial payments, we are always willing to look at increasing initial payments. We have done it twice already this year. We said from the beginning when we formed the government over eight years ago that that was an ongoing policy. We will continue to do that.
He also talked about other things. Just let me say again that if he wants to make representations to the federal government he should go to his own province. Witnesses this morning said that the changes that were made in the Saskatchewan GRIP cost Saskatchewan producers something like $200 million to $300 million. If he wants to make representations to the federal government he should do it through his own ilk in Saskatchewan and see if he can get some results there.


Mr. David Kilgour (Edmonton Southeast):: The same question on the same subject to the same minister, Mr. Speaker.
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Members of this House learned this morning about the severe plight of many prairie grain producers in my part of the country. His own department now projects net farm income in Saskatchewan for this year at less than $5,000 per farm-$5,000 per farm. It is the lowest since the annus horribilus of 1938.
Will the minister tell us today about the timing and amount of his third line of defence deficiency payment? Will he be making that announcement before seeding begins very shortly?


Charles James Mayer: Mr. Speaker, most of us who follow this issue do not need to go to a committee to find out there is difficulty in the Saskatchewan farm economy. Some of us have been there for a long time and know some of the difficulties.
With regard to what we intend to do, let me say again, there is a considerable amount of money on the table put there by both the federal and provincial governments and the producers. The tone and the substance that I heard this morning of some of the things that were suggested are dead on. We have to work together to solve the problem. We need more education and training and we need better long-term planning. Nobody was in favour of ad hoc programs. That is the approach we intend to pursue.


David Kilgour: Mr. Speaker, if I am correct, the minister was not present for the brief given by the Saskatchewan Wheat Pool which is the largest farm organization in Saskatchewan and has been around the longest.
Is the minister assured that the tripartite stabilization program is compatible with the Dunkel income base proposals at the GATT? If not, will he indicate to the House today that he will implement an income base program this calendar year?


Charles James Mayer: Mr. Speaker, just to correct him on the nuance, the longest serving farm organization we heard this morning was the Saskatchewan Association of Rural Municipalities. It came into being when Saskatchewan was formed in 1905.
I say again that we intend to pursue the course we are presently pursuing. That is to work with farmers and
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organizations together to develop the best possible farm program to support farmers in this time of need.


Mr. Maurice Foster (Algoma):: Mr. Speaker, my question is for the minister.
The Saskatchewan Wheat Pool has estimated that the net farm income in that province will have a shortfall this year of $1 billion. That slashes in two the net farm income of 1992 which spawned the rally of 13,000 farmers in Saskatoon in January.
The minister is talking about co-operation. What the farmers need is cash. Is the minister going to bring forth an emergency assistance program before spring seeding this year?


Charles James Mayer: Mr. Speaker, I say again that we intend to do what we have been doing. That is to work with the amount of money that is presently on the table, that is contributed by both levels of government and by the producers, to see if we can design a program that will be of maximum assistance to producers. That is exactly what we intend to do.


Maurice Brydon Foster: Mr. Speaker, the major farm organizations from Saskatchewan that made presentations today outlined the deficiency of the Gross Revenue Insurance Program, the government's major stabilization program. They outlined how net farm income is going to drop from over $650 million to some $238 million this year. They outlined clearly that this program is deficient.
Is the minister prepared to make major changes to this program so that these people can stay on their land and so that they can survive at this time when major trade wars are causing this tremendous slump in net farm income? Is he prepared to bring in changes to that program so that it will be adequate?


Charles James Mayer: Mr. Speaker, we have said all along that we are prepared to consider any kind of changes. I do not know what he means by major changes. We would have to make a judgment on that, but certainly we are prepared to make changes and some pretty significant ones if everybody could agree on the changes and everybody could agree that they were going to be in the best interests of the people we are trying to serve.

March 30, 1993
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If the hon. member has some specific ideas, we would be more than happy to hear from him. It is very easy for people to stand up and say that they find the GRIP program flawed and it has major deficiencies in it, but I have yet to have somebody come forward and tell me how they could improve it working with the same amount of money that we presently put into the GRIP program.


Ms. Lynn Hunter (Saanich - Gulflslands):: Mr. Speaker, my question is for the Minister for International Trade.
This government has never fulfilled its promise to bring forward legislation that would ban large-scale Canadian water exports. Protection of Canadian water is a major concern to Canadians, particularly in my province of B.C.
Will the minister give an unequivocal answer today? Is this government prepared to introduce legislation that will prohibit outright large-scale freshwater exports and strictly regulate small-scale water sales such as those by tanker?


Hon. Michael Wilson (Minister of Industry, Science and Technology and Minister for International TVade):: Mr. Speaker, I thought we had dealt with that question through her colleague, the member for Kamloops. He asked the question on a number of occasions. I gave him some very clear answers which basically said that the large scale exports of water are not covered under the NAFTA. They are simply not covered under the NAFTA and that is made absolutely clear by the legislation that is before the House now.
My hon. friend is suggesting that we should go and negotiate something that no one else wants to negotiate. If that is what my hon. friend wants to do then I would say to her that she is trying to give away something that needs not to be given away.


Lynn Hunter: Mr. Speaker, the minister's confusion on this issue is distressing to all of us.
It is a fact that water is a tradable commodity under the free trade agreement with the U.S. and in the
proposed deal with Mexico. His government refused to introduce domestic legislation to prevent water exports, yet the Conservatives have signed two trade agreements that will allow large scale water exports.
Will the minister finally come clean with Canadians and admit it is Tory policy to export Canadian water to the U.S.?


Michael Holcombe Wilson: Mr. Speaker let me quote if I might from the free trade agreement: "For greater certainty nothing in this act or the agreement except article 302 of the agreement applies to water. In this section water means natural surface and ground water in liquid, gaseous, or solid state, but does not include water packaged as a beverage or in tanks".
In other words, the only water that is covered in the free trade agreement is water that is in a bottle, water that is in a glass, water that is in a truck and water that people want to drink on the other side of the border that is not going in any other way except in a container like a bottle, a glass or a truck.


FISHERIES
Hon. Roger C. Simmons (Burin-St. George's):: Mr. Speaker, I have a question for my friend the minister of fisheries. It has to do with his proposed fisheries reforms. His plan to create one board for the Atlantic fishery pits one province against the other, pits one sector against the other. What is even worse, the board is going to be accountable to absolutely no one.
I want to know what the minister is up to. Is he simply trying to insulate himself from criticism for fishery decisions? Why the mad rush to wash his hands of responsibility for the fishing industry?


Hon. John C. Crosbie (Minister of Fisheries and Oceans and Minister for the Atlantic Canada Opportunities Agency):: Mr. Speaker, it certainly has taken some time for the hon. gentleman to catch on to what is up because this started with a discussion paper issued in November 1991. We are obviously not trying to railroad anything through either the House or the governmental system.
What is proposed is a board to undertake some of the responsibilities of the minister of fisheries of Canada
March 30, 1993

with respect to issuing licences to allocations and as an enforcement agency so that we can better enforce the rules in the fishery. Rather than proceeding through the courts, enforcement will be done with respect to conditions that are violated by fishermen if they violate such conditions including conservation decisions.
The policy will still be made by the minister of fisheries and the department, but the board will undertake certain activities which up to now have been done by the minister who has complete and arbitrary power over these matters and who no longer wants it. He wants to be accountable and open to the public.


Roger Simmons: Mr. Speaker, the minister knows full well despite what he just asserted that this board is not going to be accountable and open to the public. It is going to be accountable and open to no one.
The first thing this board needs if it is going to be useful is some kind of a process for redress. It would also need to be structured along provincial lines where the various fisheries are very different from one province to the other.
On this one would the minister swallow his pride of authorship, go back to the drawing-board, back off this demented twisted scheme and come up with an arrangement that better reflects the concerns of each of the Atlantic provinces and Quebec and the concerns of the fishing industry itself?


John Carnell Crosbie: Mr. Speaker, there have been extensive consultations with provincial governments, all of whom support this with the exception of one, the Government of Newfoundland, the Edgar Bergen for whom Charlie McCarthy is now speaking. That is the only government opposing this on entirely fallacious grounds. Otherwise the industry generally is supportive of this. We have had a dialogue with them.
I just met with the industry of the Atlantic coast an hour ago. I met with the B.C. industry last week. Believe me, they all think this is a step forward, with the exception of Uncle Charlie Wells down in St. John's who is opposed to it. He wants something he calls joint management which has nothing to do with this topic at all, but which he hopes to use as an election ploy.
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I am sure the hon. gentleman would not encourage him in that.


Mr. Brian Tobin (Humber-St. Barbe-Baie Verte):: Mr. Speaker, my question is also for the minister of fisheries.
This past weekend I met with the chairmen of 14 fisheries committees on the Baie Verte peninsula. The chairmen of those fisheries committees on the Baie Verte peninsula unanimously asked me to convey to the minister of fisheries that they reject this proposal for a management board. They are not interested in elections and they are not interested in ploys.
In no other resource sector, be it forestry, be it mining, be it agriculture, does the minister responsible turn over his responsibilities to a board that is not accountable to anybody.
I want to ask this minister whether he believes that the capacity of fishermen affected by the northern cod moratorium to get justice this past year would have been fully utilized had there been a board rather than a minister who was answerable to fishermen to put in place a proper compensation program.


John Carnell Crosbie: Mr. Speaker, if the hon. gentleman received these suggestions from the fishermen that he says he received, then obviously they did not understand and he did not enlighten them as to what the true purpose of this board is.
This board is simply to undertake questions of licensing for example. Should the minister of fisheries be deciding on his own whether John Brown or John Smith should get a licence and not have to give any reasons for that? It would be much better to have a quasi-judicial board which will be able to see to these processes. After having hearings it will give its decisions in writing where everything will be on the public record, rather than some hoary old minister of fisheries, h-o-a-r-y by the way, making these decisions.


Brian Vincent Tobin: Mr. Speaker, the minister of fisheries may think this is a laughing matter, but we are talking about a resource that is absolutely crucial to the economy of the province, in this case Newfoundland and Labrador, and the other Atlantic provinces as well.

March 30, 1993
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The proposed new licensing policy of this minister would have the effect of eliminating from the fishery the fishermen who participated on the basis of a family partnership and have been in the industry for 25 or 30 years because of technical details. As it now stands those fishermen can appeal their being caught up in that web of bureaucratic red tape but under a new board they would be lost.
Does the minister recognize that fishermen, just like people in the agricultural industry, people in the forestry industry, people in the mining industry want to retain the ability to appeal directly to their elected representatives and to their government and not to some unaccountable board about their very livelihood?
Will the minister put aside this foolish and cowardly idea?


John Carnell Crosbie: Mr. Speaker, the hon. gentleman is confusing two matters. With respect to licensing there are going to be major changes made for the future. In the groundfish fishery we will license professional fulltime fishermen who have a permanent attachment to the fishery. We can no longer afford the luxury of allowing anyone to go throw their nets in the water and fish. They will have to be certified and professional.
At the present time to whom do they appeal if they are turned down in a licensing application? To the minister. Does he have to give any reasons for his decision? No, he does not. To whom will they appeal in the future? To a quasi-judicial independent board which will have to give written reasons for its decision. I suggest they will be much better off out of the political circus and before quasi-judicial process than they are today.
Might I just say that we had Charlie McCarthy in the Elouse and now we have Mortimer Snerd on the other side.


Mr. Howard McCurdy (Windsor-St. Clair):: Mr. Speaker, my question is directed to the Minister for International Trade.
While Investment Canada has been made a virtual toothless tiger in protecting Canadian high technology industry, the Americans have protected theirs well.
I want to ask the Minister for International Trade whether he would confirm that under provisions of the United States' trade law which are not subject to NAFTA or the FTA or to any challenge or any dispute settlement processes, the United States can block virtually any Canadian investment in the U.S. high technology industry by invoking even the slightest relationship to national security?


Michael Holcombe Wilson: Mr. Speaker, I think my hon. friend is grossly exaggerating the point in the question he has just asked.
There is a provision under U.S. law which is used very sparingly that relates to acquisitions which could be characterized as affecting national security. My understanding is that it has been used in a handful of situations.


Howard Douglas McCurdy: Mr. Speaker, I guess the Minister for International Trade has never heard of Sematech which is the United States' semiconductor consortium that controls 35 per cent of the international market. It is supported by the Pentagon and therefore excludes Canadian investment.
Maybe he has heard of the American high resolution television industry also supported by the Pentagon from which Canadian participation is excluded.


An hon. member:: 


Howard Douglas McCurdy: Television. Is it not clear to the minister that what we have is a very asymmetric deal? Canadian high technology can be bought left and right. The Americans just invoke national security which is everything and we are out of the game.


Michael Holcombe Wilson: Mr. Speaker, my hon. friend has used two examples. I think that counts as something like less than a handful.
If my hon. friend looks at the balance in the free trade agreement he will see there is a considerable degree of protection for large Canadian companies with assets over $150 million that the United States does not have.
March 30, 1993

We have that element of protection through Investment Canada. The United States does not have that.


SMALL BUSINESS
Mr. Ken Atkinson (St. Catharines):: Mr. Speaker, my question is for the Minister of Finance.
One way my community and other communities are trying to stimulate economic activity is by helping local people start their own businesses through entrepreneurship programs and training programs. However when these individuals go to banks and traditional institutions they are told that they do not fit within the traditional lending formula. The Small Businesses Loans Act will help, as will other measures.
I would ask the minister if he will consider this difficulty in his upcoming budget and take some steps to help communities such as mine establish community equity funds or venture capital funds which can be used to help finance existing businesses or new businesses that are innovative and can help our local economy?


Donald Frank Mazankowski: Mr. Speaker, I thank the hon. member for his question. I particularly thank him for making reference to the changes that have been introduced to the Small Businesses Loans Act for which I thank all hon. members. I think everyone will agree that it is a vast improvement.
In so far as his question about community venture capital funds is concerned, I will take that as a representation. I should remind him that we have made changes to the way we treat RRSPs and also the activities related to the labour sponsored venture capital corporations which I believe has gone a long way in helping the important small business sector in providing capital for investment.
I appreciate the hon. member's interest and I assure him I will take his representation seriously.


TAXATION
Bill Attewell: Mr. Speaker, my question is directed to the
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Minister of Finance. As the minister knows labour unions in this country collect tax subsidized dues and earn tax-free income on their investments.
In 1990 Canadian and international unions collected $796 million in tax deductible dues. The cost in lost tax revenues to the federal and provincial governments could exceed $300 million a year. These same unions enjoyed $52 million in revenue on their invested assets all tax free.
Does the minister agree that the unions' tax status should be reviewed so that the tax system will be fairer and more equitable for all Canadians? Surely this tax loophole should be closed.


Donald Frank Mazankowski: Mr. Speaker, union dues are deductible for much the same reasons as other professional membership fees.
The tax exempt status of unions is treated in much the same way as Canadian non-profit organizations. I appreciate however the hon. member bringing this to my attention.
I have noted the article in the newspaper outlining the very point which the hon. member raises in the House today. I will certainly examine it and get back to the hon. member.


INDIAN AFFAIRS
Mr. Robert D. Nault (Kenora-Rainy River):: Mr. Speaker, yesterday in the House I tried to ask a question of the minister of health. He was away and I would like to try again today.
The suicide rate in the Nishnawbe-Aski Nation territory continues to be alarming to the rest of us. In the last year alone there have been over a dozen suicides in the Nishnawbe-Aski Nation.
From the beginning of this year until now there have already been seven suicides in the Nishnawbe-Aski Nation. The minister has received a proposal from the Nishnawbe-Aski Nation to put in place an inquiry into the suicide crisis in northern Ontario.

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I would like to ask the minister who is in the House today whether he could tell us if he is prepared at this time to look at this kind of inquiry into this very desperate situation in northern Ontario?


Hon. Benoit Bouchard (Minister of National Health and Welfare):: Mr. Speaker, I believe that all members of the House share the member's concern about the Nish-nawbe-Aski Nation's problem of suicide.
The proposal made by Chief Morris, who I met with last week, talks about an inquiry with a format that would include disclosures by young people and would provide a safety net for these young people to assist them to cope with the potential effects of public disclosures.
It is a very delicate operation. We understand that when we ask young people to expose the problems they face, such as sexual abuse or that kind of issue, it can make it very difficult for them.
This morning I had a long discussion with the officials of the department. I decided that with the collaboration of the Government of Ontario and the nation itself I would be ready to move ahead with an inquiry if I had the guarantees that a few conditions are respected, that the young people involved will be assisted and it will be done in light of the consequences they face.
If it is fact that once again it will be the Government of Ontario and the nation itself I would be ready to say yes to the proposal.


Robert Daniel Nault: Mr. Speaker, I thank the minister for his answer.
I would like to ask a very important question which relates to the inquiry and the effect it may have on the present crisis that we face.
It is well known that an inquiry could take up to 18 months. During this process it is incumbent upon the House and the department of health to understand that there are programs available now that we can put in place, if the resources are available, so that the crisis we are dealing with will not be delayed for 18 months as the inquiry is going on.
Would the minister be prepared to continue to fund and look at individual proposals from communities for crisis intervention programs so that we can continue with the work that we started last week at the suicide prevention workshop in order that the situation we are dealing with, the crisis of the suicides, will not go unresolved until the inquiry is over?


Benoît Bouchard: Mr. Speaker, obviously the work being done will continue to be done.
I would like to correct something that Chief Morris said last week. He said that we have not done anything to alleviate the problems in the communities. For 1992-93, we have provided $1,400,000 to help the communities to deal with the problems and we will continue to do that.
As I said to Chief Morris last week, he should recognize the work done by the Government of Canada to help the community to deal with the suicide problem.


WESTRAY COAL MINE
Mr. David Dingwall (Cape Breton-East Richmond):: Mr. Speaker, my question is for the government House leader.
Yesterday the minister stated that the reason for not releasing 25 pages of censored documents was because of the Privacy Act. We now know that that is not true.
Second, the minister said that the Government of Canada was co-operating 100 per cent with the commission of inquiry in Nova Scotia.
Earlier today the chief legal counsel of the Westray mine public inquiry said: "The federal government has not released all of its Westray mine documents to the inquiry".
Why has the government House leader and other members of the federal cabinet continually told members of the House that all of the documentation and co-operation was forthcoming from the Government of Canada to the commission of inquiry in Nova Scotia when in fact it was not?


Hon. Tom Hockin (Minister for Science and Minister of State (Small Businesses and Tourism)):: Mr. Speaker, let me first deal with the hon. member's comment about the 25 pages.
How can we believe there are 25 pages missing when in fact yesterday the hon. member for Humber-St. Barbe-Baie Verte said that seven pages were missing from the CANMET report. That is quite untrue. All pages of the CANMET report were tabled with the commission on June 13, 1992. The whole report was tabled. How can we believe the hon. member when he
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says that there are 25 pages missing when he was wrong on this particular matter.
Concerning the commission, the federal government has co-operated fully with it. We have tabled over 7,000 pages with regard to this matter. We are going to continue to co-operate further. When the commission meets again we will be tabling further documents with it.


David Charles Dingwall: Mr. Speaker, my supplementary is for the government House leader.
The chief legal counsel of the Westray mine public inquiry goes on to state: "Specifically the inquiry does not have a copy of the memo to Energy, Mines and Resources' Minister, Jake Epp, entitled Federal Funding of the Westray Coal mine. The inquiry does have an incomplete copy of the CANMET report which was obtained from a source other than the federal government".
If that is not clear, unequivocal evidence of a cover-up, I do not know what is. I want to ask the government House leader or the minister responsible why they have misled the House by not giving us all of the information?


Thomas Hockin: Mr. Speaker, the hon. member is talking about misleading the House.
He must listen to me very carefully. He is misleading the House if he says that the CANMET report, the nine-page CANMET report, was not released last June. It was, all nine pages of it were. For him to allege otherwise is to mislead the House.


TAXATION
James Capsey (Jim) Karpoff: Mr. Speaker, I have a question for the Minister of National Revenue.
The minister of health has been quoted extensively as saying that he favours the reimposition of the export tax on cigarettes to prevent the rapidly increasing smuggling of Canadian cigarettes back into Canada.
Will the minister respond yes to such a request, given that the first export tax of $8 a carton resulted in
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cigarette exports and therefore smuggling dropping 80 per cent in the month of March last year?


Benoît Bouchard: Mr. Speaker, I just want to put before the House that what I said about the export tax on tobacco was that it was one of the possible options.
I did not say that I was for or against it. I said it was an option and it should be treated accordingly.


James Capsey (Jim) Karpoff: Mr. Speaker, the Minister of National Revenue knows that the tobacco companies are not helping in the fight against the smuggling of cigarettes.
Will the minister confirm that contraband cigarettes seized in Canada cannot be traced because all the tobacco companies are now shipping all cigarettes to one warehouse in Syracuse, New York to hide the real destination?
Why are tobacco companies allowed to give tacit support to illegal smuggling?


Hon. Otto Jelinek (Minister of National Revenue):: Mr. Speaker, I do not totally agree with the premise to the hon. member's question.
It is true that the distribution system in the United States has been altered in recent months. As a result of that, the government as a whole is looking at various options to deal with the serious matter of tobacco smuggling into Canada. One of these is to call the cigarette tobacco manufacturers to the table once again to consider various issues and sundry matters.
In so far as the export tax is concerned, we have always kept that on the books as a condition of replacing it should the co-operation by the tobacco manufacturers not be there.


EXTERNAL AFFAIRS
David Bjornson: Mr. Speaker, my question is for the Solicitor General.
It has become public that a number of government employees in the Department of External Affairs submitted false travel claims. It is estimated that the

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Privilege
difference between the real and the submitted claims is in excess of $300,000.
Most recently it was reported that there will be no criminal charges laid in these cases of fraud. I would like to ask the minister why, with these very serious allegations against some public servants, charges are not being laid.


Hon. Doug Lewis (Solicitor General of Canada):: Mr. Speaker, I agree with my hon. friend that these are very serious allegations.
The government is obviously concerned when there is any allegation that taxpayers' dollars are being misspent. The RCMP completed a full investigation of the matter.
I am advised that the RCMP recommended that charges be laid. However, the Department of the Attorney General of Ontario has carriage of this matter and it has decided it would not be in the public interest to pursue charges.


PRESENCE IN GALLERY
Mr. Speaker:: I draw the attention of hon. members to the presence in the gallery of members of the Committee on Justice and Human Rights of the House of Representatives of the Kingdom of Thailand led by Mr. Prasob Butsarakam, first vice-chairman of the committee.


Some hon. members:: Hear, hear.


PRIVILEGE
Brian Vincent Tobin: Mr. Speaker, I rise on a question of privilege.
The minister of tourism and small business during Question Period suggested to the House that I had misled the House during my comments. I hope when provided with all of the information the minister for small business will withdraw that allegation because it is false.
Yesterday I stated in the House and I read from Hansard that the reference to the CANMET report which I said was made public by the government last June and which we understood at the time was a complete document is missing seven additional pages as we now see under the Access to Information request.
In fact, with the request made under the Access to Information legislation we were provided with the nine-page report as is referenced by the minister.
We were also provided with a 10th page. The 10th page provided by the Access to Information commissioner states clearly that an additional seven pages of the CANMET report are excluded.
It says that all pages are excluded. It says that only item three of attachment is relevant to the request. The remainder is not relevant, excluded under 69(l)(g) and (a), pages 28, 29, 30, 31, 32, 33, and 34. That is the statement I made yesterday in Question Period and this may be helpful to all members of the House.
Mr. John Merrick, QC, counsel to the commission of inquiry in Nova Scotia, has just completed a press conference in which he said-


Mr. Speaker:: The difficulty the Chair has is that this is sounding very much like a question of different views of things. It is a matter of debate. I am having some difficulty in finding the question of privilege. If the complaint that the hon. member has is that somebody said that because of something a member said he was misleading the House, I have always had to draw the line between whether that was intentional or otherwise.
I notice the hon. member has not gone so far as to say the minister was saying he was intentionally misleading.


Brian Vincent Tobin: He did say that.


An hon. member:: Check the "blues".


Mr. Speaker:: I may have to. If the hon. member is advising the Chair that his allegation is that the minister claimed that he, the hon. member for Humber-St. Barbe-Baie Verte, intentionally misled this House then I will listen further.


Brian Vincent Tobin: Yes, Mr. Speaker. I think the "blues" will show in the context of the discussion back and forth that it is precisely what the minister said. I hope that with the additional information he will withdraw.
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I will conclude because the matter is self-evident to anybody who looks at it reasonably. The legal counsel of the commission of inquiry, not the opposition, not a journalist, not a pundit, but the legal counsel of a judicial commission of inquiry has found it necessary today to call a press conference to respond to answers given yesterday by the minister responding on behalf of the government.
The legal counsel said today with respect specifically to the CANMET report, which is the report in question, that the inquiry does have an incomplete copy of the CANMET report that was obtained from a source other than the federal government. Regrettably the inquiry recently concluded that it had no option but to consider formal proceedings to resolve this matter of incomplete reports.
I am merely reporting the facts to the minister. If he has been misinformed by his staff I will accept that. However, I ask the minister, as an hon. gentleman, to withdraw the allegation that I have misled this House, deliberately or otherwise.


Thomas Hockin: Mr. Speaker, I welcome the opportunity to respond to this question of privilege.
First of all, earlier in Question Period I said very carefully, because I wanted to make sure the House was not being misled, that if the member was saying we did not table the whole CANMET report then he was misleading the House. My understanding is that the whole CANMET report is nine pages. I can table the nine pages right here, Mr. Speaker, if you like.
Now he is saying something that surprises me. He is saying there are pages beyond the nine pages. I am not led to believe that there are any more than nine pages to the CANMET report. I would like to know the title of the tenth page that he is reading because it may be another document attached to the CANMET report.


Mr. Speaker:: The issue here is clear enough and the hon. member for Humber-St. Barbe-Baie Verte has made it clear to me. I will check the "blues", and if the minister has said or imputed that the hon. member intentionally misled the House then I shall have to deal with it. I am going to check the "blues" very carefully.
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There is another debate here which may very well be factual, or at least a disagreement on the facts. That is debate and I am not being asked to rule on what the facts are. I will take the hon. member's representation, along with the representation of the hon. minister, and consider it and return appropriately. Is the hon. minister seeking the floor further?


Thomas Hockin: Mr. Speaker, my hon. friend and I do not usually disagree on things even though we are on different sides of the House on all sorts of matters. I would also like to take into consideration the fact that he accused me of misleading the House.
In fact I stood up in full knowledge that the CANMET report is made up of nine pages, and I said so. I am not trying to mislead the House when I say that.


Brian Vincent Tobin: Point of order.


Mr. Speaker:: Is it on the same point or another point?


Brian Vincent Tobin: Point of order.


Mr. Speaker:: This is not a point of order of course.


Brian Vincent Tobin: Mr. Speaker, I will make your job easier. I did not accuse the minister of misleading the House anywhere in my comments. If the minister thinks I did then I have no hesitation in saying that I have not accused the minister of that and shall not accuse the minister of that. What I have accused the minister of is being ill briefed or misinformed. I am saying now that he has all the facts an honourable member would do as I am doing now and quickly jump to his feet to withdraw any allegation that a member opposite is acting in a dishonourable fashion.


Mr. Andre:: You said misleading.


Mr. Speaker:: I think hon. members on both sides will understand that this is now for the Chair to settle.


MESSAGE FROM THE SENATE
The Acting Speaker (Mr. DeBlois):: I have the honour to inform the House that a message has been received from the Senate informing this House that the Senate has passed Bill C-119, an act for granting to Her Majesty certain sums of money for the Public Service of Canada for the financial year ending March 31, 1993; Bill C-120, an act for granting Her Majesty certains sums of money for the Public Service of Canada for the financial year

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ending March 31, 1994; and Bill C-104, an act respecting an agreement regarding treaty land entitlement in Saskatchewan entered into on September 22, 1992 among Her Majesty the Queen in right of Canada and Her Majesty the Queen in right of Saskatchewan.



THE ROYAL ASSENT

['Mr. Speaker, pursuant to Standing Order 83(1), I wish to table a notice of a Ways and Means motion to amend the Excise Tax Act and the Income Tax Act, and I ask that an Order of the Day be designated for consideration of the motion.']
The Acting Speaker (Mr. DeBlois):: I have the honour to inform the House that a communication has been received as follows:
March 30, 1993
Mr. Speaker,
I have the honour to inform you that the Honourable John Major, Puisne Judge of the Supreme Court of Canada, in his capacity as Deputy Governor General, will proceed to the Senate chamber today, the 30th day of March, 1993, at 5.45 p.m., for the purpose of giving Royal Assent to certain bills.
Yours sincerely,
Judith A. LaRocque,
Secretary to the Governor General



Donald Frank Mazankowski: Mr. Speaker, pursuant to Standing Order 83(1), I wish to table a notice of a Ways and Means motion to amend the Excise Tax Act and the Income Tax Act, and I ask that an Order of the Day be designated for consideration of the motion.



GOVERNMENT ORDERS


[Stage Direction]
The House resumed consideration of Bill C-92, an act to amend the Income Tax Act, the Canada Pension Plan, the Income Thx Conventions Interpretation Act, the Tax
Rebate Discounting Act, the Unemployment Insurance Act and certain related acts; and Motion No. 3.
The Acting Speaker (Mr. DeBlois):: The hon. member for Mississauga South has six minutes remaining.


Donald Alex Blenkarn: Mr. Speaker, I was saying prior to the break at lunch time that this particular statute change is one which will remove the right to all of the $100,000 exemption with respect to speculative real estate or with respect to non-producing real estate.
This is a budgetary measure. The effect of the $100,000 allowance applied to real estate that is a static investment reduces the revenue of the government very considerably. Over a five-year period the result of the tax change will increase the revenues of the government by $980 million a year, and will probably slightly increase every year from then on.
It is difficult to determine how much it is really going to work out to because it is a tax on the increase in sale value of real estate. If real estate prices do not advance then perhaps it will not be as much. If real estate prices advance more then the gain may be even more.
The concept here is to take away a break in the tax system that was designed to encourage effective job producing investment and make sure that investment break is only toward effective job producing investment. In other words, at the present time this benefit can be used for any piece of real estate a person might hold, and dead real estate, even if it is rental real estate, is not an effective job producing investment.
In terms of rental real estate, the Income Tax Act is still very favourable. Rental real estate is able to take a capital cost allowance and deduct that against rents received. The same applies with respect to the deduction of mortgage interest applicable to the investment so that there is a profit in holding rental real estate. The fact is that rental real estate is not a job producing investment and therefore it is felt by the government that in future that type of investment should not receive the $100,000 advantage.
The proposal by the government being contested in this suggested amendment by the member for Sudbury is that this restriction on the use of the $100,000 be eliminated. This is an important restriction. It is a very
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necessary restriction in terms of income to the government from the tax system and it is inappropriate for the House at this point, certainly in view of the fiscal status of the country, to expect that this benefit continue.
Those who presently have static real estate can continue to claim the $100,000 deduction against their existing real estate holdings but they can only claim it as a proportion of the period of time they have held the investment. For example, if they have held a piece of static real estate from 1972 forward, this year being 1993, they would be able to have a 21 fraction of the $100,000 tax-free gain.
As years go by the percentage of tax-free gain goes down, but nonetheless they will still be able to have a very substantial tax-free advantage applicable to the gain on non-producing property.
With respect to producing real estate, which is real estate property held as part of a business, if one owns a store and is running a hardware store from it then that is real estate that is part of the business. That can be sold as part of the business and the $100,000 applies. In the case of a small business the $500,000 allowance would apply on its shares. We are not affecting businesses as businesses. We are affecting static real estate investment.
I am indeed surprised that members opposite would want to make sure that benefit is still in the Income Tax Act. I think on reflection they may agree with the government that the $100,000 allowance is not proper in this particular case and ought not to be allowed and that the government's change in the statute ought to proceed as the bill indicates.


Mr. Dennis Mills (Broadview-Greenwood):: Mr. Speaker, I just want to pick up on the comments of the member for Mississauga South. He put forward the notion that we should do an analysis of this in terms of it being an effective job producing investment. I like that idea of analysis. I wish the government would be consistent with that notion in all the tax expenditures it has allowed to go into the act over the nine years it has been in power.
It is my contention that one of the reasons the tax act is so inefficient and unfair is because we have built up a number of tax expenditures within the act where we have
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had no analysis as to whether or not they are meeting the job objectives they were originally put in the act for.
When we talk about singling out this particular amendment, the disallowance of the capital gains exemption on capital gains accrued after February 1992 on real estate held for investment purposes, I think the government is not being totally fair when it says there may not be a job creation effectiveness within that particular exercise.
I know in my own riding many people invest in a second home. They are constantly hiring people to do renovations and upgrades. It is almost an industry in itself. I think when the government disallows that exercise it is hurting a lot of small people. We call it the panel truck trade. The carpenters, electricians, plumbers, gardeners and all of the people who are in the renovation business in my city of Toronto are being hurt by this particular amendment to the tax act. It has effectively shut down the incentive for people to get involved with that second home, that second piece of property.
The member for Mississauga South comes from the same community, although he is from Mississauga where there are a lot of large, brand new homes and there probably would not be as much renovation. However, in the downtown areas where there are constant renovations and renewals there is a whole new industry developing where people are working in a craftsman-like way, renewing and renovating these homes. A lot of that industry comes from individuals who take on a second property as an investment.
I do not think the government has in fact really done an analysis as to whether or not this is effectively producing jobs. I think if it did a proper analysis it would find out that there are a lot of jobs being created. In fact this disallowance is another measure whereby the government is once again shutting down the entrepreneurial spirit of Canadians. It is shutting down the opportunities for a lot of crafts people who like to work on small projects of renovation.
It is a funny thing with this government. It has managed to put forward the image that it is a great fiscal manager with its lean, mean machine approach to our deficit and our debt. However, since this government has been in power, is it known that between unemployment insurance and welfare disbursements we have spent close to $170 billion? This government has spent an

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amount almost equal to half of the national debt in disbursements to people who have not been doing productive things.
This is where the Liberal Party is totally different from the Conservative Party. When we go through a global recession just like the one we have been through and the one in 1981-82, we made sure we had programs because we believed that it was more important to take people off welfare and the unemployment insurance rolls and put them back to work. At the end of the recessionary period, yes, we would have a debt and a liability, but we would have something to show for it at least. We would have roads. We would have bridges. We would have upgraded airport facilities. An illusion that this government has managed to perpetrate upon Canadians is that it is a much better fiscal manager.
We have to get the message out that in fact this government has spent close $170 billion, almost half of the national debt, on unemployment insurance and welfare payments where there is absolutely no concern for the dignity of people.
I know that 99 per cent of Canadians would much rather have the dignity of a job and be working on some special project that was in the national interest.
My leader has been putting forward this notion of infrastructure projects and the NEED program that the member from Winnipeg operated in 1980, 1981 and 1982 when we had a recession. In 90 days during that period we put close to 200,000 people back to work. We used the engine of small business to hire people in a way that supplemented the small businessman with money that would have otherwise gone to unemployment insurance or welfare.
This particular motion is another example of where the bean counters over there in finance have said: "Oh, if we disallow this exemption in the interest of fiscal responsibility, then we are much further ahead". The fact of the matter is that in my city of Toronto, and I am sure it is the same as in other major cities across the country, when people buy that second piece of property or invest in that other piece of property, they hire what I call the panel truck tradesmen. They employ people to
renovate, whether it is carpenters, bricklayers or interior work that has to be done on homes.
I know of at least a half dozen people in my own riding whose spirits will be dampened once this particular amendment comes into place from the government. Their incentive to buy a second property or upgrade a second property which ultimately leads to more employment in the community will be held back. Once again the government under this illusion of fiscal responsibility has put more people out of work.


Ms. Roy-Arcelin:: I rise on a question of privilege, Mr. Speaker, simply to tell the House that the member for Quebec-Est is 50 years old today.


Some hon. members:: Hear, hear.


The Acting Speaker (Mr. DeBlois):: That is not a question of privilege, but I gladly join the hon. member in congratulating the hon. parliamentary secretary and offering him my best wishes.


Marcel R. Tremblay: Mr. Speaker, those who thought I was much older than 50 are amazed when they hear such kind words.

The lifetime capital gains exemption was introduced in order to encourage investment, risk taking and broader individual participation in equity markets. These are all goals to which the government is as committed today as it was when the exemption was first introduced in 1985.
However, as with any legislation, it is necessary to continually assess the effectiveness with which the exemption meets these objectives and to weigh these objectives against the need for fiscal responsibility.
In keeping with this, the government is proposing-effective for 1992 and subsequent taxation years-to amend the rules governing the availability of the lifetime capital gains exemption.
Specifically the exemption will no longer be available in respect of most gains of an individual on the sale of real estate purchased after February 1992 that is not used in an active business carried on by the individual.
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Individuals who purchased real estate before this date will, however, still be eligible to benefit from exemption in respect of a pro rata portion of any gain that they realize.
The portion of the gain that will continue to be eligible for the exemption will be determined on the basis of a formula that notionally allocates any gain over the ownership period. That portion of the gain that is allocated to the period prior to March 1992 will qualify for the exemption.
Thus, if an individual realized a $15,000 capital gain on land that was purchased in March 1990 and sold in February 1993, two-thirds of the gain or $10,000 will be eligible for the exemption.
These changes are in no way a reversal of the government's original intention in introducing the lifetime capital gains exemption. Rather, they are intended to help direct resources toward those investments such as equities that will best enhance Canada's ability to compete in international markets.
In this manner they respond to the economy's growing need for investment funds and will ensure that the lifetime capital gains exemption will continue to represent a major incentive for Canadians to invest.
Finally, it is not clear that these changes will have an adverse impact on the provision of private rental accommodation. It is clear that speculative real estate ventures will be less attractive thereby easing the upward pressure on real estate prices. This, in turn, could potentially increase the yields on investments that may be realized through rent as opposed to capital gains on real property.
I would like to recap what I said earlier today just a few minutes ago and make some comments on four major objectives.
First, the objective of the capital gains exemption is to encourage risk taking and broader and individual participation in equity markets.
Second, it is necessary to assess the effectiveness with which the exemption meets these objectives and to weigh these objectives against the need for fiscal responsibility.
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Third, by restricting the availability of the exemption, the government is responding to the economy's growing need for investment funds. This will help direct resources to those investments that will best enhance Canada's international competitiveness.


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


Some hon. members:: Question.


The Acting Speaker (Mr. DeBlois):: The question is on Motion No. 3. 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.
And more than five members having risen:


The Acting Speaker (Mr. DeBlois):: Pursuant to Standing Order 76(8), a recorded division on the motion stands deferred.


Hon. Pierre Blais (for the Minister of Finance) moved:: Motion No. 4.
That Bill C-92 be amended by adding immediately after line 28 at
page 242 the following new clause:
"137. (1) Subsections 241(1) to (5) of the said Act are repealed and the following substituted therefor:
241. (1) Except as authorized by this section, no official shall
(a)	knowingly provide, or knowingly allow to be provided, to any person any taxpayer information;
(b)	knowingly allow any person to have access to any taxpayer information; or
(c)	knowingly use any taxpayer information otherwise than in the course of the administration or enforcement of this Act, the Canada Pension Plan or the Unemployment Insurance Act or for the purpose for which it was provided under this section.

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(2)	Notwithstanding any other Act of Parliament or other law, no official shall be required, in connection with any legal proceedings, to give or produce evidence relating to any taxpayer information.
(3)	Subsections (1) and (2) do not apply in respect of
(a)	criminal proceedings, either by indictment or on summary conviction, that have been commenced by the laying of an information or the preferring of an indictment, under an Act of Parliament; or
(b)	any legal proceedings relating to the administration or enforcement of this Act, the Canada Pension Plan or the Unemployment Insurance Act or any other Act of Parliament or law of a province that provides for the imposition or collection of a taxor duty.
(3.1) The Minister may provide to appropriate persons any taxpayer information relating to imminent danger of death or physical injury to any individual.
(4)	An official may
(a) provide to any person taxpayer information that can reasonably be regarded as necessary for the purpose of the administration or enforcement of this Act, the Canada Pension Plan or the Unemployment Insurance Act, solely for that purpose;
(b) provide to any person taxpayer information that can reasonably be regarded as necessary for the purposes of determining any tax, interest, penalty or other amount that is or may become payable by the person, or any refund or tax credit to which the person is or may become entitled, under this Act or any other amount that is relevant for the purposes of that determination;
(c)	provide to the person who seeks a certification referred to in paragraph 147. l(10)(a) the certification or a refusal to make the certification, solely for the purposes of administering a registered pension plan;
(d)	provide taxpayer information
(i)	to an official of the Department of Finance solely for the purposes of the formulation or evaluation of fiscal policy,
(ii)	to an official solely for the purposes of the initial implementation of a fiscal policy or for the purposes of the administration or enforcement of an Act of Parliament that provides for the imposition and collection of a tax or duty,
(iii)	to an official solely for the purposes of the administration or enforcement of a law of a province that provides for the imposition or collection of a tax or duty,
(iv)	to an official of the government of a province solely for the purposes of the formulation or evaluation of fiscal policy,
(v)	to an official of the Department of Energy, Mines and Resources or of the government of a province solely for the purposes of the administration or enforcement of a program of the Government of Canada or of the province relating to the
exploration for or exploitation of Canadian petroleum and gas resources,
(vi)	to an official of the government of a province that has received or is entitled to receive a payment referred to in this subparagraph, or to an official of the Department of Energy, Mines and Resources, solely for the purposes of the provisions relating to payments to a province in respect of the taxable income of corporations earned in the offshore area with respect to the province under the Canada-Nova Scotia Offshore Petroleum Resources Accord Implementation Act, the Canada-Newfotindland Atlantic Accord Implementation Act or similar Acts relating to the exploration for or exploitation of offshore Canadian petroleum and gas resources,
(vii)	to an official solely for the purposes of the administration or enforcement of the Pension Benefits Standards Act, 19S5 or a similar law of a province,
(viii)	to an official of the Department of Veterans Affairs solely for the purposes of the administration of the War Veterans Allowance Act or Part XI of the Civilian War Pensions and Allowances Act,
(ix)	to an official of a department or agency of the Government of Canada or of a province as to the name, address, occupation, size or type of business of a taxpayer, solely for the purposes of enabling that department or agency to obtain statistical data for research and analysis,
(x)	to an official of the Canada Employment and Immigration Commission or the Department of Employment and Immigration solely for the purposes of the administration or enforcement of, or the evaluation or formulation of policy for the purposes of, the Unemployment Insurance Act or an employment program of the Government of Canada,
(xi)	to an official of the Department of Agriculture or of the government of a province solely for the purposes of the administration or enforcement of a program of the Government of Canada or of the province established under an agreement entered into under the Farm Income Protection Act,
(xii)	to an official of the Department of Communications or a member of the Canadian Cultural Property Export Review Board solely for the purposes of administering sections 32 and 33 of the Cultural Property Export and Import Act,
(xiii)	to an official solely for the purposes of setting off against any sum of money that may be due or payable by Her Majesty in right of Canada a debt due to
(A)	Her Majesty in right of Canada, or
(B)	Her Majesty in right of a province on account of taxes payable to the province where an agreement exists between Canada and the province under which Canada is authorized to collect the taxes on behalf of the province, or
(xiv)	to an official solely for the purposes of section 7.1 of the Federal-Provincial Fiscal Arrangements and Federal Post-Secondary Education and Health Contributions Act',
March 30, 1993

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Diane Marleau: Mr. Speaker, I am very surprised that the government that is proposing Motion No. 4 is not standing up and speaking to Motion No. 4.
I want to say that this motion concerns employees of the government and I believe it should be embarrassed. This is a clause which would allow the personal tax returns of tax and Revenue Canada employees to be used in a way which obviously worries them very much and in a way that most Canadians would not be subjected to. They feel if this particular clause is moved forward that their employers will be able to access their personal tax returns and use the information in the particular tax return to harass them in their work if it is absolutely the case.
I cannot say that I am convinced one way or the other because in committee we did not have a chance to completely study the question.
The committee system is meant for us to have a chance to study all the clauses at the committee and when we do that we have a chance to speak to different witnesses. Certain witnesses from a union of public employees came forward and addressed the committee stating that they were very worried about this clause. We had requested perhaps that the privacy commissioner, who had also written to the committee, appear before the committee.
The committee chairman was very anxious to get Bill C-92 through the committee and it was decided in the interest of facilitating the bill that this clause would be taken out. For that reason the bill moved through committee.
Now here we are back in the House. The clause has been reintroduced absolutely word for word in its original form. It is a despicable way of behaving for people who are going around the country saying they wish to have a reform of the parliamentary institutions. What kind of reform is it going to want when the only thing it understands is that if it makes a decision, it has to be its way and that is it. The government reintroduced this clause with absolutely no changes, without answering the questions and the fears of employees. This is a serious matter. The government should withdraw the motion which reintroduces this clause in order to facilitate and
to open up the debate and to make it a more honest approach.
I would ask the government to at least defend its position. Members should explain to the people of Canada, to their employees, why it has reintroduced this clause in word for word fashion without answering the fears of its employees.
Nobody else will have the same kind of rules apply to them. Imagine, Mr. Speaker, if your tax return information could be accessed by your boss to be used in some way against you if it is thought that you are not performing your job properly. No one else has that privilege.
If an employee does anything with his own personal tax return which is not right, he should be subjected to exactly the same rules as all other Canadians. In effect, this clause will remove that.
It is a serious matter. Perhaps there are reasons for doing this. It certainly was not clear at committee and there was not a lot of discussion on it. I would ask that this motion be withdrawn.


Marcel R. Tremblay: Mr. Speaker, you know how much I respect the hon. member for Sudbury. I did not want to precede her; I just wanted to offer her the floor before me on report stage of Bill C-92.
The amendment in question would put back in Bill C-92 the clause deleted by the finance committee. This clause, former clause 137, amends some rules on the confidentiality of information in section 241 of the Income Thx Act. Section 241 forbids officials to use or communicate information obtained under the act unless expressly authorized in one of the exemptions provided in that section.
I think that the former clause 137 should be restored for three reasons.
First, in addition to the amendment considered by the finance committee, this clause makes some improvements to section 241 of the act. For example, one of the improvements is that rules on the confidentiality of information do not apply to information that does not directly or indirectly identify the taxpayer.
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This would confirm Revenue Canada's ability to publish summary data or statistics needed to develop social and fiscal policy. These data are also very widely used by the business community.
Another important amendment would allow Revenue Canada to use a taxpayer's address to send him information. Thus Revenue Canada could provide a service like the mail service available through the American tax authorities in medical or legal emergencies.
Another amendment says that confidential information can be provided to provincial governments for evaluating or formulating tax policy. This amendment would also allow providing confidential information to provincial officials responsible for applying or enforcing a federal tax law. That is important, for example, when the Quebec Department of Revenue collects the GST for the federal government.
The second reason for reinstating former clause 137 is that without this clause certain amendments to another clause in the bill would no longer serve any purpose. More specifically, clause 136 introduces a number of amendments to section 239 of the Income Tax Act which arise from amendments made under former clause 137. Unless the clause is reinstated some of the amendments provided under clause 136 will not make sense. In fact, the relevant provision of section 239 of the act provides that contravening the confidentiality of information rules described under section 241 of the act constitutes an offence. If former clause 137 is not reinstated it would be impossible to enforce this provision in some cases, which could seriously undermine the application of the rules on the confidentiality of information.
These references to certain clauses may be confusing to some, but all members who sat on the finance committee know very well what we are talking about right now.
The third reason for reinstating former clause 137 is that most of the concerns about this clause, based on the right to privacy, have been laid to rest. These concerns arose from the amendment that would allow the use of confidential information for the purposes of surveillance
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or evaluation of Revenue Canada employees or of disciplinary measures imposed on these employees.
I would like to explain briefly why it was necessary to introduce this amendment.
Until recently senior management at Revenue Canada, Taxation, considered that the department's mandate for applying tax legislation allowed it to use confidential information for the purpose of supervising and evaluating its employees and taking disciplinary action in their regard. For instance, if a Revenue Canada employee used information concerning another taxpayer for his own purposes or if the employee falsified information in his own tax return in order to take advantage of insider information on the department's assessment and audit practices, Revenue Canada managers assumed they could use that information to take appropriate disciplinary action.
However, in 1987 the Federal Court maintained that this particular use of information by management contravened the rules on the confidentiality of information. Consequently it is impossible to submit confidential information to support the disciplinary action proposed in a particular case. The fact remains that relevant confidential information can always be submitted as evidence when charges are laid, as is sometimes the case. However, in other less serious situations it is more appropriate to take disciplinary action than to lay charges, and even in cases where charges are laid Revenue Canada managers must be able to take temporary disciplinary action, pending the outcome of the case, in order to safeguard the integrity of the tax system.
The proposed amendments would allow the use of confidential information in the case of disciplinary proceedings, as was the case before the decision handed down by the Federal Court in 1987. This particular use would however be qualified by new safety measures to make sure that only relevant confidential information is used and to prevent disclosure of information submitted before a disciplinary tribunal. The person chairing the proceedings would be authorized to order a hearing to be held in camera and to impose a ban on publication of the information or measures in question in order to protect the identity of the taxpayer.

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Many of the concerns about this amendment were raised by privacy commissioner, Bruce Phillips, who was afraid that the amendment would impinge on the right to privacy of Revenue Canada employees and that it would give departmental managers undue authority over their employees. However these fears were allayed after discussions and exchanges of letters between Mr. Phillips and national revenue deputy minister Pierre Gra-velle.
To prove my point I would like to read a few paragraphs from a letter written by Mr. Phillips, which the deputy minister of national revenue was kind enough to give me. The finance committee did not have the opportunity to see this letter before voting on Bill C-92. The letter is dated March 23, 1993 and it is addressed to Mr. Gravelle. With your permission, I will read some excerpts of this letter, which I was kindly given. I am making an ad hoc translation.
Thank you for your letter of March 23, 1993 on the proposed amendments to the Income Thx Act and the Excise Tix Act, as well as the concerns which I raised in my letter of March 18.
I first want to tell you how pleased I was with the tone and the substance of your letter. Indeed, you readily recognize the importance of issues related to privacy and you propose to hold consultations to develop safeguards for protecting the right to privacy when disciplinary action is taken.
You mention that I did not disagree that you have the right, indeed the obligation, to ensure the total honesty of your employees, and particularly to make sure that no employee uses insider information for his or her personal benefit. I am convinced that all Canadians support this objective.
My concern has to do with potential abuse, and I proposed, as a possible approach, setting strict criteria for the disciplinary review of employee files, such as defining what constitutes reasonable grounds.
I am therefore pleased to see that you have undertaken to develop guidelines on this issue and that you are willing to discuss them with people from my office and others concerned. I am very pleased with this proposal and I am confident that together we can come up with a satisfactory solution which will protect the employees' right to privacy.
As I said earlier, this is an excerpt from a letter dealing with Bill C-92, which was addressed to Mr. Gravelle, the deputy minister-


George Baker: Mr. Speaker, the hon. member speaking just quoted excerpts from a letter. He repeated it three times. I heard him say that he had the full letter in his hand. According to the rules of procedure the member must, if called upon, table the complete letter forthwith. I ask Mr. Speaker to make that ruling.


Marcel R. Tremblay: Mr. Speaker, I have before me the whole letter from Bruce Phillips to Pierre Gravelle, dated March 23, to which I was referring. This letter is in English and I translated it as I went along. My comments apply to the whole letter. I will be pleased to include with my notes the full text of the letter, which is a public document in any case.
With your permission, I will now carry on.


The Acting Speaker (Mr. DeBlois):: I first want to remind the hon. members of the usual practice in the House. A member can ask for the tabling of a document by a minister, however, in the case of a member, even though he or she may be a parliamentary secretary, it is up to that person to comply. I understand that the hon. member has no objection to tabling that document.


Marcel R. Tremblay: Indeed, Mr. Speaker, I do not think that the minister will object to the tabling of a letter which is already a public document.
The Privacy Commissioner of Canada is convinced, as I am, that by holding consultations with his office and with others concerned, such as the Public Service Alliance of Canada and other unions representing Revenue Canada employees, this department will be able to develop guidelines for protecting the legitimate privacy interests of its employees.
I maintain that these guidelines, along with the legislative proposals included in the former clause 137, will ensure a fair balance between the different interests involved.
Since my time is running out quickly, I recommend that the House adopt the motion to amend Bill C-92 by reinstating the former clause 137.
March 30, 1993


George Baker: Mr. Speaker, the letter that the hon. member was quoting from was a letter in response to Mr. Phillips from the deputy minister. The member stands up in the House and says:"Oh, I have a copy of a letter here from Mr. Bruce Phillips who is the privacy commissioner to the deputy minister". He quotes from one letter and then claims he has the other letter in his hand. I do not want the other letter. That was in the news media. I want the letter that he was quoting from. I would maintain that a parliamentary secretary has the same status in this Chamber as a minister.
It is important to see what has happened here. What has happened in this House is this. Let me just take us back a week. There was a national news story across Canada. The national news story said that the privacy commissioner had concerns about what was in this bill. The committee voted to take out the clause relating to the so-called invasion of privacy. The clause says that certain people can have their income tax returns examined. There have been no criminal charges laid because of course once you do that you can get it examined anyway. This allows a specific employer to take somebody's personal income tax return, namely an employee of the Government of Canada working at Revenue Canada, and it allows the boss to look at his income tax return to discipline him. That is why the committee took it out.
It made the news right across Canada. The committee decided to take out that clause. Then the committee, having seen a victory, shortened its hearings because no witnesses were called. The privacy commissioner was off the hook and the bill went through the committee. Now we are back in the House of Commons and they are reintroducing the clause they took out in the committee to shorten the committee hearings.
What would you call that? It is an interesting study in parliamentary procedure. I am sure that the clerks at the table and people who write in such magazines as The Parliamentarian and political science students will be able to do a masters thesis on this one. This is a precedent I would say in the British tradition of parliamentary procedure to have a clause taken out in a committee. The committee then reports back the bill, satisfied that it has done its job. There were no hearings on that clause at all, no hearings from the privacy commissioner who
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said: "You are violating the rights of people in Canada to have their income tax returns taken and looked at by your boss to discipline you".
It was taken out and the bill passes because the clause is out. It comes before the House with a majority vote in the House of Commons to reintroduce the clause during closure and have it passed. The privacy commissioner, Bruce Phillips, was absolutely correct in his judgment. The government is doing something against what the privacy commission made a big fuss about in the media last week. There is such a thing on the back of every income tax return called the "Declaration of Taxpayer Rights".
You will see it on the back of every single booklet for income tax purposes. It says: "Declaration of Taxpayer Rights". It has been there, my goodness, ever since I can recall. It is a declaration of taxpayer rights in dealings with Revenue Canada, Taxation. You have important rights.
In a section of the declaration of taxpayer rights, it reads: "Privacy and confidentiality". Let me just read the sentence. It says: "You are entitled to expect that we will use the personal and financial information you provide us only for purposes the law allows". The law allows.
This is the law that we are passing today. This is the amendment that we are sticking into that law that we are passing today. That will be the law of Canada. It will be that which the law allows. What will the law allow?
It will allow an employee of Revenue Canada to have his or her personal income tax return taken out to be examined for "surveillance purposes" for "disciplinary actions" without laying charges. As the law presently stands if you do not lay the charges you do not get to look at the income tax return.
This will allow them to do it without any other reason except the boss having an inkling or a feeling. If he does not like the looks of a person, if he does not like the way a person is acting in Revenue Canada, all those employees now can have their personal income tax returns looked at and examined.
We have a division of Revenue Canada called the audit branch. There are 14.6 million returns filed in Canada. There are 35,000 returns on average that are re-examined. They are audited. If you work it out that works out to one chance in 430 years of having your income tax

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return examined in a manner that we are prescribing under this new clause.
In other words, for you to be audited it is once every 430 years if the law is not discriminating against you if you are an ordinary Canadian. If you have done something wrong in your income tax return of course you can be liable. If some little thing is wrong there are fines of up to $25,000 and jail for one year.
Now we will have a new class of people in Canada whose income tax returns can be taken out at any time. They can be judgeu as to whether or not they can get a promotion. Their personal finances are looked at, who they are paying money to and which educational institution they support. What are their deductions? What are their personal and financial circumstances? What are people doing in their families? Exactly what is the condition of each person in that family? What are they doing? Everything.
We are passing this on an excuse. The minister says: "For possible disciplinary actions without laying charges", "for surveillance of employees at Revenue Canada", "to allow supervisors to obtain the private information of somebody's income tax return", "to allow the government to give surveillance to employees of Revenue Canada".
Can you imagine what the employees of Revenue Canada are feeling today having this special law just for them?
They will now be under a microscope because the Parliament of Canada has decided to defy what the privacy commissioner said last week publicly in the newspapers in this country. Members of Parliament decided when they went into their standing committee that somebody behind the scenes was going to pull a fast one and they were going to get the thing out of the public view by withdrawing the clause. All the government members sat there and refused to vote.
If I am wrong on this let me be corrected now. They supported it by their silence because they knew that it was going to be brought back in a sneaky fashion and reintroduced through the strict majority of this Chamber.
This is an outrage. We should have a hearing by the privacy commissioner before the House of Commons.


Mr. Blaikie:: Mr. Speaker, on a point of order. Have we totally abandoned the way we normally do business here? We have had a government member and two Liberal members. It is about time we had an NDP spokesperson on this.


The Acting Speaker (Mr. DeBlois):: I have no problem giving the floor, but in the tradition of this House the Speaker watches the two sides of the House. After this side, I have my eyes on the other side. It is the tradition. If the hon. member wants to speak absolutely, I have no problem.


Murray Dorin: Mr. Speaker, perhaps inadvertently I changed what might have been your normal procedure because I was simply getting up, not because I had been planning to, but because I wanted to respond to what the hon. member who just spoke stated. I wanted to do that in a timely fashion. I was completely prepared to allow the hon. member from Winnipeg to go ahead if he wishes. Perhaps I could just intervene here on this point.
The member has just talked about a process which included a committee of which I was the chairman. I think perhaps I could elucidate slightly about the procedure that was followed because perhaps inadvertently he has heard about the procedure. As I recall he was not there so he must have read or heard about it or otherwise got his information.
We are dealing here with a bill with probably 200 to 250 pages that incorporates many different changes to the Income Thx Act, what we often call a technical bill. Basically it is a bill which is picking up all kinds of different things which have accumulated over the course of a year and putting them into a bill.
One of those things happens to do with the matter that the hon. member is speaking about in the question of the utilization of tax returns of Revenue Canada employees in the evaluation of their work or in cases which may involve them in terms of their own personal tax liability.
What happened in committee was that this matter was brought to our attention very late in the committee process. The bill had been referred to committee. We had examined the matters that had been raised and of interest and in particular the one spoke of here earlier today about trusts where we invited some people to come and talk about that.
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This matter only came to our attention at a point in time when we were doing clause by clause. Given the fact that this matter was not necessary in terms of the remainder of the bill, at the time the thought was that we could proceed with the remainder of the bill and allow this matter if you like to be defeated or to stand aside because it did not have anything to do with the integrity of the rest of the bill. We were in fact conceding this matter in order to pass 99 per cent of the bill.
What happened is that the union representing Revenue Canada employees had raised the matter. It raised it with the privacy commissioner as well. He wrote a letter to me advising of his concern. We were going to deal with that. We were interrupted that day because of a vote in this House. We discovered after that that in fact there had been subsequent action. The deputy minister of Revenue Canada had responded to the letter of the privacy commissioner and subsequently the privacy commissioner responded to the deputy minister for Revenue Canada saying that he was satisfied with the response and the process and that his concerns had been alleviated. All those letters are a matter of public record and if anybody wishes to have them I can make them available because I have them. I have circulated them to all members of the finance committee. I believe members of his own party should have them, but if not I can make them available. Those letters outline the exchange.
The understanding of many members, including myself, was that over the course of time between the passing of the bill and its returning to the House, members would have an opportunity to examine the issue, see the exchange of correspondence that had taken place and then come to a proper conclusion.
Whether the idea of incorporating or allowing the tax returns of employees of Revenue Canada to be used in cases where they were involved to be entered into evidence is a matter on which members can come to their conclusion. However I just want to speak to the process.
The process was not that members in some way defeated this. The expectation at the time was that members would apprise themselves of the exchange of correspondence and any other facts that they might not
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be aware of at that time. It was a way to let the bill proceed expeditiously.
On the question of whether this information should be allowed to be used for the purposes of Revenue Canada in its administration of the Income Thx Act, this was the practice at Revenue Canada for many years. It was a court decision a couple of years ago. The Revenue Canada Act states that this information can only be used for the purposes of the act. Revenue Canada had always interpreted that to mean that administering the Revenue Canada Act included administering its own employees and on that basis could use this information. The courts defined more narrowly.
This measure seeks to suggest that where a Revenue Canada employee may have been involved in a matter that may have involved a taxpayer and there may have been a fraud, a breach of trust or some other matter, that the income tax return of that employee could be relevant to the particular case and could be used in evidence before a tribunal that involved this employee.
Again it is up to members to debate the merits of that, but that is what this matter seeks to do. It re-establishes a practice that had been there in the past. The process used was to expedite the passage of the bill. There was no objection to most of the other measures.


NORTH AMERICAN FREE TRADE AGREEMENT IMPLEMENTATION ACT
Thomas Edward Siddon: On a point of order, I beg the indulgence of the House, Mr. Speaker, to give notice that an agreement could not be reached under the provisions of Standing Order 78(1) or (2) with respect to second reading of Bill C-115, an act to implement the North American free trade agreement.
Under the provision of Standing Order 78(3), I give notice of my intention to move a time allocation motion at the next sitting of the House for the purpose of allotting a specified number of days or hours for the consideration and disposal of proceedings at the second reading stage.

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George Baker: Mr. Speaker, a point of order. I wonder if you could rule whether it is permissible for a motion to be put on a point of order when dealing with a separate motion before the House?


The Acting Speaker (Mr. DeBlois):: I want to remind the hon. member that this is only a notice. This does not necessarily mean that government will act on this notice. For the time being, it is nothing more than a notice given to this House. Therefore, no motion per se has been put before this House.


INCOME TAX ACT
[Stage Direction]
The House resumed consideration of Bill C-92, an act to amend the Income Thx Act, the Canada Pension Plan, the Income Thx Conventions Interpretation Act, the Ihx Rebate Discounting Act, the Unemployment Insurance Act and certain related acts, as reported (with amendment) from the Standing Committee on Finance; and Motion No. 4.
William Alexander (Bill) Blaikie: Mr. Speaker, the notice given by the minister just previously may be procedurally acceptable, but it is certainly not acceptable in any moral or parliamentary way.
We have only just begun debate on the North American free trade agreement and already the government is moving time allocation. It is certainly something on which I have made representations to the Chair. I hope now that the government's intentions are clear that the Chair will respond to my letter of Thursday last week with some expedience and with favour I hope.
In any event, I appreciated the intervention of the chairman of the finance committee. He has a reputation of being a fair-minded person. I think he gave a reasonable account of things except that it is also fair to say that opposition members have good reason to feel somewhat betrayed by the process.
I know that I as the NDP member on that committee had the impression at one point that when clause 137, which is the motion we are debating now, was defeated it
was for the purposes of either leaving it out altogether or amending it in a way that may have proved acceptable to the opposition or may have proved unacceptable. But I certainly did not expect the government would simply reintroduce it at report stage without any changes at all.
It is perfectly within the government's right to do that but that was not my expectation. Certainly we could have kept things going that evening had we thought that all we were going to be faced with, having done what we did, was the reintroduction of the clause unchanged.
There was some disposition on the part of the government at that time to find an amendment that would meet some of the concerns that were raised by the Public Service Alliance. When the government members said: "Why don't we just defeat the clause and we can deal with this later", I think there was a reasonable expectation on the part of the opposition and of the Public Service Alliance people who were present that there was a willingness to try and deal with it.
The chairman of the committee may argue that it has been dealt with in the sense that the privacy commissioner has dealt with it by saying that the objections which he raised in his conversations and exchange of letters with Mr. Gravelle of Revenue Canada have been dealt with to his satisfaction. However, just because the privacy commissioner is satisfied that there is a willingness to develop safeguards, et cetera, does not mean that the issue simply disappears. The issue did not rely solely on the intervention of the privacy commissioner in the first place. In fact, we did not hear from the privacy commissioner, we heard from the Public Service Alliance of Canada.
It is in that sense that I think the government, even though it is operating within the rules, has not acted in good faith, perhaps not even in a way that the government members on the committee thought it would act. I have no way of knowing exactly what they expected, but my reading at that time was that there was a willingness to try and find some accommodation.
Instead we are faced with the reintroduction of clause 137 exactly as it was. One wonders about the integrity of the committee process in the final analysis. If a committee can defeat a clause only to have the government- the government in the big brother sense of the word-say presumably to the committee members: "That was a fine, independent act you were responsible
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for in committee but we are sorry, we are going to reintroduce exactly what you permitted to be defeated".
For me, it was one of those times when I really felt that committee work mattered. We got together with the government members and said: "Look, there is a problem here. Let's defeat it". If we had time maybe we could have developed an amendment, but I thought that was forthcoming. There we were working like members of Parliament are supposed to work in the public mind. What happens is the government steps in at some point after and says: "Sorry, we want our way and we want our way exactly the way we want it".
From a kind of political process and parliamentary process point of view, this is an awfully disappointing thing. I am somewhat-I do not know if disappointed is the right word-in the privacy commissioner who in some respects seems to have retreated from his earlier concerns.
Perhaps retreat is a pejorative way to put it. Maybe it is just that he understood things that he did not understand before, whatever the case may be. The fact is that the commitment to develop safeguards is understandably not enough for Revenue Canada employees. For one thing, they do not know what those safeguards will be, whether they will actually be safeguards or whether they will just be phoney guards that safeguard the government in its introduction of this new and much more Draconian measure with respect to access to the tax files of Revenue Canada employees than anything we have ever seen before.
I was certainly persuaded by the testimony we heard and by my own reading of the issue that this is not something the government desperately needs. It has at its disposal other remedies when it feels that an employee of Revenue Canada is somehow using their position in a way that advantages them in terms of their own personal income tax. The government has ways of dealing with that.
I mentioned the court case that the member before me referred to and which officials before the committee referred to frequently in justifying this action. The one thing that they never mentioned was that the person who was the centre of that court case, if I understand things correctly, is not now an employee of Revenue Canada. It is not as if the government was unsuccessful in its
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dealing with that person. It did manage to get rid of that person, so to speak.
I think the government is making a serious mistake here. I have a great many Revenue Canada employees in my constituency. I happen to have located in my constituency, Winnipeg Transcona, the taxation data centre for western Canada and I know a great many people who work there. I have walked the picket line with them. I have fought on their behalf, successfully once and unsuccessfully the second time, when the government tried to introduce parking fees and a number of other things.
I find that I share their offence at having the government introduce a measure which puts them in a special category of Canadian taxpayers. I share their offence at being put in this special class of people whose tax files will be available basically at the whim of supervisors or senior management in Revenue Canada.
Maybe this is what the safeguards are intended to deal with, but we will believe that when we see it. When someone is in dispute with management, management will have this extra hammer that they will presumably in an unrelated way, if they so desire, be able to use. TTiey will be able to look into that person's tax files in a totally unprovoked way, that is to say, as far as it pertains to their tax, the way that they are dealing with their taxes, and see if there is not something that they can get on that person, see if there is not something that they can use against that person.
That is a form of discipline and a form of management oversight or intrusion into the privacy of employees that no one else in the country would be expected to tolerate. That is the reason why people who are working for Revenue Canada take offence at this. I think they are justified in taking offence at this. I think that the members of the committee saw the offence that this was to them and to other notions of privacy that we all hold in common.
That is why they defeated it and hoped that it would be dealt with satisfactorily, presumably by an amendment or, failing an amendment that was satisfactory to all the interested parties, by leaving out clause 137 or reintroducing clause 137 without the offending language. I understand that clause 137 contains more than just what

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we are dealing with here. That was part of a concern expressed by a departmental official who did the very unusual thing of leaping to the table at the committee meeting as if he was a committee member and trying to prevent the committee from doing what it was about to do. Then he was reminded that he was not a member of the committee and that he should take his place as an official.


The Acting Speaker (Mr. DeBlois):: Is there unanimous consent to extend the time of the hon. member?


Some hon. members:: Agreed.


William Alexander (Bill) Blaikie: I promise not to go on too long, Mr. Speaker, at the request of my own colleagues.
In any event, there was a way this could have been dealt with so that it could have satisfied the Public Service Alliance of Canada and it could have been an exemplary moment in the life of committees and the relationship between committee and Parliament. Instead, it has turned out to be kind of a dirty deal and one other occasion on which we feel that maybe we were a little bit naive. We should have dragged the committee on and been obstructionist and made absolutely sure that we got exactly what we wanted and done all of those things that we are sometimes condemned for in this place.
This time we did not do that. We said that it looks like there is some goodwill here and there is the possibility for a constructive solution. What happens? We get it in the ear. The clause is reintroduced exactly as it was. That is why we will be voting against it.
It is still the offence that it was in the beginning to the integrity and privacy of Revenue Canada employees. It is beyond that now. It is an offence against the appropriate relationship that ought to obtain with a committee that deletes a clause with the expectation that it will be amended and not reintroduced uncritically at report stage, as it has been.


Donald Alex Blenkarn: Mr. Speaker, I rise to make a few comments with respect to what happened in the committee and the reason this amendment is before us.
When we in the committee received the complaint by the Public Service Commission we had already heard all of the witnesses we intended to hear on this bill and were going to go immediately to clause by clause. We decided to break the pattern and call in the Public Service Alliance people to explain their concerns.
We then called Revenue Canada people and unfortunately the bells rang for a vote and we came back.
During the course of that vote period, Bruce Phillips, the privacy commissioner, had re-examined the entire matter and was going to appear as a witness at the committee. Unfortunately it was impossible to carry on the committee in that room much longer and it was necessary for the purpose of moving legislation forward that this bill be passed and this whole issue, which is really a very minor issue in a very large bill, be dealt with at report stage.
Everyone who has been involved in the bill has had a copy of the privacy commissioner's advice concerning the change. Indeed, if people take a look at the matter quite impartially they will note the rationale for the change. The change in the statute is brought about because of a case between the government and a woman by the name of Monica Lau, who is a tax assessor.
Ms. Lau was involved in tax gains in the years 1981, 1982 and 1983. In the course of a disciplinary matter the government used her tax return to fire her because the information on the tax return was essential to show the misfeasance that allowed a person to be fired from the Public Service of Canada.
The complainant took the matter to court and the court ruled that the government had no right to use Ms. Lau's tax return for the purpose of discipline and for the purpose of terminating her employment. That gave her the right to the damages that a public servant would have for being fired. She was fired for cause but she got damages for being fired for cause.
This change in the statute makes sure that people who have a special ability in the administration of income tax cannot use the tax system, their own tax system, to make money.
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We have a situation in which disciplinary action is required and the tax return of an employee is relevant to that disciplinary action, and only to that extent can the tax return be used. The guidelines will specifically and in detail control that use.
It seems to me, and I am sure to other people here as taxpayers, that people who are employees of Revenue Canada and are in the business of examining tax returns and organizing the tax system have specialized knowledge and inside information in terms of how things work.
Therefore it is important, if we are going to make sure the system is fair and honest for taxpayers, that those persons who are hired for that specific purpose know that their own returns can be used should they play games with the system and benefit themselves through information they have gathered as a result of their employment with Revenue Canada.
One could say that we could fire her, and Ms. Lau certainly did get fired, but the question really is whether this is a dismissal with cause or a dismissal subject to damage. It is the government's view that when people are deceitful and dishonest in Revenue Canada and it is necessary to use their tax information to prove that deceit and dishonesty that they should not be able to hide behind the privacy of their tax returns so that then-deceit and dishonesty cannot be legally shown and that deceit and dishonesty becomes a matter of employee discipline.
I think any fair-minded person would find that to be a fair statement and I suggest that the amendment is necessary. It came forward like this because we were not prepared to pass the bill and that section without the information and undertakings from the privacy commissioner. We now have those. We are now prepared to put the section before the House.
Therefore members on the government side in the committee deliberately did not vote on that clause when the clause was put by the chairman and consequently the clause did not pass.
Members of the committee did it that way because the most convenient way of doing the amendment, changing it and handling it was by not passing the clause at committee and reintroducing it at report stage so that it
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could be passed. That was the clean, easy and neat way of doing it.
Everyone who was at the committee that evening knew that was going to happen. There is no deceit or misrepresentation here. It was perfectly obvious to everyone who was there exactly what we were doing. Otherwise we would have introduced detailed amendments at committee in connection with the particular clause before us. We did not do that simply because the cleanest, easiest and neatest way of handling the matter was to reintroduce the clause at report stage and put it to the House.
That is why it is before the House now. It was a neat, clean way of handling the matter and it would have been introduced in part form or altered form had the privacy commissioner not reported as he had. When he reported as he had the only proper and effective way of bringing this matter back to the House was to reintroduce the entire clause the way it was when the bill was first brought before the House at second reading.
That is the reason for it and that is why this amendment should pass.


Dennis Joseph Mills: Mr. Speaker, I was not at the committee and I have listened attentively to the member for Mississauga South. I do not want to debate his point on what happened technically to the clauses of the bill. I want to deal with the substance of what we are involved with here, and I am personally opposed to this.
To have a situation where-and it does not matter that we are putting the onus on the fact that they are Revenue Canada employees-managers or supervisors, by a law of the land, are allowed to have access to a person's tax return is obscene. If there is a suspicion by a manager that the employee is breaking the law then lay the charge. Simply lay the charge.
We all know that from time to time because of the nature of human beings there could be a moment of frustration or tension in which someone could use the tax system in a way that would not be just. They could use that tax system outside the actual basic law of treating someone fairly. They could use this as a way of harassment.
I do not think this is right in any way, shape or form.
I want to go back to the remarks put forward by the Parliamentary Secretary to the Minister of Finance because he was quoting selectively from a letter that was

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written by the privacy commissioner of Canada to the deputy minister of revenue, Mr. Pierre Gravelle. I want to read the entire letter because when I read it I think members will see that this is not a case in which the privacy commissioner is completely satisfied with what is going on here.
It says: "Dear Mr. Gravelle: Thank you for your letter of this date", this is March 23, "regarding the proposed amendments to the Income Ikx Act and the Excise Tax Act and the concerns we expressed about them in my letter to you March 18. Let me say at the outset that I was gratified both by the tone and the substance of your letter. In the case of the former by your ready acknowledgement of the privacy interest in these matters, and in the latter by your proposal for a consultative process to develop proper privacy safeguards in disciplinary actions.
You noted that I did not disagree with the proposition that you have a right, indeed a duty, to ensure a high degree of employee integrity and particularly to satisfy yourself that no employee uses insider information for personal benefit. I am sure every Canadian supports that objective.
My concerns lie with the potential abuse. I suggested as a possible approach the establishment of stringent criteria for the examination of employee files for disciplinary purposes such as defining conditions of reasonable cause. It was satisfying, therefore, to learn that you already are in the process of developing guidelines with my office and other interested parties. I welcome this proposal, confident that together we can work out a satisfactory regime that protects privacy rights of employees.
Finally, let me acknowledge with pleasure that your interpretation of the "made language in the amendment to section 241" is the same as our own. Namely, that it is intended to enable Revenue Canada officials to carry out their duties under the Privacy Act.
I presume that your officials will soon be in touch with my office to initiate discussions on the guidelines mentioned above."
What we have here today is yet another example of this government's total disrespect for the House of
Commons. It is another example where this government with its majority and its lean, mean machine approach to governing this country is trying to slide through an amendment that would give the management of Revenue Canada the right to look at their employees' tax returns.
There is not a person in this country who would support that kind of treatment. There is not a businessman or businesswoman in this country who would support an initiative where the boss can look or can get access to a person's tax returns. Once something like this is put into law with Revenue Canada where does it go?
One could use the same logic and apply it to judges, departments that give out grants for industry and to every public servant. Every public servant in this country is in a position of trust. Every one of us in this House of Commons is in a position of trust. If I am doing something wrong then someone can lay a charge against me or the employer or whoever it is can lay a charge against any public servant. However, to use the legislative process of the House of Commons of Canada to try and slide through just this little amendment so that the management of Revenue Canada could look at their employees' tax returns is totally and utterly wrong.
Something else bothers me about this as well. We had the deputy minister of Revenue Canada in the public accounts committee last week. He is a great public servant and a man who is dedicated to his job.
I want to say that I was so shocked to find out that the Department of Revenue has done no cost-benefit analysis on the GST. It has done no analysis. We know that the revenue of the GST is approximately $30 billion. We know that it put out this number of $15 billion after the social credits and the operating costs such as the GST police and so on. There is a net of $15 billion.
It has no figure for what, for example, the restaurant sector in Canada was bringing into the national Treasury pre-GST and post-GST. It has no idea how the GST has affected tourism pre-GST and post-GST. Tourism employs almost 12 per cent of the nation's work force. The tourism receipts in this country are down by almost 35 per cent. One cannot find a tourism operator in this country who will not say that the GST has caused the damage.
March 30, 1993


The Acting Speaker (Mr. DeBlois):: 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 Bonavista-Trinity-Conception-National Defence; the hon. member for Gatineau-La Lievre-Dairy Industry; the hon. member for Edmonton Southeast-Sovereign Life Insurance Company; the hon. member for Davenport-The Environment; and the hon. member for Saint-Boniface-Employment.

It being 4.45 p.m. pursuant to an order made Thesday, March 30, 1993, in accordance with the provisions of Standing Order 78(3), it is my duty to interrupt the proceedings and put forward every question necessary to dispose of the report stage of the bill now before the House.
The question is on Motion No. 4. 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.
And more than five members having risen:


The Acting Speaker (Mr. DeBlois):: Pursuant to Standing Order 76(8), a recorded division on the proposed motion stands deferred.


[Stage Direction]
Call in the members.

And the division bells having rung:
The Acting Speaker (Mr. DeBlois):: Order, please. The first question is on Motion No. 1.


PAIRED MEMBERS
[Stage Direction]
nil/aucun
The Acting Speaker (Mr. DeBlois):: I declare the motion lost.
The next vote will be on Motion No. 3.



[Stage Direction]
nil/aucun
The Acting Speaker (Mr. DeBlois):: I declare the motion lost.
The next vote will be on Motion No. 4.


Mr. Gagliano:: Mr. Speaker, I think you will find unanimous consent in the Chamber to apply the vote on Motion No. 1 but in reverse to Motion No. 4 as well as to the motion at report stage.


The Acting Speaker (Mr. DeBlois):: Is there unanimous
consent?


Some hon. members:: Agreed.



[Stage Direction]
nil/aucun
[Stage Direction]
March 30, 1993
Government Orders
The Acting Speaker (Mr. DeBlois):: I declare the motion carried.
++NAYS
Members


Donald Frank Mazankowski: that the bill be concurred in.



[Stage Direction]
nil/au cun
The Acting Speaker (Mr. DeBlois):: I declare the motion carried.

It being 5.25 p.m., pursuant to Standing Order 30(6), the House will now proceed to the consideration of Private Members' Business as listed on today's Order Paper.
March 30, 1993



PRIVATE MEMBERS' BUSINESS


Ms. Dawn Black (New Westminster-Burnaby) moved:: That, in the opinion of this House, the government should
incorporate the following national objectives in all of its child care
initiatives:
1.	child care services should be licensed and regulated so that they apply the highest standards consistent with current knowledge of early childhood development;
2.	cost should not be a barrier to access to child care services;
3.	child care services should be universally accessible, irrespective of a person's income, employment status or geographic location;
4.	child care services should be comprehensive enough to offer services for infants, pre-schoolers, school-age children, and children with special needs, and be culturally sensitive;
5.	child care services should be flexible enough to accommodate the demand for full-time, part-time, seasonal, shift and occasional services;
6.	child care services should be operated on a non-profit basis.
She said: Mr. Speaker, I rise today to call for a national child care program which is accessible, affordable, comprehensive, culturally sensitive, of good quality, flexible and non-profit. Yes, that is a tall order, but it is an essential goal.
Many may lead us to believe that such a program is impossible but that does not explain how a number of European countries have achieved comprehensive, publicly funded national child care programs, some of which even include allowances for homemakers who raise small children full time.
Unlike most other developed affluent nations, Canada does not have a system of child care. Child care in Canada has developed in a haphazard manner driven by market forces.
Child care is a women's rights issue. The royal commission on equality and employment reported in 1984 that child care is the ramp that provides equal access to the work force for mothers.
Private Members' Business
In our society women are primarily responsible for child-rearing. This has resulted in the incredible poverty of older women who do not have pensions built up in their own name. It has also resulted in inequality between women and men workers. Our society must come to terms with blending work and family responsibilities in a way that does not penalize either the mother at home or the mother in the paid work force.
In 1990 Canada signed the UN Convention on the Rights of the Child. Child care is recognized in that convention as a significant children's rights issue. Every child has the right to adequate care either by a parent or by another caregiver.
France has an extensive and well-funded system of child care and women's equality is not used to justify it. They consider what is best for the children. Child care is a family issue. It should be there for parents who want or need to do paid work and to provide respite care for those at home who are child care workers 24 hours a day, seven days a week.
The Vanier Institute for the Family estimates that 1.3 million Canadian children are in need of child care. Yet there are only 300,000 licensed child care spaces in the entire country.
Child care is a social policy issue. Child care is a way to identify and to help abused children and to provide educational and other resources and opportunities for poor children that their parents are not able to afford.
Child care is an economic issue. It is an investment in a skilled and educated work force. It is about time government and employers realized that the majority of workers are parents and that the future workers and citizens may now be growing up with inadequate care that will have a major and long lasting impact on the future of our country.
Child care is an important issue, one which this government and the Liberals when in power have chosen to ignore. Even during these times of economic hardship the New Democrat governments in both British Columbia and Ontario have invested in the creation of new licensed child care spaces.
Canadian families have changed. Children are being raised in smaller families. This means fewer siblings and fewer aunts and uncles to care for children. Families are more mobile. Over 16 per cent of the Canadian population are immigrants. This means that parents and

March 30, 1993
Private Members' Business
children may not live in the same city as their grandparents and other family members, or they may have no extended families or strong networks of people who can care for their children while they financially support them.
Before the 1980s the paid labour force participation rates for mothers of pre-school children were lower than that for all other women. Now the rate for mothers of pre-schoolers has surpassed the paid labour force participation rate of all women.
The 1992 Canadian national child care study found that over half the families with pre-school children were dual earner couples or employed sole support parents.
It is harder to make ends meet these days and it is becoming impossible to raise a family on one income. Wages have not kept pace with inflation. Taxes have increased while services have been cut. The number of women raising children on their own has risen, both due to divorce and to the fact that many young, unmarried mothers choose to raise their children themselves.
I want to go through each point of my motion. First, child care must be of good quality. Child development research shows that the quality of care children receive has a profound effect on their future development. Some unregulated, informal or private arrangements may suit all parties; for instance, sometimes a grandmother who cares for her grandchildren while her daughter or son is in the paid work force. Sometimes for some families that works and it is a positive arrangement. She may be a good, experienced caregiver who has a lot of love and wisdom to share.
We have all heard the horror stories of other types of unlicensed care such as the alleged sexual abuse ring, run from an unlicensed, unregulated child care centre in Martensville, Saskatchewan. Abuse can also be a problem in unregulated care provided by friends or relatives.
A child is most likely to be abused by someone they know, by a friend, a family friend or a relative, than by anyone else. We must ensure that all Canadian children are being cared for in conditions which do not hurt their health, imperil their safety or close their minds. That means good staff-child ratios so that caregivers can interact frequently with each individual child. It means
fair wages, benefits and working conditions for child care workers so they do not bum out and a child can count on having the same caregiver for a period of several years. It means a physical environment which is safe and pleasant where kids can get fresh air. It means training in early childhood education for caregivers so they can structure programs appropriate for children's developmental levels.
When compared to France, Denmark, Sweden or Italy, Canadian child care is substandard on many counts and particularly deficient in staff training requirements. Not only must we have standards for care of our most important resource, our children, but those standards must be enforced.
Second, child care must be affordable. Since 1966 child care has been funded through the Canada Assistance Plan which is essentially a welfare program. The government has talked about giving parents choices, but currently many parents have no choice. They do not qualify for a subsidy, but cannot afford the full fees for care. Child care costs can take up almost all or a majority of a woman's yearly salary. A family with a pre-school child and one school age child can pay up to $12,000 a year for child care costs alone. It means a woman can end up working for $5,000, $6,000 or $7,000 a year after she has paid her child care costs.
The crying shame of this is that there are empty child care spaces out there that no one can afford and yet the line for subsidized child care spaces can be over a year long. That is a year when a parent must stay out of the paid work force or on welfare. Because of the shortage and ineligibility of many families for subsidized regulated spaces, many families are forced to turn to informal arrangements which can be unstable and for which they may not be able to get receipts to deduct on their income tax. Studies have found that unregulated arrangements have a high turnover rate which means the child is shunted about to a different caregiver every few months. People must have the option of affordable licensed child care.
Third, child care must be accessible regardless of income, employment status or geographic location. In Canada today, child care is simply not available in many rural areas, while both parents may be busy working on a farm or one is working in town while the other is working on the farm. Licensed child care is not accessible in Canada. Many families do not qualify for a subsidy and
March 30, 1993

yet cannot afford the enormous costs of child care. The gap between the availability of licensed child care and the number of mothers in the paid labour force has been widening over the past decade until it has become a huge gulf. By 1990 there were 500,000 more children under 13 with a mother in the paid labour force for whom there was no more regulated child care than there was in 1983.
Fourth, child care must be comprehensive, culturally sensitive and be able to deal with special needs. Cultural sensitivity, training and screening should be a part of staff training and hiring. No child should go to child care and come out of that child care centre with a lack of self-esteem.
Aboriginal communities face a particular challenge in terms of instilling knowledge and respect of traditional language, customs, values and spirituality. Aboriginal child care must be controlled by aboriginal communities.
Fifth, child care must be flexible enough so that it can be used on a full, part-time or occasional basis or seasonally or by shift workers.
I had three children in two years. I know what it is like to be at home in a low income, one income family trying to deal with the needs of three very small children, one of whom was critically ill. Parents who are in that position must have the availability of respite so that they can have care for their children and continue to have their young children socially interact with other children and move out of their own home environment for the health of both the parents and the children.
The Canadian national child care study reported last year that 55 per cent of parents with paid employment did not have a standard work schedule, that is Monday to Friday with no evening or weekend work. Yet most child care centres are only open from 8 a.m. to 6 p.m. or fewer hours. What care is there for children whose parents must work shift work? The need for flexible child care cannot be underestimated.
Why should taxpayers be paying good money for a child care centre's owner's profit rather than putting it directly into good nutrition and educational resources for children? There is a body of research that shows that commercial child care is on average of poorer quality than non-profit child care in the areas of child-staff
Private Members' Business
ratios, staff training, staff turnover and wages and benefits.
Far from giving parents an increased choice most parents trying to find child care have little choice but to take whatever is available unless they are wealthy enough to be able to shop around.
Choice in child care is a myth. Many choices for families are constrained by economics in more ways than one. Some women who are in the paid work force would prefer to be at home with their young children. Some women who are at home being supported by a partner or on welfare or living on small savings would prefer to be in the paid labour force but are constrained by the lack of child care.
They cannot go to school. They cannot go for training or retraining. They cannot look for work. They cannot accept work because there is no alternative care for their children.
We are living in Canada in a society with a declining birth rate. The 1986 task force on child care known as the Katie Cooke task force reported that people wrote to them saying that the lack of parental leave and child care had directly affected their own child bearing decisions not to become parents. Our society does not acknowledge the work women do in the home and consequently underpays child care workers as well.
Many child care workers particularly in regulated non-profit centres have degrees or certificates in early childhood education, experience, patience, responsibility and love and they are paid much less than many male workers in jobs that require less education and certainly less responsibility.
This government and the Liberals when in power have chosen to avoid the fact of the increased need for affordable child care until it has now reached crisis proportions.
As a society we will prosper or decline based on how we collectively care for our children and on what opportunities they have to learn and to grow and to receive adequate nutrition and care. These early years are very important in shaping the health and abilities of our future society. We cannot afford to overlook it or to shrug it off just because pre-schoolers cannot write letters to members of Parliament or lobby or demonstrate on the lawns of Parliament Hill.

March 30, 1993
Private Members' Business
In 1970 the Royal Commission on the Status of Women said of child care that we are faced with a situation that demands immediate action. That was in 1970. Twenty-three years later nothing at all has changed except that federal child care funding contributions to the Canada Assistance Plan have been capped which is choking the ability of the provinces to pay for child care and a Child Care Initiatives Fund was set up to fund research in innovative projects only to be cut back twice by millions of dollars.
The Family Allowance Program was a way that Canadian society recognized albeit in a small way the contribution made to society by those who raise children. That program was eliminated.
We are still faced with attitudes like that of the Conservative member of Parliament from Fraser Valley West who recently said that child care centres are: "little more than temporary orphanages".
The Liberals had 14 years to act and they did absolutely nothing except study the issue. The time to act has long passed. Let us join together now with parents and with communities to build a comprehensive child care system which also recognizes and values the contributions of parents in the home and a child care system on which to base our future as a nation.
Canadian women and Canadian families are in desperate need of licensed child care in this country. They are very tired and very fed up with a government that continues to spend money on big-ticket items like $5.8 billion for 50 helicopters at the expense of our nation's children.
[Translation\


Mrs. Suzanne Duplessis (Parliamentary Secretary to Minister for External Relations and Minister of State (Indian Affairs and Northern Development)):: Mr. Speaker, children are our future. Everyone agrees on that.
How we care for children today, the support they get from their parents, teachers, community leaders and governments, will determine the success of our society later on. Today's children will be tomorrow's grown-ups. They will have to look after their own children's education while earning a living and paying taxes.
The family unit has changed considerably over the years. Nowadays, both parents generally have jobs out of their home. It is an economic necessity.
Statistics Canada 1991 census shows that 69 per cent of women with young children are in the work force, compared to 49 per cent a decade ago, in 1981.
This represents a radical change which has a major impact on how our society is organized, from business hours to flexible work schedules, from our social support networks to the kind of child care services available.
Child care and education are two of the most important aspects of a nation's social policy. We are glad to live in a privileged country. In most cases our children are raised in a loving environment and they are well fed. They are provided with the support and social skills they need to grow into responsible adults. Parents should be proud of their children's successes and accomplishments in spite of the increasing pressures being put on modem families.
Not all children live under the same conditions however. Some children suffer from malnutrition and infantile diseases and do not receive quality health care. So, government has to give priority to these children and situations.
Faced with limited financial resources and competing demands, government was forced to make a choice in 1992. It had to chose between providing a national child care program, investing loads of money in a government plan aimed at all the children or working together with its partners to provide immediate assistance to those who are the most vulnerable. The government chose the latter.
Last year the Minister of National Health and Welfare announced Canada's action plan for children entitled Brighter Futures. This is an extensive strategy dealing with prevention, promotion, protection and community action for our children.
The new child benefit was a major feature of Brighter Futures. This benefit combined the family allowance, the child tax credit and the dependant child tax credit and increased payments by $2.1 billion over a five-year period.
March 30,1993

The child tax benefit also introduced a new earned-income supplement of up to $500 per family in recognition of the additional education costs faced by working families.
The child development initiative, Brighter Futures, is a $500-million program aimed particularly at vulnerable children. The federal government recognizes the importance of prevention. It wants to ensure that we look as early as possible after kids who are most likely to become sick or socially disadvantaged. The child development initiative is also targeted to parents at the community level. It enables them to acquire the necessary skills to raise their children even better.
Even though the government chose to direct additional money to children at risk rather than to child care services, it still supports the day care program. In fact, the amount spent by the federal government on day care services has quadrupled since 1984; it has gone from $250 million in 1984 to more than $1 billion last year. The government still supports this initiative.
For parents who work outside the home we have increased the maximum child care expense deduction on their income tax return starting with the current tax year. It goes up from $4,000 to $5,000 for each child under 7 or with special needs. For other eligible children the maximum deduction was raised from $2,000 to $3,000.
The government particularly looks after the need for child care services of parents taking training courses or trying to get off welfare. Employment and Immigration Canada makes payments totalling $75 million to trainees who need child care services.
Under the Canada Assistance Plan the federal government gives some $275 million a year to the provinces and territories to reserve day care spaces for low-income families.
Moreover, the federal government is a leader in national issues related to child care services through the Child Care Initiatives Fund. Since 1988 we have contributed more than $74 million for 468 national, regional and aboriginal projects.
All the programs which I mentioned, namely the child care expense deduction, the dependent allowances paid through CEIC training programs, the sharing of day care costs through the Canada Assistance Plan and the Child
Private Members' Business
Care Initiatives Fund still exist. In fact they have been improved or expanded since this government came to power.
It is inaccurate to say that our government spends less on daycare. We may not be spending enough according to some, and we may not be able to take on all these expenses.
Just like today's families, the government is facing new realities. We cannot ask our children to bear the debt resulting from new spending programs. There should be a return on each dollar that we spend today.
This is why we are concentrating our efforts on vulnerable children. And let us not forget that the federal government helps children and their families through many other programs on protecting and promoting health, family violence, Canada's Drug Strategy and the environment. The federal government also supports the provincial and territorial programs on health, welfare and social services through tax transfers such as Established Programs Financing and the Canada Assistance Plan.
In spite of what our critics might say this government has not abandoned the children of Canada, their families or the day care program. We continue to meet the needs of all children. However we have increased our resources to help the neediest children especially.
We want to help those children and to do so we must reach their parents. Young parents, especially single mothers, must gain the necessary basic skills to be able to feed their children properly. These mothers need help to get training so that they no longer depend on social assistance. It is a mistake to believe that single mothers who are on welfare do not want to be independent and take care of their children on their own.
That is why we stress how important it is to help families to become financially independent. To this end, we have added the earned income supplement to the child tax benefit in order to further help the working, low income families.
One must also recognize that governments cannot bear the entire responsibility. The time has come to demand that employers take more steps to meet the needs of their employees. An adequate social policy would be greatly appreciated by their workers and their

Mar
Private Members' Business
children and would be considered a good business decision.
We recognize that more must be done to allow all Canadians and in particular those who care for children to be able to be active members of society. We are committed to helping families escape the welfare merry-go-round.
It is probably the best hope we can give their children for a brighter future. These families will be able to state proudly that they can afford to support their children. In turn, their children will also feel that same pride and self-confidence which breeds autonomy. With the help of governments, social service agencies, communities and other partners this is the hope we can give all our children.


Ms. Mary Clancy (Halifax):: Mr. Speaker, it is my very great pleasure to support this motion this evening. Before I get into my support of this motion, I cannot allow the remarks of the hon. member for Louis-Hebert to go unremarked. Indeed they were remarkable. They were remarkable with the greatest of respect for the hon. member in their sheer tommy-rotness if there is such a word.
I heard the hon. member say that one of the reasons the government has not instituted a national child care program is because it would cost too much money. I quote the hon. member, translating freely, that we cannot ask our children to bear the burden of the debt of the expenditures that we authorize today.
That is a noble sentiment in some categories, but when one million Canadian children today are latch-key children, are without care for a significant portion of their day, I bet if we asked them, they might not mind so much paying off that debt somewhere down the road. That is the disgrace we face in this country today.
The second thing I want to say about all this is I want to hearken back to the royal commission on employment equity chaired by, as she is now, Madam Justice Rosalie Abella of the appeal division of the Supreme Court of Ontario. There was a sentence in that report which should be carved in stone on every public building in this
country. It perhaps should be carved in the stone of the heads of some of our colleagues. Those words are that child care is the bridge to employment equity.
I will go a step further because I suspect that most child care advocates, most women and most thinking men would agree with me that child care is the major bridge to gender equality in this country. Rightly or wrongly the major care givers for children are women. It is an unfortunate imbalance in the division of labour because both fathers and children would benefit greatly from more contact. That is a topic for another debate on another day.
In our society, indeed in western society and in the world society today, women are the care givers for children. If women are going to be able to take their full place in the labour force, if women are going to be able to work with a sense of security about their families, what great leap of logic does it take to say they must have adequate, accessible, affordable child care. I do not think you need an Einstein to set out that particular premise. We all know that is the case and the time has come to do something about it.
I realize my time is truncated. I have one minute so I will make the best of it. I will say that I agree with every single one of the six segments of my colleague's motion, but I want to speak most particularly, in the limited time available to me, about the question of child care services operating on a non-profit basis. This is something that we have traditionally done in this country-


Mr. Shields:: I rise on a point of order, Mr. Speaker. I hate to interrupt my friend but I have to do this before six o'clock. I would ask consent of the House, and I think there have been discussions, that if during the late show we are called to the other place for royal assent that we suspend the late show to accommodate this and then resume the late show after royal assent is completed. I wonder if I could seek the unanimous consent of the House for this.


The Acting Speaker (Mr. DeBlois):: Is there unanimous consent?


Some hon. members:: Agreed.
March 30, 1993


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.



PROCEEDINGS ON ADJOURNMENT MOTION

[Stage Direction]
A motion to adjourn the House under Standing Order 38 deemed to have been moved.

Mr. Fred J. Mifflin (Bonavista-THnity-Conception):: Mr. Speaker, I rise on a follow-up to a question I asked the Minister of National Defence on February 22. It was a question on peacekeeping of great concern to me.
The point I made in my question was the concern I had at that time, in consultation with other members of Parliament and as a result of some hearings in the Standing Committee on National Defence and Veterans Affairs, with the growing dependence of the Canadian forces on reserve forces. It was the result of what I believe was the overcommitment taken on by the government for peacekeeping around the world.
This is a very judgmental thing. I raised the question with the minister and she really did not answer it. She gave me a lecture on what the Canadian forces were doing and talked about the perspective of international affairs. I am going to quote here what she did say. She said:
In some instances we have deployed people where the United Nations has regarded our services of greater urgency than where they were at that particular time.
I was not sure what she meant by that. The minister went on to say that the Canadian forces were designed to meet domestic concerns and security concerns. I did not need the minister to tell me that. She continued:
When they are not needed on active deployment we make them available to the United Nations. This incurs costs to the Canadian people.
The minister was not entirely right there. My understanding is that there is a commitment and a contingency in the planning process to commit x number of peace-
Adjournment Debate
keepers. I know at one point in time that was roughly 2,000 when we had a larger force of soldiers by 4,000.
I realize that we are going to reduce our commitment to Cyprus and there is some juxtapositioning going on regarding the deployment of troops. However, there are two points I want to make in this late show.
It is now March 30 and I am seeing more and more experts saying that a 50 per cent ratio-in fact in the case of the battalion relieving in Croatia which is under way right now-we are looking at 55 per cent of the force being reservists. I have the greatest admiration, belief and faith in reserves. I have always been for the total force concept. In fact I was very much involved in making the naval reserves part of the over-all total force concept in the navy. However in this particular case 55 per cent is way out of whack.
It is not me saying that. I was saying it on February 22, but in the latter days of this month of March no less than four experts are saying that 50 per cent is too much. They are saying that we are endangering our peacekeepers and we are doing things that we should not be doing. A recognized expert says that 10 per cent is about right. Whether it is 10 per cent, 5 per cent or 20 per cent, the fact is that 50 per cent is too much.
We have 60,000 peacekeepers deployed in the world today. Canada has 4,800 and that represents 8 per cent. We make up one-half of 1 per cent of the world's population. I think we are doing at least our share. One could argue we are doing more than our share.
My talking in the late show is not going to really achieve very much. I will get a response from the parliamentary secretary and then we will get on with other business. However, before we have any further commitment to United Nations peacekeeping operations, as they are not necessarily the old, low intensity peacekeeping operations that we knew in the past, we need to have a debate in this House. That is the point I was making to the minister and she missed it.


Suzanne Fortin-Duplessis: Mr. Speaker, on behalf of the Minister of National Defence, I would like to thank the hon. member for his question. As

March 30, 1993
Adjournment Debate
is his custom, the hon. member has once again shown his interest in the welfare of those who serve in the Canadian forces, a concern shared I am sure by all members of this House. First of all, I would like to talk about some specific points and then comment on some more general ones.
Although important, our participation in United Nations peacekeeping operations in only one aspect of our defence policy. It is an aspect of our activities that is a source of great pride among members of the Canadian Forces and contributes every day to increasing Canada's international reputation as one of the greatest supporters of the United Nations.
The Canadian forces now have sufficient resources to meet their obligations in peacekeeping operations. Although we are near our limit, the Canadian forces are still able to do their duty with the same professionalism and dedication that we have witnessed over the past 40 years.
Canadian troops are deployed in United Nations peacekeeping operations with the same care and attention that we have always shown in deploying our troops, whether in exercises or operations abroad. Canada maintains command of all its forces that are deployed in United Nations peacekeeping missions.
The question of our troops' safety was also raised, particularly concerning the type of armored vehicles that we use in Bosnia-Herzegovina.



THE ROYAL ASSENT

[Stage Direction]
A message was delivered by the Gentleman Usher of the Black Rod as follows:
Mr. Speaker, the Honourable Deputy to the Governor General desires the immediate attendance of this honourable House in the chamber of the honourable the Senate.
Accordingly, the Speaker with the House went up to the Senate chamber.
And being returned:
['Pursuant to Standing Order 38(5), the motion that the House do now adjourn is deemed adopted. The House therefore stands adjourned until tomorrow at 2 p.m., pursuant to Standing Order 24(1).']
@Acting Speaker: I have the honour to inform the House that when the House went up to the Senate chamber the Deputy Governor General was pleased to give, in Her Majesty's name, the royal assent to the following bills:
Bill C-119, an act for granting to Her Majesty certain sums of money for the public service of Canada for the financial year ending the 31st March, 1993-Chapter 9
Bill C-120, an act for granting to Her Majesty certain sums of money for the public service of Canada for the financial year ending the 31st March, 1994 -Chapter 10
Bill C-104, an act respecting an agreement regarding treaty land entitlement in Saskatchewan entered into on September 22, 1992 among Her Majesty the Queen in right of Canada, Her Majesty the Queen in right of Saskatchewan and the Keeseekoose, Muskowekwan, Ochapowace, Okanese, Piapot, Star Blanket, Yellowquill, Beardy's & Okemasis, Flying Dust, Little Pine, Moosomin, Mosquito Grizzly Bear's Head, Muskeg Lake, One Arrow, Pelican Lake, Red Pheasant, Saulteaux, Sweetgrass, Thunderchild, Witchekan Lake, Canoe Lake and English River bands, and respecting an agreement regarding treaty land entitlement in Saskatchewan entered into on September 23, 1992 among Her Majesty the Queen in right of Canada, Her Majesty the Queen in right of Saskatchewan and the Nekaneet band - Chapter 11.


@Acting Speaker: The hon. member for Louis-Hebert has twenty seconds at most to complete her answer.


Suzanne Fortin-Duplessis: Mr. Speaker, I doubt that I will be able, in 20 seconds, to briefly answer all the questions raised by the hon. member, though I am willing to try, if he is willing to listen.



David Kilgour: Mr. Speaker, I rise to seek answers from the Minister of Finance regarding what would appear to be a serious injustice done by his office and officials to the Sovereign Life Insurance Company, its employees and policy holders.
March 30, 1993

Last February 5,1 asked the minister to tell the House precisely why the government had shut down the only federally regulated life insurance company in Calgary. Perhaps the parliamentary secretary will respond today. The junior minister certainly did not adequately answer then.
It would appear the minister's seizure of Sovereign Life on December 21, 1992 was based on grossly defective and irresponsible information his office received from the Office of the Superintendent of Financial Institutions, OSFI.
The Minister of State for Finance was present on November 30, 1992 when the company asked for an 80-day extension to produce audited 1992 financial statements and an unqualified actuarial opinion. He also had an independent actuarial opinion that the extension was warranted.
The actuaries, both highly respected individuals and one of whom used to be a member of this House, concluded as follows: If Sovereign were seized and liquidated, thousands of policy holders would incur losses; the company's position at the end of 1992 would be more favourable than indicated in the provisional actuarial opinion of November 11, 1992; and the only signed opinion the minister had before him on December 13, 1992 was that by the OSFI's own solvency test, "the MCCSR", Sovereign would be solvent at the end of 1992 and would improve its position during 1993. The OSFI significantly refused to provide any signed actuarial opinion.
The December 31, 1991 financial statement of Sovereign contained a $40 million error which was later adjusted in Sovereign's favour. At all times there were excess resources of $52 million. Does the minister or government dispute this? I think not.
The finance minister was not even present when Alan Graham, the former owner of Sovereign Life, made his presentation to the junior finance minister.
Despite a requirement of the relevant legislation, the senior finance minister subsequently ordered the company to be seized. It is the first time in 100 years a federal life insurance company had been brought down by Ottawa.
Adjournment Debate
The seizure will affect about 240,000 Sovereign policy holders, 1,000 Sovereign brokers, 250 head office employees in Calgary, 300 in-house Sovereign agents. It will also affect about $810 million in company assets.
The minister's decision to take Sovereign over was appealed to the federal government on December 23. Has the government failed to file a response because there is no real response?
Sovereign was supposed to have its day in court today, but when an Alberta Court of Queen's Bench justice ruled to delay the legal action of the federal government until next September, Mr. Graham reportedly decided to turn to the Federal Court.
Why did this government attempt to have dismissed the shareholder action in Calgary seeking the right to represent Sovereign Life in the Federal Court in pursuing a claim for damages against the government agencies involved? Is this government afraid of the truth on this matter?
Finally, whatever might transpire in the courts will not alter the fact that the government has made another grave public policy error. What does the government intend to do to minimize the damage this grossly irresponsible action has done to a major financial institution in western Canada?


Marcel R. Tremblay: Mr. Speaker, it is a pleasure to answer the question asked on February 5 by the hon. member for Edmonton Southeast on the Sovereign Life Insurance Company.
On December 21, 1992 the Finance minister, after a report by the Superintendent of Financial Institutions to the effect that the assets of Sovereign were not adequate to properly protect its policy holders and creditors and, after the company was given the opportunity to state its case, ordered that the Sovereign Life Insurance Company be placed under the control of the Superintendent of Financial Institutions.
The minister and the Superintendent acted promptly to preserve the assets and the residual value of this company for the benefit of policy holders. They both acted in accordance with their responsibilities under the Insurance Companies Act.

March 30, 1993
Adjournment Debate
Before deciding to shut down the company considerable efforts were put into finding an investor who would inject money to allow the company to carry on and provide coverage to all its clients.
Unfortunately no one made a firm commitment to invest a larger amount of money and the Canadian Life and Health Insurance Compensation Corporation, an organization similar to CDIC but financed by the industry, did not take part in an assistance program to make the merger easier. The main responsibility of the minister and the superintendent is to protect those who entrusted Canadian financial institutions with their assets.
The Office of the Superintendent of Financial Institutions regulates about 175 life insurance companies. It has been doing so for a long time.
As far as the Sovereign Life Insurance Company is concerned, the company's finances were assessed by the Office of the Superintendent of Financial Institutions and its report did not match assessments made by the company itself. After going through the accounting records potential buyers were not as optimistic about the financial situation of the company. That would explain why no other prospective buyer was to be found.


EMPLOYMENT
Ron J. Duhamel: Mr. Speaker, on February 11, when we were debating the Unemployment Insurance bill, the hon. member for Laval-Est said, and I quote: "I have reported some myself and I am still alive. I am fed up with paying taxes and giving to the poor. I want everybody to be rich because if I am surrounded by poor people, some day they will steal from me or kill me."
That was a remark, as I said before, supposedly made by the hon. member for Laval-Est.
He made another remark, speaking in English, and I quote:

"It is the cheapest way and it is the best way to police a system. We can keep it confidential. You do not have to identify yourself. You just report to the government a neighbour or a friend".
My purpose on that particular day was to try to determine whether or not those particular quotations attributed to that particular member of Parliament were in fact correct, whether or not they were in line with the minister's thinking and whether or not they were government policy.
It just so happened that for some reason the Speaker of the day felt that perhaps these should not be read into the record. I felt rather badly about it because certainly I had taken them from public documents. I was not charging the member. I was simply saying it was attributed to that member. In fact the member could have risen if they were incorrect and dissociated himself from them.
In the ensuing debate the minister who was a little hot under the collar indicated and tried to denigrate the questions by suggesting that I had prepared them ahead of time and they had not heard that he had decided not to have that particular 1-800 line, often referred to as a snitch-line.
My subsequent question to that minister was, in spite of the fact that he had decided not to have that particular 1-800 number, would it be the policy of this government to encourage people to report others.
I think you can agree, Mr. Speaker, that there are some people who would take that responsibility much more seriously than others. There are some individuals unfortunately who would probably do so with a certain amount of glee. I do not like the notion of trying to encourage people from reporting others, particularly when they do not have to identify themselves.
It is quite easy to pick up the telephone and make any kind of charge, particularly when you do not have to identify yourself.

We know that this bill has now been passed by the government. I hope the government will not ask people to report their neighbours or their next of kin. I think it would be useless and dangerous to encourage such a policy since there would be no need to identify yourself and it would be so easy to do it.
[English ]
Therefore I await the response of the parliamentary secretary with a certain amount of anticipation. I am pleased that I have an opportunity to correct the record
March 30, 1993

and I am anxious to find out what the government has to say about this particular matter.


Jack Wendele Shields: Mr. Speaker, it is unfortunate that my hon. friend would bring forward and try to resurrect an issue that was a false issue in the first place because the minister at no time ever considered a so-called snitchline. That should have put an end to all debate in this House of Commons about it.
I would like to take advantage of this opportunity to inform my hon. friend about some of this government's activities to get Canadians back to work.
In 1992-93 Employment and Immigration Canada is investing $3.55 billion in providing training and employment assistance for over 900,000 Canadians. For 1993-94 we are increasing the UI developmental uses budget by another $260 million, bringing it to a total of $2.21 billion and EIC's over-all expenditures on training and employment assistance to $3.8 billion. With that $3.8 billion we will be providing assistance to over one million Canadians.
In 1993 some 326,000 Canadians will receive skills training through UI developmental uses, $110 million in self-employment assistance will encourage participants in their efforts toward greater self-sufficiency, and $15 million will go to assist workers to move to other localities where they have found jobs. Over 11,000 Canadians will be assisted under these programs.
The $120 million that is now budgeted for UI job creation will assist over 31,000 unemployed workers to get back into the work force by maintaining and enhancing their skills, and $130 million in work sharing assistance will allow employers and workers to jointly manage periods of production slow-down without reverting to lay-offs. Some 160,000 Canadians will participate in this initiative.


THE ENVIRONMENT
Hon.   Chas. L. Caccia@Davenport: Mr. Speaker, tonight this brief exchange is on the North American free trade agreement, and in particular on the question of the environmental agreement that will be required if this trade agreement is to eventually become a reality.
Adjournment Debate
I would like to refer more specifically to the exchange in Question Period on March 18 when I raised with the minister the question of the role of the North American commission on the environment. I urged him during that exchange to let us know whether this commission, which would be in charge of environmental management, the environment being the basis of our economy, would have powers to enforce environmental laws and standards.
The minister was visibly preoccupied with the question of sovereignty and the violation of sovereignty should such a commission become involved with enforcement of environmental standards, for instance. As often happens in exchanges in Question Period we got nowhere. It was like two trains passing by in the middle of the night.
Therefore I would like to put forward some thoughts and some possible suggestions concerning this North American commission on the environment. I will draw heavily in the two minutes available from a colloquium sponsored by the North American institute in Santa Fe, New Mexico, from February 12 to February 14 of this year.
In this report, which resulted from this symposium on the North American environment, there are a set of recommendations, the examination of which by this government would certainly be worth while. They ought to be the object of discussions by those officials who will be in charge of further deliberations in Washington with the Americans and the Mexicans.
The North American commission on the environment could play a role in regularly reviewing environmental programs of the three countries with the specific goal of strengthening and harmonizing upward environmental laws and enforcement in the three countries.
The same commission could have an oversight function with the help of the environmental ministries of the three governments and could also report annually to the three governments and the public.
The proposed commission should form part of the North American free trade agreement dispute resolution process when environmental questions are raised. This same commission should be institutionalized through

March 30, 1993
Adjournment Debate
appropriate mechanisms and I will not go into the details of the mechanism because of lack of time.
This commission under the mandate given it by the three governments should receive references from the government to investigate and report on matters of trilateral concern. This commission in its environmental monitoring role should provide particular attention to migratory species and the protection of trans-boundary natural resources.
This is where we probably differ. This commission ought to go beyond performing a monitoring role and should have some teeth.


Jack Wendele Shields: Mr. Speaker, first I would like to repeat the question that was put before the minister and it was as follows: "Will the government give its unqualified commitment that the proposed North American commission on the environment will have powers to enforce environmental laws and standards?"
The functions of the commission are still being negotiated among the three governments. At the first trilateral meeting Canada put forward proposals developed following consultations with the provincial governments, non-governmental organizations and other private-sector interests including business and labour representatives.
Our starting point is that the North American commission on the environment should strengthen trilateral co-operation and development and the enforcement of regulations to protect the environment. Our aim is to encourage the upward harmonization of environmental regulations and standards.
We also want to be confident that our respective domestic and environmental laws and regulations will be eniorced. We seek a commission that respects the sovereignty of each party and at the same time provides strong assurances that domestic environmental law will be enforced and even improved over time.
The use of trade sanctions to enforce environmental standards would be a mistake. The use of trade sanctions could seriously harm vital Canadian trade and economic interests.


DAIRY INDUSTRY
Mr. Mark Assad (Gatineau -La Lievre):: Mr. Speaker, on December 7 of last year I put a question to the Minister of Agriculture regarding the cut in subsidies to Canadian dairy farmers. That cut, although not very large, justifiably angered many dairy farmers who, over the last few years, were very concerned about the Dunkel report and the GATT negotiations. This cut just added to their anxiety, and I can understand that.
Dairy farmers are very much aware that the quota system, which is fundamental to the Canadian dairy industry, is being eroded. Not only are subsidies reduced but we can now read in various articles that a new way of measuring quotas is being sought.
Naturally quotas are extremely important and they really determine the value of a farm. The land and the buildings certainly have value, but without quotas that value is greatly reduced. Faced with this cut in subsidies the farmers would like to have an answer to this crucial question: Is the government still committed to defend and maintain milk production quotas? It is essential that dairy producers be assured that the quota system will never be jeopardized and will be kept intact. Dairy producers have to be guaranteed a certain price and not be faced every year with a cut in subsidies. We know that our dairy industry is very efficient; notwithstanding its critics, proof of that was given in the past.
In brief, the question dairy producers are asking is whether the quota system which has now existed for years and years in Canada will remain untouched? Moreover, they do not want any change without being thoroughly consulted.


Marcel R. Tremblay: Mr. Speaker, I am pleased to respond to a question that was raised in this House on December 7 by the hon. member for Gatineau-La Lievre concerning the cut in the subsidies to the dairy industry.
Mr. Speaker, you will recall that in his economic statement of December 2, 1992 the Minister of Finance stated that as part of the government effort to control the budget deficit the processed milk subsidy would be cut by 10 per cent in the next two fiscal years.
March 30, 1993

It is important to mention that there are two markets for milk in Canada: the market for milk (milk and fresh cream) and the market for industrial milk, which is used to make milk products such as butter, cheese and yoghourt. Producers get direct support payments of $ 6.03 per hectoliter of milk only for the deliveries of milk and cream required to meet domestic needs. Since the majority of producers make both fluid milk and industrial milk the cut in the federal subsidy does not affect their total production in most cases.
In times of budget restraints, tough decisions must sometimes be made. The subsidy cut would result in a decrease in revenues of no more than 60 cents per hectoliter of milk, or about 1.2 per cent. That is what the Minister of State for Agriculture answered when asked that question on December 7, 1992.
Even after this reduction, industrial milk producers will continue to receive over $200 million a year in subsidies from our government for their production of industrial milk.
How the subsidy cut will be implemented remains to be determined. It could be done in two different ways.
Adjournment Debate
The first possibility is to reduce the producer's target income by an amount equal to the subsidy cut. Producers would absorb the reduction and the prices of dairy products would remain unchanged.
The alternative is to increase support prices for butter and/or skim milk powder, which means that consumers would pay for the reduced subsidy. The producers' income per hectolitre would therefore remain unchanged, but the resulting price increase could have a slightly negative effect on demand for dairy products.
A third possibility would be to have producers and consumers share the impact of the lower subsidy.
I see that my time has expired. I would have liked to talk about quotas but time does not allow it.


The Acting Speaker (Mr. DeBlois):: Pursuant to Standing Order 38(5), the motion that the House do now adjourn is deemed adopted. The House therefore stands adjourned until tomorrow at 2 p.m., pursuant to Standing Order 24(1).


[Stage Direction]
The House adjourned at 6.47 p.m..
[Stage Direction]
Wednesday, March 31,1993